Beyond traditional financial asset classes: The demand for infrastructure in a multi-period asset allocation framework

This paper employs a multi-asset allocation framework to analyse the short-term and long-term desirability of listed infrastructure investments in an investor\u27s portfolio. We employ 14 infrastructure indices encompassing six regions and eight sectors. The asset menu of the investor comprises traditional financial asset classes (stocks, bonds and bills) and infrastructure. We calculate the welfare losses due to ignoring the demand for infrastructure for various levels of risk aversion. In addition, we calculate the portfolio weights across various levels of risk aversion. Our results show that infrastructure is a desirable addition to the portfolio of traditional financial asset classes for both short-run and long-run investors

Influence of Bank Specific and Macroeconomic Factors on Profitability of Commercial Banks: A Case Study of Pakistan

The intended aim of study is to identify the influence of bank specific and macroeconomic factors on profitability of commercial banks in Pakistan over the period of 2007 to 2011. Return on assets and return on equity are used as dependent variable. Deposit to assets, bank size, capital ratio, net interest margin and nonperforming loans to total advances are utilized as bank specific measures. Inflation, real gross domestic product and industry production growth rate are macroeconomic factors. By employing descriptive statistics, correlation and regression analysis researcher conclude that bank size, net interest margin, and industry production growth rate has positive and significant impact on the ROA and ROE. Nonperforming loans to total advances and inflation have negative significant impact on Return on assets while real gross domestic product has positive impact on ROA. Capital ratio has positive significant impact on ROE. Key words: Return on Assets, Return on Equity, Inflation, Capital Ratio, Nonperforming loan

State-Level Culture and Workplace Diversity Policies: Evidence from US Firms

This paper examines the effect of state-level culture in the US on the adoption of firms’ workplace diversity policies. Using firm-level panel data (1592 firm-year observations) over the period 2011–2014, we document that firms in highly individualistic states are less likely to adopt workplace diversity policies, which in turn negatively affects firm performance. Our results are robust to alternative variables and econometric specifications. Our findings provide insights into the contemporary debate on the economic aspects of workplace diversity policies for firms operating in different cultural backgrounds

Executives' pay–performance link in China: evidence from independent and gender-diverse compensation committees

Purpose In this paper, the authors investigate whether an independent and gender-diverse compensation committee strengthens the relationship between top managers' pay and firm performance in Chinese companies. The authors also investigate whether the independent compensation committee composed of all male directors is effective in designing the optimal contract for executives Design/methodology/approach The authors use data from A-share listed companies on the Shenzhen and Shanghai stock exchanges from 2005 to 2015. As a baseline methodology, the authors use pooled ordinary least square (OLS) regression to draw inferences. In addition, cluster OLS regression, two-stage least square regression, the two-stage Heckman test and the propensity score matching method are also used to control for endogeneity issues. Findings The authors find evidence that an independent or gender-diverse compensation committee strengthens the link between top managers' pay and firm performance; that the presence of a woman on the compensation committee enhances the positive influence of committee independence on this relationship; that a compensation committee's independence or gender diversity is more effective in designing top managers' compensation in legal-person-controlled firms than they are in state-controlled firms; that gender diversity on the compensation committee is negatively associated with top managers' total pay; and that an independent compensation committee pays top managers more. Practical implications The study results highlight the role of an independent compensation committee in designing optimal contracts for top managers. The authors provide empirical evidence that a woman on the compensation committee strengthens its objectivity in determining top managers' compensation. The study finding supports regulatory bodies' recommendations regarding independent and women directors. Social implications The study findings contribute to the recent debate about gender equality around the globe. Given the discrimination against women, many regulatory bodies mandate a quota for women on corporate boards. The study findings support the regulatory bodies' recommendations by highlighting the economic benefit of having women in top management positions. Originality/value This study contributes to literature by investigating the largely overlooked questions of whether having a gender-diverse or independent compensation committee strengthens the relationship between top managers' pay and firm performance; whether an independent compensation committee is more efficient in setting executives' pay when it is gender-diverse; and whether the effect of independent directors and female directors on top managers' compensation varies based on the firm's ownership structure. Overall, the main contribution of the study is that the authors provide robust empirical evidence in support of the managerial power axiom

Gender‐diverse boards and audit fees: What difference does gender quota legislation make?

We investigate the effect of board (audit committee) gender diversity on audit fees in the French context. We also examine whether the relationship between the proportion of female directors and audit fees is moderated by the enactment of the gender quota law in 2011. We use the system GMM estimation approach on a matched sample of French firms listed in the SBF 120 index between 2002 and 2017. Consistent with the supply‐side perspective, we contend that female independent directors and female audit committee members, by improving board monitoring effectiveness, affect the auditor's assessment of audit risk, resulting in lower audit fees. Our findings also document that, by breaking the glass ceiling, the effectiveness of the gender quota law lies not in increasing the proportion of female insider directors, but in boosting the appointment of female independent directors and female audit committee members. Using the difference‐in‐difference approach, our results reveal that female independent directors and female audit committee members are more willing to assert their monitoring skills after the quota law, leading to lower audit fees. Moving beyond tokenism, we show that, after the quota law, the negative impact on non‐audit fees is strengthened only for female independent directors

Do Board Independence Carry Value? A Case Study of Pakistani Banks

Abstrac

Investigating the varying relevance of CSR dimensions on firm leverage: The implications for internationalized firms

We empirically investigate the varying role of CSR dimensions such as community, diversity, employee relations, environment, human rights, and product on US firms’ leverage. Overall CSR performance and dimensions relating to diversity, employee relations and environment are negatively associated to firm leverage, implying easier access to equity financing. Contrastingly, the human rights dimension is positively associated to firm leverage. For internationalized firms, particularly operating in non-environmentally sensitive industries, the relationship is however reversed for overall CSR performance and dimensions related to diversity, employee relations and environment, while community performance is negatively associated to firm leverage. Drawing on the stakeholder theory of capital structure and stakeholder salience, we highlight the heterogeneous consequences of CSR dimensions as channels that both enable and limit access to equity financing. Our results are robust to alternative explanations and proxies and highlight the need for managing specific CSR dimension performance, the more so when operating multi-nationally

Beyond gender diversity: How specific attributes of female directors affect earnings management

We apply the system GMM regression estimation approach to a matched sample of French firms listed on Euronext Paris during the period 2001–2010 in order to investigate the relationship between female directors and earnings management by considering their specific (statutory and demographic) attributes. We first find that the presence of female directors deters managers from managing earnings. However, this finding does not hold when the statutory and demographic attributes of female directors are taken into account, thus showing that the detection and the correction of earnings management require particular competencies and skills. Interestingly, we find that business expertise and audit committee membership are key attributes of female directors that promote the effective monitoring of earnings management. An important implication of our findings is that the decision to appoint women on corporate boards should be based more on their statutory and demographic attributes than on blind implementation of gender quotas. Finally, our supplementary analysis reveals that female CEOs and CFOs are strongly inclined to reduce earnings management

La diversité du genre au conseil d’administration et la qualité des états financiers : le rôle des attributs des femmes administrateurs

This thesis proposes to study to what extent board gender diversity influence the quality of financial statements. Specifically, this thesis explores the relation between gender-diverse boards and financial statements quality by highlighting the value relevance of female directors‟ attributes for enhancing the quality of financial statements.This thesis focuses on a large sample of French firms belonging to the CAC-All shares index listed on Euronext Paris over the period 2001 to 2010. We find, after controlling for endogeneity and other board, firm and industry specific factors, that board gender diversityis positively associated with the quality of financial statements. Further, our findings provide evidence of significant influence of female directors‟ attributes on the relation between gender-diverse boards and financial statements quality. With regard to female directors‟ attributes, we find concrete evidence to suggest that audit committee memberships, financial expertise and experience of women have substantial impact on the quality of financial statements. Taken together, these results testify the effective monitoring skills of gender-diverse boards and the value relevance of female directors‟ attributes for ensuring the quality of financial statements. Finally, an important implication of thesis is that the decision to appoint women on corporate boards should be more based on their statutory and demographic attributes than blind implementation of gender quotas.Cette thèse propose d'étudier dans quelle mesure la diversité du genre au conseil d'administration influence la qualité des états financiers. Plus précisément, cette thèse explore la relation entre la diversité du genre au conseil d'administration et la qualité des états financiers en soulignant l'influence des attributs des femmes administrateurs sur la qualité des états financiers.Cette thèse repose sur un large échantillon d'entreprises françaises appartenant à l'indice CAC All-shares d'Euronext Paris entre 2001 et 2010. Après avoir contrôlé l'endogénéité et d'autres facteurs spécifiques au conseil d'administration, à l'entreprise et à l'industrie, nos résultats montrent que la diversité du genre au conseil d‟administration est positivement associée à la qualité des états financiers. De plus, nos résultats mettent en lumière une influence significative des attributs des femmes administrateurs sur la relation entre la diversité du genre dans les conseils d'administration et la qualité des états financiers. En ce qui concerne plus particulièrement les attributs, nous avons trouvé que l'appartenance au comité d‟audit, l'expertise comptable et financière et l'expérience des femmes ont un impact positif et significatif sur la qualité des états financiers. L'ensemble de ces résultats témoigne de l'importance des compétences dans les conseils d'administration diversifiés en termes de genre et révèlent la pertinence des attributs des femmes administrateurs pour assurer la qualité des états financiers