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This study investigates if the widely held predictors of corporate leverage exhibit predictive consistency through times and across countries amidst country heterogeneities such as legal principles, state of economic development and protection of investors’ rights.

We employ financial data for 3,197 unique firms from eight emerging and ten developed countries during the years 2001–2017 and use Tobit regression models, a two-step Fama−MacBeth(1973) regression and panel data regression techniques in order to ensure the robustness of estimates.

We find that firms in the civil French law system exhibit the highest average of a debt (around 27%), whereas firms based in high investors’ protection environment and in developed nations borrow significantly less than their counterparts. Furthermore, among predictors, including a firm's payout ratio, it returns on equity and the cash ratio except the P/B ratio have varying predictability for a corporate debt when firms are classified based on law systems, investors’ rights and the economic scenarios. The crisis period significantly affects the relationship of debt levels with legal systems, investors’ rights and economic development scenario. The author’s estimates are robust to alternate analysis.

This study is unique in its methodological approach and involves a considerably large number of countries and a longer study period for the results to be more generalizable compared to other existing studies.

The study examines the role of a country's legal system in predicting the corporate cash holdings using a sample of 18 countries inherited with distinct legal traditions. The central point of the study is the comparative assessment of legal frameworks in shaping the corporate finance policies.

The authors employ host of regression techniques including dummy variables, panel data regression and Fama–MacBeth regressions to establish the relationship.

The study results support the idea of “theory of law and finance” that legal tradition is a key factor determining corporate behaviour and policy. In particular, the authors observe that firms operating in civil law systems hold significantly higher cash as compared to their peers from common law systems. Moreover, the authors report that the law system affects the corporate cash holdings through the channels of economic development and shareholder's protection, yet in opposite directions. This is because the authors find that in developed countries where civil law tradition prevails, firms hold reasonably higher cash. Moreover, if the firm belongs to high investors' protection country with civil law traditions, the cash holdings get substantially reduced. Besides, the authors find that the predictability of widely held determinants of cash holdings is not invariant of law traditions, and it holds true also when analysed in conjunction with the financial crisis. Overall, the authors find support for their postulation that corporate cash management policies are likely to be different across legal traditions. The study results are robust to the controls for various firm and country-specific antecedents of cash holdings and to the alternate econometric techniques.

The study findings would encourage the government and firm policymakers and regulators in strengthening the investor protection rights which would further augment the legal system and firm-specific corporate governance mechanisms. This would mitigate agency issues and managers would be forced to undertake investor-friendly financial policies especially corporate cash holdings which would be resulting into shareholder value maximization.

The study contributes uniquely since the existing literature is largely silent on the role that legal tradition of a country has on the cash holdings of its firms.

The purpose of this paper is to study the impact of some corporate governance mechanisms on the market risk (stock price return and volatility, exchange rate) and on the exchange rate and Treasury Bill during the financial crisis. In order to better clarify the firms’ resistance to financial crises, the effect of exchange rate, Treasury Bill and the market risk are also considered.

The study uses a sample data of the SBF 120 on a panel of 99 French firms over the period between 2006 and 2015 divided into three sub-periods: the first sub-period, which covers the period between December 31, 2006 and December 31, 2009, was characterized by the outbreak of the subprime crisis. The second sub-period considers the sovereign debt crisis in Europe between December 31, 2010 and December 31, 2012. The last sub-period includes the post-crisis period (December 31, 2013 to December 31, 2015). The GARCH and BEKK models are used to capture the effect of volatility and conditional heteroskedasticity of both corporate governance and market risk.

The paper found that during the financial crisis (first sub-period, the sovereign crisis period), the high shareholders’ protection had a positive and significant impact on the stock market returns. Furthermore, the shareholders’ protection, the Treasury Bill, the institutional investors, the board’s size, had a negative and significant effect on the stock returns volatility. During the post-crisis period, the high protection and the board’s size had a negative and significant effect on the volatility of the stock returns.

This result implies that during the financial crisis, the high shareholders’ protection played a role in increases the stock market return and minimized the stock return volatility.

This study helps in improving the legal protection of investors and helps managers, shareholders and investors to evaluate their investments. This study also provides implications for policymakers and legal environment in order to evaluate the importance of the current corporate governance frameworks in place.

This result implies that the institutional investors, as the results suggest, should follow the shareholders’ protection in all the countries to make decisions about their investments since the high shareholders’ protection increases the firm’s stock returns and decreases the stock return volatility.

The authors examine the stability of dividend payout and the consistency in its predictability using sample of firms from 18 different countries amid their prevailing heterogeneous formal institutions (such as the legal system, corporate governance), the distinct state of economic development (developing vs developed) and changing times (during the crisis vs the noncrisis periods).

The authors use tobit regression models with distinct specifications for the authors’ investigations. The authors alternately analyze the study’s results using Fama–Macbeth (FM) (1973) and generalized least square (GLS) regressions.

The authors show a sharply declining stability in dividend payout with time using DeAngelo and Roll’s (2015) framework. In terms of predictive consistency, the authors report that only a few idiosyncratic factors predict dividends consistently, and these results hold qualitatively true across the robustness analysis. The firm's liquidity appears to be the most consistent predictor of dividends payout, whereas firm's size being on the other extreme. The results signify that the idiosyncratic factors that matter for firm's dividend policy are not country specific. Instead, it reveals commonality of predictors grounded on characteristics of countries such as legal environment, investor's protection, economic state (ES) and economic cycle.

The authors contribute to the dividends literature by providing the evidence of dividend instability through time and disapproving the stylized fact of sticky dividends. Besides, the authors provide international evidence of inconsistent predictability of dividends.

This paper aims to investigate the link between agency costs mitigation via three levels of rights protection (minority rights protection, enforcing contracts, resolving insolvency issues) provides the propitious climate for financing investment opportunities around the world.

We use Bartlett’s three-group method to stratify countries based on how well they protect investors as measured by the scores provided in the Doing Business dataset developed by the world bank for 189 countries. We then test a variety of independent hypotheses that the alleviation of agency costs via three levels of protection (minority investors’ rights, contract enforcement, resolving insolvency issues) is associated with better access to credit via the banking system, better valuation of listed firms via the stock market and higher investment and growth.

Our findings support Agency Theory which explains why the absence of legal protection of external investors leads to stock markets and financial institutions failing to fulfill their role of financing the economy.

The policy implication from this study indicates that countries ought to (1) develop legislation that protects investors’ rights, (2) improve the quality of their judicial system in terms of enforcing the legislation and (3) build the framework for resolving disputes during insolvency as these are important ingredients for a developed financial system.

We use the World bank dataset and a new methodology to quantify the significance of the relationship between minority rights protection, ineffective enforcement, lack of bankruptcy laws and access to firm financing via the banking sector and the stock market. It provides new evidence that the quality of the judicial system in a country matter for firms’ ability to raise financing and enhance value creation.

本文旨在探討一個假設，該假設為透過三級別權利保障（保障少數群體的權利、執行合同、解決破產問題）的代理成本緩減會為世界各地的金融性投資機會提供良好的氣侯。

我們以巴特利特（Bartlett）的三組法把國家分組，分組方法是基於該國家保障投資者的程度，而保障程度是以世界銀行為189個國家而制定的營商資料集內提供的評分來衡量的。我們把國家分組後，便就各樣的獨立假設進行測試。這些假設是：透過三級別保障（保障少數股權投資者的權利、合同的執行、解決破產問題）的代理成本緩減是連繫於透過銀行系統而產生的更佳信貸途徑，透過股市的更佳上市公司估值及更高的投資和增長。

研究結果証實了代理理論，該理論說明為何當外來投資者沒有得到法律保障時，結果會導致股票市場和金融機構不能履行其為經濟提供資金的角色。

本研究具有政策方面的意義，因研究顯示了國家應該：（1）設立保障投資者權利的法律；（2）在執行法律方面，改善其司法系統的素質；（3）建立解決破產時爭議的體系。這些是應該做的，因它們是一個已發展的金融體制的重要元素。

本文強調了一個保障投資者權利的法律環境所需的三個特定要素：對少數股權投資者權利的保障、有效的執行、有效的破產法律及透過銀行部門和股票市場而取得公司融資。這提供新的證據, 證實這三級別權利保障對公司籌集資金及提高價值創造的能力而言至為重要。

The purpose of this paper is to explain theoretically the relation between large shareholders, legal institutions, and capital structure, then empirically deduce how large shareholders and legal institution affected capital structure decision by integrating Chinese institutions.

This paper adopted cross‐section data of non‐financial listed companies in China and applied series of ordinary least square to empirically test the relationship between large shareholders, legal institution, and capital structure decision.

The empirical evidence provided by this paper indicates that large shareholders and legal institution do affect capital structure decision, specifically in seven areas.

This paper, based on the institutions of China, takes the largest shareholder, ultimately the controller, the relation of legal institution and capital structure into the research framework for the first time and systematically studies how the capital structure decision making is affected by the controlling shareholders, the nature of ultimately controllers, the concentration degree of shares held by a few large shareholders and legal institution. It is the first to empirically test whether the concentration degree of shares held by a few large shareholders and legal institution will affect the relation between controlling shareholders and capital structure, and compensates for the deficiencies in previous studies.

This paper aims at discussing the determinants of strategic transparency and the governance structure of the East Asian firms. The relatively weak institutional infrastructure in East Asia raises the question about the adaptable governance structure and transparency in the East Asian firms.

The paper presents theoretical underpinnings of the literature on corporate governance, corporate strategy and international business. This paper argues that one of the common factors that determine the success of corporate governance structure is the extent to which it is transparent to the market forces within particular institutional arrangements.

When the institutional arrangements favor mandatory versus voluntary corporate disclosure, this study suggests a reform measure for the East Asian corporate governance system that relies, inter alia, on the percentages of long‐term and short‐term financing to total financing. The higher the percentage of long‐term financing, the more we can infer the extent of outside investors' confidence in the future of the East Asian firms. When more active role of banks involvements with the firms' business is permitted and an effective banks' and firms' strategic transparency can be assured, the East Asian banks and stock market can both lead firms to long‐term favorable achievements. This study also suggests that the protection of both shareholder's rights and creditors' rights can go in parallel lines with the latter is to be given first priority until the investors' confidence in the near and far future of East Asia corporate governance system is built.

This paper extends the value of corporate governance structure to the East Asian firms through advocating the determinants of strategic transparency in East Asia.

The aim of this study is to investigate the effect of foreign institutional investors (FII) on the contribution of cash and dividend to firm's value in the context of Japan.

This study used a sample of 1,929 nonfinancial firms listed in Tokyo Stock Exchange in the period from 2002 to 2016. For data analysis, pooled OLS regression with firm and year fixed effect is applied. Further, the p-value of difference is used to test the null hypothesis of equal coefficients.

The findings depict that cash holdings contribute more to firm's value when ownership by FII is high. Contrarily, dividends contribute more to firm's value when ownership by FII is low. The results remain consistent after using excess cash holdings instead of cash holdings and after re-estimating the main regression model in the presence of top 30% and bottom 30% ownership level.

This study is limited to Japanese nonfinancial sector. The results implied that firms where the probability of managerial agency cost and expropriation of cash is high, the presence of FII mitigates the agency cost and positively influences the contribution of cash to firm's value. Overall, this research highlighted the disciplinary and monitoring role of FII in Japan.

This study provides new insights on the monitoring and governance role of foreign institutions, showing that FII promote better cash management and utilization, which significantly affects the contribution of cash holdings to firm's value.

To examine the impact of corporate governance on Cost of Capital (COC) and financial distress in the ASEAN countries.

We compiled a list of the 50 largest publicly listed firms by market capitalization in each of the following five East Asian countries, namely Malaysia, Singapore, Thailand, the Philippines, and Indonesia. Furthermore, we then divided the five countries into two distinctive categories – (i) Malaysia and Singapore (Common Law/strong legal protection countries) and (ii) Thailand, the Philippines, and Indonesia (Civil Law/weak legal protection countries). The annual data is collected for the time period ranging from 2006 to 2015, allowing a total observation of 1,317 firm years.

Overall, the paper supports the findings of many researchers that Board independence, promulgating good corporate governance, leads to better access to capital at lower cost, thus providing growth opportunities for ASEAN region. Taking lead from Simpson and Gleason (1999) and similar, we emphasize that during financial distress CEO duality will strengthen control systems and reduce internal discord in ASEAN firms.

The paper is one of the niche studies that has incorporated the difference between civil and common law rule in the study of corporate governance and its impact on financial measures of firms' in the ASEAN countries.

We survey board practices in Brazil. Brazilian companies are commonly controlled by family groups or through shareholders agreements. Controlling shareholders hold a very large portion of voting shares, much more than the minimum necessary to retain control. There is widespread evidence of shareholder expropriation, legal protection is weak, and stock issuance has been halted by low valuations and tax avoidance. Half of the boards are either too small or too big. Board committees are ineffective. Board procedures are rarely formalized and board members and CEOs are not evaluated in most cases. Most board members are not shareholders. No more than 21 percent of board members are independent and only 2 percent of them are elected by independent shareholder groups. It is likely the improvements in board structure and procedures will be restricted to large public corporations with foreign stock ownership while most companies avoid going public.