Corporate governance and voluntary disclosure in Kuwait

“A thesis submitted to the University of Bedfordshire, in partial fulfilment of the requirements for the degree of Doctor of Philosophy”.Failure of high profile companies such as Enron, World.com had initiated a call for an investigation to analyse the reason for such radical consequence to prevent further similar financial crises. One of the common factors identified by the researchers is the poor disclosure, transparency and Corporate Governance (CG) mechanisms. Similar to the UK, the compliance towards CG codes are voluntary for the majority of the countries around the globe including Kuwait. CG codes aimed to improve the governance of a company including transparency. Thus, voluntary disclosure had been examined by numerous academics to emphasise the importance of accountability, transparency that in turn increase the confidence of investors and creditors in the financial markets of emerging economies. This thesis is based on Kuwait, as it is a resource rich country and attracts foreign investments. The Central Bank of Kuwait (CBK) issued instructions for CG mechanism especially to the financial sector in 2004. From the research in hand, there was no longitudinal study in Kuwait concerning the impact of GC mechanism to voluntary disclosure. The sample in this thesis consists of 155 Kuwaiti listed companies from 2007 to 2010, 620 firm-year observations. A self-constructed index was developed to evaluate the level of voluntary disclosure and how it developed over time. Both univariate analysis and multivariate analysis were used. Most of the thesis results were consistent with previous studies; there was a gradual increase in the level of voluntary disclosure and its categories over the observed period. All CG mechanisms findings revealed significant associations with voluntary disclosure, except board size and role duality, have a negative significant association. Ownership structure indicates insignificant association with voluntary disclosure. Firm characteristics have a significant positive association with voluntary disclosure, except profitability, has a significant negative association, while gearing is found an insignificant association. Furthermore, the level of voluntary disclosure in the financial sector is higher than the non-financial sector. The contributions to knowledge in this thesis are; 1) It is the first empirical longitudinal study in Kuwait concerning voluntary disclosure, and its relationship with GC mechanism, ownership structure and firm characteristics, as far as the researcher is aware. 2) It provided evidence of the importance of CG to enhancing the level of voluntary disclosure in Kuwait business environment, especially that the level of voluntary disclosure in the financial sector is higher than the non-financial sector. 3) Employed many quantitative methods, such as OSL regression, Normal score, GLS regression, Tobit regression and Quantile regression (divided into 25%, 50% and 75%). 4) A self-constructed index, which was developed in this thesis, could be suitable for other Arab Gulf countries that are similar in the business environment and experiencing the same economic changes. 5) Provides evidence of the possibility of employing the disclosure theories derived from developed countries in emerging countries. 6) It is possible to generalise the results of the disclosure index to other companies not investigated in this thesis. Moreover, this thesis implies that the legislative and regulatory authorities, in particular, the capital markets authority Kuwaiti, need to increase efforts to enhance the role of corporate governance practices in Kuwaiti listed companie

Asymmetric Information, Trading Volume, and Portfolio Performance

In dealership markets, asymmetric information feeds through to higher transaction costs as dealers adjust their bid-ask spreads to compensate for anticipated losses. In this paper, we show that the presence of asymmetric information can also provide a positive externality to those market participants who operate in multiple markets-portfolio managers. Specifically, insiders lower the estimation errors of portfolio selection methods, thus improving asset allocation. We develop multiple artificial markets, in which portfolio managers trade alongside informed and uniformed speculators, and we contrast the performance of 'volatility timing'-a method that relies on efficient price discovery - with that of 'naive diversification'. Volatility timing is shown to consistently outperform naive diversification on a risk-adjusted basis

A bibliometric analysis of the literature on non-financial information reporting : review of the research and network visualization

Este artículo presenta un análisis bibliométrico de la literatura sobre informes no financieros (INF). El crecimiento exponencial durante la última década (el 90% de los artículos sobre este tema de investigación fueron publicados en los últimos 10 años) indica la relevancia del mismo. No obstante, se sabe poco sobre la estructura y extensión de la investigación en este campo académico. El propósito de este artículo es brindar un estado del arte actualizado y estructurado sobre el tema. Analizamos los artículos, autores, revistas, países y organizaciones más relevantes. El análisis incluye un total de 3113 artículos, recopilados de la Colección principal de Web of Science (WoS) desde 1970, cuando se publicaron los dos primeros artículos sobre el tema, hasta 2019. Se utiliza el programa VOSviewer para mostrar gráficamente los datos. Identificamos y describimos un total de seis líneas de investigación en la literatura: los determinantes, la esencia, los informes, el informe integrado, el medio ambiente, y las consecuencias. Se analizan estas líneas de investigación y se sugieren ideas para futuras investigaciones. También se comentan las implicaciones de las importantes redes de colaboración encontradas dentro de países árabes, europeos y asiáticos. Este estudio es de gran interés ya que proporciona a los investigadores un mapa de este tema académico, mejorando la comprensión y conexión de los aspectos estudiados. También les permite posicionar sus estudios e identificar nuevas corrientes de investigación. This paper presents a bibliometric analysis of articles on the topic of non-financial information (NFI) reporting. The exponential growth over the last decade (90% of the articles were published in the last 10 years) indicates the relevance of the topic, but little is known about the structure and extent of research in this academic field. The purpose of this article is to provide a structured and up-to-date picture of the state of the art on the topic. We analyse the most relevant articles, authors, journals, countries and organizations. The analysis includes 3113 articles, collected from the Web of Science (WoS) Core Collection from 1970 when the first two articles on the topic were published to 2019. The software VOSviewer was used to graphically display the data. We identified and described a total of six research lines in the literature: determinants, essence, reports, integrated reporting, environment, and consequences of reporting. These research lines are analysed and gaps for future research are identified. We also comment on the implications of the strong collaboration networks found within Arab, European and Asian countries. This study is of great interest because it provides researchers with a map of the field, improving their understanding of the interconnection between aspects within the topic. It also enables researchers to better position their studies and to identify new streams of research

The valuation of companies in emerging markets: a behavioural view with a private company perspective

Thesis (M.M. (Finance & Investment))--University of the Witwatersrand, Faculty of Commerce, Law and Management, Graduate School of Business Administration, 2015.Researchers have suggested that emerging markets’ activity is driven largely by unlisted companies. These companies are dynamic, and show a relatively equitable income distribution. However, they operate under severe challenges which can be a deterrent to their success. In spite of these difficulties, the companies form exceptional investment targets due to their innovative abilities, ability to customize products and formulate business models that reduce bottlenecks and input costs as well as take advantage of economies of scale and scope. Important risk factors such as: political, currency, corporate governance and information risks, amongst others, should be factored in during the valuation process of emerging market companies. In this paper, several criteria are used to assess thirteen popular emerging market valuation models’ ability to effectively incorporate these risks. Based on the outcomes of the assessment a best fit model is selected. However, none of the emerging market valuation models explicitly factor in irrationality of market participants. In order to address this, the study focuses on seven behavioural approaches to valuation under the assumption of investor rationality and managerial overconfidence and/or optimism, with a purpose to select one to include in the above mentioned “best fit” emerging market valuation models. Next, assessment mechanisms for adapting these two models for private company valuation were flagged by discussing approaches currently used in academia and corporate finance. Finally, possible means of combining the three objectives, and assessing the success of doing so, as an area for further research, were recommended. Key Words: emerging markets, valuation, risk premium, country risk, systematic risk, unsystematic risk, private companies, managerial overconfidence, managerial optimism, irrationality, efficient markets, capital asset pricing mode

Corporate governance in South Africa : the role of institutional investors

Corporate governance has become the slogan of the global investment arena over the past decade. Corporate scandals and collapses with major loss to shareholders have noted a change in investors' attitude towards this topic. Corporate governance has not only become important for the survival of companies in the global economy, a set corporate governance framework too is required to merely attract capital for start-ups. This study focuses on the institutional investors in South Africa, and their attitudes towards current corporate governance standards in South Africa, and attitude to governance reform. The aims of this study: * To accentuate the significance, features and benefits of corporate governance in light of the empirical analysis; * To understand South African institutional investor environment better, and their monitoring and participating roles in corporate governance for investment in listed corporate entities; * Review the key criteria factored into investing, and how these are monitored on an on-going basis. Corporate governance criteria in specific was used; * Highlight the attitudes of South African institutional investors to corporate governance in South Africa, and their perception on corporate governance reform; * Review weakness in findings in light of the empirical study and analytical framework and summarise recommendations given the outlook for this sector. We introduce the topic of corporate governance and the concept of agency theory which highlights the reasons behind opportunistic behaviour which occurs at different levels within corporate organisations. We further discuss the change in attitudes of institutional investors on the back of corporate scandals, as well as the reasons and remedies of institutional activism. A background of South African institutional investors is also conducted, with a review of current legislation and corporate governance reform mechanisms applicable to South Africa. Following this is a broad literature review on the quantitative as well as qualitative information needs of institutional investors; this forms the basis for the structure of our questionnaires conducted. The last section draws on the critical findings and insights (including quotes from the interviews) on the role of institutional investors in South Africa, followed by the summary and limitations of this study

Knowledge Management, Trust and Communication in the Era of Social Media

The article entitled "Selected Aspects of Evaluating Knowledge Management Quality in Contemporary Enterprises" broadens the understanding of knowledge management and estimates select aspects of knowledge management quality evaluations in modern enterprises from theoretical and practical perspectives. The seventh article aims to present the results of pilot studies on the four largest Information Communication Technology (ICT) companies' involvement in promoting the Sustainable Development Goals (SDGs) through social media. Studies examine which communication strategy is used by companies in social media. The primary purpose of the eighth article is to present the relationship between trust and knowledge sharing, taking into account the importance of this issue in the efficiency of doing business. The results showed that trust is vital in sharing knowledge and essential in achieving a high-performance efficiency level. The ninth article presents the impact of social media on consumer choices in tourism and tourist products' specificity. The study's main purpose was to indicate the most commonly used social media in selecting a tourist destination and implementing Generation Y's journey. The 10th article aims to identify the most critical purposes of using social media by responding to women's attitudes according to age and their respective countries' economic development. The research was done through an online survey in 2017–2018, followed by an analysis of eight countries' results. The article entitled "Integrated Question-Answering System for Natural Disaster Domains Based on Social Media Messages Posted at the Time of Disaster" presents the framework of a question-answering system that was developed using a Twitter dataset containing more than 9 million tweets compiled during the Osaka North Earthquake that occurred on 18 June 2018. The authors also study the structure of the questions posed and develop methods for classifying them into particular categories to find answers from the dataset using an ontology, word similarity, keyword frequency, and natural language processing. The book provides a theoretical and practical background related to trust, knowledge management, and communication in the era of social media. The editor believes that the collection of articles can be relevant to professionals, researchers, and students' needs. The authors try to diagnose the situation and show the new challenges and future directions in this area

Trends in Emerging Markets Finance, Institutions and Money

Since the waves of financial liberalization in the 1980s, emerging market economies have been accessible to foreign investors. Altogether, they contributed up to 43.8% of the global GDP in 2018, and many of them, such as China, India, Bangladesh, Philippines, Myanmar and Vietnam from 2010 to 2019, are among the fastest-growing economies in the world. Given the high economic growth, the assets issued by companies in emerging markets are viewed as a new set of investment opportunities for global investors and fund managers who seek to improve the risk-adjusted performance of their portfolios. In addition to their risky profile due to the lack of transparency as well as stable and matured institutions, their recent development path faces a number of challenges arising not only from the slow pace of economic reforms but also from their increased integration with the world. Geopolitical risks, the US–China trade wars, and rising policy uncertainty around the world are expected to reduce their growth potential and performance. This Special Issue dedicates special attention to the current dynamics of emerging financial markets, as well as their perspectives of development as a key driver for sustainable firms and economies. Accordingly, the focus is particularly placed on market integration and interdependence, valuations and risk management practices, and the financing means for inclusive growth

MBOs performance of state owned enterprises: the case of China

By reviewing and analyzing the MBO cases of 66 Chinese listed companies in the last ten years, this study draws the MBO map of Chinese enterprises and finds that the main problems in the MBOs of Chinese enterprises are the unreasonable pricing of MBOs and the lack of incentive mechanisms at the management level. In this study, 19 state-owned enterprises that are listed companies were selected as samples and the corresponding industry pairing enterprises were also selected. 2793 sample firm financial data items of 19 firms were obtained by calculating 21 financial performance indicators 7 years before and after acquisition. The financial performance indicators of this study were analyzed through DuPont financial analysis, analysis of cash flow index, analysis of scale index, analysis of investment index and change of financial performance. The financial data was analyzed through regression analysis. The analysis found that the MBOs of Chinese state-owned enterprises were better developed than the industry in terms of profitability, operational ability, debt paying ability, cash flow and asset scale. In terms of cash flow, the growth rate of net cash flow after MBO improved. In terms of asset size, the company’s annual asset growth rate was positive after deducting industry factors before and after MBO. This indicates that the scale of assets of the sample enterprises was increasing when compared with the industry. However, the regression analysis, after controlling the sample selection bias and factors such as the company's asset management, showed that the financial indicators of the company have not significantly improved after the MBO, suggesting that the MBOs of state-owned enterprises in China exhibited a relatively low efficiency.Através da revisão e da análise de casos de aquisição pelos quadros (MBO) de 66 empresas chinesas cotadas na última década, este estudo utiliza o mapa MBO de empresas chinesas, tendo encontrado que os principais problemas destes MBO são os seus preços injustificados e a falta de mecanismos de incentivo ao nível da administração. Neste estudo, 19 empresas públicas e cotadas foram escolhidas para amostra, e emparelhadas com empresas correspondentes do mesmo ramo. 2973 dados financeiros das 19 empresas da amostra foram obtidos através do cálculo de 21 indicadores de desempenho financeiro, a intervalos de 7 anos anteriores e posteriores às respetivas aquisições. Os indicadores de desempenho financeiro deste estudo foram analisados com análise financeira DuPont, análise do índice de fluxo de caixa, análise do índice de escala, análise do índice de investimento e alterações no desempenho financeiro. Os dados financeiros são analisados posteriormente com base numa análise de regressão. Concluiu-se que as MBO de empresas públicas chinesas estão mais desenvolvidas que as suas respetivas indústrias em termos de lucro, capacidade operacional, pagamento de dívidas, fluxos de caixa e escala dos ativos. No que toca ao fluxo de caixa, o índice de crescimento do fluxo de caixa líquido pós-MBO melhorou. Em termos do volume de ativos, o índice de crescimento anual das empresas é positivo após a dedução de fatores da indústria pré- e pós-MBO. Isto indica que a escala dos ativos das empresas-amostra aumenta comparativamente à sua respetiva indústria. No entanto, a análise de regressão indica que, após o controlo da polarização de seleção na amostra, assim como de fatores como a gestão dos ativos da empresa, os indicadores financeiros da empresa não melhoraram de forma significativa após o MBO, sugerindo que os MBO de empresas públicas chinesas tendem a ser pouco eficazes