There is an academic discussion about investment efficiency, regarding its determinants and effects. Corporate Governance (CG) and Audit Quality (AQ) are determinants of investment efficiency The main objective of the article is to investigate the effect of CG and AQ on investment efficiency, this objective is divided into sub-objectives: to investigate the direct effect of CG on AQ, AQ on investment efficiency, and CG on investment efficiency. Moreover, the indirect effect of CG on investment efficiency through AQ as a mediator variable. This paper focuses on non-financial listed firms in the Egyptian Stock Exchange (EGX), especially firms recorded in EGX 100 for four years’ period (2013–2018), for 103 firms and 412 completed observations. The researcher uses Structural Equation Modeling (SEM) through SmartPLS software. The paper shows evidence that management that has good CG mechanisms obtains a suitable atmosphere to prepare transparent financial statements, which helps enhance the auditor’s role and improve AQ. Improving AQ lowering IA, which increases the trust of investors in management decisions, this leads to reduce pressure on management and improve efficiency of investment decisions. Having good CG mechanisms provides management with a good atmosphere to make right investment decisions, and having good CG mechanisms increases AQ, which helps management to have a good environment to make investment decisions with higher efficiency, or in other words, there is a significant and positive effect of integration between CG and AQ on investment efficiency.
Income smoothing is affected by some factors, one of these factors is political costs (PCs) which firms may pay to get information, trading, and negotiation which is imposed by the decision making and legislating authorities. Hence, the association between PCs and income smoothing is tested by focusing on Egyptian Stock Exchange (EGX), especially EGX 30, which included the most active firms, for a ten-year period from 2006 to 2015 for 63 firms, including 417 completed observations, the sample represented 10 different sectors. Two main hypotheses were formulated and tested, the first hypothesis consists of four sub-hypotheses, it was tested using multiple regression analysis, and the second hypothesis tested by testing the moderating effect of Egyptian revolution 2011 on the association between PCs and income smoothing. The findings are; first, PCs proxies have a positive and significant effect on income smoothing, second, there is a negative and significant moderating effect of Egyptian revolution 2011 on the association between firm size only and income smoothing.
Recent studies are interested in the determinants of cash holdings (CASH), some of these studies focus on conservatism, as one of these determinants. In light of a debate on the nature of the association between conservatism and CASH, this paper discusses and investigates the answers for three questions, the first question about the direct association between conservatism and CASH, the second question about the moderating effect of firm characteristics on this association, the third question about the effect of adopting Egyptian Accounting Standards (EAS) since 2016 on the last association. This paper focuses on Egyptian listed firms in Egyptian Stock Exchange (EGX), especially EGX 100, for six years period from 2013 to 2018 for 11 main sectors, 125 firms and 703 unbalances panel data observations. The findings indicate that (1) conservatism has a negative effect on CASH, (2) only firm size has a moderating and positive effect on the association between conservatism and CASH, (3) firm leverage, firm growth opportunity, and firm managerial ownership do not have a moderating effect on the last association. (4) Adopting EAS in 2016 by Egyptian listed firms gives the management of these firms' suitable chances to control CASH using its association with conservatism.
The main aim of this research is to measure the impact of domestic Mergers and Acquisitions (M&As) on firm's performance and to determine M&As success and failure factors (i.e. weight efficiency, difference in efficiency, return on assets and return on equity) in the whole Egyptian market. The researchers used two-stage analysis; Data Envelopment Analysis (DEA) in the first step and censored regression technique (Tobit model) in the second step for sample of 21 firms listed in the Egyptian stock market (EGX) for 23 operations within the period from 2003 to 2015. The research found that there is enhancement in performance efficiency post M&As in both financial and non-financial sectors. The results showed significant relationship between both ROA and ROE with M&As performance efficiency indicating that these two factors are the most success factors affecting M&As performance efficiency. Results found that there is insignificant relationship between difference in efficiency and M&As performance efficiency.
There is an academic discussion about the value relevance of deferred tax, which aims to find out the effect of deferred tax on the investors’ decisions. In light of this discussion, the first question is about the impact of deferred tax on management practices to manipulate earnings, which is called earnings management, the second question is about the value relevance of earnings management, the third question is about the value relevance of deferred tax, and the fourth question is about the mediating effect of earnings management. The paper focuses on listed firms in the Egyptian Stock Exchange (EGX), especially firms that were recorded in EGX 100, for six-year period (2013–2018) for 107 firms and 642 completed observations. The findings are as follows: management uses deferred tax to manipulate earnings, since an increase in deferred tax amounts increases earnings management practices; there is no value relevance of earnings management, which means earnings management practices do not affect the investors’ decisions; there is value relevance of deferred tax, which confirms that deferred tax is one of the determinants that affect the investors’ decisions; there is no value relevance of deferred tax through earnings management as a mediator variable since investors are not interested in earnings management practices to make their investment decisions. This paper investigates the relationship between deferred tax, earnings management, and value relevance in the Egyptian context.
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