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1 – 10 of over 4000Marcellin Makpotche, Kais Bouslah and Bouchra M’Zali
This study aims to exploit Tobin’s Q model of investment to examine the relationship between corporate governance and green innovation.
Abstract
Purpose
This study aims to exploit Tobin’s Q model of investment to examine the relationship between corporate governance and green innovation.
Design/methodology/approach
The study is based on a sample of 3,896 firms from 2002 to 2021, covering 45 countries worldwide. The authors adopt Tobin’s Q model to conceptualize the relationship between corporate governance and investment in green research and development (R&D). The authors argue that agency costs and financial market frictions affect corporate investment and are fundamental factors in R&D activities. By limiting agency conflicts, effective governance favors efficiency, facilitates access to external financing and encourages green innovation. The authors analyzed the causal effect by using the system-generalized method of moments (system-GMM).
Findings
The results reveal that the better the corporate governance, the more the firm invests in green R&D. A 1%-point increase in the corporate governance ratings leads to an increase in green R&D expenses to the total asset ratio of about 0.77 percentage points. In addition, an increase in the score of each dimension (strategy, management and shareholder) of corporate governance results in an increase in the probability of green product innovation. Finally, green innovation is positively related to firm environmental performance, including emission reduction and resource use efficiency.
Practical implications
The findings provide implications to support managers and policymakers on how to improve sustainability through corporate governance. Governance mechanisms will help resolve agency problems and, in turn, encourage green innovation.
Social implications
Understanding the impact of corporate governance on green innovation may help firms combat climate change, a crucial societal concern. The present study helps achieve one of the precious UN’s sustainable development goals: Goal 13 on climate action.
Originality/value
This study goes beyond previous research by adopting Tobin’s Q model to examine the relationship between corporate governance and green R&D investment. Overall, the results suggest that effective corporate governance is necessary for environmental efficiency.
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Bita Mashayekhi, Ehsan Dolatzarei, Omid Faraji and Zabihollah Rezaee
This study aims to identify the intellectual structure of expanded audit reporting (EAR), offers a quantitative summation of prominent themes, contributors and knowledge gaps and…
Abstract
Purpose
This study aims to identify the intellectual structure of expanded audit reporting (EAR), offers a quantitative summation of prominent themes, contributors and knowledge gaps and provides suggestions for further research.
Design/methodology/approach
This research uses various bibliometric techniques, including co-word and co-citation analysis for EAR science mapping, based on 123 papers from Scopus Database between 1991 and 2022.
Findings
The results show EAR research is focused on Audit Quality; Auditor Liability and Litigation; Communicative Value and Readability; Audit Fees; and Disclosure. Regarding EAR research, Brasel et al. (2016), article is the most cited paper, Bédard J. is the most cited author, Laval University is the most influential university, The Accounting Review is the most cited journal and USA is the leading country. Furthermore, the results show that in common law countries, in which shareholder rights and litigation risk is high, topics such as disclosure quality and audit litigation have been addressed more; and in civil legal system countries, which usually favor stakeholders’ rights, topics of gender diversity or corporate governance have been more studied.
Practical implications
This research has practical implications for standard setters and regulators, who can identify important, overlooked and emerging issues and consider them in future policies and standards.
Originality/value
This paper contributes to the literature by providing a more objective and comprehensive status of the accounting research on EAR, identifying the gaps in the literature and proposing a direction for future research to continue the discussion on the value-relevance of EAR to achieve more transparency and less audit expectation gap.
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Abstract
Purpose
This paper aims to investigate the impact of environmental risk on corporate governance through market reaction to bank loan announcements.
Design/methodology/approach
Using the establishment of environment court in China as a quasi-natural experiment, this paper adopt the difference-in-differences approach based on listed firms during 2003–2013 to explore the impact of environment court on corporate governance.
Findings
This paper find that the environment court would weaken the cumulative abnormal return of loan announcements. Then, this paper confirm that the potential reason is that environment court worsens the interest conflict between majority and minority shareholders. Further, cross-sectional analysis suggests that bank’s supervision, market competition and analyst coverage can alleviate the impact of environment court on corporate governance.
Practical implications
Environment courts intensify firms’ internal interest disputes, thus causing the decrease of corporate governance, which can be observed through the effect of bank loan announcements.
Social implications
This paper provide reference for environmental policy formulation and implementation, firms’ decision-makings and improving the banking regulatory system.
Originality/value
This paper makes a contribution to the studies about the impact of environment court on firms’ decision-making and investors’ reaction, the impact of external factors on corporate governance and bank loan announcements effect.
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Effiezal Aswadi Abdul Wahab, Damara Ardelia Kusuma Wardani, Iman Harymawan and Mohammad Nasih
This paper aims to investigate the relationship between military connections and tax avoidance in Indonesia. Further, the paper examines whether the relationship between military…
Abstract
Purpose
This paper aims to investigate the relationship between military connections and tax avoidance in Indonesia. Further, the paper examines whether the relationship between military connections and tax avoidance is impacted by three corporate governance variables: auditor size or Big 4, board size and audit committee independence. Indonesia's settings allow for a unique investigation, as military involvement has been documented.
Design/methodology/approach
This paper uses Indonesia as the research setting because its military forces have a long history of business involvement. The sample includes 1,986 firm-year observations on the Indonesia Stock Exchange from 2010 to 2018. The period signifies the time of significant change post-Suharto to illustrate changes in military reform.
Findings
Military-connected firms recorded a negative relationship with effective tax rates, indicating higher tax avoidance. The authors extend this test by considering three corporate governance variables: Big 4, board size and audit committee independence. They find the corporate governance variables are ineffective in mitigating the positive impact of military-connected firms and corporate tax avoidance. The results remain consistent when performing endogeneity tests.
Originality/value
This paper adds to the extant literature by examining the impact of military connections on tax avoidance. The findings reflect Indonesia's institutional settings depicting military and political connections.
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This paper aims to unfold the intricate relations between private law design, the structure of organizations for collective action and cultural values and orientations that…
Abstract
Purpose
This paper aims to unfold the intricate relations between private law design, the structure of organizations for collective action and cultural values and orientations that practically guide interpersonal interactions in Chinese society.
Design/methodology/approach
Drawing upon the Hofstede Insights National Culture survey (The Culture Compass) data and some judicial rulings in China, this paper examines the legislative development and judicial approach to settle condominium disputes to explain and address the cultural orientation for future legal reform. This paper examines how the law reflects and responds to the cultural and social variations/interactions among the stakeholders, namely, local government, developers, homeowner associations, condo owners and property management agents.
Findings
Culture plays a significant role in shaping how condominiums are governed in China. This analysis can highlight the role of cultural factors that influence the success or failure of condominium governance and suggest ways in which governance structures can be adapted to reflect the legal culture of the community better. The emphasis on social harmony, respect for authority, relationships and networks and knowledge and expertise all contribute to a unique approach to condominium governance that reflects the values and priorities of Chinese society.
Originality/value
While much has been written on the importance of property rights to economic development, relatively little seems to be understood about processes of change in complex property systems, particularly in China, a socialist-transforming country. Specifically, there is a lack of reliable knowledge about the intricate relations between the structure of organizations for collective action and cultural orientations that practically guide interpersonal interactions in Chinese society. The question at the heart of this research relates to the condominium rules most suitable for an emerging Chinese private property market.
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Esraa Esam Alharasis, Abeer F. Alkhwaldi and Khaled Hussainey
This study aims to investigate the moderating effect of the COVID-19 epidemic on the relationship between key audit matter (KAM) and auditing quality.
Abstract
Purpose
This study aims to investigate the moderating effect of the COVID-19 epidemic on the relationship between key audit matter (KAM) and auditing quality.
Design/methodology/approach
The authors use the ordinary least squares regression on data from 942 firm-year observations of Jordanian non-financial institutions across the period (2017–2022) to test the hypotheses. The authors use content analysis method to measure levels of KAM disclosure.
Findings
The investigation’s findings highlight the importance of KAM disclosure in achieving audit quality in line with international standard on auditing no. 701 (ISA-701) requirements. COVID-19 is also found to have a positive relationship with audit quality, further confirming the crisis’s devastating impact on audit complexity and risks and providing evidence for the need for supplementary, high-quality audit services. Due to the correlation between KAM disclosure and increased auditor workload and responsibility, the analysis reveals that the COVID-19 factor strengthens the link between KAM disclosure and audit quality.
Practical implications
This study has the potential to be used as a basis for the creation of a new regulation or standard regarding the reporting of unfavourable events in financial filings. This study’s findings provide standard-setters, regulators and policymakers with current empirical data on the effects of implementing ISA-701’s mandate for external auditors to provide more information on KAM. The COVID-19 crisis offers a suitable setting in which to examine the value of precautionary disclosures in times of economic uncertainty, as well as the significance of confidence interval disclosures and the role of external auditing in calming investor fears. This analysis is helpful for stakeholders, regulatory agencies, standard-setters and readers of audit reports who are curious about the current state of KAM disclosures and the implementation of ISA-701. The results may have ramifications for academia in the form of a call for more evidence expanding this data to other burgeoning fields to have a clear explanation of the real impact of reporting KAM on audit practices.
Originality/value
To the authors’ awareness, this research is one of the few empirical studies on the effect of the COVID-19 crisis on auditing procedures, and more specifically, the effect of disclosures on KAM by external auditors on audit quality. This study’s findings represent preliminary scientific evidence linking the pandemic to business performance. Minimal research has been done on how auditors in developing nations react to pandemic investor protection and how auditors’ enlarged reporting responsibilities affect them. The vast majority of auditing studies have been conducted in a highly regulated system, so this research contributes by examining audit behaviour in a weak legal context.
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The objective of this study is to present novel evidence regarding the impact of the Key Audit Matters (KAM) disclosure requirements of International Standard on Auditing – 701…
Abstract
Purpose
The objective of this study is to present novel evidence regarding the impact of the Key Audit Matters (KAM) disclosure requirements of International Standard on Auditing – 701 (ISA) on the auditing profession concerning reimbursement costs in underdeveloped nations, Jordan.
Design/methodology/approach
A year-industry fixed-effects OLS regression model has been employed to test the developed hypotheses. The regression analysis of the period from 2005 to 2022 tests the presence of KAM disclosures in Jordanian finance business, while the regression analysis of the period from 2017 to 2022 tests the actual impact of KAM disclosure following the first implementation of ISA-701 in Jordan.
Findings
The analysis has verified that the presence and the proportions of KAM disclosures outlined in ISA-701 resulted to significant auditing compensatory expenses. The findings confirmed that KAM disclosures increase auditor workload, responsibility, complexity, and risk, consequently resulting in higher reimbursement expenses.
Practical implications
The findings of this study have the potential to serve as a basis for the development of a novel financial regulatory legislation or a regulated framework for disclosing significant occurrences. This paper provides new empirical evidence to standard-setters and policymakers regarding the requirement of ISA-701 for external auditors to disclose KAM. This study is advantageous for stakeholders, regulatory agencies, standard-setters, and audit report readers who are interested in KAM disclosures and the implementation of ISA-701. The results could inspire the academic community to obtain fresh data from emerging markets to ascertain the impact of KAM disclosure on audit practices.
Originality/value
To the author's knowledge, this study is one of the few empirical investigations into the impact of current additional disclosure rules on the audit profession concerning reimbursement costs. It provides preliminary evidence linking ISA regulations to corporate productivity in Jordan, a developing nation. Little is known about how developing nation auditors react to KAM disclosures' role in stakeholder protection and how their expanded reporting obligations influence them. This study examines audit behaviour in a weak legal setting, unlike most prior studies, which have been done in highly regulated systems.
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Bismark Osei, Evans Kulu and Paul Appiah-Konadu
The purpose of this paper is to study the effect of government health expenditure on the health of children (under-five mortality rate and prevalence rate of stunting) among West…
Abstract
Purpose
The purpose of this paper is to study the effect of government health expenditure on the health of children (under-five mortality rate and prevalence rate of stunting) among West African countries.
Design/methodology/approach
The study utilizes heterogeneous panel from the period 1990 to 2018 among 16 West African countries for the analysis. The effect of government health expenditure on under-five mortality rate is measured in per 1,000 live births while that of stunting is measured in percentage. The study employs Pooled Mean Group (PMG) estimation technique and Impulse Response Functions (IRFs) for the analysis.
Findings
The results indicate that government health expenditure has negative effect on under-five mortality rate and prevalence rate of stunting in the long-run but not significant in the short-run. In addition, the IRFs result indicates that under-five mortality rate and prevalence rate of stunting both respond negatively to shocks in government health expenditure.
Practical implications
Governments should ensure that inefficiencies in the public health sector are reduced by licensing the health workers of this sector and allowing independent bodies to appoint the heads of health institutions. This will improve the delivering of health services for the health of children.
Originality/value
Previous studies carried out have not examined the short-run and long-run effects of the relationship under study among West African countries.
Peer review
The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-03-2022-0212
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Zahra Souguir, Naima Lassoued and Houssam Bouzgarrou
This study aims to investigate the effect of overconfident chief executive officers (CEOs) on corporate tax avoidance and whether this relationship is affected by institutional…
Abstract
Purpose
This study aims to investigate the effect of overconfident chief executive officers (CEOs) on corporate tax avoidance and whether this relationship is affected by institutional and family ownership.
Design/methodology/approach
Using a sample of French-listed firms from 2009 to 2021, the authors find that firms managed by overconfident CEOs engage in more tax avoidance practice.
Findings
The authors further find that institutions and families are likely to discourage tax avoidance practices, paying close attention to their long-term horizons and reputational concerns. Overall, the authors' findings shed light on the monitoring role of institutional and family shareholders in restraining the effect of CEO behavioral bias on companies' tax avoidance.
Originality/value
To the authors' knowledge, no study has investigated the impact of managerial overconfidence on the tax behavior of French firms. The authors also extend the growing literature regarding managerial effects by providing new evidence that French firms held by concentrated institutional and family ownership curtail CEO overconfidence behavior toward corporate tax avoidance practices.
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Audrey Afua Foriwaa Adjei, John Gartchie Gatsi, Michael Owusu Appiah, Mac Junior Abeka and Peterson Owusu Junior
The study aims to assess the interplay between financial globalization, effective governance and economic growth in sub-Saharan African (SSA) economies.
Abstract
Purpose
The study aims to assess the interplay between financial globalization, effective governance and economic growth in sub-Saharan African (SSA) economies.
Design/methodology/approach
This study uses the Generalized Method of Moment Estimation and the Panel Quantile Regression techniques to analyze how financial globalization and governance impact sub-Saharan African economies.
Findings
The results show that governance is vital to the region's economic development. In order to achieve significant growth, sub-Saharan African economies must prioritize actions that promote good governance.
Research limitations/implications
The study is limited to sub-Saharan African economies.
Practical implications
It is crucial for the sub-Saharan Africa economies to concentrate on strengthening governance frameworks in order to realize its full economic potential because improvements in governance quality would have a favorable effect on economic growth.
Social implications
The findings indicate that both capital inflows and governance dynamics are essential for fostering economic growth in SSA economies. Also, balancing globalization's benefits with effective governance is crucial for promoting sustainable growth in SSA.
Originality/value
This paper fills a gap in literature by using the KOF financial globalization index to assess the impact of financial globalization and governance on economic growth in sub-Saharan African economies.
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