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Article
Publication date: 5 January 2023

Mehdi Mili and Yusuf Alaali

The purpose of this paper is to examine to which extent ownership and board structure improve financial institutions’ credit ratings.

Abstract

Purpose

The purpose of this paper is to examine to which extent ownership and board structure improve financial institutions’ credit ratings.

Design/methodology/approach

Ordered Probit regression models were used to examine the association between corporate governance attributes and banks’ credit ratings. The sample consists of 97 publicly traded financial institutions on Gulf Cooperation Council (GCC) stock exchange markets and cover the period 2010–2019. All GCC countries were considered in this study which are United Arab Emirates, Saudi Arabia, Bahrain, Oman, Kuwait and Qatar.

Findings

The results show that banks’ credit ratings are positively associated with the size of the board of directors and with the number of female directors serving in the board of directors. And it is negatively associated with the frequency of board meetings. Furthermore, this study finds evidence that nonbank financial institutions’ credit ratings are positively associated with CEO duality and with frequency of board meetings. Also, this study shows that their credit ratings are negatively associated with the ownership percentage held by the major five shareholders and with the number of board members serving in the board of directors.

Originality/value

Unlike previous research, this study focuses on the effect of the role of two different corporate governance dimensions, namely, ownership and board structure on the rating of financial institutions. This paper contributes to the extant literature in various ways. It bridges the gap of this topic in the GCC region. And, unlike previous research, this study focused on the financial sector and divided the sample into banks and other financial institutions to examine both subsamples separately. Also, this study introduced new ownership and board structure variables for the purpose of investigating the impact of corporate governance on financial institutions’ credit ratings such as the presence of women in the board of directors.

Details

Corporate Governance: The International Journal of Business in Society, vol. 23 no. 4
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 31 May 2023

Mehdi Mili and Ahmed Bouteska

This paper examines and forecasts correlations between cryptocurrencies and major fiat currencies using Generalized Autoregressive Score (GAS) time-varying copulas. The authors…

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Abstract

Purpose

This paper examines and forecasts correlations between cryptocurrencies and major fiat currencies using Generalized Autoregressive Score (GAS) time-varying copulas. The authors examine to which extent the multivariate GAS method captures the volatility persistence and the nonlinear interaction effects between cryptocurrencies and major fiat currencies.

Design/methodology/approach

The authors model tail dependence between conventional currencies and Bitcoin utilizing a Glosten-Jagannathan-Runkle Generalized Autoregressive Conditional Heteroscedastic model (GJR-GARCH)-GAS copula specification, which allows detecting the leptokurtic feature and clustering effects of currency returns distribution.

Findings

The authors' results show evidence of multiple tail dependence regimes, implying the unsuitability of applying static models to entirely describe the extreme dependence between Bitcoin and fiat currencies. Compared to the most common constant copulas, the authors find that the multivariate GAS copulas better forecast the volatility and dependency between cryptocurrencies and foreign exchange markets. Furthermore, based on the value-at-risk (VaR) and expected shortfall (ES) analyses, the authors show that the multivariate GAS models produce accurate risk measures by adding cryptocurrencies to a portfolio of fiat currencies.

Originality/value

This paper has two main contributions to the existing literature on cryptocurrencies. First, the authors empirically examine the tail dependence structure between common conventional currencies and bitcoin using GJR-GARCH GAS copulas which consider the leptokurtic feature and clustering effects of currency returns distribution. Second, by modeling VaR and ES, the authors test the implication of using time-varying models on the performance of currency portfolios, including cryptocurrencies.

Details

The Journal of Risk Finance, vol. 24 no. 4
Type: Research Article
ISSN: 1526-5943

Keywords

Article
Publication date: 10 January 2023

Mehdi Mili, Asma Yahiya Al Amoodi and Hana Bawazir

This study aims to investigate the asymmetric impact of daily announcements regarding COVID-19 on investor sentiment in the stock market.

Abstract

Purpose

This study aims to investigate the asymmetric impact of daily announcements regarding COVID-19 on investor sentiment in the stock market.

Design/methodology/approach

This study uses a Non-Linear Autoregressive Distribution Lag (NARDL) model that relies on positive and negative partial sum decompositions of the Coronavirus indicators. Five investor sentiments had been used and the analysis is conducted on the full sample period from 24th February 2020 to 25th March 2021.

Findings

The results show that new cases have a greater impact on investor sentiment compared to daily announcements of new deaths related to COVID-19. In addition to revealing a significant impact of new COVID-19 new cases and new death announcements on a daily basis on investor sentiment over the short- and long-term, this paper also highlights the nonlinearity and asymmetry of this relationship in the short and long run. Investors' sentiments are more affected by negative news regarding Covid 19 than positive news.

Originality/value

Financial markets have been severely affected by COVID-19 pandemic. This study is the first to measure the extent of reaction of investors to positive and negative announcements of COVID-19. Interestingly, this study examines the asymmetric effect of daily announcements on new cases and new deaths by COVID-19 on investor sentiments and derive many implications for portfolio managers.

Details

Review of Behavioral Finance, vol. 16 no. 1
Type: Research Article
ISSN: 1940-5979

Keywords

Article
Publication date: 31 July 2019

Mehdi Mili, Anis Khayati and Amira Khouaja

Motivated by agency theory, this paper aims to explore the impact of bank diversification and bank independency on the likelihood of bank failure. The effects of corporate…

Abstract

Purpose

Motivated by agency theory, this paper aims to explore the impact of bank diversification and bank independency on the likelihood of bank failure. The effects of corporate governance (ownership and board structures) are also examined.

Design/methodology/approach

Logistic regressions are used to explore the role of corporate governance on bank failure risk. This sample covers 608 banks from eight European countries.

Findings

The results suggest that the well-documented finding that diversification and bank independency may increase bank failure risk does not persist under strong corporate governance mechanism. Thus, to reduce the bank failure risk, diversification should be strongly monitored by the management to avoid excessive risk-taking by shareholders.

Originality/value

The approach used in this study differs from that used in previous studies from certain perspectives. First, unlike most previous studies that focused on the relationship between bank performance and bank diversification, the impact of income and asset diversification on bank failure is tested. Also, the impact of a combined effect of diversification and corporate governance variables on bank failure is tested. This allows the control for different ownership and board variables as factors that would potentially affect the likelihood of bank failure.

Details

Review of Accounting and Finance, vol. 18 no. 3
Type: Research Article
ISSN: 1475-7702

Keywords

Article
Publication date: 11 September 2017

Mili Mehdi, Jean-Michel Sahut and Frédéric Teulon

The purpose of this paper is to study the impact of the ownership structure and board governance on dividend policy in emerging markets. The authors test whether the effects of…

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Abstract

Purpose

The purpose of this paper is to study the impact of the ownership structure and board governance on dividend policy in emerging markets. The authors test whether the effects of corporate governance on dividend policy change during crisis periods.

Design/methodology/approach

The authors use a panel regression approach on a sample of 362 non-financial listed firms from East Asian and Gulf Cooperation Council countries.

Findings

The results provide evidence that dividend payout decision increases with institutional ownership and board activity. The authors find that in emerging countries, dividend policy of firms with CEO duality and without CEO duality does not depend on the same set of factors. It is shown that the ownership concentration and board independency affect significantly the dividend policy of firms with COE duality. Finally, the results show that during the recent financial crisis, dividend decision is inversely related to CEO duality, board size and the frequency of board meetings.

Research limitations/implications

Other variables of corporate governance and ownership structure can be studied more in depth. The results can be directly compared to an alternative sample of developed countries.

Practical implications

This study is of particular interest for managers and shareholders when adjusting their strategies of dividend payout during financial crisis.

Originality/value

The authors employ a specific approach to investigate the impact of CEO duality on dividend policy in East Asian countries. An important aspect of the results is that that for firms with CEO who is also the chairperson, the dividend decision is negatively related to ownership concentration and board independence. This research contributes to the understanding of dividend policy by testing whether the impact of corporate governance on dividend policy changes during crisis periods in emerging countries. To the best of the authors’ knowledge, this work is the first to directly address this issue from this perspective.

Details

Journal of Applied Accounting Research, vol. 18 no. 3
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 18 April 2017

Mehdi Mili and Sami Abid

This paper aims to examine risk-taking in Islamic banks by exploring moral hazard and owner/manager agency problems simultaneously.

Abstract

Purpose

This paper aims to examine risk-taking in Islamic banks by exploring moral hazard and owner/manager agency problems simultaneously.

Design/methodology/approach

The authors propose to estimate a model of bank risk-taking that includes both franchise value and ownership structure as explanatory factors of bank risk.

Findings

The results show that franchise value is an important determinant of Islamic bank risk-taking. Banks with high franchise values are less likely to take risks than banks with low franchise value. In contrast, outside block holders have, at best, limited influences on bank risk-taking.

Originality/value

This paper conducts the first empirical examination of the relationship between managerial risk preferences and Islamic banks ownership. The authors examine simultaneously the effect of franchise value and owner/manager problem on Islamic bank risk taking behavior. They consider separately the impact on total risk, systematic risk and bank specific risk.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 10 no. 1
Type: Research Article
ISSN: 1753-8394

Keywords

Article
Publication date: 8 August 2016

Mehdi Mili and Sami Abid

The purpose of this paper is to examine the relationship between corporate governance (CG) and firms’ bond recovery rates (RRs). The authors hypothesize that governance features…

Abstract

Purpose

The purpose of this paper is to examine the relationship between corporate governance (CG) and firms’ bond recovery rates (RRs). The authors hypothesize that governance features impact RRs by controlling agency costs that result from conflicts between bondholders and shareholders. The authors also test the relationship between CG and RRs during the last crisis.

Design/methodology/approach

The authors use a generalized method of moments regression model to test the relationship between CG and firms’ bond RRs. The authors employ a direct measure of recoveries rates from Moody’s ultimate recovery database covering the period from 2003 to 2012. Both firm-level CG and country-level variables are used to examine the determinants of corporate bonds RRs.

Findings

The results support a significant impact of CG mechanisms on bond RRs mainly during crisis period. The authors find that firms operating with CEO-Duality decrease their bond RRs during financial crisis. This implies wealth transfers from bondholders to shareholders and provides one explanation why some firms operate with weak governance.

Originality/value

This paper provides the first direct evidence that corporate bond RRs are directly related to CG mechanisms. The authors combine firm-level CG and country-level variables to examine the determinants of corporate bonds RRs. Earlier studies focussed on financial firm-level data and macro-economic variables. The authors also test the impact of board composition and ownership structure on bond recoveries.

Details

Managerial Finance, vol. 42 no. 8
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 5 September 2018

Elisa Figueiredo and Teresa Paiva

The purpose of this paper is to characterize the senior entrepreneurship context, as a solution for an unemployed qualified segment between 45 and 60 years of age, in the Northern…

Abstract

Purpose

The purpose of this paper is to characterize the senior entrepreneurship context, as a solution for an unemployed qualified segment between 45 and 60 years of age, in the Northern region of Portugal, from a national and European perspective, associated to the growth trend of qualified senior unemployment in the region, based on a statistical angle and from the point of view of the motivations to become self-employed with a business creation project.

Design/methodology/approach

This empirical study is a cross-sectional study of mixed nature, that reconciles qualitative and quantitative analysis. A questionnaire was made and applied to a sample of 1,000 individuals and seven semi-structured interviews which four focus groups were carried out.

Findings

Findings allow us to conclude that the studied segment, skilled unemployed individuals between the ages of 45 and 60, is a growing segment that tends to evolve into long-term unemployment and underlines a potential reluctant entrepreneurship by necessity, i.e. a reduced motivational content of these unemployed people for the creation of their own job. The authors can conclude, in the Portuguese case, that government policies relating to taxes and bureaucracy are considered as unfavorable conditions or potentially inhibitors of senior entrepreneurship. Lastly, the authors underline the clear absence of specific support programs and measures for the promotion of entrepreneurship among the qualified senior unemployed and the authors propose an ecosystem creation regarding the specifics of the target group of the study.

Practical implications

The study identifies a set of actions and/or orientations that could be relevant and taken into account by the decision makers.

Originality/value

The main contribution of this paper is the better knowledge of the context and motivations for qualified senior entrepreneurship, as well as the associated personal, economic and social barriers; and the specific suggestions provided to policy makers in order to improve the context of the senior entrepreneurship.

Details

Journal of Small Business and Enterprise Development, vol. 26 no. 3
Type: Research Article
ISSN: 1462-6004

Keywords

Article
Publication date: 17 October 2018

Mehdi Mosharaf-Dehkordi and Hamid Reza Ghafouri

The purpose of this paper is to present detailed algorithms for simulation of individual and group control of production wells in hydrocarbon reservoirs which are implemented in a…

Abstract

Purpose

The purpose of this paper is to present detailed algorithms for simulation of individual and group control of production wells in hydrocarbon reservoirs which are implemented in a finite volume-based reservoir simulator.

Design/methodology/approach

The algorithm for individual control is described for the multi-lateral multi-connection ones based on the multi-segment model considering cross-flow. Moreover, a general group control algorithm is proposed which can be coupled with any well model that can handle a constraint and returns the flow rates. The performance of oil production process based on the group control criteria is investigated and compared for various cases.

Findings

The proposed algorithm for group control of production wells is a non-optimization iterative scheme converging within a few number of iterations. The numerical results of many computer runs indicate that the nominal power of the production wells, in general, is the best group control criterion for the proposed algorithm. The production well group control with a proper criterion can generally improve the oil recovery process at negligible computational costs when compared with individual control of production wells.

Research/limitations/implications

Although the group control algorithm is implemented for both production and injection wells in the developed simulator, the numerical algorithm is here described only for production wells to provide more details.

Practical/implications

The proposed algorithm can be coupled with any well model providing the fluid flow rates and can be efficiently used for group control of production wells. In addition, the calculated flow rates of the production wells based on the group control algorithm can be used as candidate solutions for the optimizer in the simulation-optimization models. It may reduce the total number of iterations and consequently the computational cost of the simulation-optimization models for the well control problem.

Originality/value

A complete and detailed description of ingredients of an efficient well group control algorithm for the hydrocarbon reservoir is presented. Five group control criteria are extracted from the physical, geometrical and operating conditions of the wells/reservoir. These are the target rate, weighted potential, ultimate rate and introduced nominal power of the production wells. The performance of the group control of production wells with different group control criteria is compared in three different oil production scenarios from a black-oil and highly heterogeneous reservoir.

Details

International Journal of Numerical Methods for Heat & Fluid Flow, vol. 28 no. 11
Type: Research Article
ISSN: 0961-5539

Keywords

Expert briefing
Publication date: 25 February 2015

In November, the court had sentenced Ayari in absentia to three years in prison for defaming army officers and senior officials of the defence ministry. The penalty was reduced to…

Details

DOI: 10.1108/OXAN-DB197914

ISSN: 2633-304X

Keywords

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