This study performs an in-depth analysis of the curvilinear relationship between slack and future firm performance. Using a sample of US firms, we analyze the influence of three indicators of absorbed and unabsorbed slack on the two commonest dimensions of firm performance: profitability and sales growth. Although the relationship between most slack variables and firm performance is curvilinear, the inflection points (for both maximums and minimums) lie mainly outside the distribution range of the slack variables and, consequently, the curvilinear relationships between slack and performance are, in fact, neither U-shaped nor inverted U-shaped. Therefore, the influence of slack on performance can be positive or negative: linear for certain variables, but concave/convex for most variables analyzed in our study. An additional important finding is that the influence of slack on future profitability is usually the opposite of its influence on future sales growth: negative and positive, respectively, for absorbed slack; positive and negative, respectively, for financial slack. Results are robust to different lagged periods of the independent variables. The effects of equity and cash slacks on future performance are mainly negative, especially for longer time periods.
On May 27, 2014, Regulation (EU) No 537/2014 was published in the Official Journal of the European Union. Aiming to enhance audit quality, the new regulation establishes, among other measures, a maximum tenure of ten years with the audit firm and important limitations to the provision of non-audit services to audit clients by the audit firm. However, it should be noted that the extant research does not unambiguously support that long audit firm tenures or non-audit services impair the quality of audits. This research studies whether these provisions have been empirically associated with reduced audit quality for Spain. Because of its low litigation risk, the potentially negative impact of tenure and non-audit services on audit quality should be clearly observed in the Spanish audit market. Nevertheless, we do not report significantly lower levels of audit quality associated with either long tenures or non-audit services. Our results may have some interesting policy implication as they seem to put into question the necessity of such a regulation for the audit sector.
Abstract:The annual general meeting (AGM) constitutes the most important corporate event. Nevertheless, its role as an efficient instrument for corporate governance has recently come under increasing scrutiny, and numerous proposals for reform have emerged as a result. The purpose of this paper is to assess the release of valuerelevant information during the AGM by analysing its impact on returns, returns volatility, and trading volumes in a sample of common-and civil-law countries. In one of the most influential articles in the field of corporate governance, La Porta et al. (1998) examine the relationship between legal systems and shareholder protection. Given the importance of a country's legal tradition regarding not only shareholders' rights but also the role they play in the company, we cannot assume on a prior basis that results obtained in countries in which the legal tradition is based on the common law, like the U.S. and the U.K., can be directly extrapolated to countries with different legal traditions. Our results emphasise the role of national idiosyncratic characteristics among the civil-law countries analysed and show a very close relationship to the AGM in common-law countries.
Resumen: El buen gobierno de las empresas constituye en la actualidad uno de los principales temas de investigación en el ámbito académico de economía y empresa. El interés del tema no es únicamente académico, si tenemos en cuenta el elevado núme-ro de códigos de buen gobierno promulgados durante los últimos años, o la responsabilidad atribuida a las cuestiones de gobierno empresarial en la actual crisis fi nanciera. Este trabajo ha analizado 2.147 publicaciones sobre buen gobierno empresarial incluidas en la base de datos ISI Web of Science y sus correspondientes 79.635 referencias con el objetivo principal de identifi car las pautas sobre las que se basa la investigación. En particular, hemos identifi cado las publicaciones y los autores más relevantes, los más productivos, las revistas en que se han publicado las investigaciones y las aproximaciones utilizadas para abordar el tema.Palabras clave: producción científi ca, gobierno corporativo.
Research in Corporate Governance: An analysis through ISI Web of Science
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.