The OECD Principles of Corporate Governance

The numbers game.

This paper investigates the effect of corporate governance quality on earnings management in Jordan. Using a panel data set of all industrial and service firms listed on Amman Stock Exchange (ASE) during the period 2009-2013; this paper provides evidence that earnings management is affected negatively by corporate governance quality. In particular; the results show that earnings management is affected negatively by overall categories of governance index represented by board of director, board meeting, Audit and nomination and compensation committee. Furthermore, results suggest that corporate governance quality has increased over time. Thus, its ability to constrain earnings management has also increased. It is recommended to industrial and service companies to boost their compliance with corporate governance code to improve the integrity and reliability of financial reports. This paper fills a gap in the literature by providing evidence about the effect of corporate governance quality on earnings management in Jordan as an emerging economy.

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Corporate governance quality and earnings management: Evidence from Jordan

The Econometrics of Corporate Governance Studies

This study is aimed to determine the role of ownership structure on firm performance. Using panel data regression analysis method, the role of variables of ownership structure which includes: ownership concentration, institutional ownership and institutional ownership concentration have been examined for 137 listed firms of Tehran stock exchange within the period 2001 to 2006. It is concluded that ownership concentration doesn’t have any significant effect on firm performance but the effect of two other variables are significant: institutional ownership has positive significant effect on firm performance but the effect of concentrated institutional ownership is negative. In the next part of this research the effect of ownership structure on firm performance based on type of the industry has been studied and it is concluded that the industry factor moderates this effectiveness relationship. The findings of this research shed light on the role of ownership structure plays in corporate performance and thus offer insights to policy makers interested in improving corporate governance system.

The Examination of the Effect of Ownership Structure on Firm Performance in Listed Firms of Tehran Stock Exchange Based on the Type of the Industry

This paper explores the relationship between corporate governance and capital structure of listed companies in an emerging equity market, Pakistan. The study covers the period 2002 to 2005 for which firm level data for 58 randomly selected non-financial listed companies from Karachi Stock Exchange has been examined by using multivariate regression analysis under fixed effect model approach. Measures of corporate governance employed are board size, board composition, and CEO/Chair duality. Impact of shareholding on financing decisions has also been examined by using managerial shareholding and institutional shareholding. Similarly influence of controlled variables like firm size and profitability on firms’ financing mechanism is also investigated. Results reveal that board size and managerial shareholding is significantly negatively correlated with debt to equity ratio. However corporate’s financing behavior is not found significantly influenced by CEO/Chair duality and the presence of non-executive directors on the board. However, control variables firm size and return on assets are found to have a significant effect on capital structure. No temporal effects are observed. Therefore results suggest that corporate governance variables like size and ownership structure and managerial shareholding play important role in determination of financial mix of the firms.

Impact of Ownership Structure and Corporate Governance on Capital Structure of Pakistani Listed Companies

The study examines the relationship between quality of Corporate Governance and Earnings Management. A set of listed Companies have been investigated to analyze the relationship for the year 2006. Quality has been measured by assigning weights to a set of related variables whereas earnings management has been quantified by discretionary accruals. Modified Cross Sectional Jones Model has been used to determine the Discretionary Accruals. Ordinary least square estimation indicates the presence of Positive relationship between corporate governance and earnings management. Results appear unconventional, It may be due to the transition phase through which the Pakistani Companies are passing after promulgation of code of corporate governance in 2002 which has created a tendency to increase discretionary accruals as a risk averse measure.

Corporate Governance and Earnings Management an Empirical Evidence Form Pakistani Listed Companies

/pdf/impact-of-ownership-structure-and-corporate-governance-on-4tkqj7pzlk.pdf

This study examines the impact of the quality of corporate governance, as measured by a specially constructed corporate governance index, on the expected cost of equity calculated using the capital asset pricing model (CAPM) approach. A total of 114 listed companies were investigated to analyze the relationship between the two variables for the period 2003 to 2007. The quality of corporate governance was measured by assigning weights to a set of related variables, although these variables were also considered individually. We used descriptive statistics, a correlation matrix, a simple ordinary least squares (OLS) approach, and fixed effect model to test the panel data collected. We found a negative relationship between managerial ownership and board size with the cost of equity, and a positive relationship between board independence, audit committee independence, and corporate governance with the cost of equity. These results could be due to the transition phase through which Pakistani companies are passing after the promulgation of the Code of Corporate Governance in 2002.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1732509_code1515900.pdf?abstractid=1732509&mirid=1&type=2

The Impact of Corporate Governance on the Cost of Equity: Empirical Evidence from Pakistani Listed Companies

The purpose of this research study is to lower the knowledge gap by exploring the degree of corporate social responsibility disclosures (CSRD) made by top Pakistani (Karachi Stock Exchange [KSE] 100 listed non-financial) companies and investigating the financial and non-financial CSRD determinants which aid to the policy development in implementing required regulatory reforms.,KSE 100 index listed companies are covered in this study that published their annual reports consistently during the time period of five years from 2009 to 2013. Financial and non-financial data will be collected from the sample of KSE-listed company’s annual reports. Information related to corporate social responsibility (CSR) will be collected by hand from reports of disclosure of CSR, disclosures of corporate governance, report of the directors, a statement of Chairman’s and notes to the financial statement enclosed in companies’ annual reports. Content analysis technique to measure corporate environmental and social disclosures for items scoring the approach is, in essence, dichotomous, one score assigned to the item in the scores of instrument of research if it disclosed, otherwise assigned zero, and no penalty or negative score is imposed to the item which is reflected irrelevant.,Family ownership, industry type and firm size have positive significant relationship with CSR disclosure, and the authors found negative significant relationship between risk and CSRD. Results of this study propose that, in developing countries like Pakistan, the extent of determinant of CSRD is based on the number of important firm and industry characteristics and are aligned with empirical evidence.,This research uses only annual reports of the companies for the data of CSRD but companies also use other sources for disclosure of their CSR information such as mass media, etc. Content analysis is performed by one author and the second author cross-checked the companies, so biasness may remain a limitation due to the fact that errors attach in rating scale due to judgments of human.,The finding of this study helps policymakers to quantify and know the degree of CSRD and its determinants which enables them to boost the organizational legitimacy and CSR practices by adopting the needed regulatory reform.,The results of this study provide warning signals to the management of the companies in some cases where disclosure level of CSR is lower in the period before issuance of SECP CSR guidelines of 2013.,This research study offers valuable inputs in the development and betterment of CSR rules for the reason that the findings of the research provide information to the future CSR rules and guidelines. The results of this study also help the regulator (SECP) in Pakistan to revise the CSRD to align with the need of changing industrial characteristics and economic environment.

Safdar Ali Butt

Papers

Impact of Ownership Structure and Corporate Governance on Capital Structure of Pakistani Listed Companies

Corporate Governance and Earnings Management an Empirical Evidence Form Pakistani Listed Companies

Impact of Ownership Structure and Corporate Governance on Capital Structure of Pakistani Listed Companies

The Impact of Corporate Governance on the Cost of Equity: Empirical Evidence from Pakistani Listed Companies

Financial and non-financial determinants of corporate social responsibility: empirical evidence from Pakistan