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The purpose of this paper is to attempt to fill a research gap in the relationship between corporate governance mechanisms and financial performance of family and non-family firms’ by using a sample of non-financial firms listed on Amman Stock Exchange (ASE) for the period 2009–2015.

This research employs a quantitative method using data that include corporate governance mechanisms, firm characteristics and financial ratios of a sample of Jordanian listed firms in the ASE over the period 2009–2015. The sample covers all companies that have been part of the ASE during the period including both family and non-family firms, part of total of 228 companies listed on the ASE as of 31 December 2015. The study used accounting-based measures such as return on asset (ROA) and market-based measures such as Tobin’s Q as proxies for corporate financial performance.

The study found that board size both in term of Tobin’s Q and ROA has a negative relationship with the performance of family firms. In non-family firms, there is no systematic relationship with corporate performance. There is a strong relationship between corporate performance and independent directors in non-family firms. In addition, the authors found some evidence for a relationship between performance and independent directors in family firms. Also, results indicated that ownership concentration has an insignificant correlation with corporate performance and in family firms has a negative and significant correlation with Tobin’s Q. There is a significant relationship between local investors’ ownership and corporate performance as measured by Tobin’s Q in family and non-family firms.

Studies concerned with the effect of corporate governance on firm performance remains comparatively under-researched in Middle East countries and Jordan in particular (Najib, 2007; Omet, 2004; Marashdeh, 2014). Moreover, studies investigating whether the practice of corporate governance has the same impact on family firm performance are still relatively less well known than those when ownership is distributed widely (non-family firms) (Jaggi, Leung and Gul, 2009; Prencipe and Bar-Yosef, 2011). This research is seeking to fill this current gap in Jordan, which is one of the developing countries with an emerging economics that are very poorly represented in the literature.

The purpose of this paper is to investigate the effect of foreign currency derivative (FCD) usage on firm value. In specific, the authors study the significance of the relationship between FCD usage and firm value for exporters and non-exporters, respectively, with consideration of conditions of exchange rate movements.

As the main empirical test, this paper utilizes the multivariate Tobin's Q model for a panel dataset of 125 non-financial firms, which have been continuously listed on the Dhaka Stock Exchange from 2010–2018. The authors divide the sample firms into two groups: exporters and non-exporters based on theoretical background and estimate the relationship between FCD usage and the firm value measured by Tobin's Q for each firm group. Also, as a complementary test, the Fama–French three-factor model is used to estimate the effect of FCD usage on the monthly portfolio returns of the firms when exchange rate levels and volatility are considered.

First, the effect of FCD usage on firm value significantly exists in the Bangladeshi non-financial firms from 2010–2018. Specifically, the FCD effect on firm value is negative (hedging discount) for exporters, whereas the FCD effect is positive (hedging premium) for non-exporters. Second, the multivariate analyses suggest the hedging discount (premium) for exporters (non-exporters) is consistent only when the domestic currency appreciates (depreciates). Third, the FCD effect on firm value is consistently positive for non-exporters when exchange rate volatility is higher.

Further studies could be conducted with the detailed data of the firms' hedging performance, if they are available. Particularly, the cost and revenue data associated with hedging would help identify evident reasons for exporters' hedging discounts in Bangladesh. Moreover, the best hedging option for maximizing the Bangladeshi firm value could be analyzed with the detailed FCD type data, such as futures, options and swaps. Further refinement of these data would improve institutional capability for substantive growth in frontier markers.

This paper provides practical implications for corporate managers in charge of managing foreign exchange risk in Bangladesh. First, closer accounting observation is much necessary for the firms to accurately evaluate whether the FCD usage is beneficial in their cash flows because the exporters come to have two large costs: entering foreign markets and carrying FCD program. Second, for better value from using FCDs, the exporters should learn how to utilize appropriate financial derivatives. FCD usage is beneficial when the exporters are fully aware of what their real risks are and the role of appropriate derivatives within its portfolio strategy.

A policy reducing the costs of either foreign market entry or FCD usage would be helpful for lessening the FCD discount effect. Also, a long-term policy that enables the born-to-exporters to establish substantive positions in the home market would be helpful for enhancing the cash inflow capability, thereby causing the firm value structure to be strengthened.

The paper has originality because it bridges the gap in the literature. First, the authors find a new empirical result regarding the significant FCD effect on a frontier market, although the FCD effect deals with the small and secondary risk in the previous literatures. Second, finding the contrasting FCD effect between the exporters and non-exporters sheds lights on the importance of firm-specific characteristics for precisely evaluating the FCD effect on firm value. Third, we find that the significant FCD effect is prominent by condition of exchange rate movements, which has been overlooked in prior literature.

The purpose of this study is to analyze the determinants that lead REITs to pay out more dividends than the required level to retain their tax-favored status. In particular, the focus is on the effect that information asymmetry has on REITs’ excess dividends distribution.

A sample of 341 REITs from the USA, France, the UK, Spain, Belgium, Germany, the Netherlands and Italy has been analyzed for the period 2000–2016. Employing multiple linear regression models, the effects of information asymmetry, cash flow, size, ROA, leverage and treasury shares on excess dividends have been explored.

Results indicate that REITs with greater information asymmetry distribute significantly more excess dividends, with superior evidence in Europe than in the USA. Regarding other determinants, cash flow influences excess dividends the most, whereas ROA and common shares repurchase have an inverse relationship with excess dividends.

The paper explores the effects of excess dividends distribution on the most relevant REITs features. The joint analysis of the European and the US samples allows this study to make a comparison between the two markets and to identify affinities and differences.

The paper tests whether a proxy of asymmetry information plays a role in affecting the excess dividends distribution. In contrast to previous researches, it expands the analysis by comparing the US and European markets to underline any difference in the effect of asymmetry information on excess dividends. The topic has never been investigated before in relation to the European market.

Previous research suggests that a CEO’s attitude can impact a firm’s performance. More particularly, there appears to be a link between the CEO’s revealed level of optimism and firm’s market value. The purpose of this paper is to measure the level of optimism revealed by Australian CEOs in their shareholder letters and compares this with their firms’ current and future valuations.

This study assesses the CEO’s level of optimism using text analysis of the annual letters to shareholders in 180 Australian-based firms from 2010 to 2013. The market valuation of their companies over the same period is calculated using Tobin’s Q, and the results compared with the level of CEO optimism.

Comparing the level of revealed optimism with their firms’ valuations over four years, CEO optimism is positively correlated, both currently and prospectively with firm valuation. Given the period under study immediately followed the global financial crisis (GFC), the results suggest CEO optimism may be an important factor in adding to firm’s market resilience.

The study examines the link between revealed CEO optimism and firm valuation over a turbulent period of the business cycle. While the sample period follows the GFC, and Tobin’s Q has some known deficiencies, the results imply that further research should be undertaken to examine the importance of CEOs tone and communicated attitudes on their firms’ financial outcomes.

The link between CEO optimism and the firm’s valuation suggest that shareholders and boards should pay particular attention to the values, cognitions and psychological and demographic characteristics of top executives when selecting CEOs. In particular, the results suggest that given two otherwise similar CEOs the one whose record of communication is optimistic should be preferred over a similarly qualified but less sanguine individual.

The paper represents the first study demonstrating the link between CEO’s communicated optimism and Australian firms’ valuations. The study uses three different measures of optimism to improve the robustness of its conclusions, and a comprehensive measure of firm value – Tobin’s Q. It is the first to quantify the association between CEO optimism and firm value shortly after a period of financial upheaval (the GFC). The findings indicate that CEO optimism contributes significantly to firm value. The study also tests whether “excessive” optimism negatively impacts firm performance and conclude there is no evidence of this in the sample period. The study suggests that more research should be done to examine the contribution of positive business attitudes to periods of economic stress.

This paper explores dividend announcements based on information hypothesis. We explore in particular whether or not information signaling theory existed in Taiwan. We also explore the free cash flow hypothesis. In order to eliminate affecting factors, we target companies with irregular dividends as research samples, just like those with specially designated dividends (SDD). We examine whether or not those proceeds may be deemed as future earnings prospection. In this paper we study mainly dividend announcements made during stockholder’s meetings of the companies listed in the Taiwan Stock Exchange (TSE) or R.O.C. Over-the-Counter Securities Exchange (ROSE). We apply event study as means of analyzing abnormal returns of the companies. In addition we use the GARCH model with traditional ordinary least square to estimate the market model. The results indicate that SDDs are considered positive signals by the national exchange, TSE. In addition, we also show that the first-time SDD does transmit a positive signal to the market regarding the firm’s future cash flow, and that the SDD of no payment in the previous three years is negative. Furthermore, we prove that low Q firms have greater market reaction than high Q firms in announcement period. The free cash flow hypothesis and firm size effects could not be verified in Taiwan.

Purpose – Study the role of sovereign wealth funds (SWFs) as an example of foreign and politically connected large shareholders, and their impact on firm value.

Methodology/approach – Use a sample of SWF large U.S. investments where SWFs intend to actively engage with management to analyze not only whether but also why SWF investments outperform the market in both the short- and long term from the perspective of internationalization, political connections, and corporate governance.

Findings – Foreign and politically connected large investors, like SWFs, improve firm value through the provision of SWF domestic market access and government-related contracts. In the short run, the market welcomes SWF investments in expectation of potential monitoring and internationalization benefits. In the long run, the target firms’ degree of internationalization and Tobin's q increase substantially after SWF investments. The increase in q is directly related to the number of government-related contracts granted by SWF countries.

Social implications – SWF investment benefits appear to outweigh the costs for firm value and shareholders. The results point to the benefits of large and foreign investors for shareholders.

Originality/value of paper – This is the first work to provide evidence on how foreign government-related shareholders can affect firm value.

Whether institutional investors monitor corporations and improve firm value is a key question for corporate governance and investment management. I find little empirical support for the hypothesis that institutions undertake monitoring that increases firm quality and valuation. Granger causation tests show that while quality firms do attract institutional investment, institutions do not monitor and firm value subsequently declines. Instead, institutional incentives are critical; some institutions with strong incentives to monitor do, indeed, monitor. Institutions with concentrated portfolios successfully monitor while institutions with a larger percentage stake do not. Pensions and endowments are better monitors than insurers, banks and mutual funds.

The purpose of this paper is to examine if the hedging strategy of the firm adds value to the firm, and if so, is the source of the benefit consistent with the hedging theory?

The paper used data from 129 top non-financial Indian companies spanning a period of 2008-2015 and analyzed using the ordinary least squares regression technique.

The study finds that firms engaged in hedging compared to non-hedgers have less volatility in the firm’s value. The use of hedging during the financial crisis is found to be value enhancing for the hedgers. The results also found that some firms do not disclose the notional value of derivatives clearly, which highlights the need of clear regulation for derivative declaration in the annual reports.

Research implications of this study are to gain an insight into the hedging effectiveness in the highly volatile Indian market as compared to developed countries. High volatility in the exchange rate of Indian rupee further makes it one of the most relevant markets to study the effect of hedging on the firm’s value.

Mostly hedging is done purely for risk management, and if managers try to time the market by selective hedging, it can bring a negative impact for the firm. Findings show that managers should manage their hedging strategy based on changing the economic environment and not purely on the firms’ financial value.

To the authors’ best knowledge, this is the first study to extract the dollar value of derivative usage of sample firms and analyze its effectiveness in enhancing firm value in the presence of other financial parameters. This will be an advancement of previous studies, which used hedging as a dummy variable only. Most studies on this topic are carried out in developed countries; there is a limited research on developing markets such as India, and past studies have been more generic one like determinants of hedging and overall derivative scenario.

This paper investigates CEO turnover and the usefulness of relative performance evaluation (RPE) as a management incentive in an emerging economy lacking market-based competition.

In a sample of China’s listed state-owned enterprises (SOEs) from the period 2001 to 2005, we manually collect the data where a CEO has gone after being removed by reading the annual reports of the firms and searching the major news and business publications, and run OLS regressions to examine how various incentives provided by different CEO turnovers such as promotion, demotion, and rotation affect the firm performance.

We find that 41% of departing CEOs in SOEs is being promoted. The promotion is positively associated with preceding firm performance relative to peers in the same region and this association is more significant than that between the promotion and firm’s specific performance. Furthermore, the promotion outperforms other incentive schemes such as CEO demotions by 5–8% in terms of subsequent Tobin’s q in three years. These consequences persist in undeveloped regions where there are fewer firms listed on the stock market, a lower stock market capitalization, or a higher regional Herfindahl–Hirschman Index ( HHI ).

The findings imply that promotion based on RPE provides an important incentive by creating competitions.

Many organizations around the world currently are facing board diversity issues and challenges. Hence, this empirical paper investigates the relationship between board diversity and firm’s financial performance. We use a sample of 35 companies from five countries in Southeast Europe (Macedonia, Croatia, Serbia, Bosnia and Herzegovina, and Greece) for the period between 2008 and 2012 to find that, on average, companies with well-educated board members are more profitable and overvalued on the market. When running the regression again to test the levels of heterogeneity, we also find that the companies with more women on board tend to be overvalued on the market, while those with more foreigners on board are subject of undervaluation. The paper mostly contributes to the literature on corporate governance and board diversity. First, we postulate the impact of each of the board diversity variables on the financial performance and then show the extent of this impact and its economic interpretation. Our findings have important practitioners’ implications for corporate regulators and policy-makers since the demonstrated positive impact of the well-educated board members on firm’s financial performance gives a new impetus in building a corporate strategy that will intend to engage more people holding PhD on board.