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Article
Publication date: 15 December 2017

Walaa Wahid ElKelish

This study aims to investigate the relationship between corporate governance risk and agency costs across different countries.

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Abstract

Purpose

This study aims to investigate the relationship between corporate governance risk and agency costs across different countries.

Design/methodology/approach

Corporate governance risk indicators were obtained from the Institutional Shareholder Services Europe (S.A.) for 4,135 firms across 27 countries. Agency costs and other control variables were derived from companies’ annual financial reports using the DataStream database. Ordinary least squares multiple regression analysis model was used to test the study hypothesis.

Findings

Agency costs have a significant negative impact on corporate governance risk across countries. The extent of corporate governance mechanisms used, however, varies across geographic regions and industry types. The relationship between corporate governance risk and agency costs is more obvious in the non-financial than financial sector. These results were robust after several statistical checks.

Practical implications

The findings will help stakeholders, including corporate management, regulators and investors to improve corporate governance mechanisms and capital allocation decisions across countries.

Originality/value

Evidence is provided on the role of agency costs in corporate governance risk across geographic regions for financial and non-financial companies. The paper also overcomes common problems in corporate governance research such as construct validity, limited data and endogeneity.

Details

Corporate Governance: The International Journal of Business in Society, vol. 18 no. 2
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 6 November 2017

Walaa Wahid ElKelish

This paper aims to measure the extent of related party transactions disclosure and investigates their determinants across all listed companies in the United Arab Emirates…

1023

Abstract

Purpose

This paper aims to measure the extent of related party transactions disclosure and investigates their determinants across all listed companies in the United Arab Emirates (UAE) stock market during 2010 to 2012.

Design/methodology/approach

An index was manually constructed for related party transactions disclosure in accordance with International Financial Reporting Standards (IFRS) (IAS 24) using company financial statements.

Findings

Empirical results show relatively low level of related party transactions disclosure in the UAE emerging market. Furthermore, the multiple regression analysis (OLS) shows that related party transactions disclosure has significant relationships with the number of board members, audit quality, block-holders’ ownership, company size, leverage and product market competition. The multiple regression analysis (OLS) also highlights that industry type plays a significant and crucial role in disclosure levels across companies.

Research limitations/implications

This paper does not control for some corporate governance mechanisms such as audit committee characteristics.

Practical implications

This paper provides useful guidelines for several stakeholders including policy makers, accounting standard setters and corporate managers.

Originality/value

IFRS (IAS 24) standards were used to measure the strength of related party transactions disclosure. In addition, several variables were tested such as corporate governance mechanisms, ownership structure and product market competition on related party transactions disclosure over time; in an emerging market such as the UAE.

Details

Accounting Research Journal, vol. 30 no. 4
Type: Research Article
ISSN: 1030-9616

Keywords

Article
Publication date: 2 May 2017

Walaa Wahid Elkelish

The purpose of this paper is to investigate the relationship between related party transactions disclosure (RPTD) and firm valuation in the United Arab Emirates (UAE), an…

Abstract

Purpose

The purpose of this paper is to investigate the relationship between related party transactions disclosure (RPTD) and firm valuation in the United Arab Emirates (UAE), an emerging market.

Design/methodology/approach

Data on study variables were obtained manually from the published financial statements of all listed companies in the stock market during the period 2008-2012. Panel regression analysis models with fixed and random effects were used to ensure reliability of results. Several robustness checks were undertaken on the study outcomes.

Findings

The empirical results show that there is a significant negative relationship between RPTD and firm valuation in the UAE. RPTDs for subsidiaries and associates have the most damaging impact on firm valuation. Other control variables such as corporate governance disclosure (CGD), debt to equity, asset tangibility and sales growth show significant impact on firm valuation.

Research limitations/implications

The potential difference in the understanding of what constitutes “related party” across companies may affect the extent of related party disclosure across companies. Furthermore, some variables are not controlled for such as ownership structure and cultural values.

Practical implications

This paper provides useful practical guidelines for regulatory agencies, corporate managers and other stakeholders for improving the financial reporting system.

Originality/value

RPTD was measured according to the International Financial Reporting Standards (IAS 24) standards. Furthermore, the impact of new control variables such as CGD and product market competition was tested for financial and non-financial sectors.

Details

Journal of Accounting in Emerging Economies, vol. 7 no. 2
Type: Research Article
ISSN: 2042-1168

Keywords

Article
Publication date: 19 August 2021

Walaa Wahid ElKelish and Panagiotis Zervopoulos

This paper aims to investigate the internal and external determinants of firms’ efficiency and develop optimal corporate governance risk benchmarks for the manufacturing…

Abstract

Purpose

This paper aims to investigate the internal and external determinants of firms’ efficiency and develop optimal corporate governance risk benchmarks for the manufacturing sector across different countries.

Design/methodology/approach

Corporate governance risk data were acquired from Institutional Shareholder Services Europe SA. Data on firms’ efficiency and for explanatory and control variables were taken from the DataStream database. The generalised directional distance function data envelopment analysis (GDDF-DEA) model and its stochastic extension provided corporate efficiency measures and optimal corporate governance benchmarks. The authors used ordinary least squares multiple regression analysis with wild bootstrapping to test the study hypotheses.

Findings

The authors found significant differences between firms’ optimal and actual efficiency input/output variables and corporate governance risks in the manufacturing sector across countries. Internal firm characteristics such as group affiliations, product market competition and insider ownership and external institutional factors such as the legal system, the rule of law, control of corruption, law enforcement and cultural values are vital determinants of firms’ efficiency.

Practical implications

This paper provides valuable guidance to enable corporate managers, regulators and policymakers to enhance firms’ efficiency and corporate governance practices.

Originality/value

This paper develops optimal corporate governance risk benchmarks and identifies the most critical internal and external factors affecting firms’ efficiency in the manufacturing sector in various countries. It also used a novel GDDF-DEA model, with the multi-parametric model for bias correction of efficiency estimator.

Details

Corporate Governance: The International Journal of Business in Society, vol. 22 no. 1
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 26 January 2021

Walaa Wahid ElKelish

This paper investigates the relationship between information quality and stock returns during the International Financial Reporting Standards (IFRS 9) pre-adoption…

Abstract

Purpose

This paper investigates the relationship between information quality and stock returns during the International Financial Reporting Standards (IFRS 9) pre-adoption announcements and examines the influence of modern technology on these relationships across 24 emerging countries.

Design/methodology/approach

This paper conducts an event study using data obtained from the DataStream, Osiris, International Telecommunication Union (ITU) and the World Bank databases from 2009 to 2014. The non-linear generalized additive model (GAM) was implemented to test the study hypotheses.

Findings

Results indicate a significant positive non-linear relationship between low information quality and stock returns during IFRS 9 pre-adoption announcements. This result implies that IFRS 9 announcements have a positive impact on corporations with low pre-adoption quality information. This result is also more pronounced in small rather than large corporations and financial rather than nonfinancial institutions. Furthermore, modern technology plays a significant decisive antecedent role, while industry type has a moderating effect on the relationship between information quality and stock returns. The codified legal system has a positive impact on stock returns across emerging countries.

Research limitations/implications

Data unavailability in some emerging countries.

Practical implications

The empirical evidence provides useful guidelines for corporate managers, investors, international accounting standard-setters and regulators to improve financial reporting practices.

Originality/value

This paper extends the work of Armstrong et al. (2010); Onali et al. (2017) by including the impact of non-linear relationships using GAM analysis and the role of modern technology across emerging countries.

Details

Journal of Applied Accounting Research, vol. 22 no. 3
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 14 November 2016

Walaa Wahid ElKelish and Jon Tucker

The purpose of this paper is to investigate whether bank capital strength and external auditing requirements influenced international stock market stability during the…

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Abstract

Purpose

The purpose of this paper is to investigate whether bank capital strength and external auditing requirements influenced international stock market stability during the 2007/2008 global financial crisis.

Design/methodology/approach

Bank mandatory regulation data are obtained from the World Bank database, while stock market stability is gauged for 385 listed banks across 43 countries by means of generalised least squares regression models.

Findings

The authors find that mandatory capital strength requirements and the existence of mandatory audit increase stock market stability across countries. Further, more profitable banks increase stock market stability. The results are robust to both country institutional settings and economic freedom characteristics.

Originality/value

This paper provides evidence of the impact of bank regulations on stock market stability during the global financial crisis, thereby providing a useful insight for stakeholders to enhance financial regulation and policy.

Details

Journal of Financial Regulation and Compliance, vol. 24 no. 4
Type: Research Article
ISSN: 1358-1988

Keywords

Article
Publication date: 12 January 2015

Walaa Wahid ElKelish and Jon Tucker

The purpose of this paper is to investigate the relationship between the quality of property rights institutions (PRIs) and bank financial performance in an empirical…

Abstract

Purpose

The purpose of this paper is to investigate the relationship between the quality of property rights institutions (PRIs) and bank financial performance in an empirical study of 136 countries over the period 1999-2006.

Design/methodology/approach

The quality of PRIs and financial accounting-based measures of bank performance are obtained from the Economic Freedom of the World Project (Gwartney et al., 2006), the Polity IV Project, the World Bank data indicators database, and the International Monetary Fund. Several multiple regression analyses are conducted to test the study hypotheses.

Findings

The results reveal that the quality of legal structure and security of PRIs positively (negatively) affects both bank cost efficiency (inefficiency) and profitability. The presence of a quality political structure negatively (positively) affects bank cost efficiency (inefficiency). The quality of political structure has no direct impact on bank profitability. The impact of PRIs on bank cost efficiency is more evident in the upper middle and high income group of countries than in the low and lower middle income group of countries. An appropriate level of PRI quality is essential to achieve both competition and development.

Practical implications

The paper highlights policy implications for international policy makers, regulators, and the management of banks who are interested in banking sector development across countries.

Originality/value

The study investigates the fundamental importance of PRI quality in its effect on the banking sector and extends the largely US-focused literature to a broader international setting.

Details

Managerial Finance, vol. 41 no. 1
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 14 September 2015

Walaa Wahid ElKelish and Mostafa Kamal Hassan

– The purpose of this paper is to investigate the impact of corporate governance disclosure on share price accuracy of listed companies in the United Arab Emirates (UAE).

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Abstract

Purpose

The purpose of this paper is to investigate the impact of corporate governance disclosure on share price accuracy of listed companies in the United Arab Emirates (UAE).

Design/methodology/approach

Data on corporate governance disclosure were obtained from the financial statements of companies listed in the UAE stock market, and share price accuracy indices were crafted from each company’s weekly share price returns between 2008 and 2009, using generalized least squares regression analysis. Multiple regression analysis with fixed effects was then implemented to test the study hypotheses.

Findings

Voluntary corporate governance disclosure has a significant positive impact on share price accuracy. There is also evidence that mandatory corporate governance disclosure plays an important positive role on share price accuracy in the UAE business environment.

Research limitations/implications

This paper covers a two-year transitional period during implementation of a new corporate governance code in the emerging market of the UAE.

Practical implications

This paper encourages corporate managers in the UAE, as well as in other countries with similar business conditions, to review their voluntary corporate governance disclosure policies in accordance with international good practice. The authors suggest that regulators and accounting standard setters should extend mandatory corporate governance disclosure rules for the benefit of stock market participants and the overall welfare of the economy.

Originality/value

This paper extends the literature on the relationship between accounting disclosure and share price accuracy to include corporate governance disclosure in emerging market economies such as the UAE. It also shows the importance of both voluntary and mandatory corporate governance disclosure.

Details

Journal of Applied Accounting Research, vol. 16 no. 2
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 28 October 2014

Walaa Wahid ElKelish and Mostafa Kamal Hassan

The main purpose of this paper is to investigate the relationship between organizational culture and corporate risk disclosure for listed companies in the United Arab…

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Abstract

Purpose

The main purpose of this paper is to investigate the relationship between organizational culture and corporate risk disclosure for listed companies in the United Arab Emirates (UAE).

Design/methodology/approach

The organizational culture is represented by four dimensions: Clan, Adhocracy, Market and Hierarchy (Cameron and Quinn, 1999). Data are computed from the financial reports of all listed companies on the UAE Stock Market as of the year ending 2005. The multiple regression analysis model, ordinary least square, is used to test the study hypotheses.

Findings

Results show that the organizational culture of Hierarchy, which focuses on more formalized work procedures, has a significant positive effect on the companies’ risk disclosure in the UAE business environment. Several other control variables are implemented to ensure reliability of results.

Practical implications

Listed companies in the UAE are more responsive to formal rules and regulations on reporting risk disclosure, which is quite different from the “self-regulation” practices that are more common in some Western countries. Consequently, policymakers and regulators in the UAE, and in other countries with similar conditions, are encouraged to focus on continuous development of formal rules and procedures to enable more harmony with international best practices of risk disclosure.

Originality/value

Unlike the majority of previous empirical studies, this is the first study to incorporate a behavioral endogenous organizational culture model to explain the main determinants of risk disclosure, which opens the door for more understanding of the risk disclosure output function as a management process.

Details

International Journal of Commerce and Management, vol. 24 no. 4
Type: Research Article
ISSN: 1056-9219

Keywords

Content available
Article
Publication date: 6 November 2017

Tracy Artiach

508

Abstract

Details

Accounting Research Journal, vol. 30 no. 4
Type: Research Article
ISSN: 1030-9616

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