Proportion Of Institutional Ownership Research Articles

Board gender diversity, institutional ownership and earnings management: evidence from East African community listed firms

PurposeThe purpose of this study was to examine the moderating role of institutional ownership on the relationship between board gender diversity and earnings management (EM) among listed firms in East African Community (EAC) partner states.Design/methodology/approachThe study used a sample of 71 firms listed in the EAC partner states over 2011–2020. Data were handpicked from the individual firm's audited annual financial reports. Based on the results of the Hausman test, the study used the results of the fixed-effect regression model to test the hypotheses. To test the robustness of the results, the study employed an alternative measure of EM and two additional econometric techniques, including the pooled ordinary least squares (OLS) and the system generalized method of moments (GMM).FindingsThe empirical findings revealed that female directors improve the board's effectiveness in monitoring managerial roles. Specifically, the results showed a significantly negative relationship between the proportion of women in the corporate board and EM (as measured by discretionary accruals (DAs)). The findings further revealed an inverse relationship between the proportion of institutional ownership and EM. Finally, the results further demonstrated that institutional ownership enhances the role of board gender diversity in mitigating EM among listed firms in the EAC.Practical implicationsThe findings of this study may be useful to managers, investors and regulators in assessing the role of institutional ownership and women's participation on corporate boards as a strategy for alleviating unethical manipulation of earnings.Social implicationsThe findings of this study contribute to the growing concern on gender inequality, especially the marginalization of women from the paid labor force and decision-making. The findings highlight the importance of having more women in the corporate board since this may help in mitigating corporate fraud. Similarly, the findings highlight the importance of institutional ownership as a corporate governance (CG) tool.Originality/valuePrevious studies have reported mixed empirical results on whether board gender diversity mitigates EM. To the best of the author's knowledge, this is the first paper to fill the existing gap by exploring whether institutional ownership moderates the relationship between board gender diversity and EM among listed firms in the EAC.

PENGARUH PROPORSI KEPEMILIKAN INSTITUSIONAL, UKURAN DEWAN KOMISARIS INSTITUSIONAL TERHADAP RETURN ON ASSETS DENGAN ACCRUAL EARNINGS MANAGEMENT SEBAGAI VARIABEL INTERVENING

This study aims to determine the effect of good corporate governance which is proxied by the proportion of institutional ownership and the size of the board of commissioners on return on assets with accrual earnings management as an intervening variable manufacturing company in the property and real estate sectors listed on the Indonesia Stock Exchange in 2017-2019. By using a path analysis the results of the study found that the proportion of institutional ownership influences accrual earnings management, the size of institutional board of commissioners influences accrual earnings management, the proportion of institutional ownership and the size of the board of commissioners together affect the accrual earnings management. The proportion of institutional ownership has no effect on return on assets, the size of the institutional board of commissioners has an effect on return on assets, accrual earnings management has an effect on return on assets, the proportion of institutional ownership, the size of the board of commissioners and accrual earnings management together influence return on assets. Accrual earnings management can act as an intervening variable on the effect of the proportion of institutional ownership on return on assets. Accrual earnings management can act as an intervening variable on the effect of institutional board size on return on assets.

Corporate Governance Mechanism, Firm Size and Its Effects on Acceptance of Qualified Audit Opinion

This study aims to examine the effect of internal and external corporate governance mechanisms that are proxied by the size of the independent commissioners, the audit committee’s educational background, the proportion of institutional ownership, audit quality, and company size factors towards acceptance of qualified audit opinion. The population in this study is the infrastructure, utilities and transportation sectors listed in the Indonesia Stock Exchange in 2013-2017. Based on the purposive sampling method, it obtained 120 analytical units from the sample data. The analysis used in this study is logistic regression analysis. The results of this study found that if the size of the company which calculated based on total assets had a negative influence on the acceptance of qualified audit opinion. On the other hand, the element of Good Corporate Governance in the form of independent commissioners, audit committee, institutional ownership, and audit quality has no effect on the acceptance of qualified audit opinion. The conclusion of this study is the presence of the company’s internal support body are not able to influence the company’s accounting for the better.
 Keywords: good corporate governance, qualified audit opinion, firm size

An investigation into the effect of audit firm size, auditor tenure, institutional ownership, board characteristics on auditor independence

The independence of an auditor is a crucial issue because of its potential impact on audit quality. This study examines the effect of audit firm size, auditor tenure, institutional ownership, board independence, and board diversity on the audit quality. The sample comprised 52 listed service firms on the Jordanian Stock Exchange, whose data were obtained for the years from 2013 to 2016, and 208 firm-year observations were involved in the analyses process. In this study, auditor independence served as the proxy for audit quality. The results reveal that audit firm size and institutional owners and board independence significantly and positively influence audit quality. The results reveal that companies with a higher proportion of institutional ownership and independent members of the board and being audited by a Big 4 firm are more likely to maintain the independence of the external auditor. However, auditor tenure and board diversity had no significant relationship with auditor independence. The results could be useful for the management of companies that are interested in enhancing the quality of audit work in their companies.

Pengaruh Penerapan Corporate Governance Terhadap Kondisi Kesulitan Keuangan

This study examined the effect ofthe implementation of corporate governance on the condition of the financial distress of manufacturing companies listed on the Indonesia Stock Exchange (IDX). The implementation of corporate governance proxied with the proportion of managerial ownership, proportion of institutional ownership, number of the boards of directors, proportion of independent commissioners, and existence of the audit committee. Samples used in this study was manufacturing companies listed on the Indonesia Stock Exchange (IDX) with 2012 up to 2016 as an observation period. The total study samples was 48 firms with 96 firm year are determined by the method of purposive sampling. This study used Logistic Regression to examine the effect of the implementation of corporate governance of the condition of the company's financial distress. The results of this study indicated that The number of the boards of directors and the proportion of independent commissioners variables were not proven to have significant influence on the condition of the company's financial distress. The proportion of managerial ownership, the proportion of institutional ownership, and the existence of the audit committee variables proved to have a significant influence on the condition of the company's financial distress with a positive influence.
 Keywords: board of directors, independent commissioners, managerial ownership, institutional ownership, audit committee, financial distress, logistic regression

Exploring Determinants of the Proportion of Monetary Corporate Philanthropy

This essay seeks to uncover further nuances in the stakeholder management - philanthropy relationship by empirically investigating the determinants of the proportion of total (monetary plus in-kind donations) corporate philanthropy dispatched in the form of cash. The types of philanthropy employed may relay very different messages regarding the firm’s attributes thus, potentially invoking disparate responses by shareholders. We hypothesize that the proportion of institutional ownership and the existence of strong CSR policies, are negatively related to the proportion of cash-based philanthropy. We also hypothesize that the existence of weak CSR policies are positively related to the proportion of philanthropy in cash and that the breadth of philanthropic commitment is negatively related. We demonstrate our theoretical contention that the two distinct stakeholder management strategies (Strategic and Intrinsic) are related differently to the proportion of cash-based philanthropy, using a dataset comprised of 113 firms over an eleven year period from 2000-2010. While the relationship between the proportion of philanthropy in cash and weak CSR policies is positive but not significant, the proportion of philanthropy in cash is negatively related to the degree of institutional ownership, strong CSR and philanthropic breadth, as expected.

Corporate Governance and Efficiency in Nepalese Commercial Banks

The 1997-1998 economic crises in the Asian countries highlighted the importance of corporate governance. In developing countries such as Nepal, a good governance of banks is crucial for the survival of its economy. This study investigates the impact of corporate governance on efficiency of Nepalese commercial banks and covers 29 commercial banks out of 31 banks from the 2005-2011 time spans. Corporate governance variables are represented by board size, independence and diligence, Audit Committee size, independence and diligence and ownership structure. The non-performing loan variable is used for bank’s efficiency. The regression analysis is used to examine the relationship between corporate governance and efficiency of bank. The findings show that bigger board and audit committee size and lower frequency of board meeting and lower proportion of institutional ownership lead to better efficiency in the commercial banks.

The Impact of Corporate Governance on the Disclosure of Manager-Adjusted Non-GAAP Earnings

This paper investigates the association between corporate governance and the disclosure of non-GAAP earnings measures in quarterly earnings announcements. The results reveal that the previously documented decrease in the probability of disclosure of non-GAAP earnings after Regulation G is lower in firms with (1) a higher level of institutional ownership and (2) more independent members on the board of directors. These results suggest that firms with stronger corporate governance mechanisms are less likely to make misleading earnings adjustments and, as a result, they have lower incentives to cease reporting manager-adjusted earnings numbers in the presence of SEC scrutiny. Interestingly, the presence of strong corporate governance mechanisms appears to decrease investors' reliance on adjusted earnings measures. An analysis of the market's reaction to earnings announcements indicates that both a high proportion of institutional ownership and a high percentage of outside directors are associated with a lower market reaction to non-GAAP earnings.

Contested Tender Offers: An Estimate of the Hazard Function

In this article we estimate the hazard function (takeover probabilities) for firms that are targets in unsolicited tender offers. The data support a Weibull–gamma specification and imply a hazard rate that increases sharply in the initial period following the bid announcement, after which it declines steadily. In explaining the hazard, we find that the initial bid premium has no explanatory power, but the onset of an auction and the proportion of institutional ownership in the target firm significantly enhance the hazard. Legal and financial restructuring actions by target management are effective in reducing the hazard, thereby prolonging the contest.