The Impact of Corporate Governance on Firm’s Financial Distress: A Case Study of The UK-based firms

Purpose: The study aims to assess the potential impacts that the different attributes of corporate governance like the ownership structure and composition of the board on the probability of the listed firms in the UK falling into financial distress. Approach/Methodology/Design: A quantitative methodology with a positivist paradigm and deductive reasoning were employed to collect data from 100 UK-based listed incorporation using FAME-A and BoardEx databases. Moreover, a longitudinal approach was used to collect data from 2014-2019 and sort it into a panel dataset, which was then analyzed using different statistical analysis approaches including pool ordinary least square regression analysis, Pearson’s correlation, and descriptive statistics by using STATA statistical analysis tool. Findings: The findings indicate that certain components of the composition of the board have a substantial effect on a company’s probability to fall into financial distress; for instance, the board size, the board size, board independence, and the independence of the audit committee have a significant negative implication on the selected companies’ probability to fall into financial distress. Similarly, some ownership structure components like institutional ownership and shareholder’s ownership have significant negative implications on the firm’s likelihood of financial distress, while audit committee size and the extent of ownership held by the management show an insignificant implication on the selected companies’ probability to fall into financial distress. Originality/value: The study also highlighted certain limitations and provided recommendations to future researchers to overcome these limitations in the future and reach more informed findings

Does corporate social responsibility affect the participation of minority shareholders in corporate governance?

Using a unique minority shareholders voting dataset, we aim to shed light on several important issues on corporate governance and investor protection. Specifically, we first examine the effects of social responsibility (CSR) on minority shareholder participation (MSP). Then, we investigate whether the mounting attention to CSR due to certain events has marginal effects on MSP, and whether CSR and MSP affect firms’ market performances. Collectively, we find that: 1) firms’ CSR levels significantly affect MSP and can substitute the governance role of minority shareholders to some extent; 2) exogenous shocks related to CSR can significantly affect MSP; and 3) firms with higher CSR level and lower MSP enjoy higher market value improvements. In addition, we find limited evidence that institutional investors may face conflict-of-interest pressures and vote against individual investors. Our results are robust to alternative specifications and offer significant policy implications

Information asymmetry, mutual funds and earnings management: Evidence from China

This paper investigates how information asymmetry and mutual fund ownership affect listed companies' earnings management. We show that (1) reducing information asymmetry improves firms' earnings management behavior; (2) relative to short-term mutual funds, long-term mutual funds promote earnings quality by adopting a monitoring role; and (3) by dividing firms into high/low information asymmetry groups, we find that the information environment significantly increases the effect of long-term mutual funds on firms' earnings management. In this paper, we provide new evidence for the role that institutional investors play in a typical emerging capital market. Our results have clear policy implications: to increase earnings quality, it is essential to improve information transparency and develop long-term institutional investors. Ó 2013 Production and hosting by Elsevier B.V. on behalf of China Journal of Accounting Research. Founded by Sun Yat-sen University and City University of Hong Kong

Numerical modelling of FRP-reinforced masonry walls under in-plane seismic loading

This paper describes the development of Finite Element (FE) models for the study of the behaviour of unreinforced and Basalt Fibre Reinforced Polymer (BFRP) externally reinforced masonry walls under the action of in-plane seismic loading. Validated against experimental tests, the FE models were used to accurately predict the shear strength and reflect damage progression in multi-leaf masonry walls under in-plane cyclic loading, including the propagation of cracks beneath the BFRP reinforcement. The models have the potential to be used in practice to predict the behaviour and shear capacity of unreinforced and FRP-reinforced masonry walls

China’s Anticorruption Campaign and Entrepreneurship

This paper investigates the causal effect of corruption on entrepreneurship. We use staggered anticorruption investigations in China as exogenous shocks to conduct difference-in-differences estimation and find that the country’s anticorruption campaign has a sizeable positive effect on entrepreneurship, especially in urban areas, areas with high levels of trust, and areas with short verdict processes after investigation. We discuss four plausible mechanisms for the positive effect of the anticorruption campaign: reduced rent seeking, improved government quality, technology spillover from innovation, and the easing of financial constraints for non-state-owned enterprises. Our results are robust to a battery of tests based on different specifications and alternative measures. Overall, this study provides a timely evaluation of the importance of anticorruption efforts in a typical emerging market

China’s Anticorruption Campaign and Entrepreneurship

This paper investigates the causal effect of corruption on entrepreneurship. We use staggered anticorruption investigations in China as exogenous shocks to conduct difference-in-differences estimation and find that the country’s anticorruption campaign has a sizeable positive effect on entrepreneurship, especially in urban areas, areas with high levels of trust, and areas with short verdict processes after investigation. We discuss four plausible mechanisms for the positive effect of the anticorruption campaign: reduced rent seeking, improved government quality, technology spillover from innovation, and the easing of financial constraints for non-state-owned enterprises. Our results are robust to a battery of tests based on different specifications and alternative measures. Overall, this study provides a timely evaluation of the importance of anticorruption efforts in a typical emerging market

An Anatomy Of Trading Strategies: Evidence From China

Using a pooled cross-sectional time series approach, we evaluate profits of momentum strategies and identify the sources of profits in China\u27s stock market. Momentum strategies generate significant and negative returns in the A-share market on investment horizons at one month and at and above nine months. In the B-share market, momentum strategies yield significant and negative returns at and above twelve months. Decomposition analysis finds that the negative returns are predominately attributed to the time series profitability of stock returns. Although momentum strategies generate significant and positive returns over the period after China opened its once foreign-restricted B-share market to domestic individual investors, the relative importance of the time series predictability and the cross-sectional variation does not change

An Anatomy Of Trading Strategies: Evidence From China

Using a pooled cross-sectional time series approach, we evaluate profits of momentum strategies and identify the sources of profits in China\u27s stock market. Momentum strategies generate significant and negative returns in the A-share market on investment horizons at one month and at and above nine months. In the B-share market, momentum strategies yield significant and negative returns at and above twelve months. Decomposition analysis finds that the negative returns are predominately attributed to the time series profitability of stock returns. Although momentum strategies generate significant and positive returns over the period after China opened its once foreign-restricted B-share market to domestic individual investors, the relative importance of the time series predictability and the cross-sectional variation does not change