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According to the real environment of China, the authors collect micro data about Chinese family firms (FFs) to explain why some Chinese FFs still tend to introduce external managers though they have to face governance conflict between family-based managers and external managers.

This study analyzes the effect of governance conflict between family-based managers and external managers on firm performance by using ordinary least square test, which is also used to test which factor has influence on governance conflict’s profit promotion effect.

This study finds that governance conflict significantly improves firm performance (profit promotion effect). The governance conflict caused by the introduction of external managers in Chinese FFs can significantly improve a firm’s performance by raising its management efficiency and capital investment.

The governance conflict of the family business needs to be further refined in following research. Besides, this study is only based on the empirical study of cross-section data.

Different from the existing related research is mainly based on the sample data of listed family enterprises, the China employer-employee matched survey data includes a large number of small and medium-sized FFs, and has obtained the actual situation of how many of the middle and senior managers are external not family members.

This paper aims to verify whether the legitimate pressure of external forces on heavily polluting firms’ corporate social responsibility (CSR)-related behaviors affect firms’ assurance strategy in the Chinese context. The authors argue that, under external pressure, as a source of legitimacy, the assurance over CSR reports allows the business behaviors of heavy polluters to be recognized by society.

This paper sampled listed heavy polluters in China from 2011 to 2018 and used the multiperiod logit model to examine the effects of external corporate governance on firms’ assurance decisions. Principal component analysis methods were used to construct a comprehensive framework of external corporate governance. The indicators were obtained from the China Stock Market and Accounting Research databases, the NERI Report and the China Urban Statistical Yearbook.

This paper confirms that external corporate governance positively affects firms’ assurance decisions, and good financial conditions, well-governed internal controls and sufficient government subsidies positively moderate this effect.

The findings provide feasible ways to encourage firms’ high-quality corporate environmental information disclosure, thus providing valuable guidance for policymakers and other stakeholders to effectively supervise firms’ CSR behaviors.

The findings are of great importance in encouraging high-quality corporate environmental information disclosures, improving the support of capital markets among developing countries and drawing social attention to the environmental protection and social responsibility of heavy polluters.

The research extends the current research in the field of social environmental accounting by using legitimacy theory to explain firms’ assurance motivations. Additionally, this paper focuses on the practices of assurance services in the emerging economy and provides suggestions for developing assurance over CSR reports.

The purpose of this study is to explore how governance mechanisms (internal and external) enhance the performance of the return on asset (ROA), return on equity (ROE), earning per share (EPS) and dividend payout ratios (DP) of the banks of Pakistan. The study incorporates not only the internal factors of governance (board size, out-ratio, annual general meeting, managerial ownership, institutional ownership, block holder stock ownership and financial transparency) but also the external factors (legal infrastructure and protection of minority shareholders, and the market for corporate control).

The sample size of the study consists of 30 banks (public, private and specialized) listed at the Pakistan Stock Exchange (PSE) for the period 2008-2014. The panel data techniques (fixed or random effect model) have been used for the empirical analysis after verification by Hausman (1978) test.

The results revealed that not only do the internal mechanisms of governance enhance the performance of the banking sector of Pakistan but external governance also plays a substantial role in enriching the performance. The findings conclude that for a good governance structure, both internal and external mechanisms are equally important, to accelerate the performance of the banking sector.

Internal and external mechanisms of corporate governance can also be checked by adding some more variables (ownership i.e. foreign, female and family as internal and auditor as external), but they are not added in this work due to data unavailability.

The study contributes to the literature and could be useful for the policy makers who need to force banks to mandate codes of governance through which they can create an efficient board structure and augment the performance. The investments from different forms of ownership can be accelerated if they follow the codes properly.

The study facilitates the bankers in incorporating sound codes of corporate governance to enhance the performance of the banks.

This work is unique as no one has explored the impact of external mechanism of governance on the performance of the banking sector of Pakistan.

The purpose of this paper is to investigate the effect of external financing needs on both firm value and corporate governance mechanisms within the UK SME context. This framework is of importance because of the limited external financial resources SMEs might face.

The authors consider the endogeneity problem between corporate governance mechanisms and firm value, and hence, the three stages least squares and the instrumental variables based on two stages least squares estimation methods are employed.

The authors find a positive relationship between external financing needs and firm value. In addition, the authors detect that size and profitability are positively associated with firm value in the sample. Concerning the corporate governance index (CGI), the authors detect that big SMEs and those with low-debt levels have better corporate governance structures.

The authors employ a CGI for the sample which is constructed using ten corporate governance variables. The authors also examine different factors that affect SMEs 2019 governance by applying different models including logistic analysis.

The purpose of this paper is to investigate the relationship between corporate governance and firm performance by conducting a meta-analysis of 25 previous studies. The analysis has three specific concerns, i.e. the moderating effects of legal systems (common law or civil law), governance mechanisms (external or both external and internal governance together) and performance measures (accounting or market value).

The methodology used is the meta-analysis technique developed by Hunter et al. (1982).

The findings show that the external governance mechanisms measured by anti-takeover provisions and market value of firm performance measured by Tobin’s Q and market to book value are the key moderators of this relationship.

This paper has important implications for regulators and directors by proposing external governance to be an influential factor of firm performance. This paper is also of interest to the investors and companies by highlighting the significant relationship between corporate governance and market value of the firm.

As the author finds that the external governance mechanism (anti-takeover provisions) exerts more influential effect on firm performance than both external and internal governance together, this research confirms the imperative for external governance to increase the firm value.

This study aims to investigate the impact of corporate governance compliance, governance reforms and board attributes on operating liquidity of Pakistani listed non-financial firms. The study further tests how these relationships vary in the pre- and post-corporate governance reforms.

Fixed-effect regression model is used on 10 years panel data from 2007 to 2016 for a sample of 170 firms listed on the Pakistan Stock Exchange. Two-stage least squares model is used for addressing the endogeneity problem.

The findings reveal that governance compliance and governance reforms negatively affect operating liquidity. Among the board attributes, board meetings, directors’ remuneration, board foreign diversity and board gender diversity are significantly related to operating liquidity. Further exploration indicates that internal governance mechanisms are less effective to safeguard shareholders from expropriation during weak external governance. This suggests that strong external governance is inevitable to the effectiveness of internal governance mechanisms. Overall, the study findings support the agency theory.

The findings provide valid recommendations to policymakers interested in safeguarding the investors to focus on macro-level governance for making the micro-level governance effective. Further, the results provide the executives with an insight to improve the compliance level with the code of corporate governance.

Unlike prior studies, this study examines the impact of corporate governance compliance and novel board attributes – directors’ attendance at board meetings, number of board committees, directors’ remuneration and board foreign diversity on operating liquidity. Further, the study subdivides its sample period into pre- and post-corporate governance reforms to examine how external governance influences internal governance effectiveness.

This study contributes to the existing literature that corporate governance consist of internal and external governance behavior which refers to the complementarity of the elements of (1) competing values framework and (2) corporate legality framework theories and proper orientation in the provisions of the elements leads to a good corporate power in the modern legal environment. A questionnaire is designed, a survey is conducted based on the constructed corporate governance model in the study, which investigates the evolutionary background of the elements with the view of establishing the right corporate culture and corporate legality behavior. The empirical results revealed that there is a positive linear relationship between the elements of corporate culture provisions with internal governance behavior and a significant positive association between the elements of corporate legality provisions with external governance behavior. The model does not take into account long-term external factors. Therefore, measuring corporate governance may not be an easy task and may not be suitable for specific countries that have strong legal systems and corporate ownership. The elements in the model are practical to implement and facilitates corporate to improve shareholder involvement and governance reporting and hence prevent failure. The constructed model span almost every attribute embedding high quality corporate social responsibility and corporate governance for corporate to identify areas for improvement and contributes to existing corporate governance literature that, connecting corporate culture and corporate legality behavior positively affect financial markets and firm performance.

The purpose of this paper is to provide theoretical and empirical insights into the effective use of external accounts by social activists in conflict arenas in order to bring about change.

This paper presents a longitudinal case study of Action on Smoking and Health UK (ASH) and their use of external accounts and other activist practices during the period 1999-2010. The authors explore these practices from the perspective of one organisation engaged in conflict arenas concerning the (un)acceptability of tobacco production, consumption and governance. The authors conduct the exploration based upon a dynamic conflict arena framework that attends to the range of external accounting and activist practices, tactical intentions and states of conflict used by ASH to confront the tobacco industry and bring about change in tobacco governance.

The study identifies the use of a diverse range of external accounts and other activist practices. This assemblage of practices was used to confront, counter-act and to co-operate with actors engaged in tobacco-related conflicts. The evidence suggests that the deployment of different types of external accounts by ASH was aligned to the context of the particular conflict arena involved, and was influenced by the strategy and engagement tactics of the activists and other actors, as well as power dynamics and acceptability of the tobacco governance in the conflict arena. Whilst ASH used different external accounts in specific episodes of activism, these individual accounts also contributed to an emerging holistic account of the unacceptable consequences of tobacco production, consumption and governance.

This study provides new theoretical and empirical insights into how external accounts can contribute to the problematisation of governance and development of social and environmental change agendas. The dynamic conflict arena framework developed in this paper creates new visibilities and possibilities for developing external accounting practices and for researching this fast-developing area of social and environmental accounting.

This paper aims to study the impact of external fairness of executive compensation on M&A premium, and examine the moderate role of institutional investors. The high M&A premium is the main factors that induce the huge impairment of listed companies’ goodwill and the plummeting performance. Executives are the decision-makers of M&As, and their decision-making process is inevitably affected by the psychological factors. In recent years, institutional investors have become an important external force that can affect the governance of listed companies.

The authors use M&A data of listed companies from 2008 to 2018 and use OLS regression to test the relationship between executive compensation fairness and M&A premium.

The results show that the lower the external fairness of executive compensation, the greater the M&A premium. Institutional investors can effectively reduce the impact of external compensation unfairness on M&A premiums. The mechanism tests show that executives' psychological perception of fairness induced by external unfairness reduces their motivation to work and prompts them to use high premium to seek alternative compensation incentives. Further examinations of executive characteristics and corporate characteristics show that the role of external unfairness in executive compensation in driving M&A premiums is more pronounced in companies with longer executive tenure, weaker executive reputation incentives and private property.

This paper enriches the research on the pre-factors of M&A premiums from the perspective of executives’ psychological perception of fairness, provides evidence that institutional investors play a positive governance role and provides decision-making references for companies to take corresponding measures to reduce M&A premium risks.

The public listing of small and medium enterprises (SMEs) is a recent phenomenon in India, started in 2012. Such a paradigm shift for SMEs has altered the ownership structure of these firms. In addition, the listing has provided a notable status to SMEs, leading to a shift in exposure to market competition. Literature signifies that these changing dynamics are likely to impact the firm value. This study aims to examine the effects of promoters’ ownership and market competition on the firm value of listed SMEs in India. Ownership concentration (promoters’ ownership) is investigated as the primary proxy for internal governance mechanism, while market competition is investigated as an external form of firm regulation.

Three years of panel data from 2018 to 2020 of 80 listed Indian SMEs are used to conduct the analysis. The fixed effects model and cluster robust standard errors captured the detected fixed effects while adjusting for heteroskedasticity and autocorrelation. Besides, moderation analysis is conducted to test if competition regulates the relation between promoters’ ownership and firm value.

Promoters’ ownership does not impact the firm value significantly. However, market competition is significant and negatively drives the firm’s value. So, the market competition provides external regulation and coerces the firms to behave well to conserve the firm value. Finally, competition does not regulate the relationship between ownership effects and firm value. Therefore, the study contrasts the belief that the benefits of internal governance (especially promoters’ ownership) for firms in competitive economies are subject to market competition.

The study establishes the possibility of an integrated approach where internal and external governance mechanisms coexist to drive the firm value and endorses the same. The study is relevant to shareholders, practitioners, lawmakers and academics.