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In this paper, the authors examine the relation between cross-listing and the noncompliance with the mandatory corporate social responsibility (CSR) expenditure regulation in India, the first country to legally mandate the CSR expenditure.

The authors apply panel logit and ordinary least square (OLS) regression models to examine the impact of cross-listing on the noncompliance with the mandatory CSR expenditure regulation because panel regression has lesser multicollinearity problems and has the benefit of controlling for individual or time heterogeneity mostly present in cross-section or time series data.

Using a sample of 1,027 listed Indian firms, the authors show that the cross-listed firms are more likely to comply with the mandatory CSR expenditure than non-cross-listed firms. The authors further show that this relation holds only for those firms which are exposed to higher agency problems, for firms affiliated to business groups and for firms operating in high litigation risk industries. Finally, the authors show that cross-listed firms complying with the mandatory CSR expenditure command more valuation premiums.

This study’s results suggest that the noncompliance of the Indian firms with the mandatory CSR expenditure regulation comes down once they cross-list their shares in the US or the UK since such firms have to bond to the stronger corporate governance standards of the listed country. Hence, the authors recommend that merely making the investment in CSR activities mandatory may not serve the purpose and the convergence in corporate governance as well as compliance with the CSR expenditure can be achieved through cross-listing in US and UK markets.

One, the authors analyze the effect of cross-listing on the likelihood and magnitude of noncompliance with the CSR mandate. Two, this study is based in India where CSR expenditure has been made mandatory under the Companies Act, 2013. Using CSR mandate as a natural experiment, the authors have access to a richer data set on CSR in terms of the actual expenditure made by the company on CSR activities and the mandatory amount to be spent in a particular year.

This paper investigates whether the audit fees of Chinese listed firms are associated with the share pledging practice of the firm’s controlling shareholders.

This study uses the audit pricing model to estimate the association between the share pledging of listed firms and audit fees. Cross-sectional analysis is conducted on a large sample of Chinese listed firms during the period 2004 to 2019. The authors further test the moderating effects of listing on the Main Board, state ownership and abnormal audit report lag on the association between share pledging and audit fees. The results remain robust to various endogeneity tests including two-stage least squares instrumental variable analysis, entropy balancing analysis and difference-in-difference analysis.

The study finds that audit fees are positively associated with the proportion of shares pledged by the listed firm’s controlling shareholder in China. The results also provide new evidence that the positive association between audit fees and the share pledging of controlling shareholders could be mitigated if the firm is listed on the Main Board and/or it is a state-owned enterprise. In contrast, pledged firms with abnormal audit report lag are found to have higher audit fees than their pledged counterparts without the excessively long audit delay.

Findings of this study have important practical implications to those charged with governance, as boards need to comprehensively understand the adverse consequences of share pledging when pursuing it as the firm’s major source of financing. The study also has policy implications for stock market regulators such as the China Securities Regulatory Commission in China. Regulators could consider developing a threshold-based share pledging disclosure and pledge ratio requirements based on factors such as a firm’s listing status and ownership structure.

This study provides new evidence on the audit-related consequences of share pledging in a significant capital market. Findings of this study also enrich the existing audit literature by introducing the share pledging activities of controlling shareholders into the audit pricing decision-making model.

This paper aims to investigate the moderating effect of sustainability reporting on the relationship between the independent variables of board diversity, and earnings management and the dependent variable of readability of financial statements.

The study panel data regression analysis involved 36 Kenyan-listed companies from 2016 to 2020.

Key findings were that increased board diversity was found to significantly improve the readability of financial statements. Discretionary earnings management was found to significantly reduce the readability of financial statements. Sustainability reporting was found to significantly increase the readability of financial statements, and it moderated the relationship between board diversity, earnings management and financial statements readability in Kenya.

The study sample of 36 non-financial listed in the Nairobi Securities Exchange was very small and was affected by the problem of thin trading; hence, caution should be adopted when interpreting the findings.

The Capital Markets Authorities (CMA) as a policymaker should enforce sustainability reporting by Kenyan listed firms as there is evidence that the reporting enhances the readability of financial statements. The Institute of Certified Public Accountants as a policymaker should closely monitor the published financial statements of firms for earnings management and punish the perpetrators, as there is empirical evidence that the practice reduces the readability of financial statements.

Sustainability reporting is successful as a moderating variable between readability of financial statements and determinants of readability of financial statements.

This study contributes to knowledge by studying sustainability reporting as a moderating variable between the independent variables of board diversity and earnings management and the dependent variable of readability of financial statements and measured sustainability reporting using a dummy variable for the period before and after the enactment and release of CMA code of 2016 on corporate governance that required sustainability reporting by Kenyan listed companies.

The purpose of this study is to examine the cost of the introduction of independent audit inspections in New Zealand.

The research is conducted using audit fee data from New Zealand and examines the overall impact of the reforms on the cost imposed on auditees.

The findings show that there was no general increase in audit fees but a significant increase in audit fees for small listed companies compared to audit fees for unlisted companies and large listed companies.

The practical implications of this study suggest that the introduction of independent inspections led to increased costs for some clients, particularly smaller listed companies, and that audit firms were able to pass on these costs to their clients. These results have important implications for policymakers and auditors alike.

This study provides new insights into the cost of the introduction of independent audit inspections, which have been the subject of ongoing criticisms and recommendations for improvement.

This study aims to investigate the relationship between political connections and the over-indebtedness of firms in the construction industry. Furthermore, this study explores the moderating effect of corporate governance mechanisms with monitoring intent on this relationship.

This study uses the data from China’s listed construction firms for the years 2010–2019 to run the fixed-effect regression. This study constructs the optimal capital structure mathematical model by following the trade-off approach.

The research results show that most of China’s listed construction firms are surprisingly over-indebted in the long run. This study affirms that political connections positively impact the over-indebtedness of China’s listed construction firms. However, corporate governance can alleviate the impact of political connections on the over-indebtedness of China’s listed construction firms.

There were limited studies to discuss the relationship between political connections and the over-indebtedness of construction firms, and no particular attention has been given to the moderating effect of corporate governance mechanisms on the relationship between political connections and over-indebtedness. Moreover, in calculating the over-indebtedness of China’s listed construction firms, this study considers the financial characteristics of China’s construction firms when building the mathematical model of optimal capital structure, which makes the calculation results of over-indebtedness closer to reality.

This study investigated how working capital management (WCM) influences the profitability of listed halal food and beverage companies.

The study utilized a sample of 56 listed halal food and beverage companies operating in Indonesia, Malaysia, Saudi Arabia, Pakistan and the United Arab Emirates (UAE). Unbalanced panel data were generated from the Bloomberg database between 2008 and 2021. Besides, the study employed the two-step system generalized method of moments (GMM) technique for the estimation, which can address the models' endogeneity, heteroskedasticity and autocorrelation problems. Also, feasible generalized least square (FGLS) regression was applied to check the robustness of the results.

The study revealed that the cash conversion cycle (CCC) and accounts receivable period (ARP) significantly reduced firm profitability. Also, the inventory conversion period (ICP) significantly reduced return on assets (ROA) but insignificantly influenced return on equity (ROE). However, the results showed that the accounts payable period (APP) significantly increased firm profitability. These findings are robust to the results obtained by applying FGLS regression.

The study utilized a sample of only the listed halal food and beverage firms that operate in Indonesia, Malaysia, Saudi Arabia, Pakistan and the United Arab Emirates (UAE).

The study suggests that the management of listed halal firms should adopt an aggressive policy in managing their working capital in order to enhance their financial performance. This could be attained by lowering CCC when ARP and ICP are reduced and APP is increased.

This study contributes to the literature by providing cross-country empirical evidence showing how working capital and its components affect the financial performance of firms that solely produce or buy and sell halal food and beverage products in five countries.

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.

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.

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.

The VAIC method has played a critical role in the management decision-making process to integrate the intellectual capital in the financial crisis period.

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.

The United Nations' sustainable development goals (SDGs) put together a global framework in an attempt to address environmental, social and governance (ESG) concerns. Measuring a company’s contribution to the SDGs relies heavily on ESG reporting. This paper aims to examine the impact of ESG reporting on the corporate profitability of listed companies in Thailand over the period of 2019–2021.

Using 147 listed firms in the ESG group, content analysis was used to quantify the ESG reporting (within 11 themes), while corporate profitability was measured by return on asset and return on equity. Descriptive analysis, correlation matrix and panel regression are used to analyze the data of this study.

Consistent with the legitimacy, stakeholder and signaling theories, the authors found a statistically significant and positive impact of ESG reporting on corporate profitability in Thailand.

The findings highlight the importance of incorporating ESG considerations into companies’ reporting and decision-making processes, as these can enhance firm profitability and performance, attract stakeholders, improve their competitive advantage and step toward sustainability.

This article analyses the recent inverse transition from goodwill impairment to goodwill amortisation implemented in Spain in 2016. The authors contribute to the existing literature by describing their differing impact over goodwill and impairment figures and testing the impact of goodwill on balances over stock prices.

First, using a database with all Spanish non-financial firms with positive goodwill on their balance sheets, the authors describe the impact of the regulatory change over goodwill and impairment figures. Second, focussing on listed firms only, the authors study the impact of financial reporting of goodwill and impairment on stock prices.

Average goodwill per company and the share of goodwill over total assets significantly reduced after 2016, but the results cannot be easily extrapolated to listed firms due to lack of data. When testing the impact of potentially inflated goodwill balances on prices, the authors find that investors kept overvaluing firms with inflated goodwill balances also with the amortisation method.

The lack of data for listed firms with goodwill in Spain makes it difficult to obtain statistically sound evidence, the results could be biased by the cultural traits of the country and related to the intensity of enforcement and monitoring.

This might suggest that the effects of the impairment method linger, so the authors conform to the interpretation that the systematic amortisation paired with a periodic impairment test may lead to accounting that better reflects the underlying economics of goodwill.

To the best of the authors' knowledge, there are no recent articles that analyse this new “turn-around” requiring again the systematic amortisation of goodwill.

This paper aims to analyze the effect of family control and influence dimension of the socioemotional wealth (SEW) on capital structure of large listed firms in the North African region.

The study uses panel data of the top 98 largest listed firms in the North African capital markets over the period from 2018 to 2022. The analysis is conducted employing random effects models.

Findings suggest that large listed firms in North African region rely on more use of equity rather than debt financing. Further, results show that family control and influence dimension of the SEW, has no significant impact on the capital structure of North African large listed firms. This implies that the financing behavior of large firms listed in the North African countries is driven by financial and rationale factors rather than non-economic considerations. Indeed, findings support assumptions of the pecking order theory.

This transnational study provides new insights into relevancy of socioemotional theory in explaining capital structure decisions within large family businesses in emerging markets. Findings have the potential to enhance analysts', investors' and practitioners' understanding of financing decisions by large listed firms in this region. This, in turn, can aid in conceiving adapted financing solutions.