Search results

This study examines whether and how the legal origin of foreign institutional investors (FIIs) impacts corporate investment efficiency.

The study employs a large panel dataset of firms from 32 non-USA countries from 2005 to 2018. Financial and institutional ownership data are obtained from the COMPUSTAT Global and Public Ownership databases in S&P Capital IQ, respectively. The study employed ordinary least squares (OLS) regression with year and firm fixed effects. In addition, two-stage least squares with instrumental variable regression (2SLS-IV) and propensity score matching (PSM) approaches were employed to address the potential endogeneity.

The findings of this study suggest that common- and civil-law FIIs differ in their monitoring capabilities to promote investment efficiency. The authors find evidence that increased equity ownership by common-law FIIs, not civil-law investors, strengthens the investment-Q sensitivity, resulting in higher investment efficiency. Consistent with the monitoring and information channel, the results further indicate that the positive impact of common-law FIIs on investment efficiency is stronger in host environments susceptible to agency conflicts and information asymmetry.

This study offers novel evidence on the heterogeneous monitoring role of FIIs with regard to their home countries' legal origins and their impact on investment efficiency in an international context.

This paper aims to empirically investigate the moderating role of corporate governance (CG) in the capital structure-performance relationship.

The analysis is based on top Business Today-500 companies and covers a time span of 10 years. The fixed effect panel regression model is used to examine the impact of CG mechanisms on the relationship between capital structure and firm performance.

The core findings of the study indicate significant positive moderating role of board independence, board size and family ownership on the relationship between leverage and performance.

The results enable the managers of Indian firms to comprehend the significance of CG framework while taking financing decisions. The findings encourage managers to raise debt funds in those firms that adhere to good governance norms.

Unlike extant studies that emphasize on the moderating impact of single CG variable in leverage-performance relationship, the current work comprehensively examines the role of many CG factors that moderate the relationship between capital structure and firm performance. To the best of the authors’ knowledge, the present study is the first of its kind with respect to India.

Public listing of small and medium enterprises (SMEs) stimulates unremitting transformations into their corporate governance (CG) practices. These transformations in CG are likely to impact the financial performance (FP). The current study examines how individual corporate CG mechanisms and their mutual interactions (configurational approach) stimulate the FP of listed SMEs. The study selects promoters’ ownership (PO), the board (B-INX) and information disclosures (DISC) as individual CG mechanisms. In addition, market competition (COMP) is considered a form of external governance/regulation.

The study uses five years of panel data (2018–2022) of 80 SMEs listed on the Bombay Stock Exchange’s (BSE) SME listing platform in India. Panel data fixed effects and cluster robust standard errors estimated. In addition to the impact of individual CG mechanisms, their mutual interactions (configurational approach) are tested using moderated hierarchical regression and confirmed by slope tests.

The results signify the ineffectiveness of individual CG mechanisms when acting in silos. However, their mutual interactions drive the FP. A hierarchy of results is obtained. PO is the dominant form of internal CG, negatively influencing the relevance of B-INX and DISC. B-INX tends to adhere to good governance by positively moderating the impact of DISC on FP. Lastly, COMP acts as external governance that dominates the ownership effects. Findings reveal that the interactions among individual CG mechanisms are essential to the FP of listed SMEs. Such interactions adjust the agency theory dynamics of CG in these firms.

The study takes a holistic approach to investigate the agency theory dynamics via the mutual interactions among multiple CG forms. It highlights how the presence of a dominant form of CG can adjust the financial effect of others, thereby adjusting agency theory dynamics.

These results hold practical significance for SMEs in multiple ways. SMEs should embrace configurational approach to comprehend their agency dynamics. The configurational approach of CG mechanisms is the way forward for SMEs, which are known to be financially constrained. In other words, the fact that the resiliency of SMEs is very often questioned calls for the configurational approach, where different CG mechanisms coexist to drive FP.

The study is by far the first of its kind to investigate the CG of listed SMEs against the backdrop of the configurational approach. The findings will benefit industry practitioners, academics and regulatory bodies to visualize the governance practices through the lenses of configurational approach.

This paper aims to critically evaluate the impact of empowering leadership on safety behavior and safety climate during safety monitoring at a nuclear power plant (NPP) in the United Arab Emirates (UAE).

Data were collected using questionnaires filled out by 500 participants from the UAE nuclear sector. The relationships among the variables were analyzed using structural equation modeling.

The results indicated that empowering leadership has a positive impact on safety behavior, and a positive safety climate leads to increased levels of safety behavior (compliance and participation). The results also showed that safety climate partially mediates the relationship between empowering leadership and safety behavior.

This study contributes to the existing knowledge regarding empowering leadership, safety monitoring, behavior and climate. Because limited information is available on this topic, this study extends the research on the relationship between empowering leadership and safety research at an NPP. Specifically, it outlines that safety monitoring partially mediates the relationship between empowering leadership and safety behavior. This research enables NPPs worldwide to incorporate empowering leadership to enhance safety monitoring and ensure better safety behavior and climate.

The purpose of this study was to examine the moderating role of institutional ownership on the relationship between board gender diversity and earnings management (EM) among listed firms in East African Community (EAC) partner states.

The study used a sample of 71 firms listed in the EAC partner states over 2011–2020. Data were handpicked from the individual firm's audited annual financial reports. Based on the results of the Hausman test, the study used the results of the fixed-effect regression model to test the hypotheses. To test the robustness of the results, the study employed an alternative measure of EM and two additional econometric techniques, including the pooled ordinary least squares (OLS) and the system generalized method of moments (GMM).

The empirical findings revealed that female directors improve the board's effectiveness in monitoring managerial roles. Specifically, the results showed a significantly negative relationship between the proportion of women in the corporate board and EM (as measured by discretionary accruals (DAs)). The findings further revealed an inverse relationship between the proportion of institutional ownership and EM. Finally, the results further demonstrated that institutional ownership enhances the role of board gender diversity in mitigating EM among listed firms in the EAC.

The findings of this study may be useful to managers, investors and regulators in assessing the role of institutional ownership and women's participation on corporate boards as a strategy for alleviating unethical manipulation of earnings.

The findings of this study contribute to the growing concern on gender inequality, especially the marginalization of women from the paid labor force and decision-making. The findings highlight the importance of having more women in the corporate board since this may help in mitigating corporate fraud. Similarly, the findings highlight the importance of institutional ownership as a corporate governance (CG) tool.

Previous studies have reported mixed empirical results on whether board gender diversity mitigates EM. To the best of the author's knowledge, this is the first paper to fill the existing gap by exploring whether institutional ownership moderates the relationship between board gender diversity and EM among listed firms in the EAC.

This paper examines how board structure influences real earnings management and the interaction effect of CEO narcissism on board structure-real earnings management relationship.

The authors used panel data derived from secondary sources from publicly listed firms in Kenya during 2002–2017. Hierarchical regression analysis was used to test the hypotheses.

The results indicate that board independence, board tenure and size have significant negative effect on real earnings management, while CEO duality positively affects real earnings management. Further, the interaction results show that CEO narcissism moderates the relationship between CEO duality and real earnings management.

The results suggest that real earnings management reduces when boards are independent, large and comprising of long-tenured members. However, when the CEO plays dual role of a chairman, real earnings management increases. The authors also find that when CEOs are narcissists, the monitoring role of the board is compromised.

The study adds value to the understanding of how board structure and CEO narcissism influence the monitoring role of the board among firms listed at Nairobi Securities Exchange.

The authors empirically investigate the association between acquisition, ownership structure and accrual earnings management (AEM) on real earnings management (REM) using Gulf Cooperation Council (GCC)-listed firms' context.

The authors' sample consists of 1,892 firm-year observations for the period from 2007–2017, and the authors adopt a panel data approach in investigating the interrelationships in this study. The authors employ different econometrics approach to test the authors' hypotheses.

The findings reveal that acquiring companies engage more in AEM if compared to REM. In terms of ownership structure, institutional ownership and state ownership mitigate the engagement in REM, whereas foreign ownership is found to be an ineffective mechanism in reducing engagement in REM. The authors report similar findings on ownership structure for AEM. The authors also find that the GCC firms engage more in REM when the firms engage in AEM, suggesting a complementary relation between these two earnings management techniques. These findings are robust after controlling for different aspects including any endogeneity issue in the authors' models.

The authors' research highlights the importance of understanding REM and AEM dynamics in GCC context. Also, the authors' findings on ownership structure suggest that GCC-listed firms can gain from institutional and state ownership which restricts earnings management, improving firm transparency and subsequently impacting firm performance.

The effects of ownership concentration on firm performance usually considers two conflicting perspectives: monitoring and expropriation hypotheses. Past studies have produced mix findings. This study aims to shed light on this relationship by focusing on a specific measure of firm performance, firm growth. The moderating effect of industry growth in the aforementioned relationship is also considered, which advances knowledge on the role of moderators.

This study resorts to data from a sample of 21,476 Portuguese firms, which is examined using hierarchical linear modelling. This approach is adequate because the data has a hierarchical structure: the firms are nested within industries.

The results show that equity ownership concentration has a positive effect on firms’ growth and that industry growth amplifies this relationship. Ownership concentration can spur effective monitoring, thereby alleviating principal–agent conflicts of interest and speeding up decision-making, enabling timely competitive actions that promote growth.

The research conceives ownership structure in two groups. However, equity ownership concentration often acquires more complex shapes. In addition, the data used is from a single country.

The results show that firms pursuing growing strategies and operating in growing industries benefit from equity concentration.

Different from past studies, this study focuses on firm growth performance and considers the moderating effect of industry growth.

This study aims to investigate limited partners’ (LPs) influence on venture capital (VC) fund returns.

We merge data from Preqin and SDC’s VentureXpert spanning from 1993 to 2014 and conduct multiple regression analysis to examine the influence of LPs on VC fund performance. Additionally, we conduct three distinct robustness tests to verify the credibility of our findings.

Our empirical analysis demonstrates that newbie LPs consistently exert a significant positive influence on VC fund returns.

VC and LP data is self-reported, and there is no comprehensive dataset as some LPs prefer to maintain anonymity.

Extant literature on LPs’ contribution to VC fund performance is limited. The general assumption is that the role of LPs in VC fund performance is confined to funding. We introduce a new variable, LP track record, as a proxy for LP experience to examine if this variable influences VC performance.

This study provides new insights into the relationship between the heterogeneity of institutional investors (IIs) and corporate tax avoidance (CTA). It also investigates whether family ownership moderates this relationship.

Based on a sample of 200 French-listed firms from 2008 to 2017, we use the generalized method of moment (GMM) estimator proposed by Arellano and Bover (1995) and developed by Blundell and Bond (1998) to address endogeneity and omitted variable concerns.

The results show that passive IIs are associated with an increase in the level of tax avoidance. However, active ones significantly decrease the levels of tax avoidance practices. Moreover, we show that institutional activism is not sufficient to control managerial actions, particularly in the context of controlled family businesses. The results suggest that families may expropriate the rights of minority shareholders through a controlling coalition with passive IIs.

This study has several practical implications. First, the results are useful for policymakers who should constrain passive IIs to provide only one service (asset management). Second, this study may sensitize family owners to the need to cooperate with active IIs that are effective in monitoring the firm. In particular, families should be willing to sacrifice some of their socioemotional wealth to promote a balanced ownership structure, which is important for responsible and effective corporate governance.

This paper extends previous research by investigating the heterogeneity of IIs in terms of horizon, ownership and control. In addition, this paper sheds a new light on how family firms behave regarding tax avoidance practices in the presence of active and passive IIs.