Level Of Corporate Governance Research Articles

Digital Economy, Corporate Governance and Enterprise Innovation

Based on the matching data of listed companies and urban digital economy from 2011 to 2019, this paper uses multiple regression model and intermediary effect model to examine the relationship between digital economy, corporate governance and enterprise innovation. The research results show that there is a positive correlation between digital economy and enterprise innovation, digital economy positively promotes the level of corporate governance, and corporate governance plays a part of the intermediary effect between digital economy and enterprise innovation.

Internal controls and corporate technological innovation: Empirical evidence from Chinese listed companies

As the underlying institutional design for enterprise risk management, it is important to study whether and how internal control affects enterprise technological innovation in the current context of increased economic policy uncertainty. Based on the principal-agent theory and information asymmetry theory, this paper explores the impact of internal control on corporate technological innovation using the listed company data from 2009-2019 CSMAR database, and obtains the following research conclusions: (1) the quality of internal control positively affects the corporate technological innovation. (2) The operational risk plays an intermediary role in the relationship between the internal control affecting the corporate technological innovation. (3) The degree of market competition positively moderates the impact of internal control on enterprise technological innovation. (4) Relative to non-state-owned enterprises and non-high-tech enterprises, the quality of internal control of state-owned enterprises and high-tech enterprises has a more significant impact on enterprise technological innovation. This paper enriches the consequences of the study of internal control on the one hand, and on the other hand, it provides a new perspective for improving technological innovation, and it provides certain guidance for further improving the level of corporate governance.

How do investors underreact to seasoned equity offerings? Evidence from Taiwan's corporate governance evaluation

This study examines whether long-run stock underperformance following seasoned equity offerings (SEOs) differs with a firm's corporate governance practices. We address this issue by using Taiwan's official annual corporate governance evaluation to represent the quality of firm governance. Results show that firms with better governance exhibit positive long-run post-SEO stock performance, whereas those with poor governance continue to be underperforming after SEOs. Our findings reveal that investor’ underreaction to SEOs varies with the levels of corporate governance.

Company Structure and Level of Service of Syarikat Air Darul Aman (SADA) To Consumers in Kedah

The purpose of the study was to assess the function of the water supply treatment and distribution company in the state of Kedah, Syarikat Air Darul Aman (SADA) in fulfilling its function of supplying clean and treated water to 2.2 million people in Kedah. Despite the company structure, the impact of legislative regulation under the act of parliament and state enactment resulted in SADA being subject to full political control even though it is a business entity in accordance with the Companies Act 1965. For this purpose, 200 respondents were taken at random and distributed questionnaires in three SADA operating centres covering three regions, namely Eastern, Southern and Northern Kedah Regions 1. Four themes were observed using descriptive statistical analysis which is about the user's understanding of SADA functions. It also involves consumer expectations on SADA, the level of satisfaction with over-the-counter services and operations. The findings found that on average the percentage of user satisfaction in relation to the service and orientation provided by SADA was still poor. The level of professionalism, effective service and corporate governance is still underappreciated as the dominant culture in SADA due to the overshadowed company structure of a government agency.

Changes in corporate information policy in crisis conditions

Subject. The article addresses implementation of principles of sustainable development at the level of corporate governance in the context of international sanctions. Objectives. The focus is on the analysis of approaches to countering threats to information security at the corporate level. Methods. The study employs methods of comparative analysis. Results. I formulated recommendations to maintain a balance between information transparency and the need to reduce sanctions pressure on Russian corporations. The paper established that the policy of maximum openness, following Western models in the implementation of the Sustainable Development Goals in 2022 changed significantly. The amount of information reflected in corporate reporting decreased. Conclusions. While remaining committed to the general principles of sustainable development, it is necessary to develop approaches to the organization of corporate governance that meet the interests of Russia.

How does social responsibility investment strategy contribute to hospitality firms’ recovery from public health emergencies? The case of COVID-19 pandemic

Using fuzzy-set qualitative comparative analysis, this paper explores which configurations of six dimensions of hospitality firms’ corporate social responsibility (CSR) result in higher (or lower) levels of total factor productivity. We demonstrate that different categories of stakeholders and hospitality firms’ dynamic capabilities complement each other under the framework of configurational theory. The result shows that: 1) The CSR dimensions of product quality, CSR communication, and environmental protection are critical to high levels of firm performance; 2) After the pandemic, hospitality firms should make investment in CSR communication and environmental protection a priority; 3) Hospitality firms’ choice to invest in a specific combination of dimensions of CSR practice should depend on their overall level of corporate governance (high or low). This paper contributes to the strategic management and corporate governance literature by identifying the role of hospitality firms’ governance on the linkage between CSR investment strategy and firm performance.

The Internal Control System and the Performance of Financial Institutions in Uganda

Internal control systems and the performance of financial institutions have received much attention in recent times owing to the increased recognition accorded to internal control systems as a source of financial performance. Researchers and practitioners have been increasingly interested in striving to understand how these two notions can be harnessed in order to attain a firm’s success. The aim of the study was to assess the internal control system and the performance of financial institutions in Uganda. The study was guided by specific objectives, which include establishing the relationship between the internal control system and the performance of financial institutions and finding out the relationship between corporative governance and firm performance. A mixed research design was applied to achieve the set objectives utilising both quantitative and qualitative approaches. Using simple random and purposive sampling techniques, a total of 118 respondents were selected to participate in the study. There is a significant positive correlation between the internal control system and firm performance (r = .407; p< 0.01), meaning an increased internal control system in Uganda’s financial institutions is associated with positive firm performance. There is a significant positive correlation between corporate governance and financial performance (r = .649; p< 0.01). This implies that as the level of corporate governance improves, the financial performance of the company tends to improve as well. Thus, financial firms in Uganda should endeavour and put in place functional internal control systems if they are to realise better institutional performance

Trust and corporate social responsibility: Evidence from CEO’s early experience

While previous literature has paid much attention on the effects of trust as an informal institution on economic growth and corporate behavior, it is unclear whether and how the trust affects the corporate social responsibility (CSR). In this study, we use CEOs’ early experiences on trust to assess the effect of CEO’s personal trust on CSR based on a difference-in-differences design. We find that CEOs with low trust levels are more inclined to be socially responsible. Mechanistically, CEOs are willing to take the initiative to fulfill their social responsibility due to risk aversion and concern for corporate development brought about by poor trust. After excluding competing explanations for the effects of early experience on human capital accumulation and health endowment, the results on the impact of trust on CSR remain robust. The inhibitory effect of trust on CSR is more pronounced in conditions of higher levels of external corporate governance, low financing constraints, and low analyst attention and among state-owned enterprises. The findings of this paper emphasize the important role of informal institutions in CSR performance.

Exploring the effects of director network on open innovation: the moderating role of CEO short-sightedness

PurposeThis paper aims to explore the effects of director network on open innovation. As an informal institutional arrangement, the director network is an important source for the enterprise to obtain external information, which provide resource basis for open innovation. Chief Executive Officer (CEO) as the top of management team could make short-sighted decisions for personal interests; this paper also investigates the moderating role of CEO short-sightedness between director network and open innovation.Design/methodology/approachThis paper takes 4,102 Chinese listed companies from 2007 to 2020 as the research sample. By introducing network centrality and structural hole to measure director network and using data mining to extract key words related to CEO short-sightedness from annual reports, this paper constructs several multiple linear regression models to analyze the impact of director network on open innovation and the moderating role of CEO short-sightedness.FindingsThe analysis finds that director network can facilitate corporate open innovation. Enterprises can acquire more external resources in high centrality and structural hole of director network and promote ability for corporate open innovation. The relationship between director network and open innovation is negatively moderated by CEO short-sightedness. When the level of corporate governance and analyst attention is high, the negative effect of CEO short-sightedness on the innovation effect of directors’ networks is suppressed.Originality/valueThis is the first empirical paper to investigate the promotion effect of director network on open innovation as well as the negative moderating role of CEO short-sightedness. The findings bring new perspectives to the open innovation and enlightenments for practical activities from social relationship aspect.

The Impact of Enterprise Innovation Level on IPO Underpricing under Registration System - Based on Signaling Theory

Background: Chinese capital market has continued to develop and mature recently. And in December 2021, the Central Economic Work Conference formally proposed the full implementation of the stock issuance registration system. In this context, the phenomenon of IPO underpricing has not been effectively alleviated in the Chinese capital market.Objective: This paper aims to analyze the impact of listed companies’ characteristics and underwriters’ underwriting level on high IPO underpricing in the Chinese capital market, find the main reasons for high IPO pricing, and ultimately help enterprises alleviate IPO high underpricing.Methods: Based on incomplete adjustment theory and signal transmission theory, this paper analyzes the impact of listed companies’ innovation level (R&D), governance level (CG), and underwriters’ underwriting level on high IPO underpricing in the Chinese capital market through the RE model and robustness test. And all the data are from the CSMAR database and related enterprise annual report search.Conclusion: Based on the signal transmission theory, this paper empirically finds that the high innovation level of enterprises can replace their active underpricing issuance by transmitting high-quality signals to investors, thus alleviating the phenomenon of high IPO underpricing in China. But the level of corporate governance is difficult to send a signal to investors, and underwriters have no significant impact on IPO underpricing. Therefore, the main reason for the high IPO underpricing in China is the active underpricing of the issuer. And enterprises bear the cost of eliminating information asymmetry through low-price issuance between enterprises and investors.

CEO’s Remuneration and Performance of Firm: Evidence from Emerging Economy

From the perspective of an emerging market like Pakistan, this study looks into the influence of a firm’s performance over the compensation of the Chief Executive Officers (CEO). For this purpose, the sample data of 170 non-financial companies ranging from 2008 to 2018 enlisted on the Pakistan Stock Exchange is separated into groups based on firm size, ownership type (family & non-family), and levels of corporate governance so as to analyze pay-performance link. Performance is assessed using return on equity, return on assets, and Tobin's Q, along with firm size, debt ratio, and stock beta serving as the control variables. The results of the study are determined by the Fixed Effect Model and Dynamic GMM-Difference. The results show that a company's performance has a significant impact on the CEO's remuneration. Vice versa results are found on the firm’s size and debt ratio. Furthermore, the results show that family businesses pay their CEOs for performing more in case of return on equity. Similarly, in the case of Tobin Q, return on asset, return on equity, and corporate governance, mixed conclusions are drawn in the case of small, medium, and large size firms.

Competitiveness in the agricultural sector: level of Environmental Disclosure in companies with good Corporate Governance practices

The purpose of this research was to analyze the level of disclosure of environmental information in the financial statements of companies in the Agricultural segment on the Brazilian Stock Exchange B3, which follow good Corporate Governance Practices. First, a documental analysis was carried out and after that, a survey of the respective levels of Corporate Governance of each company was carried out. For data collection, the Management and Sustainability Reports, the Financial Statements, the Explanatory Notes and the websites of the companies were analyzed, in addition to the websites of B3 and CVM. The results indicate that companies have great difficulty finding an adequate way to show environmental information, although it has been found that the disclosure of environmental information is fundamental, as it generates positive marketing for companies, increasing their competitiveness, economic development and appreciation in the market.

An Empirical Study on the Impact of Corporate Governance Level on Investor Confidence Under the Supply Chain Finance

With the rapid development of cloud computing and financial technology, supply chain finance gradually takes a significant role at the financial market. More investors consider that as the future trend of enterprising growth. There is no denying that boosting investor confidence is the foundation for a capital market to achieve sustainable development. Does the quality of corporate governance affect investor confidence? Based on theoretical and empirical analysis, investor confidence is affected by managerial compensation, managerial shareholding ratio, independent director ratio and board size. Moreover, in the sample of A-share listed companies in China stock market in 2017-2021, corporate governance level is constructed as a synthetical indicator by using PCA to investigate its impact on investor confidence under the supply chain finance model. The results show that the higher the corporate governance level, the stronger the investor confidence. Based on the above findings, a series of recommendations are put forward aimed at improving the government's regulatory capacity as well as corporate governance level.

State-owned enterprises' board characteristics and audit fees: an international perspective in view of economic freedom, political democracy and protection of minority shareholders

PurposeThe paper examines the relationship between board effectiveness and audit fees for state-owned enterprises (SOEs). Furthermore, given the unique nature of SOEs, the paper assesses country-level influences, such as economic freedom, political democracy and protection of minority shareholders, which can impact board effectiveness and audit fees.Design/methodology/approachA combination of two-stage and ordinary least squares regression is used to examine the board characteristics-audit fee relationship for SOEs in a multinational setting during the period from 2016 to 2018.FindingsThe results indicate that board characteristics that represent a high level of effectiveness are associated with higher audit fees in SOEs. Furthermore, the findings suggest SOE's operating in countries evidencing medium levels of democracy and economic freedom and medium to high levels of protection of minority shareholders may be motivated to reduce agency conflicts by promoting accountability and transparency, thereby demanding increasing levels of corporate governance, monitoring and audit quality, thereby increasing audit fees.Practical implicationsThe results provide further support for the OECD (2015) guidelines promoting the use of high-quality external audits in SOEs.Originality/valueAs a result of the scarceness of research in this area, the current study extends the literature by examining the role of corporate governance and audit fees in SOEs, while examining the influence of economic freedom, political democracy and protection of minority shareholders.

Can Environmental Information Disclosure Enhance Firm Value?-An Analysis Based on Textual Characteristics of Annual Reports.

This study examines the impact of environmental information disclosure quality on firm value for Chinese listed companies in heavily polluting industries from 2010 to 2021. By controlling for the level of leverage, growth, and corporate governance, a fixed effects model is constructed to test this relationship. Furthermore, this study analyzes the moderating effects of annual report text features, such as length, similarity, and readability, on the relationship between environmental information disclosure and firm value and the heterogeneous impact of firm ownership on this relationship. The main findings of this study are as follows: There is a positive correlation between the level of environmental information disclosure and firm value for Chinese listed companies in heavily polluting industries. Annual report text length and readability positively moderate the relationship between environmental information disclosure and firm value. Annual report text similarity negatively moderates the relationship between environmental information disclosure and firm value performance. Compared with state-owned enterprises, the impact of environmental information disclosure quality on the firm value of no-state-owned enterprises is more significant.

Corporate governance and cost of equity: the moderating role of ownership concentration levels

PurposeThe study analyzes the influence of corporate governance and ownership concentration levels on the cost of equity. Further, the authors extend the literature by investigating the moderating effect of ownership concentration levels (i.e. at 5%, 10% and 20%) on the relationship between corporate governance and the cost of equity.Design/methodology/approachThe study applies several robust panel regression techniques to a sample of 114 active non-financial companies listed on the Pakistan Stock Exchange from 2011 to 2016. Corporate governance was measured through a unique index comprising 30 governance attributes. The cost of equity was measured through the capital asset pricing model. Further, the authors construct three variables for ownership concentration levels, i.e. at 5%, 10% and 20%. To address the endogeneity problem, the one-lagged variable model and GMM approaches were also applied.FindingsThe results indicate that better corporate governance reduces the cost of equity, while ownership concentration at high thresholds would increase the cost of equity. Further, the authors find that ownership concentration at the 20% threshold moderates the relationship between corporate governance and the cost of equity. Thus, the authors argue that firms can minimize the risk faced by shareholders by implementing substantive corporate governance mechanisms. In addition, effective corporate governance mechanisms at high ownership concentration levels are imperative for managing the cost of equity.Originality/valueThe study reports novel evidence that ownership concentration at a high threshold moderates the effect of corporate governance on the cost of equity.

Determinants of corporate governance compliance: what matters and what does not?

PurposeThe objective of this study is to assess the level of corporate governance (CG) compliance and identify determinants of high compliance in Indonesian publicly listed corporations including family and nonfamily firms. The country uses a voluntary disclosure approach to enforce its regulations; thus, it is important to identify the factors affecting compliance.Design/methodology/approachEmploying a logistic regression model, this paper analyzes the CG index of high-compliance vs. poor-compliance companies and emphasizes factors that contribute to better governance compliance. The CG index of high-compliant firms is almost twice as high as that of low-compliant firms.FindingsThe study explores factors that contribute to high CG in an emerging market like Indonesian corporations. The study's findings indicate that family-owned businesses predominate in the low-compliance group. High-compliance firms are older and larger with higher financial performance, free float and leverage, as well as a positive influence of the founder's great leadership. The results support theoretical arguments that concentrated ownership and excessive majority shareholder control are key factors in determining the likelihood of good governance practices by firms. Hence, the market and regulators should devise effective strategies to encourage and reward high compliance.Research limitations/implicationsThe findings of the research offer several implications for the academic community and policymakers. Improving CG at the firm level is a viable goal, even though the agenda to reform minority investor protection laws and increase judicial quality is challenging and may take a long time to show significant results. Moreover, this study has some limitations that could be addressed in future research. The study focuses on a single-country setting, Indonesia. There are cultural aspects and governance settings that may be unique in the Indonesian context, which may limit the applicability of the findings to other countries with their own cultural settings and institutional legal framework.Originality/valueThe study investigates the factors that influence high governance compliance in specific CG regulations designed for the emerging Indonesian market. The study also discovers evidence that the crisis period has a favorable impact on the firm's decision to comply with governance provisions.

Exploring the Disclosure differentials of government grants and assistance in Brazilian companies listed in B3

The study aims to explore the differences in the disclosure of Government Grants and Assistance (SAG) in publicly traded Brazilian companies. The sample consists of 353 publicly traded companies listed on Brasil, Bolsa and Balcão (B3) between 2017 and 2019. The data were obtained by analyzing the content of the explanatory notes referring to the Standardized Financial Statements (DFP) available on the company's website. B3 S/A, verifying the information related to SAG, as stated in the Accounting Pronouncements Committees (CPC), CPC 07 (2008) and CPC 07 R1 (2010). To achieve the objectives of the study, an independent t-mean comparison test and analysis of variance were performed. The results showed that the SAG are mostly of State (39.8%) and Federal (38.6%) origin and the most representative SAG is granted to companies through tax incentives (54.1%). The results of the statistical tests show that the level of SAG disclosure does not differ according to corporate governance and the period. On the other hand, the results show that unregulated companies present higher levels of SAG disclosure and that the oil, gas and biofuels and health sectors presented, respectively, the highest and lowest levels of SAG disclosure. The study seeks to contribute to the literature by evidencing the existence of differences, or not, in the level of disclosure of SAG based on company characteristics, such as the level of corporate governance, regulation, the sample period and the sector of activity.

Can green credit policy under the concept of green economy curb corporate financialization to promote sustainable development?

Under the concept of green economy, discovering how to utilize the Green Credit Guidelines in a way that guides enterprises to focus on their industries and to promote sustainable development has become an important and urgent objective. It is also conducive to the successful implementation of the “double-carbon target”. This paper uses Chinese A-share listed enterprises from 2007–2018 as its research object to explore whether green credit policy is conducive to reducing the financialization behavior of heavily polluting enterprises to curb their transformation from real to virtual. It is found that the financialization of heavily polluting enterprises has significantly decreased since the implementation of the Green Credit Guidelines in 2012, and these results remain unchanged after a series of robustness tests. A heterogeneity analysis shows that state-owned enterprises are subject to stronger policy effects than non-state-owned enterprises; furthermore, the studied policy effects are stronger in the eastern regions of China than in its central and western regions, and these effects are stronger in green provinces than in polluting provinces. A mechanism study finds that credit constraints and corporate innovation play a partially mediating role in the effect of green credit policy on corporate financialization. Further studies find that both the level of internal corporate governance and external monitoring contribute to the disincentivizing effect of green credit policy on financialization. Moreover, through an exploration of the possible economic consequences of the examined policy, it is found that the green credit policy reduces corporate financialization in favor of reducing inefficient corporate investment and major shareholders’ tunneling so that the level of corporate investor protection is improved. The findings validate the effectiveness of the Green Credit Guidelines and provide empirical evidence and empirical support for reducing corporate financialization to curb enterprises’ transformation from real to virtual and thus promoting the development of sustainability.

ВЛИЯНИЕ САНКЦИЙ И АНТИСАНКЦИОННЫХ МЕР НА РАЗВИТИЕ КОРПОРАТИВНОГО ЗАКОНОДАТЕЛЬСТВА, ПРАКТИКИ ЕГО ПРИМЕНЕНИЯ И НАУЧНОЙ ДОКТРИНЫ

The article is focused on the influence of sanctions and anti-sanctions measures on the development of corporate legislation, practice of its application and scientific doctrine. With respect to duration of antisanctions measures the author believes that it is more appropriate to define period of applicability of the special rule before introduction into the legislation of other changes (and not to determine specific period of application of the anti-sanctions measure). The author concludes that public companies in the course of antisanctions regulations were granted with substantial discretion with respect to the internal corporate procedures and disclosure of information. They are already not fully compliant with the ordinary legislation requirements. The article critically evaluates legislative initiatives on possibility of membership of the legal entities in the boards of directors because this decreases professional level of the board and personal liability of its members. In general, the author concludes that corporate law in the period of sanctions requires special attention. Keeping the achieved level of corporate governance and its subsequent increase is necessary not for foreign rankings but to secure economic stability of the Russian economy and to increase effectiveness of entrepreneur activity.