We investigate the impact of stock return volatility on different capital structure measures of nonfinancial firms in a dynamic panel model. Two‐step system generalized method of moment dynamic panel estimator is applied to nonfinancial sector's data from Pakistan Stock Exchange over the period 2001–2014. The results imply that stock return volatility has a significant negative impact on book leverage and long‐term market leverage ratios. However, stock return volatility causes the increase in total market leverage ratios. Moreover, book leverage and long‐term market leverage of firms decrease as a result of an increase in stock return volatility in different classification of firms. Conversely, stock return volatility has a significant positive impact on total market leverage ratios in those classifications of firms. Capital structure decisions are more sensitive to stock return volatility as default risk increases. Firms significantly go for the reduction in their debt financing due to high stock returns volatility and to avoid from possible consequences of default. The results are robust to alternative measures such as cash flow volatility and earnings volatility.
Public budget is an important role in achieving a country’s economic and social development goals. It essentially requires that an entire government budget be managed effectively and efficiently to ensure attainment of those goals as well as well-being of the citizens. Therefore, it is necessary to examine government spending behaviour and the process of budget preparation. This study looks into the relationship between changes in current budget and expenditure variances, in particular, operating expenditure of the Malaysia federal government. The influence of expenditure variances (overspending/ under spending) on current budget changes is examined to determine if prior year expenditure variances cause non-symmetry changes in current budget so as to identify the presence of budget ratcheting. Dynamic Panel Regression Analysis is used to examine the data from forty four government agencies/programs, covering the period from 2010 until 2014. The findings reveal that there is a significant positive association between changes in current budget with prior year overspending by agency/program. However, the relationship between changes in current budget with prior year underspending by agency/program is not significant. The contribution of the research highlights that the presence of budget ratcheting among the federal government agencies/programs of public organisations needs to be indicated to enhance budget administration regarding ratcheting.
International trade is one of the major aspects that grow tremendously in Southeast Asia and export is regarded as main accelerators of growth in either developed or developing countries. The objective of this study is to determine the determinants of export performance for ASEAN countries. In this study, panel Autoregressive Distributed Lag (ARDL) method is adopted for time period between 2000 to 2015. Empirical findings indicate that there is a long-run relationship between determinants of export such as interest rate, economic growth and foreign direct investment with export performance of ASEAN countries. Therefore, policy makers need to strategize their policies to move towards closer cooperation among the ASEAN countries, especially promoting sustainable exportation in the region.
Malaysia and Singapore are the top two successful economies in the ASEAN region. They are converging their national accounting standards with the International Financial Reporting Standards (IFRSs) in an attempt to be more globalised. The globalisation of financial reporting standard is not just accounting focus but also for enhancing the quality and transparency of financial reporting of the firms in these countries. Investors and the other stakeholders rely on financial information reported by the firms on their websites to enable the information to access globally. This study focuses on the globalisation of financial reporting standards, corporate governance and transparency practice by the firms listed on Bursa Malaysia and Singapore. It is to analyse the level of financial reporting quality of the firms in compliance with the International Financial Reporting Standards (IFRS) in their annual reports by using disclosure analysis. Additionally, it determines the association between the financial reporting quality with IFRS compliance, and corporate governance and transparency practice of the firms listed on the main markets of Bursa Malaysia and main board of Singapore Stock Exchange (SGX), using multiple regression analysis. The finding of this study highlights the association of higher level of financial reporting quality with IFRS compliance of the firms, and their good corporate governance and transparency practice are positively associated in these two countries. This study also provides some opportunities to achieve sustainable convergence with the International Financial Reporting Standards of the firms by improving corporate governance and transparency in ASEAN countries.Keywords: International Financial Reporting Standards; Corporate Governance; Transparency and Disclosure Practice; Malaysia and Singapore.
The national accounting standards set by the Malaysian Accounting Standards Board (MASB) is largely converged with the International Financial Reporting Standards (IFRS). The benefit arising from this is to enable foreign investors to analyse their investments via a standardised financial reporting system in Malaysia. Financial reporting disclosure quality by the listed firms in the consumer product and service sector on Bursa Malaysia is an essential feature in the firms’ financial reporting to the public. This research evaluates the development of financial reporting disclosure quality assurance by firms listed on Bursa Malaysia, by examining financial reporting disclosure quality and subsequent compliance with the International Financial Reporting Standards. This study uses a content analysis approach to identify a financial reporting standard compliance disclosure index, based the financial statements issued by firms listed on Bursa Malaysia from 2008 – 2016. A panel regression model is utilised to construct a model of financial reporting disclosure quality of the firm, based the extent of compliance with IFRS disclosure requirements from the following perspectives: corporate governance practice, audit quality and corporate social responsibility. The sustainability of financial reporting disclosure quality by the listed firms and subsequently the Malaysian capital markets will enable the same to attain a competitive edge in the international markets. In addition, this study will discuss financial reporting disclosure quality implications relevant to the policy makers in Bursa Malaysia, and it is envisaged that such model can be utilised in the improvement of future financial reporting policies.
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