A Cross-Firm Analysis of the Impact of Corporate Governance on the East Asian Financial Crisis

Mitton, Todd

doi:10.2139/ssrn.246030

Cited by 236 publications

(344 citation statements)

References 41 publications

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“…As indicated by the table, a unidirectional causality exists, running from VD to CP in the ASE listed companies in Jordan. Thus, it can be said that an increase in the voluntary disclosure in the half-yearly reports published by the ASE listed companies in Jordan may cause the corporate performance for these companies to also increase (Mitton, 2002;Chang, Cho, & Shin, 2007). The outcomes of the Granger causality tests for the companies in the services and industries sector are presented in Table 4.…”

Section: Resultsmentioning

confidence: 99%

“…In other words, increase in the voluntary disclosure may cause corporate performance to increase in the half-yearly reports of the ASE listed companies in Jordan. Further, the quality of voluntary disclosure is argued to have great correlation with the performance of the company (Mitton, 2002). As such, high level of transparency and quality of disclosure should lead to good governance and enhanced company performance.…”

Section: Resultsmentioning

confidence: 99%

“…However, Chang, Cho, and Shin (2007) argued that voluntary disclosure intensifies the difficulty faced by the market in foretelling the performance of the company. (Mitton, 2002;Chang, Cho, & Shin, 2007). On the other hand, increase in corporate performance may cause voluntary disclosure to increase (Camfferman & Cooke, 2002;Chau & Gray, 2002;Haniffa & Cook, 2002;Kusumawati, 2006;Adelopo, 2011).…”

Section: Resultsmentioning

confidence: 99%

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The Relationship between Voluntary Disclosure and Company Performances on Interim Reports in Jordan Using the Method of Causality Directions

Albawwat¹,

Basah²,

Khairi³

2015

IJEF

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The focal point of this study is on voluntary disclosure in interim financial reports of the ASE listed companies in Jordan. The initiatives of voluntary disclosure have been under global scrutiny since the last two decades, owing to various stakeholders' persistent needs to be more informed about their corporations. As the mandatory corporate disclosure itself is insufficient, the study attempts to assess the directions of causality between the degree of voluntary disclosure and corporate performance in the half-yearly reports released by companies listed in the Jordan's ASE for the period of 5 years (2009)(2010)(2011)(2012)(2013). The Granger tests were employed to ascertain the causality between voluntary disclosures and corporate performance in the half-yearly reports. From the test outcomes, most companies (50) show no directional causality, 21 companies demonstrate unidirectional causality while one company has bidirectional causality. The quality of voluntary disclosure appears to have high correlation with the performance of companies their half-yearly reports. Thus, high levels of transparency and quality of disclosure lead to good governance and enhance company's performance, while low voluntary disclosure makes it more difficult to forecast the company's performance.

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Section: Resultsmentioning

confidence: 99%

Section: Resultsmentioning

confidence: 99%

Section: Resultsmentioning

confidence: 99%

See 1 more Smart Citation

The Relationship between Voluntary Disclosure and Company Performances on Interim Reports in Jordan Using the Method of Causality Directions

Albawwat¹,

Basah²,

Khairi³

2015

IJEF

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“…Pryor (2007) argues that when economic institutions are not imposed by force, the cultural characteristics are more likely to determine the economic system, rather than economic institutions. This statement is partially true when we examine the studies of Mitton (2002) and Bushman et al (2004) which suggest that Malaysia is weak in legal enforcement. We could argue that due to the relatively weak legal enforcement of rules and regulations of the capital market, cultural characteristics will take precedence in business dealings, and shapes the capital market.…”

Section: Introductionmentioning

confidence: 95%

Culture, corporate governance and analysts forecast in Malaysia

Wahab

Pitchay

Ali

2015

Asian Review of Accounting

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This study examines the relationship between Bumiputra (in reference to Malay indigenous race) directors, a proxy for culture and analysts forecast. In addition, the study investigates whether corporate governance affects that relationship. Based on a sample from 1999 to 2009 and 664 observations, we find a positive and significant relationship between culture and analysts forecast error suggesting that Bumiputra directors lead to less transparent information environment. However, we find limited evidence to support that good governance weakens the positive relationship between Bumiputra directors and analysts forecast error.Keywords: Ethnicity, corporate governance and analysts forecast.Data availability: Data are publicly available from the sources identified in the paper.JEL classifications: G34, M14 3 IntroductionFinancial analysts are important players in the capital market. Their role in analysing information, either publicly and privately obtained is crucial in determining the progress of firms, especially in terms of quality of earnings. There are abundance of research on role of financial analysts in the capital market with such focus on analysts' forecasts, analysts' coverage and the effect on future income (see Bradshaw, 2011;Ramnath et al., 2008 Jomo, 1999), but on one hand, the assistance is much needed to reduce wealth imbalance among ethnics.Pryor (2007) argues that when economic institutions are not imposed by force, the cultural characteristics are more likely to determine the economic system, rather than economic institutions. This statement is partially true when we examine the studies of Mitton (2002) and Bushman et al. (2004) which suggest that Malaysia is weak in legal enforcement. We could argue that due to the relatively weak legal enforcement of rules and regulations of the capital market, cultural characteristics will take precedence in business dealings, and shapes the capital market. (1988) argues that cultural dimensions identified by Hofstede (1980) influence a country's accounting system in two ways; (1) through their influence on a country's institutions 2 We admit that there has been some concern raised by the academic world regarding Hofstede understanding on culture. Please see Baskerville (2003) and Baskerville-Morley (2005) for some arguments against Hofstede cultural studies. Although we admit limitations exists, at the same time we believe that the cultural dimensions offered by Hofstede is the best current cultural dimension model that could be used in capital market research.

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“…8 Another line of research investigates the performance of East Asian firms during the crisis. For example, Mitton (2002) documents that in five crisis-hit countries, significantly better stock price performance is associated with firms that had higher quality of corporate governance. 9 In their study of eight East Asian countries, Lemmon and Lins (2003) show stock returns of firms in which managers have high levels of control rights, but have 7 They study Hong Kong, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, and Thailand.…”

Section: Corporate Governance and Chaebols In Koreamentioning

confidence: 99%

Executive Compensation, Firm Performance and Chaebols in Korea: Evidence from New Panel Data

Kim

Kato

Lee³

2005

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This paper provides the first rigorous econometric estimates on the pay-performance relations for executives of Korean firms with and without Chaebol affiliation. To do so, we have assembled for the first time panel data (that provide information not only on executive compensation and firm performance but also on Chaebol affiliation) for 246 firms that were included in KOSPI200 for at least two consecutive years from 1998 to 2001. Contrary to a popular belief that Korean corporate governance and the structure of Korean executive compensation is considerably different from elsewhere in the West, we find that cash compensation of Korean executives is statistically significantly related to stock market performance and that the magnitude of the sensitivity of pay to stock market performance is comparable to the U.S. and Japan. Perhaps even more importantly, further analysis reveals for the first time that such overall significant executive pay-performance link is driven by nonChaebol firms and that no such link exists for Chaebol firms. The evidence is consistent with the recent literature on the nature of Chaebols in Korea and the current corporate governance reform efforts in Korea that are aimed mostly at Chaebol firms. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SJEL Classification: M52, M12, G30, G15, J33, O53

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A Cross-Firm Analysis of the Impact of Corporate Governance on the East Asian Financial Crisis

Cited by 236 publications

References 41 publications

The Relationship between Voluntary Disclosure and Company Performances on Interim Reports in Jordan Using the Method of Causality Directions

The Relationship between Voluntary Disclosure and Company Performances on Interim Reports in Jordan Using the Method of Causality Directions

Culture, corporate governance and analysts forecast in Malaysia

Executive Compensation, Firm Performance and Chaebols in Korea: Evidence from New Panel Data

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