Firm characteristics, board diversity and corporate social responsibility: evidence from Bangladesh

Purpose – This study aims to purport to investigate the relationship between firm size, profitability, board diversity (namely, director gender and nationality) and the extent of corporate social responsibility (CSR) disclosures within a developing nation context.
Design/methodology/approach – The dataset comprises 116 listed Bangladeshi non-financial companies for the period of 2005-2009. A CSR disclosure checklist was used to measure the extent of CSR disclosures in the annual reports and a multiple regression analysis to examine its association with firm characteristics and two board diversity features – female and foreign directorship.

Findings – Results indicate that large and more profitable firms provide more CSR disclosures. It was also found that female directorship has a negative association with CSR disclosures, while foreign directorship has a positive impact on such disclosures. This paper documents that CSR disclosures decrease further when family ownership is higher and there are more female directors on the board.

Originality/value – This study extends empirical evidence on the association between firm characteristics, board diversity and CSR disclosure practices from a developing nation context. Furthermore, this study also reveals that female directors’ impact on firm disclosures may differ between developing and developed nations, and somewhat impeded in the latter. This paper also provides empirical evidence on the importance of appointment of foreign nationals on the boards of developing countries to influence CSR practices.

The market for corporate control: the case of Australian listed property

 This study investigates the underlying motivation(s) for mergers and acquisitions in the Australian Real Estate Investment Trust sector. Results across the three periods of pre-, during and post-announcement show that mergers and acquisitions create synergistic benefits for both targets and bidders.

The current status of environmental reporting by Indian companies

Purpose: The purpose of this paper is to explore the state of environmental reporting by Indian companies on their web sites and also in their annual reports.
Design/methodology/approach: The web sites of the companies in the sample were visited to examine the accessibility and extent of environmental information disclosure on their web sites. The annual reports for 2003‐2004, as available on the companies' web sites were selected to investigate the extent of environmental information disclosure in these annual reports.
Findings: The paper finds that, although there are no regulations enforcing the disclosure of environmental information, most of the Indian companies have disclosed environmental information. These companies provided more environmental information on their web sites compared to the information provided in their annual reports.
Originality/value: This study contributes to the existing body of environmental reporting literature by focusing on the status of environmental reporting by companies of an emerging economy and also contributes to the existing body of environmental reporting literature by focusing on the accessibility of environmental information on web sites of respective companies.

An analysis of qualitative characteristics of management commentary reporting by New Zealand companies

The narrative section of annual reports has considerable value to its user groups, such as financial analysts and investors (Barlett & Chandler
1997; International Accounting Standards Board (IASB) 2006; Tiexiera 2004). This narrative section including chairpersons’/presidents’ statement contains twice the quantity of information than the financial statements section (Smith & Taffler 2000). However, the abundance of information does not necessarily enhance the quality of such information (IASB 2006). This issue of qualitative characteristics has been long foregone by researchers. This issue has attracted the attention of IASB (2006). Following the dearth in research in regard to qualitative characteristics of reporting this paper explores whether investors’ required qualitative characteristics as outlined by the IASB (2006) have been satisfied in the management commentary section of New Zealand companies’ annual reports. Our result suggests that the principal stakeholders’, that is, investors’ qualitative characteristics requirements have been partially met in this section of annual reports. The qualitative characteristic of ‘relevance’ and ‘supportability’ have been satisfied in more annual reports compared to that of ‘balance’ and ‘comparability’.

Does Internet reporting improve the accessibility of financial reporting in a global world? A comparative study of New Zealand and Indian companies

 The accessibility of business reporting, including financial reports on company websites is not necessarily increased by providing more information on websites. The quality of Internet-based information is affected by both the accessibility and quantity of information provided. However, the accessibility of the information is an under researched area. This paper contributes to the existing body of knowledge on webbased business reporting, by considering the dimension of accessibility in terms of website appearance and visual design from four different perspectives. The aim is to consider the differences that occur in website organisation as a way of considering the accessibility of information provided on company websites. The paper considers the differences in the accessibility of website information between New Zealand and Indian companies as a means of demonstrating the variation that can occur across countries as well as within the same reporting structure. We conclude that Internet financial reporting does provide the illusion of comparability but without a more sustained focus on the harmonisation of terminology and attributes included in Internet reporting, the potential for comparison is reduced.

Does banks’ dual holding affect bank lending and firms’ investment decisions? Evidence from China

This study investigates the effect of banks’ dual holding on bank lending and firms’ investment decisions using a sample of listed firms in China. We find that dual holding leads to easier access to bank loans, a result that is more pronounced for non-state-owned enterprises (non-SOEs) than SOEs. We also find that dual holding distorts banks’ lending decisions and harms the investment efficiency for SOEs, while resulting in optimal lending decisions and enhanced investment efficiency for non-SOEs. For non-SOEs, further analysis suggests that optimal lending decisions and efficient investment can be achieved for firms with higher ownership concentration, and firms in which the family and foreign investors are the controlling shareholders. We argue that, in emerging markets, whether a bank plays a monitoring role by directly holding the debt and equity claims of companies relies heavily on whether the potential collusion between firm executives and bank managers can be averted, which in turn is determined by the firms’ governance framework and ownership structure.

Board composition, board activity and ownership concentration, the impact on firm performance

This paper provides a parallel investigation on the impact of board composition, board activity and ownership concentration on the performance of listed Chinese firms. We find that independent directors enhance firm performance effectively than other board factors. The frequency of shareholder meetings, rather than board meetings, is positively associated with firm value. Tradable share ownership concentration has a positive and linear relationship with firm value, while state and total share ownership concentration represent U(V) shapes. Importantly, companies with the highest levels of both total share and tradable share ownership concentration have a greater firm values than companies with the highest levels of only a single concentration.

Does CEO pay dispersion matter in an emerging market? Evidence from China’s listed firms

This paper examines how the institutional features of emerging economies (i.e., government ownership, political connections, and market reform) influence CEO pay-dispersion incentives. Consistent with our expectation, we find that CEO pay dispersion generally provides a tournament incentive in China's emerging market, as it is positively associated with firm performance. In addition, tournament incentives are weaker where firms are controlled by the government and where the CEO is politically connected, but it became stronger after the China's split-share structure reforms. Further, we find that in state controlled firms the satisfaction gained by meeting multiple economic and social goals largely reduces the effectiveness of tournament incentives, while the managerial agency problems inherent in private firms might mitigate them.

Political connections, founder-managers, and their impact on tunneling in China’s listed firms

We investigate the impact of manager political connection and founder status on tunneling in China's listed firms from 2004 to 2010. By classifying the political connections into three dimensions with two categories of controlling ownerships, we find that overall manager political connection is negatively related to tunneling in private firms but positively related to tunneling in SOEs. The CPC/CPPCC-type connection is likely to protect firms from tunneling, while the official-type connection facilitates tunneling from firms. The impact of these two types of political connection on tunneling is stronger at the central level than the local level. A chairman's political connection has significantly greater influence on tunneling than a CEO's connection. We also find that firms with founder-managers have a stronger resistance to tunneling than those with non-founder-managers, which is still observed in firms with politically connected founder-managers. Our results show that the incentives of various managers towards tunneling depend on their motivation for establishing relevant political connections.

Board structure and survival of new economy IPO firms

Research Question/Issue: This study examines the relevance of currently accepted best practice recommendations regarding board structure on the survival likelihood of new economy initial public offering companies. We argue that industry context determines governance outcomes. Research Findings/Insights: We study 125 Australian new economy firms listed between 1994 and 2002. Each firm is tracked until the end of 2007 for monitoring their survival. We find that board independence is associated with an increase in the likelihood of corporate survival. We also find that the benefits of board independence increase at a decreasing rate. Theoretical/Academic Implications: The standard best practice recommendation of board independence stems from the monitoring role of directors and is based on agency theory. The results from our study suggest that the recommendation regarding board independence does not work well for new economy firms. While the agency theory based model implies a monotonic relation between board independence and performance, our research suggests that the relationship is nonlinear. This variation occurs because of increased monitoring costs faced by outsiders due to higher information asymmetry and complexity of new economy firms. Our empirical results suggest that inside directors play a complementary role to outsiders in mitigating firm failure. Practitioner/Policy Implications: Our research offers insights to policy makers who are interested in setting best practice standards regarding board structure. Our research suggests that firm/industry characteristics play a crucial role in determining the optimal board structure. In firms/industries where outsiders face significantly higher information processing costs, insiders can play a valuable complementary role to outsiders in enhancing the effectiveness of the board. Thus future hard or soft regulations related to board structure should consider industry context.

Disproportional ownership structure and pay–performance relationship: evidence from China’s listed firms

This paper examines the impact of ownership structure on executive compensation in China's listed firms. We find that the cash flow rights of ultimate controlling shareholders have a positive effect on the pay–performance relationship, while a divergence between control rights and cash flow rights has a significantly negative effect on the pay–performance relationship. We divide our sample based on ultimate controlling shareholders' type into state owned enterprises (SOE), state assets management bureaus (SAMB), and privately controlled firms. We find that in SOE controlled firms cash flow rights have a significant impact on accounting based pay–performance relationship. In privately controlled firms, cash flow rights affect the market based pay–performance relationship. In SAMB controlled firms, CEO pay bears no relationship with either accounting or market based performance. The evidence suggests that CEO pay is inefficient in firms where the state is the controlling shareholder because it is insensitive to market based performance but consistent with the efforts of controlling shareholders to maximize their private benefit.

The effect of ownership structure on leverage decision: new evidence from Chinese listed firms

This paper examines the effect of state control and ownership structure on the leverage decision of firms listed in the Chinese stock market. Our results show that state-owned enterprises (SOEs) have higher leverage ratios than non-SOEs, and SOEs in regions with a poorer institutional environment have higher leverage ratios than SOEs in better regions. We also show that the largest shareholding (the percentage of shares held by the largest shareholder) in the SOEs has a negative relationship with the leverage ratio, while the largest shareholding in non-SOEs has a non-linear relationship with the short-term and long-term debt ratios. Finally, this study also shows that the share split reform and the improvement of institutional environment both weaken the negative relationship and strengthen the positive relationship between largest shareholding and leverage of SOEs and non-SOEs to some extent. This paper documents how the financing behaviour of SOEs is more influenced by government intervention, while the financing behaviour of non-SOEs is more market oriented.

Ownership and ownership concentration: which is important in determining the performance of China’s listed firms?

This article investigates the impact if ownership and ownership concentration on the performance of China's listed firms. By recognizing the differences between ownership and ownership concentration, and between total ownership concentration and tradable ownership concentration, we find that ownership concentration is more powerful than any category of ownership in determining firm performance and that it has approximately positive linear relations with firm value. The tradable ownership concentration has a more significant and positive influence on firm performance than total ownership cocncentration. The highest level of firm performance is approached when a firm is characterized with both total ownership concentration and tradable ownership concentration. Thus, we conclude that it is a rule that ownership concentration enhances firm performance regardless of who the concentrated owners are.

Default probability for the Jordanian companies: A test of cash flow theory

Abstract
This paper aims to investigate the effect of cash flow and free cash flow on corporate failure in the emerging market in particular Jordan using two samples; matched sample and a cross sectional time-series (panel data) sample representative of 167 Jordanian companies in 1989-2003. LOGIT models are used to outline the relationship between firms’ financial health and the probability of default. Our results show that there is firm’s free cash flow increases corporate failure. The result also shows that the firm’s cash flow decreases corporate failure. Firms’ capital structures are fund a mental in predicting default. Capital structure is seen as the main factor affecting the probability of default as it affects a firm’s ability to access external sources of funds. Jordanian firms depend on short-term debt for both short and long term financing.

Property portfolio composition and earnings management for listed property portfolios

In this paper, we investigate how real estate portfolio composition impacts earnings management (EM) of New Zealand listed property portfolios (NZ-LPPs). We employ a panel dataset containing accounting and property data for NZ-LPPs. The findings include: (1) the office property ratio of the real estate portfolio provides the highest incentive for LPPs to engage in EM; (2) LPPs with a higher ratio of industry are less likely to use accrual EM and real EM approaches based on property transactions; and (3) LPPs with a hospital focus prefer accrual EM, while LPPs with a retail focus prefer long-term accrual EM and sales manipulation.