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Article
Publication date: 21 January 2022

Mubashir Ali Khan, Josephine Tan Hwang Yau, Asri Marsidi and Zeeshan Ahmed

This study aims to examine the effect of corporate risk disclosure on investment efficiency. This study also seeks to contribute to existing literature of corporate risk…

Abstract

Purpose

This study aims to examine the effect of corporate risk disclosure on investment efficiency. This study also seeks to contribute to existing literature of corporate risk disclosure by investigating voluntary and mandatory risk disclosure and its effect on the investment efficiency.

Design/methodology/approach

This study used two measures of corporate risk disclosure, level and quantity of corporate risk disclosure. A content analysis approach is adopted for non-financial Malaysian firms over the period 2010–2018.

Findings

The empirical results show that level of corporate risk disclosure leads toward efficient investment, whereas quantity of corporate risk disclosure causes inefficient investment when firms disclose more voluntary risks. Further, categorizing corporate risk disclosure into mandatory and voluntary risk disclosure, this study finds that voluntary risk disclosure tends to have higher investment inefficiency, while no evidence was found for mandatory risk disclosure.

Originality/value

This paper contributes to narrow stream of research investigating corporate risk disclosure through level and quantity contributing to the understanding of the level and quantity of risk disclosure in determining organizational investment efficiency.

Details

Journal of Financial Reporting and Accounting, vol. 21 no. 5
Type: Research Article
ISSN: 1985-2517

Keywords

Article
Publication date: 9 January 2024

Khairul Anuar Kamarudin, Nor Hazwani Hassan and Wan Adibah Wan Ismail

This study examines the non-linear effect of board independence on the investment efficiency of listed firms worldwide. This study further tests whether the COVID-19 pandemic…

Abstract

Purpose

This study examines the non-linear effect of board independence on the investment efficiency of listed firms worldwide. This study further tests whether the COVID-19 pandemic, industry competition and economic development influence the relationship between board independence and investment efficiency.

Design/methodology/approach

The data are retrieved from the Thomson Reuters (Refinitiv) database and include international data from 33 countries, comprising 21,363 firm-year observations. The authors' regression analyses include firm-specific variables as controls that may impact investment efficiency. The authors also perform various robustness tests including, alternative measures of investment efficiency, weighted least squares regression, quantile regression and endogeneity issues.

Findings

The results reveal a non-linear relationship between board independence and investment efficiency. Specifically, the relationship follows a U-shaped pattern, indicating that the negative impact of board independence on investment efficiency becomes positive after it reaches its optimal point, thus supporting optimal board structure theory. Interestingly, the authors find no significant evidence of board independence’s effect on investment efficiency during the pandemic. In contrast, the relationship between board independence and investment efficiency is significant only during the non-pandemic period. Furthermore, the authors discover evidence of a U-shaped relationship in both emerging and developed markets, as well as in industries with high and low competition.

Research limitations/implications

The authors' study discovers new evidence on the non-linear impact of board independence on investment efficiency, which has not been explored previously in existing research.

Practical implications

This study has practical implications for investors by emphasising the importance of corporate governance and the appointment of independent directors. Investors should consider the findings of this study when making decisions related to corporate governance, as they can impact a firm's investment efficiency.

Originality/value

Despite a considerable body of literature exploring the link between corporate governance and investment effectiveness, there is a dearth of research on the non-linear effects of board independence. Furthermore, the effects of the COVID-19 pandemic, industry competition and economic development remain unexplored.

Details

Managerial Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0307-4358

Keywords

Open Access
Article
Publication date: 19 December 2022

Rebecca Maughan

The purpose of this paper is to provide a theoretically informed analysis of the evolution of environmental management accounting (EMA) and social and environmental reporting…

4905

Abstract

Purpose

The purpose of this paper is to provide a theoretically informed analysis of the evolution of environmental management accounting (EMA) and social and environmental reporting (SER), and the accompanying development of a sustainability programme, in a large family-owned, unlisted corporation.

Design/methodology/approach

A longitudinal case study based on semi-structured interviews and documentary data was conducted. The main periods of fieldwork were carried out in 2007 and between 2010 and 2012. Sustainability reports were collected until 2019 when SER appeared to cease. The case analysis draws on the concepts of organisational identity (OI) and internal legitimacy (IL) to examine the decision-making and actions of a range of key organisational actors as they engage with EMA and SER.

Findings

The study demonstrates that a gap between an organisation’s identity claims (“who we are”) and its enacted identity (“what we do”) can enable the adoption of constitutive, performative and representational EMA and SER. It illuminates the nature of the role of key actors and organisational dynamics, in the form of OI and IL, in adapting these practices. It also demonstrates that, in giving meaning to the concept of sustainability, organisational actors can draw on their organisation’s identity and construct the comprehensibility of an organisational sustainability programme.

Research limitations/implications

More empirical work is needed to examine the applicability of OI and IL to other settings. It would also be beneficial to examine the potential for OI work to allow organisations to change and reinvent themselves in response to the evermore pressing environmental crisis and the role, if any, of EMA in this process.

Originality/value

The study enriches our understanding of why and how EMA and SER evolve by demonstrating that paying attention to OI and IL can provide further insight into the decision-making and actions of organisational members as they recognise, evaluate, support and cease these practices.

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