scholarly journals The Effect of Corporate Governance on Earnings Quality and Market Reaction to Low Quality Earnings: Korean Evidence

2018 ◽  
Vol 11 (1) ◽  
pp. 102 ◽  
Author(s):  
Hyejeong Shin ◽  
Su-In Kim
Keyword(s):  
Corporate Governance ◽  
Stock Returns ◽  
Stock Exchange ◽  
Earnings Quality ◽  
Foreign Ownership ◽  
Governance Mechanisms ◽  
Factors Affecting ◽  
Earnings Gap ◽  
The Board Of Directors ◽  
Reported Earnings

This study investigates whether corporate governance mechanisms are associated with earnings quality, especially accurate earnings reporting, and whether investors react differently to inaccurate earnings according to governance strength. Earnings accuracy is one of the key factors affecting a firm’s sustainability in the sense that reported earnings provide information about a firm’s long-term sustainability and further are directly associated with a firm’s cost of capital. In this paper, we employ the independence of the board of directors (BOD) and foreign ownership as governance mechanisms associated with the earnings gap between audited and unaudited earnings. Using 1976 non-financial firm-year observations listed on the Korea Stock Exchange from 2013 to 2016, we find that the gap between unaudited earnings and actual earnings is smaller for firms with independent BODs and foreign ownership, suggesting that earnings accuracy is higher for firms with effective corporate governance. This study also examines how investors react to the earnings gap. Stock returns to the earnings gap are less negative for firms with independent BODs and are more negative as foreign ownership increases, implying that each mechanism of corporate governance has different effects.

scholarly journals PENGARUH MEKANISME CORPORATE GOVERNANCE TERHADAP TRANSPARANSI

2020 ◽  
Vol 1 (1) ◽  
pp. 52-67
Author(s):  
Dian Ramadhani ◽  
Raja Adri Satriawan Surya ◽  
Arumega Zarefar
Keyword(s):  
Corporate Governance ◽  
Audit Quality ◽  
Stock Exchange ◽  
Statistical Tests ◽  
Foreign Ownership ◽  
Debt Financing ◽  
Annual Reports ◽  
Managerial Ownership ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms

This study aims to examine the influence of corporate governance mechanisms to transparency. Corporate governance mechanisms examined in this study include internal mechanism consisting of: commissioners, managerial ownership, foreign ownership, debt financing, and audit quality. The population in this study is a registered company in Indonesia Stock Exchange for the period 2015 - 2018. The sample in this research determined by purposive sampling method with a total sample of 103 annual reports. Statistical tests showed that the board of directors, managerial ownership, foreign ownership, debt financing has no effect on the performance of the company while the quality of the audit have an impact on transparency.

scholarly journals Do stock prices reflect regulatory reforms in the corporate governance mechanisms?

2016 ◽  
Vol 13 (2) ◽  
pp. 419-431 ◽  
Author(s):  
Constantinos Chalevas ◽  
Christos Tzovas
Keyword(s):  
Corporate Governance ◽  
Stock Returns ◽  
Stock Prices ◽  
Value Relevance ◽  
Stock Exchange ◽  
Economic Value ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms ◽  
Athens Stock Exchange ◽  
Regulatory Reforms

This study provides evidence on the value relevance of corporate governance mechanisms in a developing stock exchange. It empirically investigates the effect of corporate governance mechanisms prescribed by the corporate governance law (L.3016/2002) on abnormal stock returns for firms listed in the Athens Stock Exchange (ASE). The first corporate governance law in Greece aims to improve the existing corporate governance framework. However, stock prices seem no to be affected by the regulatory reforms in the corporate governance mechanisms. Three reasons are given: (1) the fundamental economic value of a firm is not affected by the introduction of corporate governance mechanisms; (2) the fundamental economic value of a firm is affected by the introduction of corporate governance mechanisms but due to the fact that the Greek stock market is not efficient share prices do not reflect firm’s fundamental economic value; and (3) investors may not be convinced that corporate governance mechanisms significantly affect the performance of a company.The findings of this study can facilitate legislators in improving the existing legislation concerning corporate governance and in developing a new one.

scholarly journals Firm Performance, Corporate Governance Mechanisms and CEO Turnover: Evidence from Nigeria

2020 ◽  
Vol 6 (1) ◽  
pp. 66
Author(s):  
Yahya Uthman Abdullahi ◽  
Magajiya Tanko
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Stock Exchange ◽  
Governance Structure ◽  
Foreign Ownership ◽  
Ceo Turnover ◽  
Corporate Boards ◽  
Governance Mechanisms ◽  
Female Directors ◽  
Internal Governance Mechanisms

This paper examines the influence of firm performance and internal governance mechanisms on CEO turnover decision. The sample of the study is all Nigerian non-financial firms listed on the Nigerian Stock Exchange (NSE) from year 2011 to 2015 consisting of 72 cases of CEO turnover. Using logistic regression analysis, this study provides evidences that poor accounting-based performance (ROA) and low engagement of female directors in corporate boards do increase the probability of CEO turnover. Furthermore, firms dominated with foreign ownership and those with independent board nominating committee are swifter in removing their CEOs. However, this study fails to support the argument that firms with large board size and those that are dominated by managerial ownership, help to enhance the monitoring practices, which ought to sanction underperformed CEOs with dismissal. Consequently, this study recommends that the Nigerian government should enact a legislation on gender quota to ensure that more female directors are appointed to the boards and as well encourage more foreign ownership in the Nigerian corporate landscape by attracting foreign investment into the economy via favourable policies. This paper contributes to the literature concerning CEO succession in developing markets with poor corporate governance structure such as Nigeria.

scholarly journals Effect of Corporate Governance Mechanisms on Value Relevance of EPS and BV: Evidence from the Indian Tourism Industry

2021 ◽  
Vol 2 (1) ◽  
pp. 31-44
Author(s):  
Saleem Ahmed Aqlan ◽  
Yaser M. Alashaf ◽  
Mohammed Salem Barakat ◽  
Dheya A. Zaid
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Value Relevance ◽  
Stock Exchange ◽  
Size Composition ◽  
Tourism Industry ◽  
Governance Mechanisms ◽  
Share Prices ◽  
Corporate Governance Mechanisms ◽  
The Board Of Directors

This paper examines corporate governance's effect on the valuation of Earnings per Share (EPS) and Book Value (BV).Differently from empirical previous studies in the area of corporate governance and value relevance of EPS and BV, this study investigates this impact within a unique setting of publicly listed tourism firms Using panel data from a selection of some Bombay Stock Exchange (BSE) listed companies from 2013 to 2015. The paper explored three aspects of the mechanisms of corporate governance: the board of directors (size, composition and diligence), the audit committee (size, composition and diligence) and foreign ownership .The study uses descriptive statistics, correlation and multi-regression model to analyse the influence of corporate governance on the value relevance of EPS and BV for the Indian tourism industry. The results show that the interaction between corporate governance mechanisms and value relevance of BV has more impact on the share prices than EPS. It is recommended that the Indian tourism industry should pay more focus to corporate governance mechanisms in order to improve its value relevance of EPS, BV and share prices.

scholarly journals PENGARUH MEKANISME CORPORATE GOVERNANCE TERHADAP TAX AVOIDANCE

2020 ◽  
Vol 13 (1) ◽  
pp. 115-120
Author(s):  
Agustina Mapadang
Keyword(s):  
Corporate Governance ◽  
Stock Exchange ◽  
Tax Avoidance ◽  
Institutional Ownership ◽  
Manufacturing Companies ◽  
Governance Mechanisms ◽  
Tax Rate ◽  
Corporate Governance Mechanisms ◽  
The Board Of Directors ◽  
Negative Effect

This study aims to analyze the influence of corporate governance mechanisms on tax avoidance. Corporate governance mechanisms are measured by Independent Commissioners and Institutional Ownership while tax avoidance is measured by the Avoidance Tax Rate. The research population is all manufacturing companies listed on the Indonesia Stock Exchange in 2012-2016 using purposive sampling method. The number of observations of 435 and the type of research is the analysis of causal relationships to see the effect of each variable. The results of the study show that corporate governance mechanisms negatively affect tax avoidance; the board of directors has a positive effect on tax avoidance and institutional ownership has a negative effect on the value of the company.

scholarly journals ANALISIS PENGARUH GOOD CORPORATE GOVERNANCE TERHADAP KINERJA PERUSAHAAN PERBANKAN DI INDONESIA

MAKSIMUM ◽  
2019 ◽  
Vol 8 (2) ◽  
pp. 86
Author(s):  
Ika Listyawati ◽  
Ida Kristiana
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Annual Report ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Foreign Ownership ◽  
Capital Adequacy ◽  
Government Ownership ◽  
Independent Variables ◽  
The Board Of Directors

Corporate governance is still a major problem during financial periods such as Indonesia. Especially, financial institutions  have  carried  out  reforms  to  improve  goals  and stakeholders. The purposeof this study is to measure corporate governance and in a banking environment that is specific to corporategovernance.The independent variables used in this study are ownership structures consisting of controllingshareholder ownership, foreign ownership, government ownership; the size of the board of  directors;  the sizeof the board of commissioners; independent commissioner; CAR. The sample of this study is a general bankingcompany located in Indonesia which is listed on the Indonesia Stock Exchange (BEI) for the period 2010-2014.This research data is derived  from  the  annual  report  of  the  bank  (annual  report)  for  the  period  20102014 whichis obtained fromthewebsiteof eachof the banks, theIndonesianBankingDirectory,Indonesian Capital Market Directory(ICMD).Theanalyticalmethodusedismultiple linear regression in accordance with the research objectives that analyzethe effect of independent variables on the dependentvariable. Thepurposivesamplingmethodisusedtodeterminethesampleofchoice.Fro this method,get26 samples of commercial banks.The results of the analysis found that  Controlling  Shareholder  Ownership  (OWN)  andGovernment Ownership (GOV) showed a negative relationship not significant to banking performance.However, for Foreign Ownership (FOR), Board of Directors Size  (BOD), Board  of  Commissioners  Size(BOC), Proportion of Independent Commissioners (INDEP) shows a  positive  and  significant  relationship.Then for the variable Capital Adequacy Ratio (CAR) there is a significant negative relationship.

scholarly journals The Influence of Corporate Governance and Operating Characteristics on Corporate Environmental Investment: Evidence from China

2019 ◽  
Vol 11 (10) ◽  
pp. 2737 ◽  
Author(s):  
Defeng Yang ◽  
Zhanqing Wang ◽  
Fangmin Lu
Keyword(s):  
Corporate Governance ◽  
Environmental Protection ◽  
Production Efficiency ◽  
Stock Exchange ◽  
Operating Characteristics ◽  
Factors Affecting ◽  
Environmental Investment ◽  
The Board Of Directors ◽  
The Relationship ◽  
Operation Characteristics

This study mainly explores the relationship between company governance, company operation characteristics, management connection and corporate environmental investment. Based on the theory of stakeholders and principal-agent, it expounds the factors affecting the environmental behavior of companies, and empirically tests the relationship of the involved variables. This study takes the non-financial listed companies of Shanghai Stock Exchange from 2009 to 2011 as a sample, and conducts empirical research on corporate governance, business operation characteristics, management connection and corporate environmental protection investment. The results show that under the same circumstances, if the CEO is also the chairman of the board of directors, it will lead to opportunistic situation of the controlling shareholder, and the degree of willingness to invest in environmental preservation is low, which is negatively related to environmental protection investment. The more redundant resources or the higher the production efficiency exist, the higher the willingness of enterprises to invest in environmental protection will be stimulated.

Impact of Corporate Governance on Credit Ratings: An Empirical Study in the Indian Context

2020 ◽  
Vol 13 (2) ◽  
pp. 140-164
Author(s):  
Taruntej Singh Arora
Keyword(s):  
Corporate Governance ◽  
Default Risk ◽  
Credit Rating ◽  
Stock Exchange ◽  
Credit Ratings ◽  
Governance Mechanisms ◽  
Factors Affecting ◽  
Indian Context ◽  
Corporate Governance Mechanisms ◽  
Prior Literature

Credit rating is the judgement of a credit rating firm of the creditworthiness of an entity as well as its ability to repay outstanding debt. Prior literature on credit ratings has majorly identified firm-specific characteristics as well as the characteristics of the debt issued as the primary factors affecting credit ratings. However, effective governance mechanisms can affect the credit ratings of a firm by way of their influence on a firm’s default risk. The present article is an attempt to discern the relationship between corporate governance and credit ratings by studying the Bombay Stock Exchange listed Indian firms that received a credit rating from CRISIL for their long-term debt during any of the 5 years from 2013–2014 to 2017–2018. It would add to the existing literature by assessing the association between corporate governance mechanisms and credit ratings in the Indian context since all other studies relate majorly to the Western parts of the world.

Corporate governance, product market competition and firm performance: evidence from Iran

Humanomics ◽  
2017 ◽  
Vol 33 (1) ◽  
pp. 38-55 ◽  
Author(s):  
Mahdi Moradi ◽  
Mohammad Ali Bagherpour Velashani ◽  
Mahdi Omidfar
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Market Competition ◽  
Product Market ◽  
Research Literature ◽  
Product Market Competition ◽  
Governance Mechanisms ◽  
Management Performance ◽  
Content Type ◽  
The Board Of Directors

Purpose The purpose of this study is to investigate the effect of product market competition and corporate governance on firm’s management performance in the Tehran Stock Exchange market. According to the research literature, the governance mechanisms used in this study consist of ownership structure, structure of the board of directors and capital structure. In addition, Herfindahl–Hirschman Index and market size were used to measure the product market competition. Design/methodology/approach This study used one selected sample among the firms in the capital market of Iran from 2004 to 2012. Findings The results of this study indicated that there is a significant relation among the major governance mechanisms (including ownership concentration, independence of the board of directors and debt ratio) and product market competition and management performance. The findings of this study also showed that product market competition is effective on the relation between corporate governance and the performance, and this is what has been ignored in most of the conducted studies. Originality/value In general, the results of this study supported the idea that product market competition is effective on implementation and efficiency of governance mechanisms.

scholarly journals Corporate governance and conglomerate diversification strategy – evidence from Vietnam

2018 ◽  
Vol 13 (6) ◽  
pp. 1578-1596 ◽  
Author(s):  
Thi Xuan Trang Nguyen
Keyword(s):  
Corporate Governance ◽  
Stock Exchange ◽  
Board Composition ◽  
Governance Mechanisms ◽  
Content Type ◽  
Unrelated Diversification ◽  
Corporate Governance Mechanisms ◽  
Control Devices ◽  
Interest Alignment ◽  
The Relationship

Purpose The purpose of this paper is to examine the impact of internal corporate governance mechanisms, including interest alignment and control devices, on the unrelated diversification level in Vietnam. Additionally, the moderation of free cash flow (FCF) on these relationships is also tested. Design/methodology/approach The study is based on a balanced panel data set of 70 listed companies in both stock markets, Ho Chi Minh Stock Exchange and Hanoi Stock Exchange, in Vietnam for the years 2007–2014, which gives 560 observations in total. Findings The results show that if executive ownership for CEOs is increased, then the extent of diversification is likely to be reduced. However, the link between unrelated diversification level and executive stock option, another interest alignment device, cannot be confirmed. Among three control devices (level of blockholder ownership, board composition and separation of CEO and chairman positions), the study finds a positive connection between diversification and blockholder ownership, and statistically insignificant relations between the conglomerate diversification level and board composition, or CEO duality. Additionally, this study discovers a negative link between diversification and state ownership, although there is no evidence to support the change to the effect of each internal corporate governance mechanism on the diversification level of a firm between high and low FCF. Practical implications The research can be a useful reference not only for investors and managers but also for policy makers in Vietnam. This study explores the relationship among corporate governance, diversification and firm value in Vietnam, where the topics related to effectiveness of corporate governance mechanisms to public companies has been increasingly attractive to researchers since the default of Vietnam Shipbuilding Industry Group (Vinashin) happened in 2010 and the Circular No. 121/2012/TT-BTC on 26 July 2012 of the Vietnamese Ministry of Finance was issued with regulations on corporate governance applicable to listed firms in this country. Originality/value This research, first, enriches current literature on the relationship between corporate governance and firm diversification. It can be considered as a contribution to the related topic with an example of Vietnam, a developing country in Asia. Second, the research continues to prove non-unification in results showing the relationship between corporate governance and conglomerate diversification among different nations. Third, it provides a potential input for future research works on the moderation of FCF to the effects of corporate governance on diversification.

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