An examination of the determinants of corporate ownership structure in an emerging market context / Omar Al Farooque

Using historical data, this study investigates the determinants of corporate ownership structure in an emerging economy in the context of two different but interactive policy directions (or reversal of policy) of market regulators. It also highlights the effectiveness of importing Anglo-Saxon governance models to emerging markets in the name of promoting ‘good corporate governance’. Based on established literature, a single equation approach is applied on a pooled sample of 490 observations listed on the Dhaka Stock Exchange over eight years to identify whether measures of corporate performance and other governance factors do contribute in shaping ownership structure. The findings indicate that while there is support for reducing board ownership level, there is no such support for reducing Top 1 shareholder’s ownership level. It suggests that the ownership restriction imposed by the SEC is unjustified and detrimental to firm performance/growth in emerging countries like Bangladesh. The study has implications for stakeholders, regulators and policy makers to revisit their attempts to limit the founder-family ownership holdings

Does Corporate Governance Have a Say on Dividends in Australian Listed Companies?

This paper investigates whether corporate governance has an impact on dividend policy in Australian listed firms. The empirical studies of corporate governance and dividend policy in the Australian context tend to have a limited scope and the findings are mixed. Unlike the existing literature, this paper provides a more comprehensive examination of the relationship between dividend policy and corporate governance mechanisms. Using a sample of 1,438 firm-year observations for the period of 2005 to 2011 and the panel data approach, this study finds that dividend payout is significantly positively (negatively) correlated with board size, board independence, institutional ownership and use of a Big-4 audit firm (CEO duality and managerial ownership). Moreover, dividend yield is significantly positively (negatively) correlated with managerial ownership (foreign ownership). These findings suggest that dividend policy and corporate governance mechanisms are complementary i.e. firms paying higher dividends are more likely to engage in good governance practices as well as having strong monitoring and control systems in place and therefore both dividend policy and corporate governance are considered as effective tools in reducing agency costs

Users\u27 information requirements and narrative reporting : the case of Iranian companies

This paper investigates whether the narrative section of Iranian companies\u27 annual reports satisfies the information requirements of financial analysts employed by institutional investors. Taking a group of stakeholders (i.e. financial analysts) as the sample, a questionnaire survey was conducted to identify their top three information needs from the narrative sections of company annual reports in each of three information categories: Present, Analytical and Prospective. Following this survey, a checklist was prepared to analyse whether Iranian companies are disclosing this information required by financial analysts. Overall, the results partially support stakeholder theory as there is a general lack of information flow on the part of Iranian listed companies in meeting their stakeholders\u27 information needs. <br /

On the relation between internal corporate governance and bank risk taking : evidence from Gulf Cooperative Council countries

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A Simultaneous Equations Approach to Analysing the Relation between Ownership Structure and Performance in Bangladesh

This paper models the managerial (board) ownership and financial performance relationship in Bangladesh using a simultaneous equations approach. This approach is deemed to be the most appropriate methodology to control for the potential endogenous relationship between managerial (board) ownership and performance. Consistent with recent literature employing this method of analysis in developed markets, we document a ‘reverseway’ causality of relationship between them in Bangladesh listed firms. Using an unbalanced/random pooled sample of 660 firmyears, our results suggest that board ownership does not have a significant impact on performance as measured by Tobin’s Q or Return on Assets (“ROA”). However, performance does appear to have a significant negative impact on board ownership. With few exceptions, other corporate governance and control variables have effects on performance and ownership consistent with both theoretical and empirical expectations. These results imply that despite huge institutional and governance differences between Bangladesh, an emerging market economy, and developed countries (US, UK, Japan, Germany) there is nevertheless similarity in governance mechanisms, in particular, ‘internal governance mechanisms’ and agency problems. Ke

CSR disclosure, corporate governance and firm value: a study on GCC Islamic banks

PurposeThis study aims to explore the corporate social responsibility disclosure (CSRD) practices of the Islamic banks in the Gulf Cooperation Council (GCC) countries during the period 2010-2014 and examines the determinants of CSRD and its effects on firm value.Design/methodology/approachBased on the Accounting and Auditing Organization for Islamic Financial Institutions Governance Standard No. 7 guidelines and using content analysis, the paper develops a comprehensive CSRD index for GCC Islamic banks. The study applies ordinary least squares regression analysis for hypothesis testing and for finding determinants of respective dependent variables.FindingsThe results show a very low level of CSRD among the sample Islamic banks in GCC countries. When using corporate governance characteristics to examine the determinants of CSRD, this study provides evidence of a significant positive association between board size and CSRD practice in Islamic banks and a significant negative relationship of chief executive officer (CEO) duality with CSRD, as per expectation. For the economic consequences of CSRD, the study documents an inverse performance effect of CSRD while board size, board composition and CEO duality indicate significant positive effects on firm value.Research limitations/implicationsThe relatively small sample size of GCC Islamic banks may limit the application of the findings to other Islamic financial institutions such as Takaful and the Islamic unit trust company.Practical implicationsThe findings of this study initiate the global debate on the need for corporate governance reform in Islamic banks by providing insights on the role played by corporate governance mechanisms in encouraging and enhancing CSRD practices among Islamic banks. The findings also have important implications for investors, managers, regulatory bodies, policymakers and Islamic banks in the GCC countries.Social implicationsThe results of the study do not support the idea that Islamic banks operating on Islamic principles can meet their social responsibilities through promoting corporate social responsibility (CSR) activities and by differentiating themselves from non-Islamic banks.Originality/valueThis is the first study to examine the determinants of CSRD in GCC Islamic banks using comprehensive CSRD and corporate governance variables and, therefore, adds value to the existing CSR literature in banking.<br

National Governance Index, Corruption Index, and Growth Rate-International Evidence from Sub-Saharan and MENA Countries

In an international setting of developing countries, applying advanced statistical estimation approaches such as the system generalized method of moments (GMM), two-stage least square (2SLS) regressions, and cluster analysis, this paper revisits the impact of macro-level governance quality and the corruption index on the economic growth rate. We use cross-country panel data for 40 sub-Saharan and the Middle Eastern and North African (MENA) countries over the period of 2009–2020. The empirical results document the positive and negative effects of the national governance index and the corruption index on the economic growth rate. Additionally, foreign direct investment and population have a positive impact on the economic growth rate and trade openness has a negative impact. The study evaluates the robustness of these associations through a series of tests. These findings have important policy implications for policymakers and regulators in developing countries. In particular, the study recommends the implementation of an anti-corruption campaign and improving country-level governance quality that could encourage increased foreign direct investment for an accelerated economic growth rate. These will further enhance accountability, transparency, the rule of law, social responsibility, the public voice, and government effectiveness

Impact of environmental information disclosure and real estate segments on cost of debt: Evidence from the Chinese real estate industry

The novel part of this paper is to examine the individual and joint effects of the real estate segments (RETs) and environmental information disclosure (EID) on the cost of debt (COD) in the real estate industry in China. Building on extant literature, using 1,250 firm‐year observations from 2006 to 2016 and applying both Feasible General Least Squares and Two‐stage Least Squares Instrumental Variable approaches, we provide evidence that the commercial RET leads to an increase in the COD, while EID leads to a decrease in the COD. The joint effects of the RETs and EID on the COD indicate a significantly positive relationship with the COD. This signifies that even with the increased levels of EID in commercial real estate sectors, its COD is higher than for residential real estate sectors. These findings have important policy implications for environmental risk assessments for real estate sectors, their lending institutions and wider stakeholder groups

Seawater desalination concentrate—a new frontier for sustainable mining of valuable minerals

The ocean has often been announced as a sustainable source of important materials for civilization. Application of the same extraction processes to desalination concentrate, rather than to unconcentrated seawater, will necessarily be more energetically favorable, so the expansion of seawater desalination in recent decades brings this dream closer to reality. However, there is relatively little concrete commercial development of 'concentrate mining'. This review assesses the technical and economic prospects for utilization of commercially viable products from seawater. The most important technologies for economic use of products from desalination plant concentrate are technologies for more economic separation and technologies for more economic concentration. The most promising separation technologies are those, such as nanofiltration, which separate brine into streams enriched/depleted in entire classes of constituents with minimal input of energy and reagents. Concentration is becoming more economic due to rapid advances in Osmotically-Assisted RO technology. Despite very active research on many aspects of desalination concentrate utilization, it is likely that commercial development of the non-NaCl components of desalination brine will depend on the available market for NaCl, as the challenges and costs of extracting the other mineral components from bitterns in which they are highly enriched are so much less than those faced in direct treatment of brines

Intellectual capital disclosures and corporate governance:an empirical examination

Empirical examinations of the links between corporate governance and intellectual capital are underresearched, particularly from the context of emerging economies where corporate governance mechanisms tend to be largely ceremonial due to family dominance. This study aims to address this gap in the intellectual capital disclosure (ICD) literature by undertaking an empirical examination of the relationship between corporate governance and the extent of ICD of Bangladeshi companies. Inter alia, the key findings of this study suggest that there is a non-linear relationship between family ownership and the extent of ICD. This research also found that foreign ownership, board independence, and the presence of audit committees are positively associated with the extent of ICD. Conversely, family duality (i.e., where the positions of CEO and chairperson are occupied by two individuals from the same family) is negatively associated with the extent of ICD