Tunisian Companies Research Articles

CEO power and corporate tax avoidance in emerging economies: does ownership structure matter?

PurposeThe purpose of this paper is to study how CEO power impact corporate tax avoidance. In particular, this paper aims to empirically examine the moderating impact of institutional ownership on the relationship between CEO power and corporate tax avoidance.Design/methodology/approachThe multivariate regression model is used for hypothesis testing using a sample of 308 firm-year observations of Tunisian listed companies during the 2013-2019 period.FindingsThe results show that CEO power is negatively associated with corporate tax avoidance and that institutional ownership significantly accentuates the CEO power’s effect on corporate tax avoidance. This implies that CEOs, when monitored by institutional investors, behave less opportunistically resulting in less tax avoidance.Practical implicationsOur findings have significant implications for managers, legislators, tax authorities and shareholders. They showed that CEO duality, tenure and ownership can mitigate the corporate tax avoidance in Tunisian companies. These findings can, hence, guide the development of future regulations and policies. Moreover, our results provide evidence that owning of shares by institutional investors is beneficial for reducing corporate tax avoidance. Thus, policymakers and regulatory bodies should consider adding regulations to the structure of corporate ownership to promote institutional ownership and consequently control corporate tax avoidance in Tunisian companies.Originality/valueThis study differs from prior studies in several ways. First, it addressed the emerging market, namely the Tunisian one. Knowing the notable differences in institutional setting and corporate governance structure between developed and emerging markets, this study will shed additional light in this area. Second, it proposes the establishment of a moderated relationship between CEO power and corporate tax avoidance around institutional ownership. Unlike prior studies that only examined the simple relationship between CEO power and corporate tax avoidance, this study went further to investigate how institutional ownership potentially moderates this relationship.

Predicting determinants of industrial firms’ loan payment default: Logit model versus probit model

Appropriate control and management of credit risk has become the main concern of financial institutions, which are constantly developing models for analyzing, assessing and predicting this risk, particularly in view of the prudential standards required by central banks. The current research paper aims to specify the determinants of payment defaults in Tunisian companies in the industrial sector so as to develop a model with the optimal predictive precision of forecasting payment default when it relates to industrial firms functioning in the Tunisian environment. Within this framework, we compared two generalized linear models which correspond to the logit and probit models based on a sample of Tunisian industrial companies. The results revealed that debt ratio is the most important variable that increases the probability of default payment, while the solvency ratio reduces the probability of default payment. This study highlights the vital contribution of macroeconomic agents, such as GDP growth rate and inflation rate, in terms of the prediction of default payment.

Impact of Audit Committee Determinants on Financial Performance: Case of Tunisian Listed Banks

Purpose - The objective of this research is to study the relationship between audit committee determinants and corporate performance. To do this, we focus on the Tunisian context. Design/methodology/approach – Our research sample is made up of 16 banks operating in Tunisia observed over a period of five years (2017-2021) the paper uses a linear regression to investigate the association between the performance of the company and the determinants of audit committee. Findings - The results obtained show that the variable relating to the size of the audit committee has a positive influence on financial performance measured by Tobin's Q. On the other hand, the variable relating to the number of meetings held by the audit committee has a negative impact on the financial performance of listed Tunisian companies.

Study of the Relationship between the Rotation of External Auditors and Audit Quality

Purpose - The objective of this research is to study the relationship between external auditor turnover and audit quality. To do this, we chose two measures of audit quality, namely discretionary accruals and the auditor's opinion. Design/methodology/approach - Using a sample of 37 Tunisian companies listed during the period from 2015 to 2021, the paper uses a logistic regression to investigate the association between the quality of the audit and the rotation of the auditors. Findings - The results obtained based on linear and logistic regression invalidate the two hypotheses which assume on the one hand that a long-term mandate negatively influences the quality of the audit, on the other hand the assumption that the rotation of the auditors has a positive impact on the quality of the audit. Contrary to what was expected in our research, the results of the logistic regression show that a long-term audit mandate has a positive effect on audit quality. Research limitations/implications – This research may be of interest to many developing countries that has not a lot of studies on the audit turnover. Future research should focus on the link between audit turnover consequences to overcome the gap which might exist in the literature. Practical implications – Previous studies has shown how it is important to focus on audit opinion to reduce asymmetric information between managers and stockholders. And, this study offers some insights about audit shipping that should be analyzed to understand audit turnover. Originality/value – This research highlights the role of audit opinion in the rotation of auditors in emerging markets. Consideration of this relationship may contribute to the understanding of the auditor turnover in developing countries.

How does innovation moderate the CSR impact on financial performance? An exploratory study and an empirical validation in the Tunisian context

Purpose This paper aims to examine the effect of corporate social responsibility (CSR) on firm performance (FP) of companies listed on the Tunis Stock Exchange. Design/methodology/approach This paper reports on two empirical studies. The first was an exploratory qualitative study carried out on a sample of 30 Tunisian companies operating in different sectors. The second empirical study used a panel data regression analysis, to examine data from 46 companies listed on the Tunis Stock Exchange during the 2017 to 2021 period. Findings The results of the exploratory qualitative study pointed out the specificities of the Tunisian context as to the importance of CSR. The results highlighted also the importance of the 2018 CSR law in Tunisia, yet it drew attention to the non-implementation of its applying texts, meaning that CSR is not always enforced in the Tunisian context. Moreover, in this qualitative study, most companies confirmed that CSR is a key factor behind good governance practices. By studying the impact of CSR on various FP proxies, the results highlight that CSR has a positive and significant impact on FP measured by ROA as an accounting variable and stock returns as a market-measure variable. In addition, the authors confirm the moderating effect of innovation on the CSR and FP relationship. Indeed, innovation affects corporate FP differently. It hinders accounting-based FP while fostering the market-based one. Practical implications The study provides insights for managers into how CSR approaches can be used to maximize profits, improve its FP and reputation, while considering the corporate innovative capacities. CSR is a real performance lever for companies, a means of improving their economic, environmental and social efficiency. It enables companies to anticipate constraints and prevent risks, reduce certain operational costs, optimize resources, communicate a good image and stand out from the competition, gain easier access to innovation, strengthen their competitive edge, gain easier access to financing and strengthen their territorial and social roots. Originality/value The main contribution of this paper is the adoption of two empirical approaches. These two methods are complementary. The first is an exploratory qualitative approach aimed at better understanding the current state of CSR implementation by Tunisian companies. The second one is quantitative, a panel data regression analysis. Furthermore, the authors test the moderating effect of innovation on the studied link. To the best of the authors’ knowledge, this is the first paper that investigates the moderating effect of innovation on CSR FP in the Tunisian context. Finally, robustness tests were conducted to test the reliability of this study’s results.

Artificial Intelligence Techniques for Bankruptcy Prediction of Tunisian Companies: An Application of Machine Learning and Deep Learning-Based Models

The present paper aims to compare the predictive performance of five models namely the Linear Discriminant Analysis (LDA), Logistic Regression (LR), Decision Trees (DT), Support Vector Machine (SVM) and Random Forest (RF) to forecast the bankruptcy of Tunisian companies. A Deep Neural Network (DNN) model is also applied to conduct a prediction performance comparison with other statistical and machine learning algorithms. The data used for this empirical investigation covers 25 financial ratios for a large sample of 732 Tunisian companies from 2011–2017. To interpret the prediction results, three performance measures have been employed; the accuracy percentage, the F1 score, and the Area Under Curve (AUC). In conclusion, DNN shows higher accuracy in predicting bankruptcy compared to other conventional models, whereas the random forest performs better than other machine learning and statistical methods.

The variables of “Management By skills”: A new management logic. Application within some Tunisian companies

La gestion des ressources humaines est très importante dans le processus de l’emploi, elle est constituée d’un ensemble de variables ayant pour finalité d’aider l’entreprise, efficacement et avec pertinence, à trouver des solutions aux problèmes rencontrés. À ce niveau, la gestion des ressources humaines a connu deux concepts de gestion : la gestion des compétences et la gestion par les compétences. Cette dernière se caractérise par un climat psychologique particulièrement adapté et stimulant pour le déploiement des compétences des salariés dans le travail. Elle entraine une nouvelle logique de gestion. L'autonomie, la responsabilité, la formation, l’évaluation et le contrôle ont établi des principes et régissent la nouvelle image des employés.

The mediation effect of innovativeness on knowledge application and organizational innovation: Case of Tunisian companies

Today, the company is becoming more and more aware of the immense power of knowledge, the stakes of which are becoming more and more crucial. However, acquiring, developing and maintaining competitive advantage from internal resources and skills remains the overarching goal for every organization. It is for this reason that it is necessary to put in place a strategic plan for the application of knowledge. This research focuses on the efforts made by companies in terms of knowledge management processes in order to implement innovative solutions. The objective of this research is part of this perspective and aims to examine the relationship between the application of knowledge and organizational innovation by highlighting the mediating effect of innovative capabilities. To determine this relationship, a quantitative method was adopted using a total of 252 Tunisian senior managers. The results of the structural equation analysis reveal the existence of a significant influence of knowledge management on both types of technical and administrative organizational innovation.

The determinants of the communication of societal accounting data within companies in Tunisia

The objective of this research is to study the reasons for the communication of societal accounting information in Tunisian companies. In fact, we have discussed the questions of the convergence of sustainability accounting models, the questions of the communication of accounting data or even questions of the participation of the actors. The results of qualitative research on a sample of 16 companies show a certain homogeneity in the assessment of the communication policy of societal accounting information of each type of company. It turns out that the social and societal activities identified come under the initiative of companies, their organizational culture and their extra-economic concerns. The social and societal concerns of these companies remain at the heart of the concerns of managers.

CSR's impact on debt: Tunisian companies that are publicly traded (23 companies listed on the BVMT (2017-2023))

CSR's impact on debt: Tunisian companies that are publicly traded (23 companies listed on the BVMT (2017-2023))

CSR's Impact on Debt: Tunisian Companies That Are Publicly Traded (23 Companies Listed on the BVMT (2017-2023))

CSR's Impact on Debt: Tunisian Companies That Are Publicly Traded (23 Companies Listed on the BVMT (2017-2023))

Economic Intelligence and Competitiveness of Tunisian Companies

Economic Intelligence and Competitiveness of Tunisian Companies

Do KM and TQM have an impact on employee effectiveness and supply chain performance?

PurposeCompanies should enhance their market position and competitiveness by improving staff effectiveness, skills, resource commitment, and applying relevant managerial methods. This study aims to examine the impact of knowledge management (KM) and total quality management (TQM) on employee effectiveness (EE) and supply chain performance (SCP) in emerging economies.Design/methodology/approachThe used methodology consists on conducting a survey within Tunisian companies, where the authors gathered 206 responses. Collected data was analyzed using statistical package for the social sciences (SPSS) software, enabling the authors to establish a conceptual model. This model was further examined through structural equation modeling, using analysis of moment structures (AMOS) software for hypothesis validation. Additionally, the authors’ research aimed to enhance SCP and boost EE while minimizing costs through a nonlinear mathematical model and the quality function deployment method.FindingsThe results indicate that TQM and KM positively impact EE, and KM and EE positively impact SCP. However, the significance of employee performance on SCP varies depending on company location and industry sector studied.Originality/valueThis work emphasized the involvement of small- and medium-sized enterprise managers from emerging economies in the studied concepts and confirmed the effects of KM and TQM practices on EE and SCP.

The Effect of External Efficacy on the Moral Courage and Self-Efficacy of Internal Auditors

Purpose: This study investigates the effect of external efficacy (means efficacy and collective efficacy) on internal auditors' moral courage in the Tunisian context. This study also examines the effect of external efficacy on the self-efficacy of internal auditors. Theoretical framework: Previous auditing studies have revealed moral courage as the required tool for internal auditors to overcome their fears, break their silence about management fraud, and guide their ethical behaviors. Based on the social cognitive theory developed by Bandura and the model of the internal-external efficacy of Eden, this study tries to explain the association between means efficacy, collective efficacy, self-efficay, and internal auditors' moral courage Design/Methodology/Approach: 163 questionnaires were collected from internal auditors working in Tunisian companies and a partial least squares–-structural equation model was used to test the hypotheses. Findings: The results reveal a significant and positive effect of means and collective efficacies on internal auditors’ moral courage. Similarly, these variables have a significant and positive effect on the self-efficacy of internal auditors. Research, Practical & Social implications: This study permits to offer practical solutions to professional institutions and organizations (e.g., the Institute of Internal Auditing) that aim to determine what might encourage internal auditors to tell the truth about management fraud and report corruption. Originality/Value: This research fills one of the major research gaps in accounting studies by revealing that the self-efficacy and courageous behavior of internal auditors can be fostered by furnishing the necessary tools and working with an efficacious team.

Ownership structure and technological innovation: an investigation of Tunisian agri-food companies

PurposeThe aim of this study is to investigate potential relationships between the corporate governance system and the innovation development process, with a specific focus on the agri-food sector in the Tunisian context.Design/methodology/approachMost studies on innovation management have shown the collective nature of the innovation process, resulting from the multiple interactions that can be established between various actors, internal and external to the enterprise perimeter, which is increasingly digitally open, especially in the COVID-19 era. More specifically, the implementation of an innovation strategy is a risky issue for businesses, most of all when considering its financial requirements and impacts, and thus, appropriate management plays a relevant role in this respect.FindingsStatistical tests, operated on a sample of 80 Tunisian companies, show that the style of management and the concentration of ownership exert significant influence on the dynamism of technological innovation in the agri-food sector.Originality/valueThe involvement and the commitment of institutional investors can contribute to stimulate the innovation process in the agri-food sector, providing related implications with significant impact, at the scientific and managerial level.

The Impact of Knowledge Acquisition on Technical and Administrative Innovation: Case of Tunisian Companies

In our complex and rapidly changing environment, personal knowledge is enriched and has become more effective in the collective bargaining process, thereby creating social capital. The combination of individual knowledge in collective wisdom is the key to innovation, which is considered a major social and human phenomenon. By deepening our reasoning, this social and human dimension gives sustainability to any company. This organizational capacity proves to be crucial because possessing knowledge confers a substantial advantage. It is the ability to mobilize and deploy them that will produce value. This research makes it possible to analyze the relationship between the acquisitions of knowledge with innovation within Tunisian organizations. In order to determine this relationship, a quantitative method was adopted. The results reveal the existence of a significant influence between the acquisition of knowledge and administrative innovation.

Impact of lean management on work safety and operational excellence within Tunisian companies

PurposeLean management tools are becoming increasingly applied in different types of organizations around the world. These tools have shown their significant contribution to improving business performance. In this vein, the purpose of this paper is to examine the influence of lean management on both occupational safety and operational excellence in Tunisian companies.Design/methodology/approachA survey was conducted among Tunisian companies, and it resulted in the collection of 62 responses that were analyzed using the software SPSS. In addition, a conceptual model linking the practices of the three basic concepts was designed to highlight the hypotheses of the research. Subsequently, factor analysis and structural equation method analysis were conducted to assess the validation of the assumptions.FindingsThe results obtained have shown that lean management has a significant impact on occupational safety. Similarly, occupational safety has a significant impact on operational excellence. However, lean management does not have a significant impact on operational excellence.Originality/valueThis work highlighted the involvement of small and medium-sized enterprise’s managers from emerging economies in the studied concepts’ practices. Likewise, it testified to the impacts of lean management on occupational safety and operational excellence in the Tunisian context.

Examining Digital Readiness in the Era Of Industry 4.0 in Tunisia

Industry 4.0 is the fourth and most current industrial revolution, which refers to the integration of the digital and physical worlds in a manufacturing context. It is the current trend in organizational automation and data interchange. It denotes intelligent manufacturing processes that combine cyber and physical systems via a collection of technologies such as the Internet of Things, big data, and cloud computing. The transition to Industry 4.0 is predicted to result in significant structural changes, productivity increases, and increased competitiveness in the global manufacturing industry. The use of such technology enables businesses to identify solutions capable of transforming rising complexity into possibilities for assuring long-term competitiveness and profitable growth. Organizations must self-assess their Industry 4.0 readiness in order to survive and prosper in the Fourth Industrial Revolution. Digital readiness enables the workforce to be able to use digital tools consciously, productively for a given purpose, and to adapt quickly to the ever-changing work environment. Following that, the conception or construction of an Industry 4.0-ready model with the basic model parameters is required. The business environment is changing as a result of digitalization, and companies are facing new hurdles in order to advance. The first step in supporting companies is checking their digital readiness and capabilities, as well as setting clear progress goals. The purpose of this paper is to identify the primary aspects for measuring companies' preparation for Industry 4.0, the relationships between these readiness criteria, and how future Ph.D. research should proceed based on the findings. This paper focuses on the literature analysis identifying the reasons, challenges, barriers, and facilitators of digitalization. The research applies triangulation, by combining qualitative and quantitative methodology. The qualitative approach will be applied initially by conducting open interviews, and then, for the quantitative part, with a questionnaire aimed at Tunisian companies and their workforces.

Social responsibility and tax evasion: organised hypocrisy of Tunisian professionals

PurposeThe present work aimed to present the perception of Tunisian professionals towards companies engaged in social responsibility practices and describe the tax evasion strategies of socially responsible Tunisian companies following the coronavirus disease 2019 (COVID-19) pandemic (COVID-19) shock.Design/methodology/approachA survey was sent to 119 Tunisian tax administration auditors. Data analysis methods principal component analysis (PCA) and regression analysis were used. The data were collected through a questionnaire after the general containment of Tunisia from September 2020 to February 2021. These quantitative data were analysed using processing software (STATA).FindingsProfessionals of the tax authorities, particularly those in charge of the audit mission, aim for corporate profitability from the perspective of stakeholders that seek to integrate ethics and social responsibility into companies and consider employee morale a top priority. The results show that highly ethical and socially responsible professionals are far from practising aggressive strategies. Thus, an auditor from the tax administration is far from engaging in social responsibility to justify fraudulent acts. During the COVID-19 period, the role of these professionals was to prevent and detect fraud in the tax sector to fight corruption and investigate taxes based on sound regulations.Research limitations/implicationsThe results are consistent with optimal taxation theory, which postulates that a tax system should be chosen to maximise a social welfare function subject to a set of constraints. Professionals seek to make taxation much simpler for taxpayers by providing advice and consultation to manage tax obligations. The minimisation of tax or the play of tax values requires expertise in the field to respect legal constraints. Therefore, these professionals play a crucial role in tax collection, as the professionals' advice and suggestions can influence taxpayers' decision-making.Practical implicationsIn recent years, academic researchers, policy makers and the public have become increasingly interested in corporate tax evasion behaviour. At the same time, companies are under increasing pressure to integrate CSR into the companies' decision-making processes, which has led to increased academic interest in CSR. Opportunistic tax minimisation reduces state resources and funds needed for government programmes to improve the social welfare of the entire community. This study represents an overriding concern not only for legal and tax authorities and companies, but also for shareholders and stakeholders.Originality/valueThe authors' study contributes to the existing literature by determining the state of play on corporate social responsibility (CSR) practices amongst Tunisian tax authorities' professionals. In Tunisia, an executive of the tax authorities in charge of the verification mission is required to verify the proper application of the accounting and tax legislation in force, follow up on tax control operations on declared taxes and validate the sincerity of the accounts. This study focussed on the tax evasion of companies engaged in social responsibility practices according to the judgements of Tunisian tax authorities' auditors during the global COVID-19 pandemic.

The effect of political connections and governance on credit ratings: substitution versus complementary view: case of Tunisian firm

PurposeThe objective of this paper is to study the impact of political connection and governance on credit rating and whether there is a substitution or complementary relationship between them.Design/methodology/approachIn order to achieve the objective, a succession of eight ordered probit regressions has been carried out. Moderating variables between the political connection and governance characteristics were introduced. The whole population is taken as a sample, i.e., 27 Tunisian companies that are evaluated by FITSH NORTH AFRICA agencies over a period of 10 years (2009–2018).FindingsThe outcomes are mixed. They show that the political connection does not always influence credit rating; the size and board independence always improves credit rating; the duality between the functions affects credit rating; whereas the majorities’ proportion does not influence credit rating; and a substitution between the political connection and the governance characteristics is validated.Research limitations/implicationsLike any other research, our results are factors of our measures and variable choice and depends heavily on the how these variables were conceived. Also, although our number of observations responds to the statistical result generalization requirements, our sample remains relatively narrow with 27 companies only.Practical implicationsIn practice, the research will allow investors to have a better vision upon the future of their investments based on whether to develop their governance system or promote political networking. It will also prompt lenders to look beyond ratings and consider factors such as political connections to make a rational judgment on their future placements.Social implicationsThis study leads us to find various solutions: the establishment of credit agencies that take into consideration all the data of all the operators taken as a whole (bank, leasing company, and factoring). It encourages the reorganization of the Tunisian banking sector through mergers for example.Originality/valueThis study is a pioneer in the credit rating field in Tunisia, where the source of debt financing is the most used by all enterprises across all sectors. This study extends the literature of political connection effectiveness, independent directors, board size, in improving corporate performance and credit rating.