The Impact of Internal Corporate Governance Mechanisms on the Performance of Firms: Evidence From the UK and Germany

This thesis examines the effectiveness of corporate governance regulations in the UK’s and Germany’s corporate governance systems. The UK and Germany are chosen for this study because they exhibit different board structures, legal systems and capital markets. The differences and similarities across these two corporate governance systems provide an opportunity to explore the effectiveness of firm-level and country-level corporate governance regulations in different corporate governance systems. Using a sample of 120 firms from the UK and Germany for the period 2007-2011, this thesis investigates: (a) the relationship between internal corporate governance mechanisms and the performance of firms; and (b) the types and quality of explanations reported for non-compliance with the corporate governance codes. Unlike previous studies, this study focuses on compliance and the explanations reported for non-compliance with a corporate governance code. The concepts of ‘comply’ and ‘explain’ are claimed to be the two most important pillars of an effective corporate governance system. Using an index-based approach, this thesis develops a ‘comply or explain’ index for each firm in the sample. The index captures the level of compliance as well as the quality of explanations reported for non-compliance with the corporate governance codes. Furthermore, a generalised method of moments (GMM) model is used to investigate the govemance-performance relationship and a mechanistic (quantitative) content analysis method is applied to examine the quality of explanations reported in response to non-compliance with the corporate governance codes. The results from the univariate analysis reveal that the UK and Germany exhibit significant differences in terms of compliance with the corporate governance codes, board structures and ownership structures of firms. The results for govemance-performance relationship show that the ‘comply or explain’ index is significantly and positively associated with the operating performance of German firms, while in the UK, the ‘comply or explain’ index has a positive impact on the market valuation (Tobin’s Q) of UK firms. However, the impact of the ‘comply or explain’ index is statistically not significant for the accounting-based measure of firm performance in the UK, and for the market-based measure of firm performance in Germany. The results provide some evidence that the quality of corporate governance (measured by the ‘comply or explain’ index) has positive implications for firms’ performance in both countries. The findings are different for the accounting-based and market-based measures of firm performance, and the mixed empirical evidence is supported by the different theories of corporate governance. For instance, board structure (the percentage of non-executive directors) is positively associated with the operating performance (ROA) of UK firms and with the market valuation (Tobin’s Q) of German firms. However, board structure is negatively associated with the market-based measure of firm performance in the UK. The positive and negative impact of board structure on different measures of firm performance can be explained through the lens of agency theory and stewardship theory, respectively. The results for blockholders’ ownership show that non-institutional blockholders have a positive impact on the performance (ROA and Tobin’s Q) of German firms. Institutional blockholders’ ownership is positively associated with the operating performance of firms in the UK. However, the impact of institutional blockholders’ ownership is negative for the market-based measure of firm performance in both countries, which raises concerns about the monitoring role of institutional shareholders in both countries. The results from the content analysis of 600 corporate governance reports show that non-compliant firms across the UK and Germany do exploit the ‘explain’ option and flexibility granted by the ‘comply or explain’ principle. The explanations reported in response to non-compliance are largely uninformative and the content of such explanations mostly remained similar over the time and across the firms. Overall, the mixed empirical evidence on the relationship between governance and firm performance indicate that the governance-performance relationship cannot be examined through the lens of a single and universal theory of corporate governance. A multiple theoretical perspective could be very helpful in examining the governance-performance relationship in different corporate governance systems. In fact, investigating the complex governance-performance relationship using multiple theories and multiple methods may take us closer to developing a more comprehensive theory of corporate governance

Decoding recent Indo-Pak peace gestures

After a long period of military and diplomatic tension between the two South Asian nuclear powers, India and Pakistan have recently made friendly gestures to one another. Dr Subhan Ullah explores if this development, in the uniquely changed global scenario of a post-Pandemic world alongside China’s increasing entrenchment in the region, holds the promise of better relations and longer-term peace in the region

Globalisation, governance, accountability and the natural resource ‘curse’: Implications for socio-economic growth of oil-rich developing countries

Motivated by recent inconclusive debates on the natural resource ‘curse’ phenomenon, this paper reviews studies that have explored the causes and implications of natural resource endowments ‘curse’ within oil-rich developing countries (ODCs). Most of these studies find corruption, transparency, accountability, weak institutions and poor governance as causes of developing countries’ natural resource ‘curse’. However, recent studies identify a strong association between oil and gas multinational corporations (MNCs) as agents of globalisation and the resource-curse. First, we consider the international dimensions of this relationship and how MNCs have an influence on the resources of ODCs. Second, we link the impact of MNCs and their natural resource nexus to broaden debates on strategic organisational practices. We show that globalisation creates the platform for the natural resource ‘curse’ phenomenon. Our findings offer new insights into the natural resource ‘curse’ debates. We expand knowledge on the traditional focus of the resource-curse literature to include globalisation and how ethical practices of MNCs could avert the ‘curse’ or allow ODCs to experience the advantages of their natural resource wealth

Dealing with endogeneity bias: The generalized method of moments (GMM) for panel data

Endogeneity bias can lead to inconsistent estimates and incorrect inferences, which may provide misleading conclusions and inappropriate theoretical interpretations. Sometimes, such bias can even lead to coefficients having the wrong sign. Although this is a long-standing issue, it is now emerging in marketing and management science, with high-ranked journals increasingly exploring the issue. In this paper, we methodologically demonstrate how to detect and deal with endogeneity issues in panel data. For illustration purposes, we used a dataset consisting of observations over a 15-year period (i.e., 2002 to 2016) from 101 UK listed companies and examined the direct effect of R&D expenditures, corporate governance, and firms’ characteristics on performance. Due to endogeneity bias, the result of our analyses indicates significant differences in findings reported under the ordinary least square (OLS) approach, fixed effects and the generalized method of moments (GMM) estimations. We also provide generic STATA commands that can be utilized by marketing researchers in implementing a GMM model that better controls for the three sources of endogeneity, namely, unobserved heterogeneity, simultaneity and dynamic endogeneity

Smart Cameras with onboard Signcryption for Securing IoT Applications

Cameras are expected to become key sensor devices for various internet of things (IoT) applications. Since cameras often capture highly sensitive information, security is a major concern. Our approach towards data security for smart cameras is rooted on protecting the captured images by signcryption based on elliptic curve cryptography (ECC). Signcryption achieves resource-efficiency by performing data signing and encryption in a single step. By running the signcryption on the sensing unit, we can relax some security assumptions for the camera host unit which typically runs a complex software stack. We introduce our system architecture motivated by a typical case study for camera-based IoT applications, evaluate security properties and present performance results of an ARM-based implementatio

Determinants of corporate cash holdings: An empirical study of Chinese listed firms

This study explores the determinants of corporate cash holdings in the Chinese context. As one of the largest developing countries in the world, China offers an interesting opportunity to explore the role of corporate governance, and ownership structure in explaining corporate cash holdings. Owing to the unique economic problems in the developing and emerging economies, this study aims to investigate whether the research findings on developed countries could be generalized globally. Applying fixed-effects estimations on a sample of 115 Chinese firms listed between 2012 and 2016, we find that the level of corporate cash holdings has a significantly negative relationship with leverage, bank debt, non-cash liquid assets and managerial ownership. In particular, cash flow volatility, investment opportunity and dividend have a significantly positive relationship with cash holdings levels. These findings are consistent with the majority of the existing studies carried out in the Western context. We also find that firm size, cash flow, board independence and ownership concentration have a significant influence on the level of corporate cash holdings. Our study contributes to the finance literature and we offer new insights into the relationship between corporate governance and corporate cash holdings in the Chinese context. Some of the findings on the developed countries could be generalized to a wider context. Further, the unique relationship between corporate governance and cash holdings in the Chinese context provides empirical insights for further research

Antispasmodic, Bronchodilator and Blood Pressure Lowering Properties of Hypericum oblongifolium - Possible Mechanism of Action

The crude extract of Hypericum oblongifolium (Ho.Cr), which tested positive for flavonoids, saponins and tannins caused concentration-dependent (0.1-1.0 mg/mL) relaxation of spontaneous and high K(+) (80 mM)-induced contractions in isolated rabbit jejunum preparations, suggesting a Ca(++) antagonistic effect, which was confirmed when pretreatment of the tissue with Ho.Cr produced a rightward shift in the Ca(++) concentration-response curves, like that caused by verapamil. Ho.Cr relaxed carbachol (1 mu M) and high K(+)-induced contractions in guinea pig tracheal preparations. It caused a dose-dependent (3-100 mg/kg) fall in arterial blood pressure of rats under anesthesia. In isolated guinea pig atria, Ho.Cr caused inhibition of both atrial force and rate of spontaneous contractions. When tested in rabbit aortic rings, Ho.Cr exhibited a vasodilator effect against phenylephrine (1 mu M) and high K(+)-induced contractions. These results indicate that Ho.Cr possesses gastrointestinal, respiratory and cardiovascular inhibitory effects, mediated via a Ca(++) antagonist mechanism

Analysing corporate governance and accountability practices from an African neo-patrimonialism perspective : Insights from Kenya

The authors thank the Editors of this Special Issue, including the Managing Guest Editor Dr Philippe Lassou, and the two anonymous reviewers for their insightful feedback and comments that greatly improved our manuscript. The authors are also immensely grateful to Professor Teerooven Soobaroyen for his useful suggestions and critique of earlier versions of this paper, and whose feedback has helped to improve its quality significantly. Finally, we acknowledge the input of delegates at the 9th Asia-Pacific Interdisciplinary Research in Accounting (APIRA) Conference, held in Auckland, New Zealand.Peer reviewedPostprin

Comparative evaluation of pancreatic histopathology of rats treated with olanzapine, risperidone and streptozocin

Olanzapine and risperidone are widely prescribed atypical antipsychotics used in the treatment of schizophrenia and various other psychiatric disorders. Both of these drugs have been extensively reported to cause Type 2 diabetes mellitus and pancreatitis, however, the mechanism of olanzapine and risperidone-induced toxicity has not been so far unveiled. We, therefore, compared the streptozocininduced pancreatic damage with that of pancreas isolated from olanzapine and risperidone treated rats. It was noticed that fibrotic growth, necrosis and derangement of the pancreatic islet cells caused by streptozocin were more pronounced than olanzapine and risperidone