Financial Performance in Indian State-Owned Enterprises Following Corporate Governance Reforms

Locke, Stuart; Duppati, Geeta

doi:10.1108/s2051-663020140000002002

Cited by 8 publications

(18 citation statements)

References 37 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The findings indicated that there was significant and positive market reaction to female director appointments than the appointment of their male counterparts. The findings by Tariqul et al (2019), Black and Khanna (2009), Dhammika (2012), Puneeta (2018), Rossi and Cebula (2015), Locke and Duppati (2014) and Adams et al (2011) were consistent with the findings of Campbell and Vera (2019) who studied market reaction to female board appointments in the short and long term in Spain using 105 female appointments data. The event study and multiple regression analysis methods were used.…”

Section: Empirical Literature Reviewsupporting

confidence: 79%

“…Further, the results showed that the performance of state-owned enterprises was less than that of publicly listed companies. Tariqul et al (2019), Puneeta (2018), Dhammika (2012) and Locke and Duppati's (2014) studies had consistent findings with the study by Rossi and Cebula (2015) who studied stock market reaction to announcements of appointments to the board of directors in Italy. The study used data relating to 100 appointments from 2012 to 2014.…”

Section: Empirical Literature Reviewsupporting

confidence: 56%

“…Tariqul et al (2019), Puneeta (2018) and Dhammika’s (2012) studies agreed with that of Locke and Duppati (2014) who studied financial performance in Indian state-owned enterprises following corporate governance reforms during the period 2003–2011 and used the DiD analysis method. In their study, the treatment group was central public sector enterprises (CPSE), whereas the Indian private listed companies formed the control group as they are not affected by the public firm corporate governance reforms.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 74%

“…In Dhammika ( 2012), the treatment group comprised of firms that were targeted by clause 49 corporate governance reforms, whereas the control group comprised of firms that were not targeted by clause 49 corporate governance reforms. Locke and Duppati (2014) had a treatment group being CPSE, whereas the Indian private listed companies formed the control group as they are not affected by the public firms' corporate governance reforms.…”

Section: Empirical Modelingmentioning

confidence: 99%

See 3 more Smart Citations

Do markets react to corporate governance reforms? Evidence from a developing economy

Ndegwa¹

2022

View full text Add to dashboard Cite

Purpose The purpose of this study is to investigate market reaction to corporate governance reform pronouncements on board diversity in Kenyan listed firms. Design/methodology/approach An event study was performed using 240 days pre-event period and an event period that consisted of 25 days pre and 25 days post the March 2016 board diversity reforms announcement in Kenya. The difference in differences (DiD) method was also used for cause–effect analysis for two years before and three years after the March 2016 board diversity reforms announcement. The outcome variable was firm value, whereas the treatment and control groups were Kenyan listed firms and deposit-taking credit unions, respectively. Findings The event study method found cumulative abnormal returns after the date of the board diversity reforms announcement to be positive and significant. The DiD methods found a positive and significant market reaction to the March 2016 board diversity reforms announcement in Kenya. Research limitations/implications This study was limited by the secondary data that was collected and analyzed from financial statements and stock price data from the Nairobi Securities Exchange (NSE). Financial statements have the disadvantage of being affected by the judgment and estimates of their preparers or accountants. Practical implications Emerging markets like the NSE are vulnerable to market manipulation by insiders. Efficient stock markets are known to attract more investors who are interested in a trustworthy stock price determination mechanism. The Capital Market Authority should thus continue implementing corporate governance reforms aimed at improving the efficiency of the NSE and the trustworthiness of stock prices therein. The continued reforms thus imply better value for money for the NSE investors. Originality/value This study makes an important contribution to literature by combining an event study and DiD analysis to assess market reaction to board diversity reform announcements in emerging markets of sub-Saharan Africa which is a concept that has not been researched before. Past studies have used event studies to investigate the efficiency status of stock markets in sub-Saharan Africa, whereas the current study used an additional method of DiD and hence contributed to literature.

show abstract

Section: Empirical Literature Reviewsupporting

confidence: 79%

Section: Empirical Literature Reviewsupporting

confidence: 56%

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 74%

Section: Empirical Modelingmentioning

confidence: 99%

See 2 more Smart Citations

Do markets react to corporate governance reforms? Evidence from a developing economy

Ndegwa¹

2022

View full text Add to dashboard Cite

show abstract

“…SOEs in emerging economies are more easily utilised for rent-seeking and bribery than in OECD countries because of generally less transparency and weaker institutions for securing accountability and the rule of law. From China, rampant corruption within China’s SOEs rampant corruption within China’s SOEs rampant corruption within China’s SOEs (Cheng, 2004) reports on “rampant corruption” in SOEs, and Locke and Duppati (2014) find that “corporate corruption” is a major concern for the governance reform of Indian SOEs. Transparency International (2017) writes about the “multiple layers of corruption risk” in SOEs in Brazil, based on the disclosures of the recent Petrobras scandal.…”

Section: Introductionmentioning

confidence: 99%

The logics of political business in state-owned enterprises: the case of Indonesia

Apriliyanti

Kristiansen

2019

IJOEM

View full text Add to dashboard Cite

Purpose The purpose of this paper is to illuminate the hidden process of collusion among power holders in state-owned enterprises (SOEs) in an emerging economy, which endures despite comprehensive reforms towards democracy and good governance. Why are mechanisms of checks and balances not functioning in the way they should? Design/methodology/approach The analysis is based on in-depth interviews with board members, executives, politicians, bureaucrats and representatives from auditing boards involved in the management of SOEs in Indonesia. Findings The findings reveal practices of collective conservatism, reciprocal opportunism and normalisation of corruption. The costs of getting into powerful positions are so high that conglomerate business owners gain control over the management of SOEs. The authors use the terms “wall-building and gatekeeping” to explain such cases. Research limitations/implications There is a continuous process of wall building and gatekeeping occurring among business oligarchs, bureaucrats and elected politicians in Indonesia. New entrants into the system are co-opted by the established elite. Practical implications This study shows collusion, rent-seeking and corruption among political and business elites as well as top officials in the government hinder good governance reforms in state-owned Indonesian enterprises. Social implications Collusion and illicit business practices in SOEs are clearly grounded on wall building and gatekeeping. Tackling this problem is a precondition for good governance and an improved legal and regulatory business environment in Indonesia. The ideal separation of powers and the checks and balances for good governance apparently need more than a democracy to break through. A further strengthening of the free press and critical academics will be one crucial contribution. Originality/value There is generally a lack of understanding of the context of corruption, such as the influence of institutional and organisational structures. The topic of corruption is also under-researched due to the difficulty of finding empire evidence. This paper contributes to explaining why new political and organisational structures, such as a democratically elected parliament and a particularly designed corruption eradication commission, are not able to hinder rent-seeking practices and illicit political business in state agencies.

show abstract

Sustainability reporting, board diversity, earnings management and financial statements readability: evidence from an emerging economy

Ndegwa

2023

View full text Add to dashboard Cite

Purpose This paper aims to investigate the moderating effect of sustainability reporting on the relationship between the independent variables of board diversity, and earnings management and the dependent variable of readability of financial statements. Design/methodology/approach The study panel data regression analysis involved 36 Kenyan-listed companies from 2016 to 2020. Findings Key findings were that increased board diversity was found to significantly improve the readability of financial statements. Discretionary earnings management was found to significantly reduce the readability of financial statements. Sustainability reporting was found to significantly increase the readability of financial statements, and it moderated the relationship between board diversity, earnings management and financial statements readability in Kenya. Research limitations/implications The study sample of 36 non-financial listed in the Nairobi Securities Exchange was very small and was affected by the problem of thin trading; hence, caution should be adopted when interpreting the findings. Practical implications The Capital Markets Authorities (CMA) as a policymaker should enforce sustainability reporting by Kenyan listed firms as there is evidence that the reporting enhances the readability of financial statements. The Institute of Certified Public Accountants as a policymaker should closely monitor the published financial statements of firms for earnings management and punish the perpetrators, as there is empirical evidence that the practice reduces the readability of financial statements. Social implications Sustainability reporting is successful as a moderating variable between readability of financial statements and determinants of readability of financial statements. Originality/value This study contributes to knowledge by studying sustainability reporting as a moderating variable between the independent variables of board diversity and earnings management and the dependent variable of readability of financial statements and measured sustainability reporting using a dummy variable for the period before and after the enactment and release of CMA code of 2016 on corporate governance that required sustainability reporting by Kenyan listed companies.

show abstract

Financial Performance in Indian State-Owned Enterprises Following Corporate Governance Reforms

Cited by 8 publications

References 37 publications

Do markets react to corporate governance reforms? Evidence from a developing economy

Do markets react to corporate governance reforms? Evidence from a developing economy

The logics of political business in state-owned enterprises: the case of Indonesia

Sustainability reporting, board diversity, earnings management and financial statements readability: evidence from an emerging economy

Contact Info

Product

Resources

About