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Article
Publication date: 3 July 2017

Orhan Akisik and Graham Gal

The purpose of this study is to empirically examine whether two major stakeholder groups – customers and employees – consider third party-reviewed corporate social…

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Abstract

Purpose

The purpose of this study is to empirically examine whether two major stakeholder groups – customers and employees – consider third party-reviewed corporate social responsibility (CSR) reports and assurance on the quality of internal controls as value determinant in their decisions, and how their decisions influence financial performance through the halo effect of these reports.

Design/methodology/approach

Using Compustat North America and Global Reporting Initiative data, the authors used first-order autoregressive models over the period from 2006 to 2012.

Findings

The results indicate that the impacts of customers and employees on financial performance are influenced by third party-reviewed CSR reports and effective internal control. Moreover, it is found that the third party-reviewed CSR reports and effective internal control enable the persistence of financial performance.

Social implications

The findings have implications for stakeholders in terms of third party-reviewed CSR reports and effective internal control. The findings are important due to the influence that these stakeholders (customers and employees) have on the financial performance of firms and the impact that CSR actions can have on society as a whole.

Originality/value

To the authors' knowledge, this is the first study that contributes to the literature by demonstrating that information about third party-reviewed CSR reports and internal control reviews may influence the perceptions of firms by two primary stakeholders – customers and employees.

Details

Sustainability Accounting, Management and Policy Journal, vol. 8 no. 3
Type: Research Article
ISSN: 2040-8021

Keywords

Article
Publication date: 21 October 2019

Orhan Akisik and Graham Gal

The purpose of this paper is to examine the relationship between integrated reports, external assurance and financial performance for North American firms between 2011 and 2016.

Abstract

Purpose

The purpose of this paper is to examine the relationship between integrated reports, external assurance and financial performance for North American firms between 2011 and 2016.

Design/methodology/approach

Corporate websites were examined for disclosures which included both financial and non-financial information. Compustat North America and Global Reporting Initiative (GRI) websites provided additional data for the analysis.

Findings

Using a panel data analysis, the results provide evidence that there is a significant positive association between integrated reports and multiple measures of financial performance. Moreover, this positive effect is enhanced when integrated reports are assured by accounting firms.

Research limitations/implications

There are relatively a small number of firms that do this kind of reporting. A major limitation of the study is the small sample size.

Practical implications

As stakeholders find information in integrated reports relevant, there needs to be standardization on their content and level of assurance. Standard setters and regulators should be involved in setting these standards and assurance guidelines.

Social implications

Although it is clear that there is a cost to firms which produce integrated reports, the benefits to society may outweigh these costs. This may go beyond the benefits to shareholders as they make investment decisions.

Originality/value

According to the knowledge of the authors, this is the first study that examines the impact of integrated reports and external assurance on financial performance for North American firms.

Details

Sustainability Accounting, Management and Policy Journal, vol. 11 no. 2
Type: Research Article
ISSN: 2040-8021

Keywords

Article
Publication date: 2 December 2019

Orhan Akisik and Mzamo P. Mangaliso

The purpose of this paper is to examine the relationships between International Financial Reporting Standards (IFRS), types of foreign direct investment (FDI) – greenfield…

Abstract

Purpose

The purpose of this paper is to examine the relationships between International Financial Reporting Standards (IFRS), types of foreign direct investment (FDI) – greenfield investments (GFIs) and mergers and acquisitions (M&As) – and economic growth in 49 African countries between 2003 and 2017.

Design/methodology/approach

In the study, panel data fixed effects and generalized method of moments estimation techniques are used in order to test the hypotheses.

Findings

Using country-level data obtained from the World Development Indicators, The United Nations Conference on Trade and Development and World Governance Indicators websites, the authors find that IFRS and the types of FDI are significantly related to economic growth. Moreover, our results provide evidence that the effect of GFIs and M&As on growth is influenced by IFRS positively.

Research limitations/implications

With a handful of exceptions, most African countries do not have active stock markets. Therefore, the authors were unable to determine the effect of capital markets on growth.

Practical implications

FDI has the potential to contribute to economic growth and quality of life. Our findings suggest that policymakers should create incentives for attracting FDI and effective enforcement of IFRS in order to unleash the benefits of FDI on their economies.

Originality/value

The study provides important insights into the effects of types of FDI on the economic growth of African countries and into the role that IFRS play on this relationship.

Details

Journal of Applied Accounting Research, vol. 21 no. 1
Type: Research Article
ISSN: 0967-5426

Keywords

Book part
Publication date: 3 September 2014

Orhan Akisik

This paper explores the relationship between foreign direct investments and financial reporting changes via financial development in 12 Latin American countries during the…

Abstract

Purpose

This paper explores the relationship between foreign direct investments and financial reporting changes via financial development in 12 Latin American countries during the period from 1997 to 2010.

Methodology/Approach

In order to control the possible endogeneity problem, the Generalized Method of Moments (GMM) estimation technique has been conducted using country-level panel data obtained from the World Development Indicators website.

Findings

The empirical analyses provide evidence that international accounting standards have a significant effect on foreign direct investments. However, financial development associated with such standards reduces this positive effect. This is an important finding, suggesting that investors are likely to prefer portfolio to direct investments in Latin American financial markets that require or permit the use of international accounting standards.

Research Implications

The conclusions that have been drawn from this study are important for investors, creditors, and regulators. Although international accounting standards appear to affect foreign investments, there could be a lack of adaptation of these standards to specific economic environments due to cultural, educational, and economic factors. Therefore, firms, regulators, professional organizations, and accounting firms should make necessary arrangements so that the benefits of using these standards increase their costs.

Originality/Value

The study contributes to the international accounting literature by examining the effects of international accounting standards and financial development on foreign direct investments in Latin America.

Article
Publication date: 20 September 2011

Orhan Akisik and Graham Gal

The purpose of this paper is to examine the relationship of sustainable development in businesses with corporate social responsibility (CSR) and accounting, in 53…

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Abstract

Purpose

The purpose of this paper is to examine the relationship of sustainable development in businesses with corporate social responsibility (CSR) and accounting, in 53 developed and emerging economies over the period 1997‐2008.

Design/methodology/approach

The authors test the relationship of sustainable development in businesses with CSR and accounting using ordinary least squares estimation technique for country‐level panel data.

Findings

The results of the analyses provide evidence that sustainable development is strongly related to CSR and accounting standards, even after controlling for a variety of macroeconomic variables such as inflation, foreign direct investment, and unemployment. Moreover, the authors find that sustainable development is strongly and positively associated with customer satisfaction and the availability of senior managers.

Practical implications

Conclusions that have been drawn are important for a large group of stakeholders such as investors, companies' managers, employees, customers, suppliers, governmental and private regulatory agencies, and the general public, indicating that socially responsible firms and good accounting standards are likely to contribute to sustainable development in businesses in developed and emerging countries.

Originality/value

To the best of the authors' knowledge, this is the first country‐level study of its kind that attempts to explore the association of sustainable development in businesses with CSR and accounting standards.

Details

International Journal of Accounting & Information Management, vol. 19 no. 3
Type: Research Article
ISSN: 1834-7649

Keywords

Book part
Publication date: 15 December 2011

Orhan Akisik

Purpose – The aim of this paper is to examine the relationship of the efficient management of shareholder value as the main objective of corporate governance systems with…

Abstract

Purpose – The aim of this paper is to examine the relationship of the efficient management of shareholder value as the main objective of corporate governance systems with stakeholder theory.

Design/Methodology – The study uses data from 29 emerging market economies from 1997 to 2006. In order to control possible endogeneity issue, generalized two-stage least squares (G2SLS) and generalized method of moments (GMM) estimation techniques were conducted using country-level panel data.

Findings – The results provide evidence that the efficient management of shareholder value is strongly associated with managers' credibility, social responsibility, employment, and customer satisfaction, suggesting that emerging market economies should consider the interests of stakeholders for the efficient management of shareholder value.

Originality/Value – This is the first study of its kind that attempts to explore the association of the efficient management of shareholder value with country-level determinants of stakeholder theory.

Research Limitations/Implications – The lack of sufficient data is a major problem in international studies. This study also has some limitations in this respect as some emerging economies have not been included in the sample.

Book part
Publication date: 1 January 2008

Orhan Akisik

Purpose: The purpose of this paper is to examine the relationship between the inflow of foreign direct investment (FDI) into emerging market economies and its determinants…

Abstract

Purpose: The purpose of this paper is to examine the relationship between the inflow of foreign direct investment (FDI) into emerging market economies and its determinants between 1997 and 2005 from a new perspective emphasizing the role of accounting standards and corporate governance.

Methodology: The study covers 27 emerging market and transition economies that are classified into three groups: Asian, Central and Eastern European, and Latin American. Considering the possible endogeneity in studies on corporate governance, Generalized Two-Stage Least Squares (G2SLS) and Generalized Method of Moments (GMM) estimation techniques are used in this study.

Findings: Results indicate that the adoption of high quality accounting standards and effective corporate governance lead to an increase in FDI. I conclude that, in order to attract more FDI, emerging market countries should improve the quality of financial reporting and corporate governance in addition to improving their macroeconomic indicators.

Originality: This is, to my knowledge, the first study that aims to explore the association of FDI with accounting standards and corporate governance.

Research limitations: Difficulty in obtaining data constitutes the major limitation in international accounting research, in general, and in this study, in particular. Therefore, some emerging market countries are necessarily excluded from the study.

Details

Corporate Governance in Less Developed and Emerging Economies
Type: Book
ISBN: 978-1-84855-252-4

Article
Publication date: 20 February 2009

Orhan Akisik and Ray Pfeiffer

This paper aims to examine the relation between the proportion of direct investment to US total – direct and portfolio – investment abroad and their country‐specific…

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Abstract

Purpose

This paper aims to examine the relation between the proportion of direct investment to US total – direct and portfolio – investment abroad and their country‐specific determinants in developed and developing countries between 1997 and 2005, emphasizing the role of high‐quality accounting standards and corporate governance.

Design/methodology/approach

The study covers 46 developed and emerging market countries that are classified into four groups: Advanced, Asian, Central and Eastern European and Latin American. In order to eliminate the adverse effects of possible outliers in some observations on regression results, fixed effect robust regression (RR) techniques were conducted, in addition to fixed effect ordinary least squares (OLS) estimation using panel data.

Findings

It was found that the proportion of direct investment to US total investment abroad is strongly and negatively related to both high‐quality accounting standards and effective corporate governance, even after controlling for a number of variables found in previous research to be important: inflation, stock market capitalization, per capita gross domestic product, openness of destination countries’ economies and tax rates.

Research limitations/implications

One major problem in international accounting research is the difficulty in obtaining of data. This problem was encountered in this study, too. Therefore, some emerging market countries are necessarily excluded from the sample.

Originality/value

The main focus is the contributions of accounting standards and corporate governance to explaining tradeoffs between US direct and portfolio investment in developed and developing countries. In this sense, this is – to the authors’ knowledge – the first study in this area.

Details

Review of Accounting and Finance, vol. 8 no. 1
Type: Research Article
ISSN: 1475-7702

Keywords

Content available
Book part
Publication date: 3 September 2014

Abstract

Details

Accounting in Latin America
Type: Book
ISBN: 978-1-78441-067-4

Content available
Book part
Publication date: 1 January 2008

Abstract

Details

Corporate Governance in Less Developed and Emerging Economies
Type: Book
ISBN: 978-1-84855-252-4

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