An empirical investigation of agency costs and ownership structure in unlisted small businesses

The study uses panel data to investigate agency costs, both principal-agent (PA) and principal-principal (PP), in 240 small businesses not listed on the New Zealand Stock Exchange. Results show that both forms of agency cost vary according to industry, the life of the business and size. The results indicate that the degree of owner involvement in the business influences firm PA and PP agency costs. Moreover, this study finds non-linear relationship between agency costs and ownership structure align with convergence of interest hypothesis and managerial entrenchment hypothesis. It is noted that the distortion between equity returns and debt returns gives rise to a preference for quasi-equity and distorts the productive base and effective pricing of risk. The analysis indicates there is considerable variability in the burden of agency cost and that this raises the potential for regulatory and policy reforms that may enhance the productivity and growth in the sector

Nonrigid Registration of 3-Dimensional Images of the Carotid Arteries

Atherosclerosis at the carotid bifurcation can result in cerebral emboli, which in turn can block the blood supply to the brain causing ischemic strokes. Non-invasive imaging tools that characterize arterial wall, and atherosclerotic plaque structure and composition may help to determine the factors, which lead to the development of unstable lesions, and identify patients at risk of plaque disruption. Registration of 3D ultrasound (US) images of carotid plaque obtained at different time points, and with Magnetic Resonance (MR) images are required for monitoring of plaque changes in volume and surface morphology, and combining the complementary information of the two modalities for better understanding of factors that define plaque vulnerability. These registration techniques should be nonrigid, to remove deformations caused by bending and torsion in the neck during image acquisition sessions. The high degrees of freedom and large number of parameters associated with nonrigid image registration methods causes several problems including unnatural plaque morphology alteration, high computational complexity, and low reliability. Thus, we used a “twisting and bending” model with only six parameters to model the natural movement of the neck for nonrigid registration. We calculated the Mean Registration Error (MRE) between the segmented vessel surfaces in the target and the registered images using the distance between “matched points” to evaluate registration results. We registered 3D US carotid images acquired at different head positions to simulate images acquired at different times, and obtained an average MRE of 0.8±0.3mm for nonrigid registration. We registered 3D US and MR carotid images at field strengths, 1.5T and 3.0T, of the same subject acquired on the same day, and obtained an average MRE of 1.4±0.3mm for 1.5T and 1.5±0.4mm for 3.0T, using nonrigid registration. Furthermore, we showed that the error metric used here was not significantly different from the widely accepted Target Registration Error (TRE)

Corporate governance and financial performance of Sri Lankan listed companies 2006-2010

This thesis investigates the effect of corporate governance practices have on the financial performance and agency costs of multinational subsidiaries and local public companies in Sri Lanka. In particular, this study examines (i) the relationship between corporate governance mechanisms of Sri Lankan listed companies, financial performance, principal-agent and principal-principal agency costs (ii) corporate governance practices and compliance differences of multinational company subsidiaries (MNCs) and local public companies (LPCs) in Sri Lanka, (iii) whether voluntary compliance with the new corporate code had an effect on firm financial performance and agency costs and (iv) corporate governance and firm financial performance differences across quantiles of performance proxies in MNCs and LPCs. Corporate governance has become a major issue since the collapse of major companies around the world. Additionally, the Asian financial crisis in 1997 showed the need for legislative reforms to strengthen corporate governance practices in that region. Now, it is widely believed that good corporate governance is an important factor in improving firm financial performance in both developed and developing financial markets. Until the mid-1990s, corporate governance was popularly known in Sri Lanka as, the systems used to control and direct companies. A real effort to codify the principle of corporate governance in a structured manner in Sri Lanka was made in 1996. Since the financial year commencing April 2008, Sri Lankan listed firms have been subject to mandated rules on corporate governance by the Securities and Exchange Commission of Sri Lanka. The main purpose of this new mandatory corporate governance rule is promoting accountability, transparency and overall efficiency in corporate governance best practice. This thesis makes a number of contributions to corporate governance and firm financial performance knowledge in several ways. First, it provides evidence of the relationship between corporate governance practices and firm financial performance and agency costs. Second, in contrast to most existing studies that use data from developed countries, this research considers how differences in institutional and governance systems between countries may impact firm financial performance, agency costs and corporate governance relationships. Third, this research is the first direct study of firm financial performance, agency costs and corporate governance practices for listed Sri Lankan companies. Data needed to test various hypotheses are sourced from the Handbook of Listed Companies - 2007, Fact Book - 2008 and Data library CD issued by the Colombo Stock Exchange (CSE). Further data have been collected from companies listed on the (CSE) during 2006-2010 that published audited annual reports. For the LPCs and MNC subsidiary companies, the sampling period is 2006 through 2010. The focus of this thesis is on the governance variables that have been highlighted by the Sri Lankan Corporate governance best practice code (2008) and also other governance variables that are supported in the literature as providing an appropriate structure for the institutions in the environment in which they operate. Statistical issues such as controlling the endogenity effect and reverse causality effect of corporate governance variables indicate is appropriate to employ dynamic panel generalised method of moment estimators to explore the relationship between corporate governance variables, financial performance and agency costs. Various other statistical techniques including as ANOVA test, panel tobit regression, difference-in-difference method, quantile regression are used to check hypotheses relevant in this study. The findings indicate that there is positive relationship between corporate governance and firm financial performance and a negative relationship between corporate governance and firm agency costs. However, the process by which the firm financial performance and agency costs affect MNC subsidiaries and LPCs is different. These results also support the central argument in corporate governance that the institutional and cultural differences determine the effect of complying corporate governance and financial performance and agency costs. Although Sri Lanka basically follows an Anglo-American model of corporate governance, country institutional and cultural differences create a unique corporate governance environment in Sri Lanka. It is important to further develop the corporate governance code incorporating country specific characteristics rather than inherit bundles of corporate governance mechanisms from other developed countries. However, as this study shows, some mandatory corporate governance mechanisms have negative impacts on firm financial performance and/or increase company agency conflicts. A corporate governance framework appropriate for each organisation structure as “one size does not fit all” seems preferable. Guidelines encompassing an “or explain” exemption clause may be particularly beneficial in emerging economies

Comparative analysis of environmental performance measures and their impact on firms' financing choices

This study investigates the roles of different measures of environmental performance in firms' financing choices. Environmental performance is measured through energy-efficiency investments, energy intensity, and energy consumption disclosures, which correspond to input-based, output-based, and disclosing perspectives, respectively. We further distinguish between debt financing and equity financing since environmental information asymmetry varies across investors, affecting the pecking order of financial sources. We use Eastern European and Central Asian firm-level data from the World Bank Enterprise Surveys conducted in 2019/2020. The study sample consists of above 3000 private firms from 42 countries. The logit model shows that alternative measures of environmental performance have varying impacts on financing. For a particular measure, it affects bank and equity financing in different ways. We also find that there is a direct joint impact of environmental investments and disclosures on equity financing. Overall, our study indicates that investors prefer to invest in eco-friendly firms rather than supporting conventional firms in reducing their environmental impacts. Hence, it is required to promote government support programs and loan guarantee programs to initiate firm-level environmental practices. Further, the complementary relationship indicates that firms may choose different environmental practices to reduce environmental information uncertainty, which improves the credibility of environmental information from the investors' perspective.publishedVersio

Environmental performance and the role of government support: Evidence from the recent COVID-19 pandemic

This paper investigates whether good firm environmental performance attracted government support. Furthermore, we explore the effect of different government measures such as access to new credit, cash transfers, fiscal exemptions or reductions, and wage subsidies. The COVID-19 data were collected from the COVID-19 follow-up survey, while environmental data are from the World Bank Enterprise Surveys. Our results show that 21% of the firms received wage subsidies, 10% received cash and exemption support and only 6% of firms received credit support. The results indicate that the probability of receiving government support increases if firms have a good environmental performance score

Capital structure and its determinants in New Zealand firms

The current study aims to empirically explore the relationship between firm characteristics, corporate governance and capital structure in New Zealand's large listed companies. Eight years of data for 40 firms listed on the NZX50 Stock Exchange, are collected and observations are analysed using a conditional quantile regression. This study finds firm-specific characteristics rather than corporate governance variables play a significant role in determining firm leverage levels. The results indicate that finance policies need to vary across firm type and firm characteristics, and should match with the different borrowing requirements of listed firms

Formal credit and innovation: Is there a uniform relationship across types of innovation?

We investigate the formal credit effect on firm level innovations of small and medium enterprises in developing economies. Using the instrumental regression method, we control for potential endogeneity in innovation and credit relationships. Results indicate that formal credit availability boosts all four types of innovations. However, this impact is more significant for soft innovations compared to hard innovations. The results also point to the importance of informal finance as a source of external finance for firms where capital markets suffer from imperfections. Our study encourages the development of policy based on financing for various types of innovation, which is especially suited for developing economies

OAS: An Advanced Undergraduate Office Automated System for Automate Bank Work Routing

Office automation systems (OAS) have steadily gained popularity as a result of the information technology industry's fast expansion. The promise of office automation, which is meant to increase productivity in the office setting, has caused organizations in both the public and commercial sectors to grow concerned. This issue becomes quite important due to the rising costs of new and enhanced office automation technologies. As a result, industries like banks have improved their front-end client operations using digital solutions. However, a large number of bank processors still depend on personnel and paper. This level of human processing is expensive, sluggish, and may provide results that are highly inconsistent, have significant mistake rates, and pose security risks. Through this research work, our aim is to consider existing significant opportunities in backoffice automation level increase and develop a pilot OAS to work smart with a higher level of efficiency in the office environment. The proposed solution is enriched with image processing methods to authenticate employees to ensure the security of the banking environment by enabling access control and providing a well-accurate employee attendance handling system through web and mobile app facilities which are enabled by GPS and API call technologies. To maintain on-time accurate customer support service, our study has proposed a smart customer handling facility with the help of an AI chatbot and some IoT device material

Innovation and SME finance: Evidence from developing countries

This paper explores the relationship between firm-level innovation and external finance for small and medium enterprises (SMEs). Our sample consists of 13,430 firms from Eastern Europe and Central Asian countries. A propensity score matching approach reports a positive relationship between formal finance and product and process innovations, which is greater for early-stage SMEs than for mature counterparts. However, informal finance has more significant impact on mature firms’ product innovation. Our empirical evidence highlights policy implications for countries desiring to enhance the innovation of their SMEs by improving the external finance of these SMEs

Remittance and financial inclusion in refugee migrants: Inverse probability of treatment weighting using the propensity score

This paper investigates the impact on remittances on financial inclusion of refugee migrants. While financial inclusion is gaining traction in the humanitarian and development literature, the linkage with the potential to improve the wellbeing of refugees, who are part of an upward spiral in numbers, has not been tackled. We examine World Bank survey data of 1041 Syrian refugees, using inverse probability of treatment weighting propensity score analysis (IPTW). The method minimises the influence of outliers and addresses unobservable and missing data biases, which can plague survey based data. We observe that common indicators of financial inclusion when applied to refugees, given their limited access to formal financial services, may introduce a bias as informal financial sector and excluded formal financial sector services do contribute to inclusiveness. We adopt a broader protocol for our data, measuring financial inclusion through six metrics stemming from G20 proposals: Bank account, ATM card, IRIS account, debit card, credit card and insurance. Overall, there is an opportunity to deepen financial inclusion for refugees who receive or send remittances. The possibility of expanding the financial inclusion options, and for this to percolate through to greater social inclusion, proffers practical commercial steps and policy enabling actions