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1 – 10 of over 26000Dana L. Haggard and K. Stephen Haggard
The purpose of this paper is to examine the effects of culture, legal origin and religion on four measures of the ease of starting a new business; the number of procedures…
Abstract
Purpose
The purpose of this paper is to examine the effects of culture, legal origin and religion on four measures of the ease of starting a new business; the number of procedures required, the number days required, the ease of getting credit and the cost to start a business.
Design/methodology/approach
The authors use linear regression to test the hypotheses using publicly available data on legal origin and religion from La Porta et al. (1999), cultural dimension information from Hofstede (2009) and measures of the ease of starting a business from the World Bank’s (2017) Doing Business Initiative. The final sample consists of 71 countries for which information was available on all the variables of interest.
Findings
Legal origin affects the number of procedures and the length of time needed to start a business, as well as the ease of getting credit. Culture (power distance) and religion are important for explaining gender differences in the ease of starting a business. The cost of starting a business is unrelated to culture, legal origin or religion.
Originality/value
Economic development is an important determinant of a country’s political stability and standard of living. Although politicians play a significant role in how a friendly a country is toward business, the study demonstrates that other longer-term and less dynamic factors have a material influence on economic development.
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Dana L. Haggard and Stephen Haggard
We proposed a model in which culture plays a dominant role, along with religion and legal origin, in determining the quality of governance in a country. We examined four…
Abstract
We proposed a model in which culture plays a dominant role, along with religion and legal origin, in determining the quality of governance in a country. We examined four dimensions of culture and four measurements of governance quality across 71 countries. Our empirical results demonstrated the dominant role played by culture, over and above religion and legal origin, in explaining governance quality. As culture is persistent and unlikely to be easily changed, efforts to improve governance quality might be doomed to failure in nations with cultural values that are hostile to good governance.
This study aims to learn how a three-way interaction moderation model is used to analyse the role of country-specific characteristics, in the form of the implementation of Sharia…
Abstract
Purpose
This study aims to learn how a three-way interaction moderation model is used to analyse the role of country-specific characteristics, in the form of the implementation of Sharia law and legal origin in a particular country, in the choice of sukuk type.
Design/methodology/approach
The firm profitability and firm leverages of sukuk issuer are used as the firm characteristics that can influence the choice of sukuk type between Mudharaba sukuk, Ijara sukuk and Murabaha sukuk. The research sample of 545 global sukuk issuances, obtained from the IIFS database, includes the issuance of Mudharaba sukuk, Ijara sukuk and Murabaha sukuk from ten sukuk issuer countries all over the world.
Findings
The research results show that the probability of choosing Mudharaba and Ijara sukuk is found in issuers sukuk with a high firm leverage, while the probability of choosing Murabaha sukuk is found in issuers sukuk with a high firm profitability. A three-way interaction moderation model is used in this research to explain that sukuk issuers in countries that implement Sharia law and adopt a legal origin common law system will have a higher choice of Mudharabah and Ijarah sukuk types if the firm’s leverage is high. If the firms’ profitability is high, then the sukuk issuer prefers Murabaha sukuk.
Research limitations/implications
The use of firm’s characteristic variables is based solely on trade-off theory and pecking order theory. Also, limitations on the implementation of Sharia law in countries that do not provide opportunities for countries that apply a mixed law system.
Practical implications
The role of Sharia law and common law legal origin is proven, through a three-way interaction model, to strengthen the interaction of the firm leverage and choice of Mudharaba sukuk.
Social implications
Legal certainty for Islamic financial institutions is created in the context of ease of investing in sukuk. Flexibility in the structure is also one of the factors that encourage the development of market acceptance of sukuk. The right structure of the sukuk can be used for specific target markets.
Originality/value
There has been no study carried out on a three-way interaction moderation model used to analyse the role of country-specific characteristics. The role of Sharia law and common law legal origin is proven, through a three-way interaction model, to strengthen the interaction of the firm leverage and choice of Mudharaba sukuk.
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Maha Khemakhem Jardak, Marwa Sallemi and Salah Ben Hamad
Remuneration policies may differ from country to country, and their effect on bank stability could be due to the legal framework. Therefore, this study aims to investigate how the…
Abstract
Purpose
Remuneration policies may differ from country to country, and their effect on bank stability could be due to the legal framework. Therefore, this study aims to investigate how the legal system impacts the relationship between CEO compensation and bank stability across countries.
Design/methodology/approach
To test the study hypotheses, the authors use panel data of 74 banks operating in ten OECD countries during the period 2009–2016 and apply the generalized moments method regression model to better remediate the endogeneity problem.
Findings
The findings confirm that a country’s banking regulations significantly affect its bank stability. Common law countries have less bank stability than civil law countries. This result can be interpreted by the fact that, in common-law countries, banks’ CEO are strongly protected by the law, so they allocate a large part of bank assets to risky loans to improve their variable remuneration.
Practical implications
The research can help policymakers understand bank stability in one country. Any legal reform would require prior knowledge of how risk-taking may arise in executive compensation.
Originality/value
The contribution is to explain the controversial effect of executive compensation on bank stability in the framework of legal theory. The authors argue that regulators should monitor compensation structures and that the country’s legal origin of law shapes the CEO compensation structure and is a determinant of bank stability. To the best of the authors’ knowledge, there are no studies exploring this field. So, this study tries to shed more light on the dark side of CEOs’ behavior when undertaking risky projects to maximize their remuneration.
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Dana L. Haggard and K. Stephen Haggard
This study provides insight into the proportion of the variation across countries in the desirable outcomes of freedom and peace that can be accounted for using a set of national…
Abstract
This study provides insight into the proportion of the variation across countries in the desirable outcomes of freedom and peace that can be accounted for using a set of national characteristics which are difficult, if not impossible, to change. The majority of prior studies in this area have utilized bivariate (correlational) analysis. While these studies have made important contributions to the field, they have not been able to disentangle the effects of other important national characteristics from the effect of culture on freedom and peace. Through our multivariate framework, we are able to shed light on the relative importance of these national characteristics in explaining the variation in freedom and peace across countries.
Jason D. DeBode, Dana L. Haggard and K. Stephen Haggard
The purpose of this paper is to investigate the influence of broad cultural dimensions, as well as those of religion and legal origin, on countries’ economic freedom, i.e., trade…
Abstract
Purpose
The purpose of this paper is to investigate the influence of broad cultural dimensions, as well as those of religion and legal origin, on countries’ economic freedom, i.e., trade freedom, investment freedom, business freedom, labor freedom, monetary freedom, as well as a composite measure of economic freedom.
Design/methodology/approach
Linear regression of publicly available data regarding economic freedom (Miller et al., 2018) on cultural dimensions (Hofstede, 2009), legal origin and religion (LaPorta et al., 1999) for 52 countries was performed to determine the impact of these factors on economic freedom.
Findings
Results indicated femininity was the cultural dimension associated with the most measures of economic freedom. Short-term-oriented cultures were predictive of greater business freedom, while more restrained cultures were associated with greater business and monetary freedoms. Higher individualism was predictive of greater monetary freedom. Catholicism positively predicted investment freedom and negatively predicted business freedom. French civil law negatively predicted labor freedom, while socialist legal origins positively predicted trade freedom, but negatively predicted business freedom.
Originality/value
This is the first study to examine the impacts of culture, law and religion on economic freedom. One practical implication of this research is that countries would be wise to emphasize more feminine aspects in their cultures, as these are associated with greater economic freedom. Even minor adjustments that move in the direction of cooperation and fair processes might help increase economic freedoms and the many benefits that stem from such freedoms.
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Ming Gao, Qiankun Gu, Shijun He and Dongmin Kong
Does the history of the bureaucratic system, along with the establishment of the Great Wall during the Ming and Qing dynasties (1368–1911), affect firm behavior across the…
Abstract
Purpose
Does the history of the bureaucratic system, along with the establishment of the Great Wall during the Ming and Qing dynasties (1368–1911), affect firm behavior across the borderlands of the Great Wall?
Design/methodology/approach
The Ming and Qing dynasties built a centralized administrative system in the borderlands on the south side of the Great Wall, in contrast to the “feudal lordship” system on the north side. Employing a regression discontinuity analysis framework with the Great Wall as a geographical discontinuity, we examine the long-run effects of the Great Wall on firms’ earnings management.
Findings
Using a large sample of nonlisted firms in the central core frontier region, we show that the earnings management of firms in the region south of the Great Wall is significantly curtailed compared with firms in the north of it, and this effect is more pronounced for non-SOEs. Our findings are robust to a battery of tests to account for alternative explanations.
Practical implications
Overall, by emphasizing the role of institutions, like legal system, shaped in history on firms’ earnings management, this study sheds new light on institutional determinants of firms’ behaviors in earnings information disclosure.
Originality/value
First, we enrich our understanding of the institutional determinants of firms’ financial reporting outcomes. Second, our findings shed new light on the long-term effects of historical ruling styles on modern corporate behavior.
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Ali İhsan Akgün and Serap Pelin Türkoğlu
This study aims to reveal to what extent successful European listed firms depend on their intellectual capital investment in achieving business success during the global financial…
Abstract
Purpose
This study aims to reveal to what extent successful European listed firms depend on their intellectual capital investment in achieving business success during the global financial crisis.
Design/methodology/approach
This study used value added intellectual coefficient (VAIC) methodology to measure the effect of intellectual capital on financial performance of business, which consist of 683 the sample listed firms. To examine the nexus between intellectual capital, legal origin and firm performance, estimated panel test and ordinary least squares regression model is used to data obtained from a sample of European countries.
Findings
The finding of this study suggests that there exists a positive relationship between intellectual capital and firm performance with return on assets (ROA) before the financial crisis, while firm performance with return on equity did not contribute to intellectual capital before and after the crisis period. Additionally, common law countries have a positive and statistically significant impact on firm performance with ROA for the before-crisis period, while code law countries have positively significant effect with VAIC on ROA.
Practical implications
The VAIC method has played a critical role in the management decision-making process to integrate the intellectual capital in the financial crisis period.
Originality/value
This study examines intellectual capital components such as human capital, structural capital and process capital efficiencies and firm performance in the legal origin context. The empirical evidence shows that there are significant impacts of legal origin on the nexus between intellectual capital and performance of listed firms during the global financial crisis.
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Chih-Pin Lin, Chi-Jui Huang, Hsin-Mei Lin and Cheng-Min Chuang
Country of origin has profound effects on consumer behavior; yet few studies have examined an antecedent of these effects: why some countries enjoy a positive image while others…
Abstract
Purpose
Country of origin has profound effects on consumer behavior; yet few studies have examined an antecedent of these effects: why some countries enjoy a positive image while others suffer a negative one. Developing an institutional theory of country image, the authors argue that weak legal institutions at the country level increase firm opportunistic behavior that expropriates consumers and decrease the product quality of local brands, thus decreasing the country’s image regarding its products and brands.
Design/methodology/approach
This study measures country image for products and brands using the number of valuable brands (i.e. brands included in the top 500 brands from 2008 to 2016) in a particular home country. Data concerning the rule of law in each country come from the World Bank, and data on the efficiency of countries’ judicial systems comes from Djankov et al. (2007). We also collect patent data from the US Patent and Trade Office, national culture from Hofstede Insights and GDP and GDP per capita from the World Bank as control variables. Panel Poisson regression, Tobit regression and truncated regression are used in the analyses.
Findings
Supporting the institutional theory of country image, both the rule of law and efficiency of the judicial systems show positive and significant effects on country image, even when economy size (GDP), degree of economic development (GDP per capita), level of technology and skill (patents) and culture are controlled.
Practical implications
To improve their country’s image and the brand value of local firms, policymakers should strive to strengthen legal institutions aimed at punishing firm opportunistic behavior in their countries.
Originality/value
Previous research on the country-of-origin effect has not yet appreciated the role of legal institutions in developing the construct of country image.
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This paper aims to investigate whether natural disasters enhance efficiency improvement, capital accumulation and technological progress. Further, this paper examines whether the…
Abstract
Purpose
This paper aims to investigate whether natural disasters enhance efficiency improvement, capital accumulation and technological progress. Further, this paper examines whether the influence of naturals disasters depends on the legal origin.
Design/methodology/approach
For this purpose, by using long-term panel data, this paper decomposes productivity growth measured by the growth of output per labor unit into three components of efficiency improvement, capital accumulation and technological progress.
Findings
After controlling for countries' specific unobservable characteristics and year-specific effects, the paper found that impacts of natural disasters vary according to specification. However, the natural disasters enhance capital accumulation and technological progress for non-French legal origin countries, while the disasters have no effect on them for French legal origin countries.
Originality/value
The role played by natural disasters on capital accumulation and Schumpeterian creative destruction depends on historical institutional conditions. Hence, it is important to consider the interaction between exogenous shock and institutions when examining economic growth.
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