Weak Legal Enforcement Research Articles

Environmental Management Practices and Sustainable Green Concrete Use in Malaysia's Construction Industry: Challenges, Benefits, and Future Directions

This review examines the environmental management practices (EMPs) employed within Malaysia's construction sector, with a particular focus on sustainable practices and the adoption of green concrete, including fly ash, rice husk ash, and palm oil fuel ash varieties. The study identifies key challenges, such as low awareness, high costs, weak legal enforcement, and the underdevelopment of green materials in the country. To address these issues, the report proposes solutions such as capacity-building programs, government incentives like tax breaks and grants, regular site inspections, and investment in research and development of green materials. The review also assesses the advantages and limitations of different green concrete types used in Malaysia. The aim of this study is to enhance sustainability efforts and reduce the environmental impact of construction activities through greater awareness, stronger regulatory support, and commitment from all stakeholders. Implementing greener concrete and EMPs is expected to not only mitigate environmental concerns but also yield long-term economic benefits for Malaysia.

Sexual Abuse Among Adolescents (13 to 19 Years) of Boys and Girls in Three Private Schools in Dhaka City, Bangladesh

Background: Sexual abuse in adolescents is a global public health issue with severe physical, psychological, and long-term effects. In Bangladesh, societal stigma, underreporting, and weak legal enforcement further exacerbate the issue. Objectives: The primary objective is to evaluate the prevalence and patterns of sexual abuse among adolescents in three Dhaka schools, with secondary objectives to assess their clinical, demographic, and mental health status. Method and Materials: This cross-sectional study aims to evaluate the prevalence of sexual abuse among 130 adolescents (aged 13-19) from three private schools in Dhaka, selected through purposive sampling. Data will be collected using a pre-tested questionnaire administered by trained research assistants. The data will be analyzed using SPSS and STATA for both descriptive and inferential statistics. Result: The study included 130 adolescents, with boys making up 53.8% and girls 46.2%. The most prevalent form of sexual abuse was verbal abuse, reported by 46.2% of participants, followed by physical touch (30.8%) and online abuse (15.4%). Peers or schoolmates were the primary perpetrators in 38.5% of cases, while 19.2% reported abuse by strangers. Notably, 46.2% of the adolescents did not report the abuse to anyone. Of those who did, 30.8% informed school authorities, and 23.1% confided in their family. Conclusion: Children, particularly girls, are highly vulnerable to sexual abuse due to lack of parental awareness, weak reporting systems, and difficulty in disclosing abuse. Strengthening community vigilance and reporting mechanisms is essential to protect them.

Caught in the net: Unravelling policy challenges and smuggling dynamics in Indonesia’s puerulus exploitation

Indonesia’s natural puerulus resources position the country as a potential leader in lobster aquaculture. Over the last decade, frequent policy changes aimed at restricting exports have been enacted to encourage domestic aquaculture production; however, illegal trade has increased. This study explores Indonesia’s puerulus governance, analysing the impact of export bans on illegal trade and resources management from 2015 to 2022. We examined the strategies employed by fishermen and other business groups in puerulus trading and smuggling, and their implications on the state revenue by combining court rulings and semi-structured interviews with fishermen and puerulus dealers. We found that the export ban policy has spurred (1) illegal trade, further straining the struggling fishers, (2) potential loss of government revenue from puerulus export, and (3) the stalled domestic aquaculture industry due to the absence of capacity building and enabling environments for domestic production to complement the export ban. Our results indicate that the weak legal enforcement may be the reason the export ban did not work and local aquaculture development has not progressed as expected. Future puerulus management policy underscores the needs for a balanced approach that combines liberal trade policies with strict law enforcement and monitoring, along with capacity building and institutional support for fishermen and the private sectors to develop local aquaculture and curb illegal trading.

Traditional herbal medicine regulatory implementation in Ethiopia: a qualitative study.

Background: Approximately 80% of the Ethiopian population predominantly depends on herbal medicines (HMs) for their primary healthcare needs. Nevertheless, worries regarding the safety, efficacy, and standard of herbal-based treatments have been escalating due to the lack of strong regulatory frameworks. Therefore, the study aimed to assess the presence of regulatory frameworks for traditional herbal medicines and their enforcement in Ethiopia. Methods: The qualitative-phenomenological study design was conducted from November 2021 to March 2022 G.C. The study included 25 regulatory official key informants (KIs) who work for national and regional medicine regulatory agencies, and 15 traditional herbal medicine (THM) practitioners who work at the regional level were purposefully selected for an in-depth interview (IDI). An in-depth interview guide was developed through the purposive sampling technique. The collected data were analyzed using thematic content analysis techniques. Results: The study found that the current national medicine proclamation is deemed inadequate in the regulation of THM. Both conventional and traditional herbal medicines are regulated by a single agency. Weak legal enforcement, a lack of government commitment and support, resource constraints, and inadequate regulatory tools are the main challenges faced in THM regulation. Conclusion: Overall, the study found inadequate legal frameworks and weak THM regulatory implementations in Ethiopia. Consequently, it is critical for all regulatory authorities in Ethiopia to exert their utmost efforts to effectively regulate THM.

Prevalence and Causes of Software Piracy among Tertiary Students in Ghana

In the era of the Knowledge Economy, Intellectual Property Rights (IPRs) have become a crucial aspect of the twenty-first-century environment. Software piracy, characterized by the unauthorized copying, downloading, sharing, selling, or installation of copyrighted software, remains a serious problem worldwide, and Ghana is no exception. Various forms of software piracy, such as software lifting, hard disk loading, counterfeiting, and unauthorized renting, are prevalent in the country, leading to negative economic consequences. These consequences include distorted competition, loss of tax revenue and jobs due to the absence of a legitimate market, and increased costs for recovery. The impact of software piracy affects the social well-being of the Ghanaian citizenry. This research aims to explore the causes and effects of software piracy in Ghana, especially among tertiary students, and proposes potential solutions. A quantitative survey design was used via an online questionnaire to collect data from a sample of 47 students in the tertiary institutions especially public universities in Ghana with backgrounds in IT and are familiar with evolving trends in IT. The findings revealed that software piracy is prevalent in the country as a result of a lack of awareness, poor economic conditions, and weak legal framework and/or enforcement. The study recommends increased public education and awareness, strict enforcement of laws related to software piracy, and the promotion of domestic software development as measures to address the menace.

Barriers of Good Corporate Governance Practices: Evidence from Emerging Economy

Corporate governance (CG) is often split among rule and principle-based methods to regulation in distinctive institutional contexts. CG practices are divergent among countries due to differences in their institutional environments. Therefore, the purpose of this study is to identify the barriers of CG practices and compliance in Pakistan. The primary data is collected from 105 Pakistan Stock Exchange (PSX) listed firms through survey questionnaire. The study employed the exploratory factor analysis (EFA) to identify the barriers of good CG practices and compliance in Pakistan.
 Using exploratory factor analysis (EFA), this study identified five major barriers, i.e. firm level barriers (lack of auditor independence, board ineffectiveness, lack of shareholders’ awareness), external barriers (political and governmental interference in business activities, weak legal control and enforcement, high levels of corruption), social barriers (strong social ties among different stakeholders, interpersonal connections among boards of directors (BoDs), education and training barriers (lack of professional education and training among stakeholders) and legal barriers (fewer voting rights) which restrain good CG practices in Pakistan.
 The study contributes to existing CG literature and highlights the barriers which hinder the good CG practices and compliance, especially in the context of Pakistan. The findings are applicable to other emerging markets especially in Asian countries due to similar socio-economic environment.

Making Vacant Land Work: Assessment of Vacant Land Utilization in Wolayta Sodo Town, SNNPR, Ethiopia

Undeveloped vacant land is an asset, but unfortunately many people don’t realize and they have not used it properly as a source of business. It is because they don’t know about business opportunity which can be applied on the undeveloped vacant land. In the heart of the study town, it is used as solid waste disposal sites, unused, and neglected are commonly observed. It seems strange that land convenient to economically vibrant areas where many people work, land that should itself have great value, lies vacant and ignored. Hence, the purpose of the study is assessing the factors that contribute to the existence of vacant land in the town and its socio-economic effects as well as to evaluate the intervention made by the town administration. The research methodology mainly concentrates on survey strategy, explanatory and descriptive research type for qualitative and quantitative approaches based on probability and non-probability sampling specifically simple random and purposive sampling technique. To conduct the study both primary and secondary data were collected. The collected data was analyzed and presented with the help of tables, bar graphs, pie charts and pictures. Poor financial capacity of the owners, market instability, land speculation, property tax burden, urban decline, neighborhood change, poor provision of loan, bureaucracy and long procedure, weak legal enforcement & implementation of rules and regulations, and inadequate provision of infrastructure & services are the observed fact that causes the existence of undeveloped vacant land. In relation to that, lower revenue collection and low tax income, reduced infrastructure development, reduced employment opportunity, discouraged investment, disputes, social crime, human health problem, plan distortion, loss of aesthetic value, and urban sprawl are observed as a major effect that were caused by the existence of the undeveloped land in the town. Based up on the findings, the researcher put possible recommendations to come up to this obscurity. Finally, this study is the first of its kind that to open a gate for other researchers, to get baseline data of the study town and other stake holders to come up with new policy options, programs, and projects. Keywords: Undeveloped Vacant Land DOI: 10.7176/JEES/12-7-01 Publication date: July 31 st 2022

Earnings management during financial crisis: The case of Greece

Research Question: Did Greek listed firms engage in earnings management practices during the initial phase of the 2010's economic crisis? Motivation: Impact of structural attributes of a country along with firms' characteristics on economic entities' accounting policy decisions. Idea: Firms' accounting policy decisions are conditioned upon their characteristics and the conditions prevailing in the broader economic and business environment. We investigate whether these factors affect firms' propensity to engage in earnings management within a context of financial distress. Data: The sample consists of all Greek listed firms which were active for the period 2009-2014. Tools: We employ the Kothari et al (2005) model to estimate discretional accruals of Greek listed firms. Findings: The family-controlled Greek firms that are audited by Big-4 Auditing firms are likely to use discretionary accruals in order to affect accounting figures. This finding may be attributable to the family control of the firms, along with the weak legal enforcement and investor protection that prevail in Greece. In addition, discretionary accruals show a positive relation with firm’s ability to cover its current liabilities using current assets while they are negatively associated with cash-flow from operations. Contribution: This study contributes to the existing literature on earnings management. Our research has been conducted in the initial phase of financial crisis and within an economic environment which is characterized by family-controlled firms, dependency on debt financing and low investor and creditor protection.

Factors Affecting the Adoption of Financial Reporting Standards by Micro, Small and Medium Enterprises in Tanzania: The Case of Mbeya City Council

Different studies have revealed that the majority of the micro, small and medium enterprises (MSMEs) in Tanzania do not use basic accounting principles and practices which are consistent with financial reporting standards in managing business though Tanzania adopted International Financial Reporting Standards for small and medium enterprises (IFRS for SMEs) in 2009 and issued financial reporting standard for Micro entities in 2018. This shows that the level of adoption and applicability of the standards is very low. Therefore, this study was carried out to assess factors that affect the adoption of financial reporting standards by MSMEs in Tanzania. The study was conducted in Mbeya City Council where primary data was collected from a sample size of 245 respondents via a Likert scale questionnaire. The descripto-explanatory research design was employed where the results were quantitatively analysed through descriptive statistics and chi-square (x2) model hypothesis testing. The results show that non-adoption of the standards was the result of inadequate knowledge by MSMEs, lack of awareness by most MSMEs on the existence of the standards, high perceived cost of conversion and implementation, weak legal and regulatory enforcement strategy, low level of technology applicability by SMEs and complexity of the standards as it needs a well-trained accountant to implement. The study recommends the government to come up with the implementation strategy that will first ensure that a large number of MSMEs is well trained on financial reporting standards because the decision to adopt or not to adopt largely depend on the adequacy of knowledge.

Trust and Law in Credit Markets

This study examines the coevolution of trust and legal institutions in a model of competitive credit markets plagued by asymmetric information. When entrepreneurs’ relative payoff to productive activities versus cheating is private information, dishonest ones, who intend to cheat, can enter credit markets and be cross‐subsidized by honest ones, who engage in productive activities. To exploit this benefit, dishonest entrepreneurs demand weak legal enforcement through the political process. This rent‐seeking behaviour interacts with the formation of trust, generating an underdevelopment trap with weak enforcement and distrust. Technological advancement may encourage entrepreneurs’ rent‐seeking and aggravate distrust.

Factors and Constraints Hindering Effective Municipal Solid Waste Management Systems in Sub-Saharan Africa: Case Study of Northern Uganda

In developing countries, little information is available about solid-waste characteristics, determinants for adoption and performance-evaluation of municipal-waste management systems in Municipals. This study aimed: to characterize the municipal solid-wastes, collection, dumping and evaluate the efficiency and reliability of Municipal solid-waste management system. A total of 200 households were randomly sampled and interviewed. Data was analysed using Binary-Logistic Regression model to determine factors influencing collection and dumping of solid wastes. Results showed that biodegradable/organic wastes comprise a major fraction of solid-wastes produced. Factors that influenced solid-waste collection and dumping included: household-age, unavailability of solid-waste containers, inadequate collection/dumping space and weak legal-enforcement against poor-dumping. The waste system is constrained by inadequate transport facilities, inadequate space for temporal dumping; and lack of legal enforcement in matters of solid-waste poor handling. These have made the systems ineffective and unreliable. This study recommends involvement of all stakeholders in innovative approaches to uphold sustainable municipal sanity.

The impact of forecasting cash flows on enhancing analysts’ own earnings forecasts: International evidence and the effect of IFRS adoption

AbstractUsing a large international sample from 1995 to 2018, we find that individual analysts’ earnings forecasts accompanied with cash flow forecasts are more accurate than those not accompanied with cash flow forecasts, suggesting that the findings for the United States in Call et al. (2009) apply to other countries. In addition, using a difference‐in‐differences design, we find that the positive association between cash flow forecast provisions and earnings forecast accuracy is weakened after mandatory IFRS adoption. Furthermore, we find that the reduced usefulness of forecasting cash flow for analysts’ own earnings prediction after mandatory IFRS adoption is more pronounced in countries with a common law origin and strong legal enforcement as opposed to countries with a code law origin and weak legal enforcement.

Corporate social responsibility of the mining companies in Tanzania

This paper sets out to examine the neglected research area of corporate social responsibility (CSR) of the Mining Companies in Tanzania, and was guided by the following specific objectives: 1) to examine tax payment compliance of the mining companies in Tanzania; 2) to explore the extent to which mining companies donate local communities services in Tanzania; 3) to investigate the compliance of environment management Act of 2015; 4) to explore the challenges facing Tanzania in enforcing CSR of the mining companies. A case study design was used and the methods of data collection were interviews and documentary reviews. 74 respondents were selected by the author through purposive sampling. The findings revealed that there is poor practice of CSR due to none compliance of the mining companies on paying tax, environmental pollution in Tighthe river in north Mara, inadequate compensations to the relocated local communities in Tanzania as well as low contribution of mining companies to the National economy that have turned the Country into resource curse. Also, it was noted that some challenges such as weak legal enforcement and lack of government stake in the mining companies resulting into myth of mining companies’ social responsibility in Tanzania. It is therefore concluded that the government should increase its stake in Mining Companies as it is in Botswana and also establish comprehensive legal and regulatory framework for effective and efficient CSR in Mining sector in Tanzania.

Bank Quality, Judicial Efficiency, and Loan Repayment Delays in Italy

ABSTRACTItalian firms delay payment to banks weakened by past loan losses. Exploiting Credit Register data, we fully absorb borrower fundamentals with firm‐quarter effects. Identification therefore reflects firm choices to delay payment to some banks, depending on their health. This selective delay occurs more where legal enforcement of collateral recovery is slow. Poor enforcement encourages borrowers not to pay when the value of their bank relationship comes into doubt. Selective delays occur even by firms able to pay all lenders. Credit losses in Italy have thus been worsened by the combination of weak banks and weak legal enforcement.

Analysis of the effects of changes in Spanish auditing regulation on audit quality and its differential effect depending on the type of auditor

The objective of this paper is to provide evidence on the effect of the reforms of the Spanish auditing legislation, enacted in 2002, 2010 and 2015, on audit quality. More specifically, we study whether the reforms had a differential effect depending on the type of auditor. To this end, the auditors were classified according to their size. We analyzed the specific case of non-financial listed Spanish companies which are considered as Public Interest Entities (PIEs). The main results indicate that none of the reforms caused an improvement in financial reporting quality. This could mean that legal reforms per se are not sufficient to achieve the intended objectives in countries with weak legal enforcement, as is the case of Spain. Because of this, it may be necessary to implement mechanisms to encourage auditors to apply the new rules. El objetivo de este trabajo es aportar evidencia sobre el efecto de las reformas de la legislación auditora española, efectuadas en 2002, 2010 y 2015, sobre la calidad de la auditoría y, más concretamente, sobre si las mismas tuvieron un efecto diferencial en función del tipo de auditor. Para ello, los auditores fueron clasificados en función de su tamaño. Se analizó el caso concreto de las empresas españolas cotizadas no financieras, colectivo que tiene la consideración de Entidades de Interés Público (EIP). Los resultados principales indican que ninguna de las reformas causó mejoras en la calidad de la información financiera. Esto podría significar que las reformas legales per se no son suficientes para lograr los objetivos previstos en países con débil aplicación legal, como es el caso de España. Por ello, podría ser necesario implementar mecanismos para alentar a los auditores a aplicar las nuevas reglas.

Relationship Between Controlling Shareholders’ Participation in Share Pledging and Accounting Conservatism in China

AbstractThis study examines the relationship between controlling shareholders’ participation in share pledging and accounting conservatism in the Chinese stock market. Share pledging introduces risks to controlling shareholders and leads to severe information asymmetry between controlling shareholders and outside minority shareholders. This, in turn, results in competing incentives with regard to financial reporting. We find that controlling shareholders’ participation in share pledging negatively affects accounting conservatism, especially for firms located in regions with weak legal enforcement and poor investor protection. Our study shows that controlling shareholders’ share‐pledging behaviour negatively influences firms’ reporting quality, especially in areas with weak legal systems.

Financing Durable Assets

This paper studies how the durability of assets affects financing. We show that more durable assets require larger down payments making them harder to finance, because durability affects the price of assets and hence the overall financing need more than their collateral value. Durability affects technology adoption, the choice between new and used capital, and the rent versus buy decision. Constrained firms invest in less durable assets and buy used assets. More durable assets are more likely to be rented. Economies with weak legal enforcement invest more in less durable, otherwise dominated assets and are net importers of used assets. (JEL D25, G31, G32, O31)

Impairment Losses: The Impact of First‐time Adoption of the Accounting Standardisation System in Portugal

AbstractPortugal has been recognised as a code law country, with weak legal enforcement mechanisms and conservative accounting practices. However, since 2005, Portuguese companies have been changing their financial reporting practices to those based on common law institutional logic. In 2010, unlisted Portuguese companies began to apply a new set of accounting standards called the Accounting Standardisation System (Sistema de Normalização Contabilística – SNC) based on International Accounting Standards/International Financial Reporting Standards (IFRS). This paper seeks to analyse the impact of the first‐time adoption of the SNC with regard to the accounting treatment of impairment losses. It is found that, to mitigate political costs associated with their public visibility, larger companies present more credible financial statements that reflect their overall true financial and economic condition. This study is a valuable contribution to both users of financial information and domestic standard setters to help them understand and improve the impact of accounting standards. Consistent with Khalil and Simon (2014), it also contributes to the debate on the optimal flexibility permitted by IFRS to improve reporting quality and reduce earnings management.

Does working capital determine firm performance? An empirical research of the emerging economy

The primary objective of this study is to examine the impact of working capital management efficiency on the financial health/well-being of a company measured in terms of firm value in the context of a rapidly emerging economy. This study applies a multivariate ordinary least square regression analysis on industry adjusted performance variable of 1532 Indian firms listed on the National Stock Exchange (NSE) for a period of 18 years (from 1999-2017). Not all of the 1532 firms selected for this study were listed during the whole period of study. Only 610 firms were listed at the beginning and gradually more and more companies started to get listed until eventually 922 more companies got listed to the initial tally of 610 listed firms making the total number of listed companies to be 1532 by the end of the study period. A total of 19862 firm year observations correspond to listed firms and 9246 firm year observations for unlisted firms making it a total of 29108 firm year observations. The findings of this study indicate that an efficient working capital management (proxied by Cash conversion cycle and components thereof) leads to better firm performance when adjusted for industry differences. It also shows that the relationship follows a curvilinear trajectory instead of a linear one as a change in sign in the coefficient of working capital management proxy (Cash Conversion Cycle) occurs and its square term and both are manifesting itself as significant in the listed companies. This is a co-relational study investigating the association between working capital management efficiency and firm performance. The findings of this study is based in an economy that is unique in its own right. Indian corporate landscape is replete with business groups and they dominate the market in terms of asset holding and market capitalization coupled with the existence of institutional gaps and weak legal enforcement mechanisms. All of which makes the Indian corporate landscape totally different from its more developed counterparts thus rendering the results not generalizable. The relationship between these variables should be verified in other economies taking their unique characteristics into account. This study to the best of the author’s knowledge is the first one to investigate the relationship between working capital management and firm performance on such a comprehensive dataset having 62 different industries in an emerging economy. The findings of the study are intended to be of use to financial managers, investors, financial management consultants, and other stakeholders.

Corporate Board Structure and Foreign Equity Investments in Weak Institutional Regimes

This study explores how corporate board structure gives the ability to firms to attract foreign equity investments in economies affected by weak institutional regimes taking India as the experimental setup. Concentrated ownership, along with the absence of effective external governance mechanisms, weak legal enforcement and pervasive corruption, resulted in the aggravation of Type II agency problems in these countries. Moreover, the increased presence of controlling owners on corporate boards exerts significant influence thus increasing the severity of the said agency problem. Using a sample of large publicly listed Indian firms between the periods 2010–2014, our study reveals that in a setting where institutional framework is not well developed and Type II agency problems are believed to exist in a large measure, the board plays a vital role to inform foreign investors about possible chances of being expropriated which influence their investment decisions in terms of having equity ownerships in firms.