The impact of country-level corporate governance on analyst boldness and performance with target price forecasts

Sayed, Samie Ahmed; Chawla, Deepak

doi:10.1504/ijicbm.2017.081976

Cited by 4 publications

(5 citation statements)

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“…For example, some studies explored CLCG with its relation to accounting, finance, and/or auditing issues (e.g. Avram et al, 2015;Hillier et al, 2011;Lin et al, 2014;Pindado et al, 2015;Sayed & Chawla, 2017;Thenmozhi & Narayanan, 2016), economic growth (Boţa- Avram et al, 2018), FDI (Agyemang et al, 2019), ethical behaviour of firms (Agyemang et al, 2015) and investors' protection (Rachisan et al, 2017), entrepreneurship (Groşanu et al, 2015), disclosure and compliance (Ernstberger & Grüning, 2013;Sarhan et al, 2019) firm value (Saona & San Martín, 2016) and financial analysis (Seifert & Gonenc, 2018) (See Table 1). Groşanu et al (2015) examined "the influence of country-level governance on business environment and entrepreneurship" in different states over the period of 2007up to 2012.…”

Section: Theoretical Literaturementioning

confidence: 99%

Impact of country-level corporate governance on entrepreneurial conditions

Maqtari

Farhan

Al-Hattami

et al. 2020

Cogent Business & Management

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The present study examines the effect of country-level corporate governance (CLCG) and Directors' Liability (DL) on Entrepreneurial Framework Conditions (EFCs) across 52 countries from 2014 up to 2017 using balanced panel data and Panel Correction Standard Error estimation. The results revealed that the CLCG has a significant impact across EFCs dimensions. Further, the results declared that the impact of DL is significant and positive in countries that have a high score of DL, but this impact is statistically negative in countries that have a low score of DL. The findings have momentous implications for entrepreneurs, policymakers, regulators, international organizations, and academicians. The study makes novel contributions to the strand literature underpinning countrylevel governance and the role of directors' liability with EFCs. It brings a useful insight into a previously undocumented area of research highlighting the importance of CLCG dimensions and DL as important factors and determinants for better entrepreneurial conditions.

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Section: Theoretical Literaturementioning

confidence: 99%

Impact of country-level corporate governance on entrepreneurial conditions

Maqtari

Farhan

Al-Hattami

et al. 2020

Cogent Business & Management

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“…Within Asian markets, Sayed and Chawla (2017) find that good corporate governance standards enhance the performance of target price forecasts. Cheng et al (2019) use a sample of 17,334 target price observations in the Taiwan Stock Exchange between 2007 and 2016 and find that good corporate governance enhances target price accuracy.…”

Section: Related Literature and Hypotheses Developmentmentioning

confidence: 99%

“…Within Asian markets, Sayed and Chawla (2017) find that good corporate governance standards enhance the performance of target price forecasts. Cheng et al.…”

Section: Related Literature and Hypotheses Developmentmentioning

confidence: 99%

Board of directors and target price performance: evidence from Tunisia

Fredj

Gana

2022

EMJB

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PurposeThis article examines the link between the structure of the board of directors and target price accuracy using a sample of 51 listed firms on the Tunisian Stock Exchange over the period of 2011–2017.Design/methodology/approachIn this study, the authors used the generalised method of moments (GMM) model to control the endogeneity problem.FindingsAs a result, that model can serve as a signal in the forecasting process. The authors' results suggest that target price accuracy is negatively related to board independence, and dual Chief Executive officer (CEO). In addition, CEO compensation tends to exert a negative impact on target price error.Practical implicationsThe authors' findings are valuable for common investors because the findings can be useful in enhancing their capital allocation decisions by assigning higher weights to forecasts issued by firms with strong corporate governance systems. The authors' study also has practical implications for managers and policymakers. Specifically, the evidence provided herein suggests that firms with strong corporate governance mechanisms enhance the accuracy of market expectations, alleviate information asymmetry, and limit market surprises, especially in a context characterised by weak investor protection. The authors' results highlight the advantages of strong corporate governance in improving a firm's information environment and, therefore, are useful for the cost–benefit analysis of improving internal governance mechanisms. Additionally, the authors' results may prove useful to investors who can rely on the information provided by analysts for well-governed companies.Social implicationsThe authors' study contributes to the literature in both corporate governance and analysts' forecasts fields. The study provides additional evidence of the benefit of board quality attributes on target price accuracy in an emerging market characterised by high information asymmetry and weak investor protection. The authors' findings exhibit the effectiveness of board attributes in producing better financial information quality in Tunisia. This is useful for investors who may improve their capital allocation decisions by assigning greater weights to target price forecasts of companies with good governance quality, suggesting that good corporate governance is a credible signal of better financial information quality. These results have important implications for capital market regulators and corporate management in encouraging the implementation of good governance practices.Originality/valueThe authors attempted to assess whether corporate governance of listed firms are priced in the Tunisian context characterised by weak governance control and to highlight which mechanism is highly considered by independent financial analysts to build their forecasts.

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“…Prior studies investigated country-level corporate governance through different streams. For example, some studies explored country-level corporate governance with its relation to accounting, finance, and/or auditing issues (e.g., Avram et al, 2015;Hillier, Pindado, De Queiroz, & De La Torre, 2011;Lin, Massa, & Zhang, 2014;Pindado, de Queiroz, & de la Torre, 2015;Sayed & Chawla, 2017;Thenmozhi & Narayanan, 2016), economic growth (Bot ¸{t\hskip-0.7ex\char "B8}a- Avram et al, 2018), FDI (Agyemang, Gbettey, Gatsi, & Acquah, 2019), ethical behaviour of firms (Agyemang et al, 2015) and investors' protection (Rachisan et al, 2017), entrepreneurship (Gros ¸anu, Bot ¸{t\hskip-0.7ex\char "B8}a-Avram, R achis ¸an, Vesselinov, & Tiron-Tudor, 2015), disclosure and compliance (Ernstberger & Grüning, 2013;Sarhan, Ntim, & Al-Najjar, 2019) firm value (Saona & San Martín, 2016) and financial analysis (Seifert & Gonenc, 2018) (See Table 2).…”

Section: Studies Related To Country-level Governancementioning

confidence: 99%

An empirical examination of the impact of country‐level corporate governance on profitability of Indian banks

et al. 2020

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The main aim of the present study is to examine the impact of country-level corporate governance on the profitability of Indian banks using a sample of 61 banks that is, 42 private and 19 public banks. The study employs descriptive statistics, correlation analysis, regression analysis of two-way variable intercept random effect model, and robustness checks including robust regression, Generalized Methods of Moments, and Panel Correction Standard Error. The results reveal that country-level corporate governance has a significant impact on the profitability of Indian banks. Private banks demonstrate better performance over public banks and the effect of country-level governance on the profitability of private banks is positive and it is better than public banks. Further, the results show that demonetisation has a significant negative impact on the profitability of Indian banks as measured by Return on Assets and Return on Equity, but it also has a significant positive effect in the case of Net Interest Margin. The findings of the current study have considerable implications for regulators, policymakers, bankers, analysts, and academicians. Regulations and several policy measures could be introduced to improve the profitability of Indian banks. To promote greater transparency, better accountability, strong rule of law, and corporate governance, corruption must be eliminated to enhance higher profitability of Indian banks. This paper presents novel evidence linking country-level corporate governance to the profitability of banks in the context of India, as an emerging economy. Therefore, it bridges an existing gap in the body of literature on the profitability of banks in India.

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The impact of country-level corporate governance on analyst boldness and performance with target price forecasts

Cited by 4 publications

References 0 publications

Impact of country-level corporate governance on entrepreneurial conditions

Impact of country-level corporate governance on entrepreneurial conditions

Board of directors and target price performance: evidence from Tunisia

An empirical examination of the impact of country‐level corporate governance on profitability of Indian banks

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