Home Bias at Home: Local Equity Preference in Domestic Portfolios

textWe draw on the knowledge spillover literature to suggest that a country's proportion of export-oriented new ventures represents an outcome of knowledge spillovers that stem from foreign direct investment (FDI) and international trade (export spillovers) as well as a source of knowledge spillovers (entrepreneurship spillovers). To test the hypotheses, we use macrolevel data from 34 countries during the period 2002-2005. We find that the relationship between FDI and international trade on the one hand and a country's proportion of export-oriented new ventures on the other differs for higher- and lower-income countries. In addition, a country's proportion of export-oriented new ventures affects the subsequent emergence of new businesses.

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Knowledge spillovers and new ventures' export orientation

This study examines the effects of firm performance and corporate governance on chief executive officer (CEO) compensation in an emerging market, Pakistan. Using a more robust Generalized Method of Moments (GMM) estimation approach for a sample of non-financial firms listed at Karachi Stock Exchange over the period 2005–2012, we find that both current- and previous-year accounting performances has positive influence on CEO compensation. However, stock market performance does not appear to have a positive impact on executive compensation. We further find that ownership concentration is positively related with CEO compensation, indicating some kind of collusion between management and largest shareholder to get personal benefits. Inconsistent with agency theory, CEO duality appears to have a negative influence, while board size and board independence have no convincing relationship with CEO compensation, indicating board ineffectiveness in reducing CEO entrenchment. The results of dynamic GMM model s...

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Firm performance, corporate governance and executive compensation in Pakistan

Risk governance and Asian bank performance: An empirical investigation over the financial crisis

In this study, we explore seven in-depth cases of high-technology acquisitions and develop an empirically grounded model of technology and capability transfer during acquisition implementation. We assess how the nature of the acquired firms' knowledge-based resources, as well as multiple dimensions of acquisition implementation, have both independent and interactive effects on the successful appropriation of technologies and capabilities by the acquirer. Our inquiry contributes to the growing body of research examining the transfer of knowledge both between and within organizations. Propositions are developed to help guide further inquiry into the dynamics of acquisition implementation processes in general and, more specifically, the process of acquiring new technologies and capabilities from other firms.

Acquiring new technologies and capabilities: A grounded model of acquisition implementation

The study examines the relationship between executive compensation and firm performance among Indian firms. The evidence suggests that firm performance measured by accounting, as well as market-based measures, significantly affects executive compensation. We also test for the presence of persistence in executive compensation by employing the system-generalised methods of moments (GMM) estimator. We find significant persistence in executive compensation among the sample firms. Further, we report the absence of pay–performance relationship among the smaller sample firms and business group affiliated firms. Thus, our findings cast doubts over the performance-based executive compensation practices of Indian business group affiliated firms.

Executive compensation and firm performance: evidence from indian firms

Purpose




This paper aims to examine the impact of corporate governance practices on the level of financial disclosures made by the Indian firms. This assumes importance in the context of the role of financial disclosures in addressing the agency problem.




Design/methodology/approach




Financial disclosure score is computed by considering disclosures provided by the generally accepted accounting principles and is the dependent variable. The independent variable – corporate governance score – is an index comprising internal governance mechanisms. The authors empirically examine the impact of corporate governance practices on financial disclosure using multiple regression model for 200 large listed Indian firms.




Findings




The study suggests that quality of governance practices significantly improves financial disclosure practices of the firm. Particularly, the composition of the audit committee is effective in improving disclosures.




Practical implications




The finding has implications for policy makers and practitioners. It will help investors, lenders, and other stakeholders to assess firms’ financial disclosure quality. In addition, the findings, suggest the influence of governance practices on disclosure, might help in the formulation of appropriate policies about board structure and audit function. It is also a call to investors to emphasize on governance quality of the investing firms.




Originality/value




The study builds a case for an urgent intervention for improving the existing governance standards to advance the quality of financial disclosure in an emerging market context.

Do compositions of board and audit committee improve financial disclosures

Impact of institutional imprinting on the persistence of superior profits: A study of regulatory punctuation in India

Purpose




The purpose of this paper is to examine whether firm-level corporate governance measures and regulatory reforms constrain manipulation of operating cash flows, an important firm performance indicator.




Design/methodology/approach




The sample comprises firms from an emerging market, India, with data from 2005 to 2011. The authors use the methodology given in the paper by Lee (2012) and multiple regressions.




Findings




The authors find that cash flow manipulation is likely to increase with an increase in the controlling ownership. Furthermore, board diligence and better audit fail to curb such manipulation. However, the authors do find that such manipulation has gone down in the recent years, and diligent boards constrain it, possibly due to the recent steps taken by the Indian Government for improving the corporate governance environment in India.




Practical implications




The findings can act as feedback for the regulators and policy makers. Potential investors and analysts may also benefit from the study, since they can be more vigilant about the firms’ cash flow manipulation practices and can demand better governance.




Originality/value




The findings suggest that good corporate governance makes managers substitute earnings management with cash flow manipulation.

Does good corporate governance constrain cash flow manipulation? Evidence from India

Recent financial scandals associated to accounting and other frauds allegedly blamed to top company managers (e.g. Enron, Worldcom, Paramalt, Satyam) have brought into public light the recurring question of whether companies are managed on the best interests of shareholders and other company stakeholders such as workers, creditors and the general community. The paper studies compliance of Corporate Governance requirements by Indian Companies. A model is developed to calculate the Corporate Governance Score of companies and then it is related to company attributes like size, profitability, leverage, foreign ownership etc. No significant correlation exists between Corporate Governance and company Characterists however average compliance by Indian Companies has been satisfactory. Factor analysis of major sub-parameters of Corporate Governance Score, namely Composition of Board, Audit Committee, Number of Board Meetings and Remuneration Committee is done. Two factors namely Strength of Committee and Competency level of Board are identified as important factors. Keywords : Corporate Governance Compliance , Disclosures & Transparency , Stakeholders, Factor Analysis

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Mehul Raithatha

Papers

Executive compensation and firm performance: evidence from indian firms

Do compositions of board and audit committee improve financial disclosures

Impact of institutional imprinting on the persistence of superior profits: A study of regulatory punctuation in India

Does good corporate governance constrain cash flow manipulation? Evidence from India

Corporate Governance Compliance Practices of Indian Companies