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This study examines acquirers' earnings management in intragroup mergers to investigate whether stock-for-stock mergers between affiliated firms within the same family-controlled business group facilitate the controlling shareholder's rent seeking. Specifically, it investigates the acquiring firm's incentive to inflate premerger-announcement earnings in intragroup mergers given the controlling shareholder's relative equity holdings in the target and acquiring firms. The authors also examine how creditor monitoring affects premerger-announcement earnings in intragroup mergers compared to mergers between independent firms.

Using univariate analysis, panel regression based on accruals and cross-sectional regression based on discretionary accruals, the authors compare earnings management in mergers between affiliated firms with that in mergers between independent firms in the context of Korean business groups. The authors also compare the effects of creditors on earnings management in both cases.

Acquirers' premerger-announcement positive abnormal accruals are less evident in mergers between affiliated firms than in mergers between independent firms. These accruals decrease with high financial leverage only in the latter case, suggesting that creditor monitoring mitigates earnings management only in independent firm mergers.

The authors examine intragroup mergers, unlike previous studies, which focus on unaffiliated firm mergers. They also contribute to the literature on stock-for-stock mergers, showing that lender monitoring can mitigate the acquiring firm's premerger earnings management in unaffiliated firm mergers but not in intragroup mergers. These findings suggest that stock-for-stock mergers between affiliated firms may facilitate the controlling shareholders' rent seeking, which has policy implications for emerging markets with large family-controlled business groups.

This study aims to investigate the impact of board independence on the cash dividend payments of family firms listed on the Borsa Istanbul (BIST) in balancing controlling families’ power to mitigate agency problems between family and minority shareholders in the post-2012 period. The authors focus on this period because Turkish authorities implemented mandatory regulations on the employment of independent directors on boards from fiscal year 2012.

The research model uses a panel dataset of 153 BIST-listed family firms over the period 2012–2017, employs alternative dependent variables and regression techniques and is applied to various sub-groups to improve robustness.

The empirical results show a strong positive effect of board independence on dividend decisions. The authors further detect that family directorship exhibits a negative effect, whereas both board size and audit committees have positive influences but chief executive officer (CEO)/duality has had no significant impact on the dividend policies of Turkish family firms since the new compulsory legal requirements in the Turkish market.

The findings suggest that independent directorship and dividend policy are complementary governance mechanisms to reduce agency conflicts between families and minority shareholders in Turkey, which is a civil law-based emerging country characterized by high family ownership concentration.

The authors present evidence that Turkish family firms’ corporate boards have evolved, to some extent, from being managerial rubber stamps to more independent boards that raise opposing voices in family decision-making. However, independent directors’ preference for dividend-induced capital market monitoring implies that their direct monitoring is less effective than it is supposed to be. This suggests a need to revise the Turkish Corporate Governance Principles to enhance independent directors’ monitoring and supervisory power.

This is thought to be the first study to provide insights on how board independence influences dividend policy in controlling agency problems in Turkish family firms since Turkish authorities introduced compulsory rules on the employment of independent directors on boards.

The purpose of this paper is to design a methodology to identify territory-linked family business groups (TLFBGs) in order to overcome the methodological challenges and ease studies about family business groups' (FBGs) impact on territories.

The paper applied an algorithm to a data set of firms located in Gipuzkoa that were registered in the SABI database in 2018.

The paper defined a new construct, TLFBGs, and proposed a methodology that automatized the identification of TLFBGs by a seven-stage algorithm that was intended to be applicable to any firm-level economic and financial data set, including all registered firms and not only listed firms.

TLFBGs unveil the real relevance that family businesses have in the territorial development, encouraging the political support to family business. Additionally, the methodology provided allows understanding growth processes of family business.

The paper defines a new construct, TLFBGs, that highlights both the underexplored links existing between family and territory and between family and business groups, providing the process and criteria to capture it. The paper opens up large-scale empirical research on the social (and economic) influence of TLFBGs in territorial development.

The purpose of this paper is to examine whether the sensitivity of investment to cash flow varies with exogenous financial conditions.

A dynamic model of investment based on the Euler equation approach is employed to investigate the impact of macro-financial factors on the sensitivity of investment to cash flow. The sample comprises data from 84 non-financial firms listed on Saudi stock market over the period 2007–2018.

The results show that the sensitivity of investment to cash flow is positive, implying the presence of financing constraints for Saudi firms. Evidence also reveals that better financial conditions relax firms' financing constraints. However, contractionary monetary policy, poor financial development and liquidity crisis strengthen the dependence of firms on internally generated funds when undertaking new investment projects.

The empirical results have useful policy implications. First, policymakers should pay attention to the importance of policymaking based on the monetary demand of microeconomic entities. In monetary contraction periods, firms face greater challenges in accessing external finance. These firms are likely to experience under-investment which at a macro level would translate into lower investments and economic growth for the country. Second, policymakers are encouraged to implement complementary measures that, coupled with existing financial reforms, may promote efficiency, competitiveness and transparency in firms' operations. Finally, managers and investors should consider financial structure and condition as important factors in their investment decision.

This study extends previous research by investigating whether the widely reported positive investment and cash flow relationship can be observed using data from an emerging market, specifically Saudi Arabia. It also sheds light on the investment-cash flow debate under a macroeconomic perspective and provides further evidence on the impact of financial crisis on the investment-cash flow (ICF) sensitivity.

The purpose of this paper is to investigate whether, in emerging economies, the relationship between a firm’s corporate governance (CG) and its performance is associated with firm’s affiliation to a business group.

A total of 209 publicly listed firms in India during a 10-year period from 2007 to 2016 were studied, and the random effects model was employed for analysis.

Empirical evidence showed that board size and institutional shareholding positively impacted firm performance, whereas the proportion of independent directors negatively impacted performance. In group-affiliated firms in emerging economies, chief executive officer duality negatively impacted, whereas institutional shareholding positively impacted performance. These results are consistent with the principal–principal agency theory. The study found no discernible impact of proportion of independent directors on firm performance in group-affiliated firms.

In analyzing the governance–performance relationship and its association with business groups, this study extends current understanding by connecting business group research in emerging economies with CG and firm performance research. In examining firms from several industries over a long period of time after controlling for firm size, capital structure and spends on research and development and marketing, the results of this study offer rich empirical evidence that contributes to the extant literature on the nature of the governance–performance relationship.

The purpose of this paper is to draw the perspective of dynamic adjustment costs, the author developed hypotheses regarding the relationships between the internationalization of business groups and first, key leaders of business groups who helped found the groups (i.e. founder-key leaders); second, business groups’ group-level decision teams where the majority of positions are held by members of the founding family (i.e. family-dominated decision teams); and third, business groups’ group-level decision teams where strong ties exist among these teams (i.e. strong-tie decision teams) because group-level top managers are simultaneously top managers of group affiliates.

This study used generalized least squares fixed-effects models to test its arguments about longitudinal data pertaining to 173 Taiwanese business groups’ foreign direct investments over a period of five years (2004-2008).

The results show that the presence of a founder-key leader and strong-tie group-level decision teams in a business group can positively affect the internationalization of business groups. However, family-dominated group-level decision teams in a business group can adversely affect the internationalization of business groups.

Using a dynamic managerial-capacities perspective, this study provides alternative explanations regarding the degree of business groups’ internationalization to demonstrate the links among business groups’ key leaders, group-level decision teams, and internationalization.

When deciding whether to expand abroad, managers at a given business group should carefully consider the characteristics of the group's management team because business groups engaging in such expansion are likely to incur dynamic adjustment costs. In this case, the dynamic managerial capacities of a business group play an important role in enabling the group to decrease dynamic adjustment costs. The differences among a group-level key leader's traits, a family-dominated group-level decision team's traits, and a strong-tie group-level decision team's traits will lead to distinct levels of dynamic managerial capacities within the group.

Given the increasing number of business groups entering international markets, this paper rests on the perspective of dynamic managerial capabilities and uses group-level evidence to clarify how the characteristics of key leaders and the characteristics of group-level decision teams in business groups affect the groups’ international expansion.

The purpose of this paper is to investigate the impact of regulations, reforms and legal environment on dividend policy in a different institutional setting. Particularly, it examines the firm-level cash dividend behaviour of publicly listed firms in Turkey in the post-2003 period, since there were major economic and structural reforms as well as significant regulatory changes of dividend payout rules imposed by the supervisory bodies.

The paper focuses on a recent large panel data set of 264 Istanbul Stock Exchange (ISE)-listed firms over a ten-year period 2003-2012. First, it employs a modified specification of Lintner’s (1956) partial adjustment model for analysis regarding target payout ratio and dividend smoothing. Second, it performs a logit model for analysis in identifying the link between financial characteristics and the likelihood of paying dividends.

The results show that ISE firms now follow the same determinants as suggested by Lintner. They, indeed, have long-term payout ratios and adjust their cash dividends by a moderate level of smoothing, and therefore adopt stable dividend policies (although less stable policies compared to their counterparts in the developed US market) as a signalling mechanism over the period 2003-2012. Moreover, the results also report that ownership structure concentration affects the target payout ratio and dividend smoothing in the Turkish market. In addition, the results further show that more profitable, more mature and larger sized ISE firms are more likely to pay cash dividends, whereas ISE firms with higher investment opportunities and more debt are less likely to distribute cash dividends in the post-2003 period.

To the best of authors’ knowledge, this paper is the first major research that examines the implications of reforms and regulations on cash dividend payments and dividend smoothing over time in Turkey during its market integration process in the post-2003 period.

In this paper, I review the concept of “institutional voids” that provides a way to understand the structure of emerging markets. These voids impede would-be buyers from getting together with would-be sellers, and hence compromise the functioning of markets. Entrepreneurs must respond to these voids. Their endeavors, however, are also the means through which the voids are progressively removed. I review my work on the contours of such entrepreneurship in many emerging markets, with the greatest research emphasis on China and India. I conclude with a focus on attempts to circumvent a particularly insidious class of institutional voids, those that prevent the marginalized two-thirds of the world’s population from participating in the economic mainstream. Cumulatively, my work calls for our profession to think more creatively and eclectically about our research and teaching in a way that displays greater contextual intelligence toward ubiquitous and socially costly voids.

This paper aims to explore the relationship between board characteristics and firm performance for Indian companies.

Corporate governance structures of 391 Indian companies out of CNX 500 companies listed on National Stock Exchange have been studied for their impact on performance of companies. Panel data regression methodology has been used on data for five financial years from 2010 to 2014 for the selected companies. Performance measures considered are market-based measure (Tobin’s Q) and accounting-based measure (return on asset [ROA]).

The empirical findings indicate that the market-based measure (Tobin’s Q) is more impacted by corporate governance than the accounting-based measure (ROA). There is a significant positive association between board size and firm performance. Board independence is found significantly related to firm performance. Number of board meetings is found to be sending positive signal to the market creating firm value. Separation of chief executive officer and chairman of the board is found to be value-creating, and overburdened directors affect firm performance adversely.

Limitations of the study are in terms of methodology and possible omission of some variables. It is understood that the qualitative dynamics happening inside board meetings impact corporate performance. The strategic decision-making process adopted by the boards to fight competition or to increase market share is not easily available in public domain. The decision-making processes and monitoring for implementation of those decisions could impact corporate governance performance relationship. These parameters and their impact on corporate performance are not covered under the scope of the present study.

The paper adds to the emerging body of literature on corporate governance performance relationship in the Indian context by using a reasonably wider and newer data set.