Search results

The purpose of this paper is to extend the existing, yet limited, literature on the influence of ownership concentration and family control on the demands for high-quality audits. This study focusses on an emerging market, namely, Indonesia, where ownership concentration and family control are relatively higher than those in developed markets.

The sample consists of 787 firm-year observations of public firms listed on the Indonesia Stock Exchange. Following prior studies, a firm is considered using a higher quality audit when its external auditor is one of the Big 4 audit firms. Logistic regressions are employed to test research hypotheses.

Empirical evidence obtained reveals that firms with higher ownership concentration are more likely to hire a Big 4 auditor. Hence, in such firms, high-quality audits are employed to mitigate agency issues. However, when the controlling shareholder is a family, the association between ownership concentration and the demands for high-quality auditors turns negative, implying that family-controlled firms tend to sustain opaqueness gains by hiring lower quality auditors.

Previous empirical studies examining the influence of ownership concentration and family control on auditor choice are relatively limited in the literature and are heavily focussed on developed economies. In addition, the present study is one of the first to investigate the association between family control and auditor choice in the context of a developing economy.

The purpose of this paper is to examine the effect of bank consolidation and foreign ownership on bank risk taking in the Egyptian banking sector.

Following prior studies (e.g. Yeyati and Micco, 2007; Barry et al., 2011), this study uses pooled Ordinary Least Squares regression models under two main analyses to test the relation between concentration and foreign ownership on one hand and bank risk-taking behavior on the other hand, where observations are pooled across banks and years for the 2000-2011 period. The reform plan was launched in 2004 and resulted in various restructuring activities in the banking system. Thus, to control for the effect of implementing the financial sector reform plan on bank insolvency and credit risk, this study includes a reform dummy variable (RFM) for the post-reform period in models testing the association between consolidation, foreign ownership and bank risk. Therefore, this categorical variable identifies whether bank risk is related to the reform activities that have been observed during the post-restructuring period, 2005-2011. Moreover, to accommodate the possibility that effects of bank concentration and foreign ownership on bank risk differ due to the implementation of the reform plan, the author create two interaction terms: one uses the product of the reform dummy variable and concentration measures, while the other uses the product of the reform dummy and foreign ownership variables to capture interactions. These interaction terms and the dummy variable provide ample room to capture the effect of bank concentration and foreign ownership on bank risks during the post-reform period.

This study provides empirical evidence that bank concentration is associated with low insolvency risk and credit risk as measured by loan loss provisions (LLP) in the post-reform period. These results are consistent with the “concentration-stability” view, suggesting that concentration of the banking sector will enhance stability. Moreover, evidence shows that while a higher presence of foreign banks reduces bank credit risk in the post-reform period, it appears to increase insolvency risk. These results are robust to using alternative measures. These findings imply that regulators in emerging countries should support foreign investments in banks to transfer better managerial skills and systems. However, government-owned banks are found to be more prone to insolvency and credit risks; thus, their ownership should not be encouraged. Finally, policy makers should reinforce bank consolidation, be prudent in determining the capital adequacy ratio (CAR) and monitor intensively less profitable, well-capitalized and small-sized banks.

Consolidation of the banking sector decreases insolvency risk and credit risk, as measured by LLP in the post-reform period. This study proposes that bank supervisors implement prudent polices in determining the bank CAR, and monitor intensively less profitable, well-capitalized and smaller banks, as they have incentives to increase risk. In addition, regulators should encourage foreign investment in the banking sector and facilitate their operations in Egypt.

Bank supervisors should intensely monitor banks with high-CARs that exceed mandatory requirements because they may be more likely to engage in more risk-taking activities.

It provides empirical evidence from a country-specific, emerging market perspective, in which restructuring events affect the national economy. Egypt, similar to other emerging countries in Africa, pursues an institutionally based (bank-based) system of corporate governance, where banks are the primary sources of finance for firms. Therefore, restructuring banks and other financial institutions and supervising their operations ensure the soundness and stability of these institutions, which represent the nerve of emerging economies. Because emerging countries tend to share common characteristics and economic conditions, and the reform of their financial systems is significant for economic development, the Egyptian banking reform and restructuring program should be of interest to other emerging countries to capitalize on this experiment. While international studies on these relationships are mostly cross-country or focus on US banks, firm-specific studies are scant. Furthermore, the findings of this study should be of interest to Egyptian regulators, bank supervisors and policy makers studying the implications of bank reforms.

The purpose of this paper is to investigate the impact of different categories of ownership concentration on corporate voluntary disclosure practices in New Zealand.

The study applies panel data regression analysis to a sample of New Zealand listed companies from 2001 to 2005. Two‐stage least squares analysis (2SLS) is conducted. Ownership concentration is categorised into four mutually exclusive ownership structures.

The paper finds that firm‐year observations characterised by financial institution‐controlled ownership structure tends to make significantly fewer (more) disclosures at high (low) concentration levels supporting expropriation. In contrast, firm‐year observations in the high (low) concentration group with government‐ and management‐controlled ownership structures exhibit considerably higher (lower) voluntary disclosure scores, suggesting a positive monitoring effect at high ownership concentration level.

The results provide evidence for the proposition that the efficiency of large block holders' monitoring varies with the level of ownership concentration.

To promote transparency in capital markets, regulators can encourage or discourage certain types of large shareholding, while monitoring the level of ownership concentration by means of regulation. Investors, especially less sophisticated retail investors, will benefit from the findings that different ownership groups affect disclosure policies differently.

The findings strengthen the importance of differentiating ownership structures into various classes to infer the real impact of differential controlling properties on managerial disclosure decisions. Furthermore, the results reveal that the relationship between ownership concentration and voluntary disclosure practices has a non‐linear pattern.

The elevated level of nitrate in groundwater is a serious problem in Texas aquifers. To control and manage groundwater quality, the characterization of groundwater contamination and identification of the factors affecting the nitrate concentration of groundwater are significant. The purpose of this paper is to determine factors which have significant impacts on the elevated groundwater nitrate concentrations of the Southern High-Plains and the Edwards-Trinity aquifers.

The characterization of groundwater nitrate contamination was undertaken by analyzing the hydrochemical data of groundwater within a statistical framework. The multivariate statistical analysis (ordinary least square) and geographically weighted regression (GWR) models were used to study the relationship between groundwater nitrate contamination and land use of the study areas.

Results show groundwater nitrate contamination is typically due to an overapplication of N fertilizers to cotton in the Southern High-Plains aquifer and to grassland in the Edwards-Trinity aquifer. Adjusted R² (0.45) explains variations of nitrate concentration by well-depth, cotton production, shrubland and grassland in the Edwards-Trinity aquifer. The results of an analysis of variations in N concentration with well depth for all 192 wells indicate that nitrate concentrations in water from wells in the Southern High-Plains and Edwards-Trinity aquifers tend to decrease with increasing well-depth.

In this study, the GWR model was built to identify nitrate concentration within a geographic framework to ensure sustainable use of groundwater, which is important for local management purposes. The analysis should include local spatial variations of elements such as hydrologic characteristics and the land use activities if groundwater nitrate contamination causes adverse effects on human and ecosystem health.

Sweating is thermo-regulatory behaviour that occurs when a person performs vigorous activity even in cold climatic condition. One of important component of sweat is the presence of lactate. Based on climatic condition, age, gender, maturity and nature of activity level, the change in lactate concentration is inevitable. Hence, the present study is focussed on the impact of change in the lactate concentration on the moisture transmission behaviour through the clothing. The purpose of this paper is to investigate the impact of changing lactate concentration on the moisture vapour transmission behaviour through multi-layered clothing ensembles.

For the investigation, sweat solution representing male and female sweat were taken for present study. Two different multi-layered ensembles consisting of either spacer or fleece as middle layer were considered. The water vapour permeability and drying rate test were done at standard atmospheric conditions. After testing, ANOVA analysis was done in order to determine the most significant parameters.

Fabric structure (constituent layers) behaved differently when tested individually and as the layered component with different sweat solutions. Water vapour permeability of sweat solution with higher lactate concentration was lower as compared to sweat solution with lower lactate concentration. Individual layers showed higher rate of vapour permeability with sweat solution containing lower lactate concentration as compared to multi-layered ensembles. Role of PU coated nylon fabric was predominant in case of multi-layered ensembles. Difference in transmission of sweat solution was found higher in case of uni-directional stitched multi-layer spacer ensembles whereas marginal difference was observed in case of bi-directional seamed multi-layer spacer ensemble. Drying rate of sweat containing lower concentration of lactate was higher as compared to the other sweat solution for all the selected fabrics. Density of liquid and amount of the water available for drying influenced the drying behaviour and thus accounted for difference in drying rate of sweat solution differing in the lactate concentration. The contribution percentage of layers, i.e. type of structure was higher (nearly 93–96%) compared to that of solution type (3.3–4.9%) in case of individual layers whereas in the case of the multi-layer ensembles; type of seam had maximum contribution percentage (71–77%) followed by solution type (10–15%). Type of layers had least contribution percentage (nearly 7–9%).

The findings from the study are expected to be realistic and important in designing and development of cold weather garment ensemble for different gender type depending on their activity level especially in case of military personnel and those performing combat activities.

This experimental work based will provide the insight about the behaviour of actual sweat transmission through the layered fabric ensembles and ways to prevent the accumulation of moisture near to human skin surface by manufacturing suitable design structures (in terms of layering composition and seam patterns) per the morphology and requirement of specific consumers.

This study aims to explore the moderating impact of governance structure, that is, board characteristics including board size, board independence, board committees and ownership structure like ownership concentration, on the underpricing of small- and medium-sized enterprise (SME) initial public offerings (IPOs) in the context of an emerging economy such as India.

Using a sample size of 403 SME IPOs listed on Bombay Stock Exchange SME platform and National Stock Exchange EMERGE, this study uses moderated hierarchical regression analysis to investigate these relationships.

The findings highlighted that board independence, board committees and ownership concentration negatively influence underpricing measured using market-adjusted excess returns. While analysing the moderating relationship, this study finds that ownership concentration positively moderates the relationship between board independence and underpricing, as well as the relationship between board committees and IPO underpricing.

This study is limited to a single country only. Although perfectly suitable for our research inquiry, it is imperative to check the validity of the findings by extending it to other emerging countries with similar socio-economic characteristics. Furthermore, this study tested the hypotheses concerning three board characteristics only. Hence, it could be extended to explore additional governance characteristics for a more comprehensive understanding.

This study provides a foundation for managers to adopt a fine-grained approach to effectively design the board structure ahead of an IPO event. Additionally, the findings may assist policymakers in formulating various policies and guide regulators in regulating the limit on ownership held by various shareholders to prevent their opportunism. The results of this study may further advise potential investors interested in SME IPO firms to critically consider the ownership concentration as a driving factor when scrutinizing their investment portfolios.

This study is unique as it advances the debate on the importance of a governance characteristic, that is, ownership concentration, as a moderating variable in the underexplored context of IPO underpricing of small- and medium-sized firms in India.

The purpose of this paper is to test two agency‐based hypotheses regarding the effect of ownership concentration on dividend policy using a large sample of Japanese firms.

Level regressions associating payout rates to ownership concentration are run. Different measures of payout are used to ensure the robustness of our findings. Endogeneity of ownership is taken into account. The choice of instruments is carefuly motivated and their statistical power and exogeneity are checked. How ownership concentration affects the propensity to increase dividends following changes in variables correlated with free cash flows is also examined.

The results are consistent with rent extraction by large shareholders. Ownership concentration is associated with significantly lower dividends in proportion to earnings as well as relative to book equity. An endogenous relation between ownership concentration and dividend payout is established, but the results are not statistically different. Firms with concentrated ownership are also less likely to increase dividends when earnings increase or when debt decreases.

Large shareholders do not appear to use dividend policy to remove excess cash and impose greater financial discipline on managers. Instead, the results underline the conflicts of interest between majority and minority shareholders.

The endogeneity of ownership is controlled for using firm age and the industry's average ownership concentration as instruments. The effect of ownership concentration on dividend changes following changes in proxies for free cash flows is also analyzed.

The importance of the agri-food supply chain in both food production and distribution has made the issue of its development a critical concern. Based on configuration theory and congruence theory, this research investigates the complex impact of supply chain concentration on financial growth in agri-food supply chains.

The cluster analysis and response surface methodology are employed to analyse the data collected from 207 Chinese agri-food companies from 2010 to 2022.

The results indicate that different combination patterns of supply chain concentration can lead to different levels of financial growth. We discover that congruent supplier and customer concentration is beneficial for companies’ financial growth. This impact is more pronounced when the company is in the agricultural production stage of agri-food supply chains. Post-hoc analysis indicates that there exists an inverted U-shaped relationship between the overall levels of supply chain concentration and financial growth.

Our research uncovers the complex interplay between supply chain base and financial outcomes, thereby revealing significant ramifications for agri-food supply chain managers to optimise their strategies for exceptional financial growth.

This study proposes a combined approach of cluster analysis and response surface analysis for analysing configuration issues in supply chain management.

The authors provide a novel interpretation of the relationship between skill demand and labour market concentration based on the training rationale.

The authors use a novel data set on Italian online job vacancies during 2013–2018 to analyse the relationship between labour market concentration and employers' skill demand. The authors construct measures of market concentration and skill intensity in the local labour market. The authors regress the measures of skill demand on market concentration, controlling for sector, occupations and other features of the labour market. The authors also use the Hausman–Nevo instrument for market concentration.

The authors show that employers in a highly concentrated labour market demand competencies associated with the ability of workers to learn faster (e.g. social skills) rather than actual knowledge. They also require less experience but higher education. These results are consistent with the hypothesis that employers in more concentrated labour markets are more prone to train their employees. Instead of looking for workers who already have job-specific skills, they look for workers who can acquire them faster and efficiently. The authors provide a theoretical framework within which to analyse these aspects as well as providing a test for the relevant hypotheses.

In addition to cross-countries differences in labour market regulations, the authors' findings suggest that policy authorities should consider the local labour market structure when studying workforce development programmes aimed at bridging the skill gap of displaced workers. Moreover, the authors show that market concentration can have relevant implications for human resource (HR) managers by affecting their recruitment behaviour through the demand for skills. In fact, concentrated markets tend to favour firms' collusion and anti-competitive behaviour that could strongly affect HR management practices.

The authors' paper innovates on the literature in a number of ways. First, the authors provide evidence of local labour market concentration in Italy. Second, the authors provide evidence of skill demand at the local level using a detailed skill taxonomy that goes beyond the classical distinction between high and low skills. Third, and most importantly, the authors provide evidence of the relationship between skill demand and labour market concentration. By analysing detailed skills and competencies, the authors take one step beyond understanding the features of labour demand in monopsonistic markets.

Previous research has found that industry concentration and firm efficiency affect stock returns. However, it is not clear if concentration is a byproduct of efficiency and hence its effect on stock returns is driven by efficiency. This paper aims to examine the relationships between industry concentration, firm efficiency and average stock returns. Mainly, it aims to answer if the effects of industry concentration and firm efficiency on stock returns are independent and significant.

The stochastic frontier approach is used to estimate firm efficiency. The Herfindahl index is used to measure industry concentration. Regression and vector autoregressive analyses are performed to examine cross-sectional and lagged relationships between concentration, efficiency, profitability and stock returns. The characteristics-based benchmark approach is also used to investigate performance of test portfolios.

Industry concentration and firm efficiency have independent and significant effects on average stock returns through profit margins and market shares, which are related to firms’ profitability. Industry concentration has a greater positive impact on market shares than on profit margins, whereas firm efficiency has a greater positive impact on profit margins than on market shares. In sum, highly efficient firms in highly concentrated markets have lower distress risks and hence provide lower average stock returns.

The paper shows the linkages between industry concentration, firm efficiency, profitability and stock returns that have not been documented together in prior studies. Businesses can better understand the impact of concentration and efficiency on market shares and profit margins. Researchers may consider incorporating concentration and efficiency, both of which are meaningful microeconomic variables, into an asset pricing model. Investors can enhance their returns by having a zero-cost portfolio with long and short positions in stocks of firms with different levels of concentration and efficiency.