Does good governance matter to debtholders? Evidence from the credit ratings of Japanese firms

Aman, Hiroyuki; Nguyên, Pascal

doi:10.1016/j.ribaf.2013.02.002

Cited by 71 publications

(111 citation statements)

References 58 publications

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“…Skaife et al (2006) findings show a positive relationship between board independence and credit rating. Aman and Nguyen (2013) find that credit ratings increase with board size, consistent with a moderation effect in large decision-making groups. As a rule, firms are expected to benefit from better governance by being able to access funding at a lower cost and in larger amounts.…”

Section: Board Structure and Processsupporting

confidence: 59%

“…However, leverage, institution ownership and governmental ownership are negatively associated with credit rating. Aman and Nguyen (2013) provide evidence that good governance is associated with higher credit ratings. There findings suggest that active monitoring (by large shareholders) and lower information asymmetry (through better disclosures) mitigates agency conflicts and reduces the risk to debtholders.…”

Section: Literature Review and Hypothesesmentioning

confidence: 93%

“…A growing number of studies investigated corporate governance attributes from the bondholders' perspective (Sengupta 1998;Bhojraj and Sengupta 2003;Skaife et al 2006;Alali et al 2012;Alkhawaldeh 2012;Aman and Nguyen 2013;Liu and Jiraporn 2010;Jiraporn et al 2013). Indeed, previous studies demonstrated that corporate governance attributes mitigate not only the agency conflicts between shareholders and management, but also potential conflicts between bondholders and shareholders that can result in wealth transfer effects between them.…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

“…Third, this research makes several contributions to the extant literature regarding credit ratings and corporate governance in general and regarding corporate governance of Islamic banks in particular. Only few papers investigated the effect of corporate governance on credit ratings (Skaife et al 2006;Alali et al 2012;Aman and Nguyen 2013) and no previous research investigated the effect of corporate governance on credit rating in Islamic banking context. Fourth, most of the prior literature that investigated the effect of corporate governance in Islamic banks focused on the value of corporate governance from the shareholder's perspective (Zouari and Taktak 2014;Quttainah et al 2013;Grassa and Matoussi 2014).…”

Section: Introductionmentioning

confidence: 99%

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Corporate governance and credit rating in Islamic banks: Does Shariah governance matters?

Grassa

2015

J Manag Gov

134

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We investigate whether Islamic banks with strong corporate governance benefit from higher credit ratings relative to Islamic banks with weaker governance and whether Shariah governance can affect the credit ratings of Islamic banks or not. We document, after controlling for Islamic bank-specific risk characteristics, that credit ratings are negatively associated with the number of blockholders, CEO power, the supervisory role of the Shariah board and investment deposits; and positively associated with share listing ownership, board independence, women directors, board directors expertise and Shariah board expertise. As well as, credit rating is higher for Southeast Asian Islamic banks and weaker for GCC Islamic banks.

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Section: Board Structure and Processsupporting

confidence: 59%

Section: Literature Review and Hypothesesmentioning

confidence: 93%

Section: Literature Review and Hypothesesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Corporate governance and credit rating in Islamic banks: Does Shariah governance matters?

Grassa

2015

J Manag Gov

134

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“…There is also evidence of a decrease in the likelihood of corporate insolvency as a function of corporate governance characteristics because governance compliance improves the prospects for greater access to external funding (Claessens, Djankov & Klapper, 2003;Fich and Slezak, 2008;Amana and Nguyen, 2013). In contrast, firms might comply to an optimal level of corporate governance practices, which would not have a causal effect on performance since corporate governance compliance could be endogenously determined.…”

Section: Introductionmentioning

confidence: 99%

More on the relationship between corporate governance and firm performance in the UK: Evidence from the application of generalized method of moments estimation

Akbar

Poletti‐Hughes

Elfaitouri

et al. 2016

Research in International Business and Finance

129

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Drivers of combined assurance in a sustainable development context: Evidence from integrated reports

Maroun

Prinsloo

2020

Bus Strat Env

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External assurance engagements performed by auditors and consultants to test sections of organisations' sustainability and integrated reports have become commonplace and are examined in detail by the prior research. Less often considered is how different types of internal and external sources of assurance form part of a combined assurance model that organisations rely on to ensure the integrity of information used for internal decision making and reporting to stakeholders. As a result, this paper offers an important contribution to the academic literature by providing one of the first reviews to deal specifically with the operation of combined assurance. The research considers if firm size and profitability, industry membership and select governance features are associated with the use of more sophisticated combined assurance models for ensuring relevant and reliable integrated reporting. Multiple regression, complemented by supplementary analysis, reveals that larger firms that are more profitable and members of environmentally and socially sensitive industries are not necessarily using extensive combined assurance models. These organisations rely on robust assurance methodologies, but the coverage of their combined assurance models is restricted. Similarly, board experience is substituting for the use of complex assurance methodologies. Board size and independence are only associated with a stronger commitment to implementing codes of best practice dealing with combined assurance but not with the coverage of the assurance models or the assurance methodologies being applied. The results may be indicative of the fact that internal controls and systems required to support integrated thinking and reporting are still in a developmental stage, making it difficult for them to be the subject of any formal verification by internal or external assurance providers.

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Does good governance matter to debtholders? Evidence from the credit ratings of Japanese firms

Cited by 71 publications

References 58 publications

Corporate governance and credit rating in Islamic banks: Does Shariah governance matters?

Corporate governance and credit rating in Islamic banks: Does Shariah governance matters?

More on the relationship between corporate governance and firm performance in the UK: Evidence from the application of generalized method of moments estimation

Drivers of combined assurance in a sustainable development context: Evidence from integrated reports

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