Does compliance with corporate governance increase profitability? Evidence from an emerging economy: Pakistan

Shakri, Irfan Haider; Yong, Jaime; Xiang, Erwei

doi:10.1016/j.gfj.2022.100716

Cited by 9 publications

(5 citation statements)

References 70 publications

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“…Finally, this study enriches the existing literature by considering hybrid offerings in Pakistan, one of the fastest-developing countries (e.g. Hussain et al, 2021;Shakri et al, 2022). The findings of this can serve as a guideline for other developing countries where hybrid offerings are becoming increasingly popular, yet have received limited analysis (Maheepala et al, 2017).…”

Section: Theoretical Implicationsmentioning

confidence: 70%

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Financial and non-financial factors for the success of hybrid offerings: evidence from multinational enterprises in an emerging market

Leonidou,

Battisti,

Ahmad

et al. 2024

IMR

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PurposeThe purpose of this study is to identify the financial and non-financial factors contributing to the success of hybrid offerings among Pakistani multinational enterprises (MNEs).Design/methodology/approachTo capture the complexity and interdependence of success factors, this study employed fuzzy-set qualitative comparative analysis (fsQCA). Data were collected from 213 chief executive officers (CEOs) of Pakistani MNEs.FindingsThe findings indicate that organizational support for service plays a vital role in hybrid offerings. Specific paths, such as a service-oriented corporate culture and management commitment to service, are necessary conditions for successful hybrid offerings.Originality/valueThe study sheds new light on the causal relationship underlying hybrid offerings in Pakistan, one of the Next Eleven countries, which is among the fastest-developing economies. We identified various paths to the financial and non-financial success of hybrid offerings within the Pakistani manufacturing MNE sector, which, to the best of our knowledge, has been underexplored. Additionally, we considered the digitalization dimension, which integrates and strengthens previous configurational models.

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Section: Theoretical Implicationsmentioning

confidence: 70%

“…As noted by Yeniaras et al (2021) and Johnson and Tellis (2008), there is insufficient research relative to emerging economies, so we focused on Pakistan MNEs as representative of a growing economy (e.g. Ali et al, 2019;Mahmood et al, 2019;Sadiq et al, 2021;Shakri et al, 2022;Zahoor et al, 2023;Shahbaz et al, 2024).…”

Section: Methodsmentioning

confidence: 99%

Financial and non-financial factors for the success of hybrid offerings: evidence from multinational enterprises in an emerging market

Leonidou,

Battisti,

Ahmad

et al. 2024

IMR

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“…Other vital corporate governance attributes (such as board size, board independence, and institutional ownership) and their relationship with profitability were however isolated. Shakri et al (2022) ~ 295 ~ documented that increased compliance with corporate governance leads to higher performance of firms, however at higher compliance costs. The study was notably carried out in the context of Pakistan.…”

Section: Statement Of the Problemmentioning

confidence: 99%

Corporate Governance and Profitability of Manufacturing and Allied Firms Listed at the Nairobi Securities Exchange, Kenya

Akims,

Pyoko

2023

TUJ

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The study examined the effect of corporate governance on the profitability of manufacturing and allied firms listed at the Nairobi Securities Exchange, Kenya. The study was anchored by agency theory and stakeholder theory. Nine manufacturing and allied firms listed at the Nairobi Securities Exchange, Kenya constituted the target population and a census approach was adopted. The study found that board size had significant implications on the profitability of manufacturing and allied firms listed at the Nairobi Securities Exchange, Kenya (p= 0.009, β= -0.023). It was established that board independence is significant in predicting profitability (p= 0.011, β= -0.001). External audit quality had a significant effect on profitability (p= 0.001, β= 0.258). Institutional ownership was significant in determining profitability (p= 0.000, β= 0.002). The study recommends that listed manufacturing and allied firms should ensure that an effective board is constituted which is optimum in size. The study further recommends that a blended board should be ensured comprising of both executive and non-executive directors which reflects the level of independence of the board. It was also recommended that firms should ensure that a highly reputable external auditor is appointed. In addition, firms should strive towards having a higher proportion of institutional shareholding to outstanding shareholdings. Given the 53.53 percent unexplained variation in profitability, further studies on manufacturing and allied firms listed at the Nairobi Securities Exchange, Kenya can consider other corporate governance attributes.

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“…Corporate governance serves as an oversight mechanism in the financial reporting process which assures the integrity of financial reports (Raml, 2013). Increased compliance with corporate governance predicts higher firm performance but entails greater compliance costs (Shakri et al, 2022). Daniel (2018) states main deficiencies of the failed fianc e companies were deficient governance, management and capital structures.…”

Section: Opportunistic Earnings Management and Corporate Governancementioning

confidence: 99%

White-collar money laundering through opportunistic earnings management: fair value accounting practices of failed finance companies in Sri Lanka

Jayasekara¹,

Perera

Ajward

2022

JFC

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Purpose The purpose of this paper is to discuss how the failed finance companies in Sri Lanka used fair value accounting practices as an opportunistic earnings management practice to launder money under weak corporate governance structures. Design/methodology/approach This paper uses a qualitative design under the philosophy of interpretivism. The case study research strategy is used inductively to investigate how fair value accounting had been used for money laundering. Findings The dishonest intention of major shareholders and board of directors had forced failed companies to misuse fair value accounting to manipulate performance and use them for personal benefits which were detrimental to the depositors and stability of the companies. The weak corporate governance structures which were developed because of regulatory forbearance were influential for manipulations. The concentrated ownership had reduced agency conflicts between shareholders and managers because major shareholders were the members of the board of directors. The appointed committees were not effective because of an inadequate number of independent directors with sufficient expertise. The reduced agency conflict between shareholders and managers has exaggerated the agency conflict with depositors. Therefore, it is recommended to dilute ownership concentration to establish good corporate governance structures and make stable institutions. Research limitations/implications This study does not discuss the dishonest fair value accounting practices of all licensed finance companies because of the sensitivity of the matter for surviving companies. Originality/value This paper is an original work of the authors which discusses how fair value accounting practices had been used to launder money in failed finance companies in Sri Lanka as an emerging market context.

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Does compliance with corporate governance increase profitability? Evidence from an emerging economy: Pakistan

Cited by 9 publications

References 70 publications

Financial and non-financial factors for the success of hybrid offerings: evidence from multinational enterprises in an emerging market

Financial and non-financial factors for the success of hybrid offerings: evidence from multinational enterprises in an emerging market

Corporate Governance and Profitability of Manufacturing and Allied Firms Listed at the Nairobi Securities Exchange, Kenya

White-collar money laundering through opportunistic earnings management: fair value accounting practices of failed finance companies in Sri Lanka

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