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The authors measure the cost of equity to earnings yield differential for a sample of 2,035 non-financial firms. In a series of Logit and Tobit regressions, the authors examine if the cost of equity to earnings yield differential is related to dividend policy in the manner predicted by agency theory.

Agency theory says a firm's optimal dividend policy is partially determined by the relationship between the earnings yield and the cost of equity capital. When the cost of equity is higher (lower) than the earnings yield, firms are motivated to (not) pay dividends as this reduces the cost of capital and holding other things constant, increases corporate valuations. The authors test whether managers set dividend policies to maximize the value of the firm.

The study’s findings show that when the cost of equity is higher (lower) than earnings yield, firms are more (less) likely to be dividend payers and the payouts are higher (lower). The results are robust to the inclusion of share repurchases as an alternative to cash distributions. The study’s findings support the cost of equity hypothesis and are consistent with alternative dividend theories.

The study’s findings support the cost of equity hypothesis and are consistent with alternative dividend theories. To the authors’ knowledge, this is the first paper testing the cost of equity hypothesis.

The purpose of this study is to examine the relationship between the ownership concentration and cost of equity of firms in Pakistan context. Moreover, this study also investigates how the presence of disclosure quality and governance quality affects the relationship between ownership concentration and the cost of equity of firms.

Data are collected from six non-financial sectors listed on Pakistan Stock Exchange during the period of 2015–2019. This study uses pooled ordinary least square (OLS) method to validate the proposed hypothesis in STATA.

The study found a positive and significant relationship between ownership concentration and cost of equity. The results also show that better disclosure and governance quality negatively moderates the relationship between ownership concentration and cost of equity.

The findings of this study will help firm managers to implement a high level of disclosure and governance quality in firms to reduce agency problems which will further help a firm in reducing the firm's cost of equity. Furthermore, this study is valuable for practitioners regarding thinking about the process of designing ownership structures to protect minority shareholders' rights, especially in emerging markets.

The novelty of this study is having better disclosure quality and more board independence members helps firms with higher ownership concentration in reducing the cost of equity.

This study aims to extend the literature on psychological contracts, employee mental health, self-control and equity sensitivity among employees in Ghana.

Data for this study came from a sample of 484 employees from an organisation in the telecommunication sector of Ghana. The details of the study were discussed with employees after which they were given the choice to participate in the study.

The present study found that psychological contract breach is directly associated with mental health and indirectly related to mental health through equity sensitivity and self-control.

The findings suggest that psychological contracts are important aspects of the employment relationship that could be used to enhance employee mental health. Furthermore, enhancing employees’ self-control and resolving issues of individuals high on equity sensitivity are effective ways that organisations can deploy to sustain mental health in the face of psychological contract breaches.

This research seeks to fill a gap in the service and retailing marketplace experience literature as well as retailing practice by extending Attribution and Expectancy Disconfirmation Theories to the large and growing market of consumers with vision disabilities. It reveals how accessibility-related service failures with a retailer's website can lead to anti-firm reactions from blind and low vision consumers, including social media sharing, negative word-of-mouth (NWOM) and avoidance of the retailer's other sales channels even if they are accessible.

Blind respondents were recruited from national blindness organizations to participate in this study using a within-subjects design to test reactions to accessibility-related propositions in two different scenarios involving varying degrees of effort.

In both high- and low-effort conditions, an accessibility-related service failure leads to the anti-firm consequences of NWOM, social media sharing and avoidance of the retailer's sales channels. Additionally, blind and low vision consumers who also feel inaccessible websites are discriminatory develop stronger anti-firm attitudes toward the offending retailers. Further, we aver that the retailer's entire website including all its features, not just the homepage, should be made accessible to the growing market of vision-impaired consumers and thereby obtain substantial competitive advantages.

This research pertains to the service failure and recovery nomological network. It extends the existing paradigm to include accessibility-related service failures experienced by consumers with disabilities into the specialized category of discrimination-based service failures in instances where service recovery is not easily achieved. Empirical investigations of these experiences have been rare, despite the frequency with which they occur.

This paper aims to discover the underlying mechanisms by which corporate financial policies, cash holdings, capital structure and dividend payouts, transmit their effects on firm value in the “Middle East and North Africa” (MENA) emerging markets.

The authors employ a novel integration of path modelling with parallel multiple mediation analysis to empirically test the hypothesised indirect effects through the mechanisms represented by the value of financial flexibility (VOFF) and agency costs.

The authors do not find any evidence of the association between cash holdings, dividend payouts, and firm value when the mechanisms through the VOFF and agency costs are considered. While these two forces, i.e. the VOFF and agency costs, have balanced mediation effects on the relationship between cash holdings and firm value, they represent equivalent and complementary mechanisms by which dividend payouts transmit their positive impact on firm value. Moreover, we document a significant negative partial mediation effect of agency costs on the relationship between leverage and firm value; however, we do not find any evidence supporting the mediation effect of the VOFF on such a relationship.

This paper sheds new light on the forces that govern the nature of the relationships between corporate financial policies and firm value.

This study aims to investigate the relation between firms’ use of related party transactions (RPTs) and cost of debt (COD) in Gulf Cooperation Council (GCC) countries.

The authors obtain data from annual reports and the Standard and Poor’s Capital IQ database over the period 2005–2016 period of nonfinancial publicly listed firms on the UAE, KSA, Oman, Bahrain, Kuwait and Qatar stock exchanges. Using a final sample of 1,810 firm-year observations, the authors empirically assess the relation between strategic use of RPTs, the COD issuance and the moderating effects of governance mechanisms.

The authors find that high levels of total RPTs and purchase-based RPTs increase firms’ COD. Furthermore, propping of sales through increased sale-based RPTs is found not to have a significant effect on firms’ COD. The authors also find that ownership factors pertaining to family member founding and royal family ownership negatively moderate the association between the firm’s RPTs and COD. Additionally, the voluntary formation of executive committees has a positive and significant mediating effect on the relation between firms’ purchase-based RPTs and COD. The results are robust to several additional tests and alternative measurement specifications.

The positive relationship between purchase-based RPTs and firm financing costs is magnified in countries with high quality of RPT disclosures. This has implications for funding of GCC entities by governments and financial institutions.

To the best of the authors’ knowledge, this study is the first to examine how wealth transfer via RPTs in the GCC region is associated with higher COD. The authors also contribute to the outcome of emerging governance regimes in the GCC, which could impact the level of credit risk and/or default risk faced by a firm and, thus, the relation between RPTs and COD. In doing so, the authors provide a more nuanced study by investigating the potential channels that could account for such a relation in an emerging market setting.

This study investigates the connection between corporate governance and zombie firm’s exit time.

With a sample of 2,794 French zombie firms, the analysis focuses on four aspects of corporate governance: board size (BS), managerial ownership (MO), director turnover (DT) and ownership concentration, using tobit regression.

Dimensions of corporate governance have an important role in determining zombie firms’ exit time. MO and ownership concentration increase zombie firm exit time, whereas larger BSs and DT reduce it.

To the best of the authors’ knowledge, this study is the first to include corporate governance as a characteristic relevant to zombie firms’ exit time. It provides new insights on why some zombie firms remain in the market longer than expected.

This study aims to examine the effect of board gender diversity on corporate litigation in China’s listed firms. The key questions this study addresses are: what are the effect of board gender diversity on corporate litigation in terms of both the frequency and severity of consequence, is there any heterogeneous effects of the relationships across firm performance?

A sample consists of 25,668 firm-year observations from over 3,340 firms is examined using logistic regression analysis and negative binomial regression analysis. The authors also use event study method and ordinary least square (OLS) regression to explore female directors’ effects on reducing the negative consequences of litigation. The logistic regression and OLS regression are reestimated with interaction terms when examining the firm performance heterogeneity.

The authors document that firms with greater female representation on their boards experience fewer and less severe corporate litigations. Moreover, in high-performing firms, board gender diversity plays a more potent role in reducing the frequency and consequences of corporate litigation than low-performing firms.

This study is among the first to examine the relationship between board gender diversity and the comprehensive corporate litigations under Chinese context. It sheds new light on China’s boardroom dynamics, offering valuable empirical implication to Chinese corporate policymakers on the role of female directors.

The current study aims to achieve two targets. First, examine empirically that whether corporate managers use tax avoidance to influence short-term profitability? Second, investigate the impact of tax avoidance on the value of firms. The tax accounts provide the opportunity to influence temporary/permanent profitability but empirical studies overlooking this matter, particularly in emerging economies.

First, the authors identified unexpected fluctuations of tax avoidance and then examine whether it impacts the profitability signal and firms' value? The unbalanced panel data of 189 non-financial firms for the period 2000–2018 are used for empirical analysis. The estimation biases and results consistency are verified by using two different econometric models including generalized least square and two-stage least square

The study identifies that managers manipulate the profitability signal through tax avoidance. Tax avoidance practices help in earning management and earning smoothing to avoid negative signals in the stock market. In line with the behavioral finance view, tax avoidance has a positive impact on current stock returns because investors focus on profitability without a detailed screening of cash flows.

A limited number of studies investigate the use of tax avoidance for manipulation of the short-term earning signal. Identifying gaps and limitations in the literature, this study provides invaluable insights into tax avoidance and its association with the profitability and value of firms. The findings are important for investors, managers and policymakers in making portfolio decisions and corporate policies.

The authors examine whether limitations in Form 990 result in zero or understated fundraising and administrative expenses for organizations supported by related organizations. Form 990 does not consolidate financial information of legally separate related organizations, resulting in fundraising and administrative expenses being reported by supporting organizations but not by the supported organization.

The authors use the IRS Statistics of Income Sample Data Files and compare charities receiving support from related organizations (supported) to non-supported charities.

The authors find evidence that supported organizations are likely to report zero or understated fundraising expenses and zero administrative expenses. Those receiving related donations are more likely to have zero or understated fundraising expense while those receiving related compensation are more likely to have zero and understated fundraising and administrative expenses. The authors also find evidence that supported organizations receiving greater amounts of related donations and related compensation are also more likely to report zero and understated fundraising expenses as well as zero administrative expenses while greater amounts of related compensation are also associated with understated administrative expense.

Since donors and other stakeholders use Form 990 to evaluate nonprofits, its unconsolidated nature could result in a lack of comparability across organizations and misinformed resource allocation (e.g. donation) decisions. The results also have implications for researchers who use zero and understated fundraising and administrative expenses as proxies for low quality reporting or interpret them as data errors.

The paper examines the extent to which zero or understated fundraising expense reporting (i.e. the fundraising expense puzzle) is associated with supported organizations receiving financial support from related organizations. The authors also expand their examination to zero and understated administrative expenses.