Corporate fraud under pyramidal ownership structure: Evidence from a regulatory reform

Choi, Daewoung; Gam, Yong Kyu; Shin, Hojong

doi:10.1016/j.ememar.2020.100726

Cited by 16 publications

(13 citation statements)

References 59 publications

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“…Firms with high state ownership are more likely to dismiss CEOs than those with low or no state ownership upon securities fraud detection. Choi et al (2020) explore a causal relationship between firms' ownership structures and the likelihood of corporate fraud in South Korea. They find that the frequency of corporate fraud was reduced more in central firms than in non-central firms as the controlling owner's cash-flow rights dropped more.…”

Section: Ownership Structurementioning

confidence: 99%

Elucidating corporate governance’s impact and role in countering fraud

Kassem

2022

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Purpose This paper aims to highlight the role and impact of corporate governance in combating fraud by drawing on insights from the literature, identify gaps in the literature and suggest new directions for future research. Design/methodology/approach The paper is based on a comprehensive general literature review using multiple search engines and databases. Findings This paper finds that effective corporate governance can help reduce fraud risk, prevent fraud and detect fraud, particularly corporate fraud, insider fraud and asset diversion. Some companies use corporate governance mechanisms to bolster their reputation following fraud detection. Ineffective corporate governance increases fraud risk, provides the opportunity for perpetrating fraud and reduces the likelihood of fraud detection. The paper sheds light on several governance mechanisms that could help in mitigating fraud risk, as reported in the literature. The paper categorises these governance mechanisms into four broad governance aspects, including board leadership and the role of ethics; (b) board characteristics, composition and structure; ownership structure; accountability. The paper proposes a guide summarising these broad fundamental governance aspects, including specific anti-fraud controls and examples of how organisations could enhance ethical cultures and the tone at the top. Originality/value To the best of the author’s knowledge, this is the first paper to elucidate the role of corporate governance in countering fraud and develop guidance in this area. The proposed guidance could be helpful to businesses leaders, policymakers, researchers and academics alike.

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Section: Ownership Structurementioning

confidence: 99%

Elucidating corporate governance’s impact and role in countering fraud

Kassem

2022

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“…Wang et al (2017) menemukan bahwa kepemilikan terkonsentrasi berpengaruh positif terhadap investasi R&D. Rossi et al (2017) menemukan bahwa individual voting right memiliki kesempatan yang rendah untuk berhasil mendapatkan dana dari platform crowd funding sedangkan pool voting right tidak berpengaruh. Kepemilikan terkonsentrasi yang merupakan kontroler pada umumnya mengenakan kebijakan pembiayaan R&D lebih besar kepada anak perusahaan dan mengenakan kebijakan pembiayaan R&D lebih rendah pada perusahaan induk (Choi et al, 2020) Terdapat dua pandangan terkait pasar modal internal. Pandangan pertama yaitu pandangan valueadded.…”

Section: Tinjauan Teoritis Dan Hipotesis Pengembangan Hipotesisunclassified

“…Jika manajemen memutuskan untuk melakukan inovasi atau investasi asset tetap, seperti membeli mesin baru, terdapat risiko penurunan return, sehingga kemungkinan manajemen industry manufaktur di Indonesia lebih tertarik pada kompensasi jangka pendek daripada melakukan investasi dengan risiko mengorbakan kinerja jangka pendek. Hasil penelitian ini sejalan dengan penelitian Rossi et al (2017), tapi berbeda dengan hasil penelitian Wang et al (2017) dan penelitian Choi et al (2020) yang menyatakan bahwa kepemilikan blockholder berpengaruh secara positif terhadap investasi R&D.…”

Section: Pengaruh Voting Right Pemegang Saham Pengendali Terhadap Pen...unclassified

Pengaruh Voting Right, Blockholder, Dan Excess Control Right Terhadap Pengambilan Keputusan

Evanany

Hasnawati

2022

Jurnal Pajak dan Keuangan Negara

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Penelitian ini bertujuan untuk menguji dan menganalisis pengaruh voting right, non-financial blockholder, excess control right, cash holding, leverage ratio, dan firm size terhadap pengambilan keputusan strategi. Penelitian ini menggunakan data sekunder. Populasi yang digunakan dalam penelitian ini adalah perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia (BEI) pada periode 2015-2019. Teknik sampling yang digunakan yaitu purposive sampling. Data diolah menggunakan analisis regresi berganda. Hasil dari penelitian ini adalah leverage ratio berpengaruh negatif signifikan terhadap pengambilan keputusan strategi diferensiasi dan berpengaruh positif signifikan terhadap pengambilan keputusan strategi cost leadership, firm size berpengaruh positif signifikan terhadap pengambilan keputusan strategi diferensiasi dan berpengaruh negatif signifikan terhadap pengambilan keputusan strategi cost leadership, sementara excess control right, voting right, non-financial blockholder, dan cash holding tidak berpengaruh terhadap pengambilan keputusan strategi.

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“…Particularly, a weak institutional framework could help higher-ranking officials to execute bureaucratic-business conniving corruption crime (Liu 2020). More restrictive regulatory reforms are likely to reduce the frequency of fraud (Choi et al 2020). The regulatory regime implemented in a country can affect the reputational cost suffered by the sanctioned fraudulent companies (Zhu 2020).…”

Section: Literature Reviewmentioning

confidence: 99%

Economic and Non-Economic Variables Affecting Fraud in European Countries

Ahmad

Ciupac-Ulici

Beju

2021

Risks

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Fraud is one of the most harmful phenomena, because it leads to collapse of organizations, causes economic downfall of countries, and destroys faith in a country’s capital markets. The impact of fraud is complex and has varying degrees depending on political and financial institutional structures of a country. In this paper, we investigate the combined effect of economic and non-economic variables on fraud using a sample of 41 developed, in transition, and developing European countries. The data cover the period July 2014–December 2020. Panel data techniques of pooled estimation and the dynamic panel data/generalized method of moments (DPD/GMM) is used, keeping in view the endogeneity perspective. Nevertheless, two-way impacts of fixed effect model estimation—cross-sectional and time-based (panel) effects (alternatively)—are used for analyzing the relationship among the given variables, based on Hausman specification test results. Empirical results of panel data extended REM and FEM approaches with country-specific cross-sectional effects showing that political stability, economic freedom, poverty, and GDP significantly affect fraud proliferation. Political stability is appraised to be the most scoring determinant of fraud incidence in a country.

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Corporate fraud under pyramidal ownership structure: Evidence from a regulatory reform

Cited by 16 publications

References 59 publications

Elucidating corporate governance’s impact and role in countering fraud

Elucidating corporate governance’s impact and role in countering fraud

Pengaruh Voting Right, Blockholder, Dan Excess Control Right Terhadap Pengambilan Keputusan

Economic and Non-Economic Variables Affecting Fraud in European Countries

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