Government Performance Research Articles

Corporate governance, firm risk and firm performance: the moderating role of group affiliation

Corporate governance, firm risk and firm performance: the moderating role of group affiliation

Peran Moderasi Kepemimpinan dalam Pengujian Akuntabilitas Kinerja Pemerintah

Purpose: This study examines the effects of the government's internal control system and the implementation of good public governance on government performance accountability. In addition, leadership style can affect the government's internal control system and implementation of good public governance. Methodology: The testing method used in this study was a quantitative method. This study used a questionnaire to collect data. The questionnaire was distributed by random sampling through Google Forms media to all civil state apparatuses at the Ministry of Communication and Information. Fifty questionnaires were obtained for distribution was 50 respondents. Hypothesis testing was performed using a Structural Equation Model (SEM). Results: The government's internal control system and implementation of good public governance positively affect government performance accountability. The leadership style weakens the government's internal control system on government performance accountability. Leadership style does not affect the application of good public governance to government performance accountability. Limitations: The questionnaire items were compiled based on limited sources, causing some items to be declared invalid. The distribution of questionnaires via Google Forms was not believed to be valid for the answers given by respondents and could not be confirmed directly. Contribution: This research is expected to improve the government's accountability for its performance and serve as a reference for further research.

PENGARUH TATA KELOLA PERUSAHAAN, KUALITAS TANGGUNG JAWAB SOSIAL DAN KINERJA KEUANGAN TERHADAP PENGHINDARAN PAJAK

This study aims to determine the influence of corporate governance, social responsibility and financial performance on tax avoidance. The population in this study is Manufacturing Companies in the consumer goods industry sector listed on the Indonesia Stock Exchange for the 2019-2023 period. In this study, the data used is secondary data, the sample was selected using the method Purposive Sampling and produced as many as 31 samples. Data analysis in the study used multiple regression analysis using e-views software version 10. The results of the study show that independent commissioners do not have a significant effect on tax avoidance, the audit committee has a significant effect on tax avoidance, corporate social responsibility does not have a significant effect on tax avoidance, financial performance has a significant effect on tax avoidance, and governance, social responsibility and financial performance simultaneously affect tax avoidance.

Board characteristics and ESG performance: an evidence from Malaysia

ABSTRACT Sustainable business practices are essential globally, emphasizing the need to study factors influencing ESG performance in corporate governance. This research examines the relationship between board characteristics and ESG outcomes within Malaysia’s mandatory sustainability reporting context for listed companies. Analyzing 357 firm-year observations from 51 Malaysian companies from 2014 to 2020, the study found that increased board meetings and more independent directors correlate with better ESG performance. However, no significant relationship was found between the proportion of female directors and ESG outcomes. These findings, consistent across robustness checks, suggest areas for governance framework improvements, particularly in board oversight of ESG practices. The results support the Malaysian Code on Corporate Governance's principles for enhanced board monitoring of ESG reporting processes.

Corporate governance and banks performance: empirical evidence from GCC countries

Corporate governance and banks performance: empirical evidence from GCC countries

Corporate Governance, Blockchain Technology and Firm Performance

Corporate Governance, Blockchain Technology and Firm Performance

“Good medicine is bitter” or “drinking poison to quench thirst”? The impact of maturity mismatch on corporate ESG performance

The maturity mismatch can influence corporate behavior to some extent, so whether they affect corporate ESG performance becomes an issue worthy of attention. This paper verifies maturity mismatch's negative effect on corporate ESG performance. This inhibitory effect acts through governance performance and productive efficiency. Furthermore, the negative impact of maturity mismatch on corporate ESG performance varies heterogeneously with different ownership and financing constraints.

The Effect of External Audit Quality, Related Party Transactions, Political Connec-tions, Esg Performance and Independent Assurance on Sustainability Reports on Firm Value

This research is based on the importance of companies knowing the factors that can affect the value of the firm in accordance with the development of the times so that the company can continue to survive in success in the long term. This study combines factors related to the company's non-financial performance, including sustainability performance such as ESG performance and the use of independent assurance in sustainability reports as well as other non-financial performance such as the quality of external audits, related party transactions, and political connections to determine the influence of these factors on the firm's value. The method used in this study is a panel data regression analysis method using e-views 9 with a sample of companies in the energy and basic materials sectors listed on the Indonesia Stock Exchange (IDX) in 2021-2023. The results of this study show that the quality of external audits, related party transactions, political connections, environmental performance (ESG_Environment), social performance to employees (ESG_Social Employees) and the use of independent assurance in sustainability reports have no effect on firm value while, social performance to the community (ESG_Social Community) and governance performance (ESG_Governance) have a positive effect on firm value.

Nexus Between Corporate Governance and Organisational Performance of Faith-Based Hospitals in Kenya

Nexus Between Corporate Governance and Organisational Performance of Faith-Based Hospitals in Kenya

Executives’ green experience and corporate ESG performance: Do government subsidies matter?

This paper innovatively explores the impact of executives’ green experience on corporate environmental, social, and governance (ESG) performance, simultaneously highlights the moderating role of government subsidies. Using data on Chinese listed companies from 2009 to 2022, we find that companies hired executives with green experience perform better in ESG, and the positive effect of executives’ green experience is more pronounced in non-high-tech industries and eastern region. Specifically, education and practice experience both have contribution, and the education experience effects greater. In addition, we reveal the positive moderating role of government subsidies.

The implied risks caused by ESG rating divergence: a test based on the cost of equity capital

ABSTRACT Environment, Social, and Governance (ESG) performance serves as a crucial factor in investor decision-making; however, the existence of ESG rating divergence adds complexity and investment risk to assessing a firm’s sustainable performance. This article investigates the impact and the mechanisms behind firms’ ESG rating divergence on the cost of equity capital, enriches the research content of the economic consequences of ESG rating. This article uncovers the following key findings: (1) Increasing the divergence in a firm’s ESG ratings correlates with a rise in the cost of equity capital. (2) The influence of ESG rating divergence on the cost of equity capital, primarily through stock market performance. Specifically, ESG rating divergence positively correlates with stock price synchronicity, exhibiting a mediating effect on the cost of equity capital; it is negatively correlated with stock returns and turnover rates. (3) Digital transformation and financial institution shareholding negatively moderate ESG rating divergence and the cost of equity capital. (4) The impact of ESG rating divergence on the cost of equity capital is more pronounced in non-state-owned, non-cross-border listed, and small-size firms. The conclusions of this study provide references for relevant institutions to standardize rating systems, provide references for firms to optimize ESG information disclosure.

Comparative study of enterprise efficiency and environmental, social and governance performance before and after COVID‐19 epidemic—A study of China's A‐share listed Fintech companies

AbstractSince the outbreak of COVID‐19, it is worth noting how the enterprise efficiency and ESG performance of Chinese fintech enterprises are affected by pandemic. However, researches using Data Envelopment Analysis (DEA) to explore this issue are still very scarce. Therefore, this paper selects 45 A‐share listed fintech enterprises to construct A two‐stage RDM‐DDF efficiency analysis model, and evaluates the efficiency of different stages and different input–output indexes by using the window efficiency analysis method. At the same time, target enterprises were grouped according to their registered locations, so as to explore the regional differences in efficiencies and changes in the efficiency before and after the outbreak of COVID‐19. The analysis results show that: (1) Regional differences in corporate efficiency are quite pronounced. (2) There is no obvious positive correlation between ESG performance and traditional financial performance of target enterprises. (3) Following the outbreak of the COVID‐19 pandemic, the efficiency changes in target companies have been complex.

Stock market reaction to mandatory sustainability reporting: Does carbon‐intensity and environmental, social, and governance reputation matter?

AbstractWith a sample of 679 listed firms, integrating the event study method and cross‐sectional analysis, we examine the stock market reaction to mandatory sustainability reporting regulation in India. We find that (1) on average, investors react positively to such announcements; (2) the impact varies across different sectors; (3) affected and unaffected firms do not posit significant differences; (4) carbon‐intensive firms are positively impacted; and (5) high environmental, social, and governance (ESG) performance is negatively associated with the event‐induced cumulative abnormal returns (CAR). One standard deviation change in ESG leads to −0.77%, −0.45%, and −0.61% significant changes in [+1,+5], [−5,+5], and [−7,+7] CAR, respectively. The findings align with the value relevance idea and the reputational risk theory but contradict the reservoir of goodwill hypothesis.

Board gender equality and ESG performance. Evidence from European banking sector

PurposeThe purpose of this paper is to investigate the relationship between board gender equality and environmental, social and governance (ESG) performance in the European banking sector. The study examines whether and how the presence of women on the board of directors (BoD) influences ESG dimensions.Design/methodology/approachThe authors analyzed a sample of 72 European Union banks for the period 2015–2021 and developed an econometric model applying unbalanced panel data regression with firm fixed effects and controls per year. To test the research hypotheses, the authors considered gender equality in terms of female participation on the BoD and measured ESG dimensions by using the ESG score provided by Refinitiv.FindingsThe findings suggest a significant positive relationship between the number of women on BoD and the ESG performance of European banks only up to a certain threshold of female directors (at least three women). The study also explores how the proportion of women on BoD influences the individual ESG pillars. The results show that the percentage of female directors has a positive and statistically significant impact on the social dimension of the ESG framework.Research limitations/implicationsThe investigation is highly relevant to investors considering ESG issues in their decision-making process. The overall findings support policymakers and regulators on how to improve ESG performance through the design and the application of corporate governance (CG) mechanisms. From a managerial perspective, the study suggests that managers and CEOs should focus their efforts on establishing the right gender combination of directors on bank BoDs.Originality/valueThis paper offers an in-depth examination of the CG practices of banks, and it attempts to bridge the gap in prior literature on the determinants of ESG issues in the European banking industry. To the best of the authors’ knowledge, this study is the first that investigates the relationship between the representation of women on BoDs and the ESG dimensions measured by the Refinitiv Eikon score. The use of critical mass theory adds a fresh perspective to the literature on ESG in Europe since the influence of board gender diversity on ESG performance of the European banks is still unaccounted for. This study addresses this pressing research issue drawing on resource dependence, agency and legitimacy theories.

Climate transition risk and corporate environment, social and governance performance: Evidence from Chinese listed companies

AbstractUsing a sample taken from Chinese A‐share listed companies from 2010 to 2020, we explore the effect of climate transition risk on corporate environment, social and governance (ESG) performance. Our finding shows that climate transition risk promotes corporate ESG performance. In addition, we discover that equity incentives play an important positive moderating role in the above relationship. Compared with positive media tone, the positive effect of climate transition risk on corporate ESG performance is more significant under the moderating effect of a negative media tone. Further analyses find that there exists a more prominent relationship between climate transition risk and corporate ESG performance in non‐state‐owned enterprises, enterprises with more female directors, and enterprises in highly market‐oriented regions. Our findings provide a reference to improve ESG practice to achieve corporate sustainable development and provide practical suggestions for better dealing with climate transition risk.

Can state-owned equity participation improve a company’s environmental, social and governance performance? Evidence collected from China

Can state-owned equity participation improve a company’s environmental, social and governance performance? Evidence collected from China

Factors influencing cross-departmental collaborative performance: evidence from 452 water governance cases in Guangzhou, China

In addressing complex public issues, cross-departmental collaboration encounters challenges that require identification of factors critical to its effectiveness. This study collected data from 452 cases of water governance in Guangzhou using systematic sampling methods, and empirically examined three major perspectives on cross-departmental collaborative performance in them. Modeling results revealed a significant and positive correlation between leaders’ attention to water environmental governance and cross-departmental collaborative performance. Conversely, power fragmentation negatively impacted performance. Greater public participation in water environmental governance was significantly associated with improved cross-departmental performance. This study comprehensively assesses the collaborative performance by incorporating process-oriented and outcome-based dimensions for systematic examination of underexplored questions of horizontal cross-departmental collaboration, going beyond the scope of prior research, which has primarily centered on cross-regional collaboration. Moreover, it offers a refined analytical framework incorporating internal bureaucratic factors and external forces, with an emphasis on the role of public involvement as an independent factor for shaping collaboration. This study contributes to the theoretical understanding of cross-departmental collaborative performance in the Chinese context as a developing country that faces obstacles in decentralized and uncoordinated water governance structures.

Global geopolitical risk and corporate ESG performance

This study investigates whether and how the global geopolitical risk (GPR) impacts the environmental, social, and governance (ESG) performance of Chinese enterprises utilizing panel data of Chinese A-share listed enterprises from 2011 to 2020. The findings show that enterprises' ESG performance is negatively impacted by the global GPR. According to heterogeneity analysis, the global GPR has a more detrimental effect on ESG performance in non-state-owned enterprises, enterprises in the decline period, enterprises with higher institutional investor shareholdings, and enterprises without political connections. Additional mechanism analysis reveals that global GPR primarily weakens Chinese enterprises' ESG performance by increasing their financing constraints and reducing competitiveness. . In conclusion, our main findings are still valid after addressing endogeneity-related concerns and doing robustness tests.

Digital Transformation and Corporate ESG Performance – Evidence from China

The focal point of this paper is to study environmental, social, and governance (ESG) performance consequences of digital transformation for companies, as well as green technological innovation, corporate social responsibility, and internal control as mediating variables. A set of digital transformation indicators was developed utilizing data from 355 listed industrial companies in China between 2011 and 2019 and vector arithmetic. The study’s findings suggested that digital transformation has considerably raised ESG performance, with green technological innovation, corporate social responsibility, and internal control as significant mediating variables. The paper has several contributions; for example, it provides theoretical and empirical evidence for ESG improvement in Chinese firms and an essential factor associated with ESG performance, among others. The non-economic impacts of digital transformation on ESG performance are essential insights offered by this study. They also provide insight into these impacts' mechanisms, including green technology, corporate social responsibility, and internal control.

Debt distribution and ESG performance: Evidence from Chinese listed companies

Utilizing consolidated and parent company financial statement data from Chinese A-share listed companies from 2008 to 2022, this study empirically examines the impact of group debt distribution on ESG performance. The study reveals that as the proportion of debt financing assumed by the parent company increases, the ESG performance of the corporate group improves. After conducting endogeneity tests and other robustness checks, the research findings remain consistent. Further analysis shows that concentrated liabilities can improve the environmental, social, and governance performance of the group. Cross-sectional analysis demonstrates that the influence of concentrated liabilities on ESG performance is more pronounced in non-state-owned enterprises, during periods of high economic policy uncertainty, non-heavy pollution industry companies, when subsidiaries are geographically dispersed, and when there are more subsidiaries in various industries. This study provides empirical support for the positive externality of internal capital markets and offers valuable insights for ESG practices among listed companies.