Corporate Ownership and Control

Journal Information
ISSN / EISSN : 1727-9232 / 1810-0368
Current Publisher: Virtus Interpress (10.22495)
Total articles ≅ 2,632
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Corporate Ownership and Control; doi:10.22495/coc

Annisa A. Lahjie, Riccardo Natoli , Segu Zuhair
Corporate Ownership and Control, Volume 18, pp 90-105; doi:10.22495/cocv18i2art7

Abstract:
The main purpose of this paper is to examine the impact of corporate governance (CG) on corporate social responsibility (CSR) of Indonesian listed firms. Estimations via simultaneous equation models with ordinary least squares (OLS) and two-stage least squares (2SLS) were employed for 84 firms with a total of 924 observations over the period of 2007-2017. The results showed that a lack of CG in monitoring and supervisory mechanisms, as well as a high concentration of managerial ownership, can significantly contribute to low levels of CSR. There are data limitations as a number of firms were omitted due to the application of the CSR criteria utilised in this study. The research has implications for Indonesian listed firms with respect to aligning CSR initiatives to firm objectives. The paper provides recommendations for future research in this area. The paper provides one of the few studies to analyse CG on CSR via a comprehensive measurement of CSR. Further, it adds to the empirical academic literature from a developing country context
Nitai Chandra Debnath, Suman Paul Chowdhury, Safaeduzzaman Khan
Corporate Ownership and Control, Volume 18, pp 74-89; doi:10.22495/cocv18i2art6

Abstract:
We observe the association amid ownership structure and real earnings management in Bangladesh. Our study takes 2195 firm-year observations which are listed on the Dhaka Stock Exchange over the period of 2000-2017. The outcome of the panel least square regression indicates that inside ownership, as well as foreign ownership, is inversely related to real earnings management, whereas institutional ownership is positively related to real earnings management. In particular, firms tend to reduce discretionary expenses to manage earnings if the magnitude of inside ownership is low. In contrast to that, when firms are characterized by more institutional ownership, they are more inclined towards real earnings management through additional price discounts, offering a more friendly credit facility, and lowering discretionary expense. This result is consistent with previous findings. Nevertheless, if firms encounter an absence of foreign ownership, they prefer to manage earnings through operating at over-production levels as well as lowering discretionary expenses. Additionally, we find that corporate governance is playing a beneficial role in limiting real earnings management
Sandra Scherbarth, Stefan Behringer
Corporate Ownership and Control, Volume 18, pp 60-73; doi:10.22495/cocv18i2art5

Abstract:
Whistleblowing systems as internal company instruments for prevention and detection of compliance violations are increasingly recommended both in academic and practical literature. In the European Union, the discussion is currently activated by the EU legislation for better protection of whistleblowers, which needs to be transferred in national law by the member states end of 2021. This literature review examines the literature for the design specifications developed for whistleblowing systems under consideration of the risk for organizational insiders to blow the whistle. The purpose is to review the design specifications developed in scientific studies, the data basis on which they are built whether and, if so, how the risk for organizational insiders to blow the whistle is taken into account. A comprehensive database of literature has been examined. The result is systematic categorization of the specifications for the design of whistleblowing systems. Moreover, we conclude, that there is a lack of data basis for clear specifications. The research shows that in the design of whistleblowing-systems there is a lack of discussion of the risks for whistleblowers to suffer social and professional disadvantages
Shyam Bhati, Anura De Zoysa , Wisuttorn Jitaree
Corporate Ownership and Control, Volume 18, pp 48-59; doi:10.22495/cocv18i2art4

Abstract:
India is one of the few countries in the world, which follows a prescriptive regulatory policy for liquidity management in banks. These policies affect different groups of banks in different ways. The main objective of this study is to examine the liquidity determinants of private and public sector banks in India on a comparative basis to assess the effectiveness of liquidity management policies for each type of bank in India. For this purpose, this study analyses the long-term effect of various macroeconomic, microeconomic, and regulatory policies on liquidity management by both groups of banks from 1996 to 2016. The findings of the study show that public sector banks rely on asset-based liquidity, and private sector banks also rely on asset-based liquidity. In the case of both private and public sector banks, this study found a significant relationship between the liquidity and several explanatory variables – call rate, discount rate, cash reserve ratio, capital to total assets, foreign exchange reserve with RBI and Size (LogTA). It also observed that in private banks some factors – LogTA (in L1); CapitalTA (in L1 & L4) and SLR (in L3 & L4) – had a significant positive effect while other factors – Fxreserve and ROE (in L2) – had a significant negative relationship with the liquidity. Similarly, in public banks, some factors – discount rate (in L4); ROE (in L2 & L3) and NPA/Advances (in L4) – had a significant positive effect while other factors – CapitalTA (in L3 & L4); CRR (in L4); NPA/Advances (in L3), and LogTA (in L1) – had a significant negative relationship with the liquidity. The findings of this study question the appropriateness of applying a similar type of regulatory measures for all groups of banks by the regulators for liquidity creation
Mejbel Al-Saidi
Corporate Ownership and Control, Volume 18, pp 40-47; doi:10.22495/cocv18i2art3

Abstract:
Prior to 2017, there were no corporate governance rules in Kuwait. The previous rules were silent regarding boards of directors, shareholders’ rights, disclosure, and auditing. However, at the beginning of 2017, the Kuwaiti government introduced new governance rules and required all firms listed on the Kuwait Stock Exchange (KSE) to comply with these rules. This study examined the impact of boards of directors on firm performance following the implementation of these new rules using a sample of 89 non-financial listed firms from 2017 to 2019. The study used four board variables – namely, board size, board independence, family directors, and board diversity – and found that, based on Tobin’s results, board size, board independence, and board diversity significantly impact firm performance whereas the ROA results indicate that only family directors significantly impact firm performance
Jost Kovermann, Patrick Velte
Corporate Ownership and Control, Volume 18, pp 20-39; doi:10.22495/cocv18i2art2

Abstract:
This article is a literature review that covers quantitative empirical research on the association between corporate social responsibility (CSR) and corporate tax avoidance. We conduct a structured literature review and evaluate the empirical-quantitative results with regard to the CSR–tax avoidance link and vice versa. The association between CSR and tax avoidance is both theoretically and empirically ambiguous. However, the majority of studies finds a negative association between CSR and tax avoidance. Nevertheless, results are highly dependent on measurement of the respective constructs and other marginal conditions. Comparability of recent research on the issue is in particular limited due to heterogeneous CSR and tax avoidance metrics and due to a potentially bidirectional relationship. Results imply that there is not necessarily a stable association between CSR performance, as measured by CSR scores or ratings, CSR reporting, and a firm’s tax practices. Thus, socially responsible investors have to make a decision about whether they are prepared to invest in firms that have high CSR scores and strong CSR performance while aggressively avoiding taxes. Investors who perceive tax payments as part of a firm’s responsibility towards society, have to select their investments with great care, as CSR scores and CSR reporting are of only limited informative value with regard to tax avoidance
Fang Chen, Jian Huang, Minghui Ma, Han Yu
Corporate Ownership and Control, Volume 18, pp 8-19; doi:10.22495/cocv18i2art1

Abstract:
Mergers and Acquisitions (M&A) advisors add value by overcoming the information asymmetries between acquirers and targets, but may also push bad deals through due to incentive misalignment stemming from contingent fees. In-house deals are those acquisitions with in-house advisors. We examine the wealth effect of M&A deals advised by in-house advisors versus outside advisors. About 15% of acquisitions are done via in-house advisors. In-house deals result in higher CARs to targets, insignificant wealth effects to acquirers, but lower cumulative abnormal combined returns. This finding is consistent with the view that the information asymmetry problem is more severe than the agency conflict in non-financial acquisitions. Thus, targets are more likely to extract wealth away from the acquirers, or the overall deal quality is lower. Also, consistent with the view that investment banks have an incentive to see deals completed, the completion rate is higher for deals with an outside advisor
Paolo Tenuta, Alexander Kostyuk
Published: 30 December 2020
Corporate Ownership and Control, Volume 18, pp 222-224; doi:10.22495/cocv18i1sieditorial

Abstract:
Corporate governance is a system designed to improve corporate performance through supervision of management performance to ensure accountability to stakeholders based on a regulatory framework. Board of directors as a field of research becomes a major point for intersection of many other issues of corporate governance, such as financial reporting, firm performance, earnings management, stock market, and reaching even well-established fields of research such as accounting and finance. Most of the papers published in this issue (volume 18, issue 1, special issue) of the Corporate Ownership and Control journal are linked to the board of directors’ issues directly or indirectly.
Anil Chandrakumara, Rohan Wickramasuriya, Grace McCarthy
Published: 29 December 2020
Corporate Ownership and Control, Volume 18, pp 438-449; doi:10.22495/cocv18i1siart16

Abstract:
This paper examines three research problems. First, what collective personality traits are reflected in CEOs’ statements in firms’ annual reports? Second, is there any impact of collective personality on financial (ROE – return on equity) and market (TQ – Tobin’s Q) performance? Third, whether attributes of CEOs or collective personality makes a greater impact on firm performance? Using the machine learning approach employed by IBM’s Personality Insights service, we performed a content analysis of 804 CEO’s annual report statements in 402 firms to estimate collective personality scores and adopted hierarchical multiple regression analysis to examine the intended relationships. The study found that collective conscientiousness and agreeableness impact positively on ROE and TQ and collective openness and neuroticism impact negatively on either or both ROE and TQ. Further, the collective personality tends to show a greater impact on ROE and firm size by assets than the impact of CEOs attributes. Besides exploring a relatively less-researched concept, the study highlights the practical value of developing intellectual and human capital through governance practices and leadership towards enhancing firm performance.
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