Corporate Ownership and Control

Journal Information
ISSN / EISSN : 17279232 / 18100368
Current Publisher: Virtus Interpress (10.22495)
Total articles ≅ 2,516
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Ahmed Imran Hunjra, Uzma Perveen, Leon Li, Muhammad Irfan Chani, Rashid Mehmood
Corporate Ownership and Control, Volume 17, pp 77-87; doi:10.22495/cocv17i2art7

Abstract:Ownership structure plays a vital role in stock market liquidity. We analyze the impact of ownership concentration, institutional ownership and earnings management on stock market liquidity. We select 114 firms from manufacturing sector of Pakistan, India, Australia and Singapore. We extract data from DataStream from 2010 to 2018 of selected countries. We apply Generalized Method of Moments (GMM) to analyze the data. We find that ownership concentration, institutional ownership and earnings management significantly affect the stock market liquidity.
Giorgia Nigri, Mara Del Baldo, Armando Agulini
Corporate Ownership and Control, Volume 17, pp 65-76; doi:10.22495/cocv17i2art6

Corporate Ownership and Control; doi:10.22495/coc

Muneer Mohammed Saeed Al Mubarak
Corporate Ownership and Control, Volume 17, pp 57-64; doi:10.22495/cocv17i2art5

Abstract:The study investigates the impact of corporate governance characteristics on stock prices in the Gulf Cooperation Council (GCC) financial markets. It covers the financial markets of four (GCC) countries with a sample of 237 firms for the period of 2013-2017. The study was based on the GCC financial markets’ database, financial statements and ancillary notes which include corporate governance, stock prices by Bloomberg and share location. A multi-regression model was used. The independent variables were four corporate governance characteristics and the dependent variable was the stock price, in addition to using a number of control variables. A positive relationship was found between corporate governance and return on stock. The Gulf companies that have increased levels of corporate governance have increased returns to their shares, indicating that these companies are working to reduce the agency’s cost and eliminate the conflict between shareholders and directors. Few studies have focused on the relationship of corporate governance characteristics on stock prices in the GCC financial markets. The existing study contributes to the financial management literature by providing further evidence on such a relationship, especially in emerging countries. It serves as a guide to investors looking for the best investments in reliable companies in the region
Ahmed Hassanein, Mohsen Younis
Corporate Ownership and Control, Volume 17, pp 46-56; doi:10.22495/cocv17i2art4

Abstract:The global financial crisis has created pessimism in terms of prospects of sales rebounding in the future. Therefore, this study aims to examine the stickiness behaviors of firm costs pre, during and post the period of the financial crisis. It uses a sample from the UK chemical industry over the period from 2001 to 2015. The ABJ sticky cost model is applied with the following cost categories: total costs, cost of goods sold, operating costs, selling, general and administrative costs, salaries and benefits, and finance costs. The ABJ sticky cost models are run separately for each cost category over pre (2001-2007), during (2007-2009) and post (2010-2015) the financial crisis. The study finds that total costs have behaved as sticky pre the financial crisis and anti-sticky during and post the financial crisis. Furthermore, cost of goods sold has changed from sticky (pre and during the financial crisis) to anti-sticky (post the financial crisis). Furthermore, salaries and benefits costs have changed from sticky (pre the financial crisis) to anti-sticky (during the financial crisis) and financing costs from sticky (pre the financial crisis) to anti-sticky (after the financial crisis). However, there is no variation in the behavior of selling, general and administrative costs pre and post the financial crisis
Alessandra Allini, Luca Ferri, Marco Maffei, Annamaria Zampella
Corporate Ownership and Control, Volume 17, pp 20-31; doi:10.22495/cocv17i2art2

Abstract:This study investigates the effects of firm and country factors, considered as determinants of the financial instruments risk disclosure (FIRD) proxied by IFRS 7 in the European banking system. We select 582 banks-year observations based on the largest five European economies (France, Germany, Italy, Spain and the UK) as provided by the International Monetary Fund (IMF). Our analysis covers a period of 8 years (2007-2014) and adopts an OLS model. Results show that both firm (the type of auditor, board size and profitability) and country factors (financing environment, regulatory environment, and organizational status) affect FIRD. Limitations for this paper could relate to country selection, as well as on the breadth of the sample. Nevertheless, these aspects could unveil possible areas of future inquiry. The contribution of the study is twofold. It enriches the literature about firm and country determinants on financial instruments risk disclosure, as combined rather than single-standing variables. Yet, it draws the attention of banks’ management and investors on what the crucial factors to reach an optimal level of FIRD are and gain the confidence of capital markets, reducing information asymmetries. This is the first empirical investigation on the determinants of FIRD, using IFRS 7, in the European banking sector that adopts firm and country factors in a combined effort.
Patrick Velte
Corporate Ownership and Control, Volume 17, pp 8-19; doi:10.22495/cocv17i2art1

Abstract:This paper provides insight to whether Corporate Social Responsibility (CSR) and earnings management are connected. Based on the agency- and stewardship theory the author conducts a literature review and evaluates the empirical results with regard to the CSR-earnings management and the earnings management-CSR link. In this context, CSR reporting and CSR performance are focused as CSR measures. The results of the 33 studies indicate that the majority of the research relies on the CSR-earnings management link, on the US-American capital market and on CSR performance measures. Most of these studies indicate that CSR relates to decreased earnings management in line with the stewardship theory. However, also other results exist on the CSR earnings management link. Research on the earnings management-CSR relationship is of low validity so far in view of the low amount. Comparability of recent research on that topic is in particular limited in view of the heterogeneous CSR and earnings management variables and the endogeneity concerns. Future research is encouraged to address endogeneity tests, include country-specific effects and increase the validity of CSR and earnings management variables. As CSR performance and reporting can have a major impact on earnings quality, the author recommends firms to search for opportunities to make their CSR activities more comprehensive by expanding their CSR reporting and thus providing deeper insights on their CSR performance in line with stakeholders’ interests. The paper is the first literature review on the CSR-earnings management and earnings management-CSR relationship so far. The author explains the main CSR and earnings management variables that have been included in prior empirical research, stresses the limitations of the studies and gives useful recommendations for future research, practice and regulators
Carmela Rizza
Corporate Ownership and Control, Volume 17, pp 350-359; doi:10.22495/cocv17i1siart15

Abstract:Research on small firms decision-making processes has stimulated accounting scholars to investigate how peculiarities of these firms could affect the way how they are managed, focusing on the limited diffusion of managerial accounting practices in these contexts. Controversial results on how managerial accounting practices work in small firms, claim for further research that mostly focus on how managerial accounting systems work in the decision-making processes of small firms. In this view, adopting a sociological perspective managerial accounting practices are interpreted as tools for making sense of past decisions and to discover future alternatives through cognitive pathways. Thus, the attention is on learning processes activated through balance sheet analysis in a small firm that was implementing this tool. The main contribution of this paper concerns the crucial role that balance sheet analyses play in supporting the organizational actors to monitor the state of the company and the decision-making processes. The discussion of balance sheet analyses results enabled the owner and his staff to appraise the current situation and pinpoint weaknesses, allowing them to analyse past events with a new lens and activating new knowledge pathways. Case evidence supports theoretical contributions to the decision-making processes of small businesses helping to better understand how managerial accounting practices work to discover future alternatives through cognitive pathways. The paper provides also a practical contribution concerning the crucial role that balance sheet analyses play in small firms.
Mark Eulerich, Tatiana Mazza, Joel Behrend, Ronja Krane
Corporate Ownership and Control, Volume 17, pp 336-349; doi:10.22495/cocv17i1siart14

Abstract:This paper examines the different factors which impact the compensation level of chief audit executives (CAE) and sheds light on often unobservable and, therefore, opaque drivers of CAE remuneration. An ordered logistic regression is used to analyze the effects of internal audit function (IAF) competences, stakeholder relationships, and firm complexity on the CAE compensation using survey data from 212 CAEs from a broad spectrum of companies and industries. The results of the study identify IAF competence and independence as fundamental drivers of CAE compensation and provide evidence that firm complexity in terms of foreign sales, listing status and need for monitoring constitute additional salary determinants related to the IAF environment. Our results are based on questionnaire data and subject to a possible response bias as they rely in part on the participants’ assessment of a given situation. This paper provides a benchmark for CAE compensation levels in Austria, Germany and Switzerland and offers insights on different company and IAF inherent factors that can be associated with varying salary outcomes. This study is the first to investigate the factors driving the overall compensation level of CAEs and by providing empirical evidence regarding determinants of CAE compensation.
Yasser Barghathi, Esinath Ndiweni, Alhashmi Aboubaker Lasyoud
Corporate Ownership and Control, Volume 17, pp 32-45; doi:10.22495/cocv17i2art3

Abstract:The present study is intended to scholarly explore auditors’ perceptions regarding joint audits; whether it can improve audit quality. To reach this goal, participants were enrolled from Big 4, non-Big 4, and other stockholders. In addition, the present study examines the perception of the same stakeholders in terms of how audit concentration affects the audit market in the UAE. Being a qualitative study, 12 semi-structured interviews were conducted to collect required data; 4 face to face and 8 through using Google forms. The finding of the study revealed mixed perception regarding joint audits; it may improve audit quality at the cost of high fees and free-rider problems. Findings of the study has practical implication for policymakers of emerging economies around the globe, such as policymakers who can make joint audits as compulsory. Another significance of the present work is that it has allowed for the perception of stakeholders, who are at the center of the controversial subject of joint audits and audit market concentration. The study suggests that there is a need for removing language barriers; it will benefit some firms in the form of directly communicating with auditors either in English or in Urdu.