How corporate governance affect firm value and profitability Evidence from Saudi financial and non-financial listed firms

Gerged, Ali Meftah; Agwili, Ahmed

doi:10.1504/ijbge.2020.106338

Cited by 37 publications

(30 citation statements)

References 67 publications

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“…Prior studies suggest that compliance with good CG arrangements can be positively attributed to increasing firms' dissemination of environmental information (Al-Gamrh et al , 2020; Ezhilarasi and Kabra, 2017; Gerged, 2021; Fernandes et al , 2019; Mathuva et al , 2019). Specific board structures are related to a more dynamic role for CG mechanisms in controlling managers opportunistic behaviour, and thus, bringing into line their interests with those of shareholders (D'Amico et al , 2016; Gerged and Elheddad, 2020; Gerged and Agwili, 2020; Gerged et al , 2020a; Matuszak et al , 2019; Salem et al , 2019). We seek to examine the impact of board characteristics on CED in the Sri Lankan setting.…”

Section: Theoretical Underpinning Related Studies and Hypotheses Developmentmentioning

confidence: 99%

Determinants of corporate environmental disclosures in Sri Lanka: the role of corporate governance

Nuskiya

Ekanayake

Beddewela

et al. 2021

JAEE

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PurposeThis study explores the levels of and trends in corporate environmental disclosure (CED) among a sample of Sri Lankan listed companies from 2015 to 2019. Furthermore, this article examines the firm-level determinants of CED, including corporate governance (CG) mechanisms, in Sri Lanka from a multi-theoretical perspective.Design/methodology/approachUsing a sample of 205 firm-year observations, this paper distinctively applies a panel quantile regression (PQR) model to examine the determinants of CED in Sri Lanka. This method was supported by estimating a two-step generalized method of moment (GMM) model to tackle any possible existence of endogeneity concerns.FindingsThe authors’ findings indicate an increasing trend in CED practice among the sampled companies (i.e. 41 firms, the only adopters of the GRI framework) in Sri Lanka from 2015 to 2019. However, it is still considered at an early stage compared with other developed counterparts. Furthermore, this study suggests that board size, board independence, board meetings, industry type, profitability and firm size are positively associated with CED level. In contrast, and consistent with our expectation, CEO duality is negatively attributed to the disclosed amount of environmental information in the Sri Lankan context.Research limitations/implicationsThe authors’ empirical evidence reiterates the crucial need to propagate and promote further substantive CG reforms, mandating CED in Sri Lanka.Originality/valueThe authors’ findings provide much-needed insights for indigenous companies, operating across similar emerging economies, to understand how CED can be incorporated into their reporting process based on the GRI framework in order to enhance their firm value, reduce legitimacy gaps and mitigate other operational risks.

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Section: Theoretical Underpinning Related Studies and Hypotheses Developmentmentioning

confidence: 99%

Determinants of corporate environmental disclosures in Sri Lanka: the role of corporate governance

Nuskiya

Ekanayake

Beddewela

et al. 2021

JAEE

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“…The main objective of financial statements audit is to reduce information risk. Financial statements are prepared by management and cannot be directly verified by any of the stakeholders, including the owners (Gerged & Elheddad, 2020;Gerged & Agwili, 2020). Accordingly, these statements contain only the management's point of view.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

The effect of auditor type on audit quality in emerging markets: evidence from Egypt

El-Dyasty

Elamer

2020

IJAIM

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Purpose Although a number of studies suggest that big audit firms provide higher audit quality in strict legal environments, empirical evidence remains inconclusive. As little is known about the effect of auditor type on audit quality in less strictly legal environments, this study aims to investigate the impact of auditor type on audit quality in the Egyptian market. Design/methodology/approach Data of Egyptian-listed companies during the period 2011–2018 are used. To examine the impact of auditor type on audit quality, ordinary least square regression and robust standard errors clustered at year and industry level are used. This study uses discretionary accruals as a proxy for audit quality. Several additional analyzes are conducted to assess the robustness of the main results, including alternative measures of audit quality and auditor type. Findings The results show that audit firms tend to provide higher audit quality when they are affiliated with a foreign audit firm. However, Big 4 auditors do not provide higher audit quality compare to their counterparts. Additionally, the governmental agency, accountability state authority, that monopolize audit function in state-owned companies do not appear to be associated with higher audit quality. Finally, local audit firms have a negative association with audit quality. This may be their strategy to secure future clients that seek low-quality audits. Research limitations/implications This study suggests that affiliation with foreign audit firms will help the Egyptian firms to develop their abilities by using advanced technology and techniques and transfer rare expertize to the Egyptian auditors. This study also shows that the strategy adopted by many Egyptian audit firms to affiliate with foreign auditors reflects the desire of these firms to be included in one tier alongside Big 4 audit firms to increase their market share under a claim of providing a higher audit quality. Originality/value This study adds to the rare but growing body of literature by investigating how auditor type affects audit quality in the context of less strictly legal environments. The results are important, as investors, standards-setters and regulators have growing concerns over audit quality since the Enron scandal. The findings suggest that audit quality depends on auditor type. These findings have important implications for investors, standards-setters and auditors interested in auditor oversight, audit quality and auditor choice.

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“…One of the motivations of capital structure management is to reduce capital cost and maximize the shareholders' interests (Danso et al, 2019;Uwuigbe, 2014). Corporate governance, on the other hand, is a mechanism to maximize shareholder value through organizational' management, which has always been related to agency problems (Adel et al, 2019;AlHares, 2020;AlHares et al, 2020;Gerged and Elheddad, 2020;Gerged and Agwili, 2020;Gerged et al, 2018;Ullah et al, 2019;Uwuigbe, 2014). Corporate governance seems to affect the capital structure and plays an important role in corporate financing decisions (Haque et al, 2011).…”

Section: Introductionmentioning

confidence: 99%

Corporate governance, ownership structure and capital structure: evidence from Chinese real estate listed companies

Feng

Hassan

Elamer

2020

IJAIM

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Purpose This paper aims to contribute to the existing capital structure and board structure literature by examining the relationship among corporate governance, ownership structure and capital structure. Design/methodology/approach The paper uses a panel data of 595 firm-year observations from a unique and comprehensive data set of 119 Chinese real estate listed firms from 2014 to 2018. It uses fixed effect and random effect regression analysis techniques to examine the hypotheses. Findings The results show that the board size, ownership concentration and firm size have positive influences on capital structure. State ownership and firm profitability have inverse influences on capital structure. Research limitations/implications The findings suggest that better-governed companies in the real estate sector tend to have better capital structure. These findings highlight the unique Chinese context and also offer regulators a strong incentive to pursue corporate governance reforms formally and jointly with the ownership structure. Finally, the results suggest investors the chance to shape detailed expectations about capital structure behavior in China. Future research could investigate capital structure using different arrangement, conducting face-to-face meetings with the firm’s directors and shareholders. Practical implications The findings offer support to corporate managers and investors in forming or/and expecting an optimal capital structure and to policymakers and regulators for ratifying laws and developing institutional support to improve the effectiveness of corporate governance mechanisms. Originality/value This paper extends, as well as contributes to the current capital structure and corporate governance literature, by proposing new evidence on the effect of board structure and ownership structure on capital structure. The results will help policymakers in different countries in estimating the sufficiency of the available corporate governance reforms to improve capital structure management.

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How corporate governance affect firm value and profitability Evidence from Saudi financial and non-financial listed firms

Cited by 37 publications

References 67 publications

Determinants of corporate environmental disclosures in Sri Lanka: the role of corporate governance

Determinants of corporate environmental disclosures in Sri Lanka: the role of corporate governance

The effect of auditor type on audit quality in emerging markets: evidence from Egypt

Corporate governance, ownership structure and capital structure: evidence from Chinese real estate listed companies

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