Endogeneity in Accounting and Finance Research: Natural Experiments as a State-of-the-Art Solution

Gippel, Jennifer; Smith, Tom W.; Zhu, Yushu

doi:10.2139/ssrn.2512098

Cited by 42 publications

(60 citation statements)

References 76 publications

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“…A large volume of recent studies seeking to address apparent concerns of endogeneity within the accounting and finance literature is highlighting this issue for further investigation (Brown et al, 2011, Gippel et al, 2015. Firstly, instrumental variable is created using an alternative weighted index to test for endogeneity.…”

Section: Additional Analysesmentioning

confidence: 99%

Corporate boards, ownership structures and corporate disclosures

Alnabsha

Abdou

Ntim

et al. 2018

JAAR

137

153

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Purpose: This paper investigates the effect of corporate board attributes, ownership structure and firm-level characteristics on both corporate mandatory and voluntary disclosure behaviour in annual reports of Libyan firms.Design/methodology/approach: Multivariate regression techniques are used to estimate the effect of corporate board and ownership structures on mandatory and voluntary disclosures of a sample of Libyan firms between 2006 and 2010.Findings: First, we find that board size, board composition, the frequency of board meetings and the presence of an audit committee have an impact on the level of corporate disclosure. Second, this study finds an evidence that director ownership, foreign ownership, government ownership and institutional ownership have a non-linear effect on the level of corporate disclosure. Finally, we find that firm age, liquidity, listing status, industry type and auditor type are positively associated with the level of corporate disclosure.Limitation: Future research could investigate disclosure practices using other channels of corporate disclosure, such as corporate websites. Useful insights may be offered also by future studies by conducting in-depth interviews with corporate managers, directors and owners regarding these issues.Implication: Investors may also rely on such corporate governance characteristics to shape expectations about voluntary and/or mandatory information disclosure. Originality/value: Existing disclosure studies have mainly examined governance and voluntary disclosure relationship in non-listed firms. Our study, therefore, extends, as well as contributes to the existing literature by the examining the governance-disclosure nexus relating to both mandatory and voluntary disclosures in both listed and non-listed firms.

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Section: Additional Analysesmentioning

confidence: 99%

Corporate boards, ownership structures and corporate disclosures

Alnabsha

Abdou

Ntim

et al. 2018

JAAR

137

153

View full text Add to dashboard Cite

show abstract

“…Poor theory development adds to econometric problems associated with endogeneity (Gippel et al, 2015). Poor theory development adds to econometric problems associated with endogeneity (Gippel et al, 2015).…”

Section: Endogeneitymentioning

confidence: 99%

Chief financial officer demographic characteristics and fraudulent financial reporting in China

Sun

Kent

et al. 2017

Accounting & Finance

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We investigate whether management's cognitions, values and perceptions are associated with fraud for 18 863 firm-years for Chinese listed firms from 2000 to 2014. Demographic characteristics of the chief financial officer (CFO) are used as proxies for management's cognitions, values and perceptions. We find that fraudulent financial reporting is higher when CFOs are younger, male, and have lower education backgrounds. An analysis of inflated earnings, fictitious assets, material omissions and other material misstatements provide similar results, with the exception that CFOs with higher education levels are associated with more inflated earnings.

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“…In According to Gippel, Smith, and Zhu (2015), there are three important specification tests relating to endogeneity: the Hausman-Wu test for endogeneity and two other tests to assess the appropriateness of the instrument. Accordingly, we test for relevance using the F-test for the joint significance of the instruments.…”

Section: Two-stage Least Squares Instrumental Variable (2sls-iv) Regrmentioning

confidence: 99%

New Evidence on National Culture and Bank Capital Structure

Haq

Pathan

et al. 2016

SSRN Journal

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We examine the nature of impact of national culture on bank leverage using a broad sample of 1,701 banks from 79 countries, over the period 2000-2013, i.e., 18,996 bank-year observations. We find that banks in countries with high individualism culture dimensions hold more leverage while, banks in countries with high uncertainty-avoidance, power distance, and long-term orientation have less leverage. Notably, bank size substantially moderates these cultural effects. Our findings are robust to endogeneity, and alternative proxies for the dependent and core explanatory variables.JEL classification: G01; G21; G28; G32; G38; H63; M14

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Endogeneity in Accounting and Finance Research: Natural Experiments as a State-of-the-Art Solution

Cited by 42 publications

References 76 publications

Corporate boards, ownership structures and corporate disclosures

Corporate boards, ownership structures and corporate disclosures

Chief financial officer demographic characteristics and fraudulent financial reporting in China

New Evidence on National Culture and Bank Capital Structure

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