The association between disclosure level and cost of capital in an emerging market: evidence from Egypt

Kamel, Hany; Shahwan, Tamer Mohamed

doi:10.1504/aajfa.2014.064173

Cited by 25 publications

(31 citation statements)

References 62 publications

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“…The computed score of each firm equals the maximum possible outcome divided by the total score of all categories. The approach of measurement is consistent with other research studies (Shahwan and Hassan, 2013; Kamel and Shahwan, 2014; Shahwan, 2015).…”

Section: Research Design and Methodologysupporting

confidence: 88%

Assurance service and performance. Effect of CEO characteristics

Oware

Mallikarjunappa

2020

MEDAR

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Purpose The purpose of this study is to investigate the impact of the choice of an assurance service provider on financial and social performance in an emerging economy. The study also examines whether the chief executive officer’s (CEO) characteristics influence the choice of an assurance service provider. Design/methodology/approach This study uses descriptive statistics, ordinary least square and probit regression to examine the 800 firm-year observations for the period 2010–2019 and with the Indian stock market as a testing ground. Findings The study shows that the engagement of assurance service providers reduces financial performance (stock price returns and Tobin’s q). The study also shows that consulting firms and auditing firms improve the social performance disclosure of the firm in an emerging economy. However, consulting firms outweigh auditing firms in improving social performance disclosure. Also, the implementation of mandatory reporting may slightly impede instead of an increase in social performance disclosure in an emerging economy. The study also shows that ageing CEOs prefer consulting firms over auditing firms in assurance service provision. Finally, the study shows that an extended stay in office by a CEO improves the choice of consulting firms, but the effect has a near-neutral significance. Originality/value The choice of CEO characteristics as an independent variable adds to the factors or drivers that cause the choice of an assurance service provider in an emerging economy. Also, the measurement variable of stock price returns and Tobin’s q expands the financial performance measurement in the relationship with assurance service providers.

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Section: Research Design and Methodologysupporting

confidence: 88%

Assurance service and performance. Effect of CEO characteristics

Oware

Mallikarjunappa

2020

MEDAR

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“…This study tests the internal and external validity of the selected sample size to ensure that it properly represented those in the Egyptian Exchange, as follows: first, following Wahba (2015), the study sample included most of the companies listed on the Egyptian Exchange. Second, the size of the data set equaled the sample size used in similar studies in the context of Egypt (see Wahba, 2008; Kamel and Shahwan, 2014; Wahba, 2015; Shahwan, 2015). Out of 222 firms listed on the Egyptian Exchange at the end of 2016, the present data set represents 23 percent.…”

Section: Data Collection and Methodologymentioning

confidence: 99%

“…Following Ferguson et al (2002), and Kamel and Shahwan (2014), only insignificant differences lie between the weighted and the unweighted approach in scoring the CG indices. Here, the weighted dichotomous approach was deployed to score the ACGINX.…”

Section: Measuring Corporate Governance Intellectual Capital and Financial Distressmentioning

confidence: 99%

Does the efficiency of corporate governance and intellectual capital affect a firm's financial distress? Evidence from Egypt

Shahwan

Habib

2020

JIC

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PurposeUsing data on 51 firms traded in the Egyptian Exchange from 2014 to 2016, this paper aimed to assess the efficiency of corporate governance (CG) and intellectual capital (IC) practices and to explore their influence on the probability of a firm's financial distress.Design/methodology/approachThe relative efficiency of CG and IC practices has been measured under the Malmquist data envelopment analysis model. A modified Z-score model was applied to assess firms' financial distress.FindingsThe Wilcoxon signed-rank test revealed almost insignificant evidence regarding the improvement of CG and IC efficiency over the study period. The efficiency score of CG practices had no impact on the likelihood of financial distress. However, the efficiency score of IC negatively affected the probability of financial distress.Research limitations/implicationsThe integration of data envelopment analysis with Tobit regression was required for identifying the significant drivers of efficient CG and IC.Practical implicationsThe findings shed light on the role of CG and IC in alleviating the degree of financial distress in Egypt as an emerging market, especially the need to raise firms' compliance with the Egyptian CG code from a voluntary to mandatory status.Originality/valueThis study, using Malmquist data envelopment analysis, is among the first attempts to assess the relative efficiency of CG and IC practices and their effects on financial distress.

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“…and X 4 : Are the number of hours of volunteering by employees recorded? The computed score of each company is the actual score attained by each firm divided by maximum possible outcome awarded to any firm for all categories (Shahwan and Hassan, 2013; Kamel and Shahwan, 2014; Shahwan, 2015). An extract on EV is depicted below.…”

Section: Research Design and Methodologymentioning

confidence: 99%

Does employee volunteerism contribute to financial performance? Effect of third-party assurance and financial performance of listed firms in emerging economies

Oware

Mallikarjunappa

2020

SRJ

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Purpose Studies on employee volunteerism have inconsistency in results. This study aims to examine whether employee volunteerism contributes to financial performance, and if employee volunteerism creates community benefit for firm legitimacy. Design/methodology/approach The data covers 80 companies (640 firm-year observations) and uses the Indian stock market for the period 2010-2017 as a testing ground. Canonical correlation analysis, panel regression and panel probit regression are used in this study. Findings The first findings of the study show employee volunteerism through employee skill contribution, number of hours spent on volunteerism, employee cash contribution and employee material contribution provide the substantive contributions to community benefit and financial performance and also contribute a possible positive reflection on employee commitment. The second findings show that return on asset and return on equity do not improve the practice of employee volunteerism. However, the stock price return (SPR) improves the practice of employee volunteerism. The third findings show that the engagement of third-party assurance (TPA) improves the practice of employee volunteerism. Finally, TPA and SPR are more likely to cause a firm to undertake employee volunteerism. Research limitations/implications The research study is limited to large firms on the Indian stock market that submit sustainability reports. Practical implications An implication from the study suggests that the critical driver of employee volunteerism is employee skill contribution, and firms stand to benefit if well managed. Originality/value TPA and financial performance contribute an increase in employee volunteerism, and therefore deepens the scholarly debate on employee volunteerism. Employee volunteerism–community benefit nexus creates a new dimension to the theory of legitimacy for firms in an emerging economy.

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The association between disclosure level and cost of capital in an emerging market: evidence from Egypt

Cited by 25 publications

References 62 publications

Assurance service and performance. Effect of CEO characteristics

Assurance service and performance. Effect of CEO characteristics

Does the efficiency of corporate governance and intellectual capital affect a firm's financial distress? Evidence from Egypt

Does employee volunteerism contribute to financial performance? Effect of third-party assurance and financial performance of listed firms in emerging economies

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