Effect of corporate governance on income persistence and value relevance of quoted Nigerian firms

Asogwa, Cosmas Ikechukwu; Ofoegbu, Grace N.; Modum, U.

doi:10.1504/ajaaf.2020.109206

Cited by 2 publications

(3 citation statements)

References 43 publications

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“…Sukanantasak (2014) shows that institutional ownership and family’s shareholding had positive effect on earnings persistence of Thai companies. Asogwa et al (2020) reveal that audit committee had a significant positive effect on the earnings persistence of Nigerian firms. Agustina et al (2021) show that the power of CG has a positive effect on earnings persistence of Indonesian firms.…”

Section: Resultsmentioning

confidence: 88%

“…Table 7 provides the results of t -tests comparing the mean and median level of each earnings quality measure for the strong and weak CG portfolios. The results show that earnings smoothness is more in firms with worse governance (Cornett et al , 2008; Wang, 2014; Yasser and Mamun, 2015; Wan Mohammad et al , 2016; Elghuweel et al , 2017; Al-Haddad and Whittington, 2019); earnings predictability is more in firms with better governance (Cho and Rui, 2009; Prencipe and Bar-Yosef, 2011; Ahmed and Ismail, 2013; Mollah et al , 2019); firms with better governance have higher earnings persistence (Calegari and Maretno, 2005; García Lara et al , 2010; Asogwa et al , 2020; Agustina et al , 2021); firms with worse governance have higher value relevance (Omokhudu and Amake, 2018); earnings timeliness is more in firms with better governance (Broedel Lopes and Walker, 2008; Ebimobowei and Yadirichukwu, 2013; Lim et al , 2014; Mathuva et al , 2019; Syofyan et al , 2021); and firms with better governance have higher levels of earnings conservatism (Xia and Zhu, 2009; García Lara et al , 2010; Lim, 2011; Leventis et al , 2013; Huang et al , 2014; Sharma and Kaur, 2021). Except the value relevance measure, these results support our hypotheses.…”

Section: Resultsmentioning

confidence: 99%

“…This means, on average, better governed corporations tend to engage significantly less in earnings smoothness than their poorly governed firms (Xie et al , 2001; Klein, 2002; Cornett et al , 2008; Krishnan and Parsons, 2008; García‐Meca and Sánchez‐Ballesta, 2009; Wang, 2014; Yasser and Mamun, 2015; Abbadi et al , 2016; Wan Mohammad et al , 2016; Dou et al , 2016; Du et al , 2017; Bajra and Cadez, 2017; Elghuweel et al , 2017; Al-Haddad and Whittington, 2019; Priscilla and Siregar, 2020). These firms have earnings that are more predictable, more persistent and higher levels of value relevance than their poorly governed counterparts (Calegari and Maretno, 2005; Habib and Azim, 2008; Cho and Rui, 2009; García Lara et al , 2010; Prencipe and Bar-Yosef, 2011; Ahmed and Ismail, 2013; Ogeh Fiador, 2013; Mollah et al , 2019; Almujamed and Alfraih, 2020; Asogwa et al , 2020; Omran and Tahat, 2020; Agustina et al , 2021). Also, better-governed firms have more timeliness earnings and engage in higher levels of earnings conservatism (Broedel Lopes and Walker, 2008; Xia and Zhu, 2009; García Lara et al , 2010; Lim, 2011; Leventis et al , 2013; Ebimobowei and Yadirichukwu, 2013; Lim et al , 2014; Huang et al , 2014; Mathuva et al , 2019; Syofyan et al , 2021; Sharma and Kaur, 2021).…”

Section: Discussionmentioning

confidence: 99%

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Corporate governance and earnings quality: the behavioral theory of corporate governance (evidence from Iran)

Rezaee

Safarzadeh

2022

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Purpose This study aims to examine the relationship between corporate governance (CG) and various measures of earnings quality in listed companies on Tehran Stock Exchange (TSE). The theoretical intuition for prediction of any relationship between earnings quality and CG is based on the behavioral theory and the institutional settings in Iran. Design/methodology/approach This study used the data of 117 listed companies on the TSE for the period from 2005 to 2019. The authors use panel data regression as the main methodology, along with principal component analysis, t-test and rank-sum test. Findings This study finds that the CG has a positive association with earnings quality. More precisely, better CG mechanisms cause lower earnings smoothness, more predictable and persistent earnings, and higher levels of timeliness, conservatism and value relevance. The relationship between CG and earnings quality is statistically and economically significant for all models. Originality/value The findings further the understanding of the role of CG in improving earnings quality in an Islamic and emerging country. First, this study provides evidence on the relation between CG and earnings quality by focusing on the behavioral theory, which suggests that corporate decision-making is not only influenced by formal CG mechanisms, but also by informal CG arrangements. In this case, this study departs from the restrictive theories (specifically, agency theory) that are widely used in past literature. Second, this study constructs an index that fits to corporate context of Iran rather than applying indexes introduced in Anglo-American environments.

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Section: Resultsmentioning

confidence: 88%

Section: Resultsmentioning

confidence: 99%

Section: Discussionmentioning

confidence: 99%

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Corporate governance and earnings quality: the behavioral theory of corporate governance (evidence from Iran)

Rezaee

Safarzadeh

2022

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Corporate Governance and Earnings Persistence of Listed Nigerian Firms

Orilonise,

Segun,

Dauda

et al. 2024

RCP

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Information about the performance of firms is very important to investors for making investment decision. However, investors of firms in developing economies particularly in Nigeria are faced with the problem of access to relevant and reliable information. In view of this, this study examines the effect corporate governance has on earnings persistence of Nigerian listed firms. This research employed the explanatory research design. It generated sampling frame for companies that are listed in 2002 and continues to be listed up to 2021, the entire 51 companies were used, using census sampling technique. Secondary data was employed for this study, extracted from the companies’ audited annual reports. The data obtained were analyzed using dynamic panel regression model. Findings from this study show that: (i) previous year earnings significantly influence current year earnings. (ii) Corporate governance has significant negative influence on the earnings of Nigeria listed firms. (iii) Current year earnings are significantly influenced by the interaction between corporate governance and the past year’s earnings. The study recommends the need for Nigeria listed firms to focus on improving their governance structures through appointing independent directors to the board, establishing effective internal control systems, and ensuring that executive compensation is aligned with long-term performance.

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Effect of corporate governance on income persistence and value relevance of quoted Nigerian firms

Cited by 2 publications

References 43 publications

Corporate governance and earnings quality: the behavioral theory of corporate governance (evidence from Iran)

Corporate governance and earnings quality: the behavioral theory of corporate governance (evidence from Iran)

Corporate Governance and Earnings Persistence of Listed Nigerian Firms

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