Internal control quality, voluntary disclosure, and cost of equity capital: The case of an unregulated market

Khlif, Hichem; Samaha, Khaled; Soliman, Mark T.

doi:10.1111/ijau.12151

Cited by 28 publications

(27 citation statements)

References 61 publications

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“…Moreover, the crisis period on the one hand and both ownership concentration and CEO duality on the other represent two competing forces influencing DDP in a country with a predominantly negative impact for the period of crisis. Our findings imply that major shareholders in Tunisian listed companies opt for a conservative dividend policy during political instability periods and adopt a strategy of less cash distribution since political instability is generally characterized by a high level of financial and operating risks (Khlif et al 2019).…”

Section: Discussionmentioning

confidence: 74%

“…This implies that major shareholders in the Tunisian listed companies opt for a conservative dividend policy during political instability periods. This also implies that they adopt a strategy of less cash distribution since political instability is generally characterized by a high level of financial and operating risks (Khlif et al 2019).…”

Section: Multivariate Analysismentioning

confidence: 99%

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Do CEO Duality and Ownership Concentration Impact Dividend Policy in Emerging Markets? The Moderating Effect of Crises Period

Ammari¹

2021

IJFS

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Despite developments of recent theoretical and numerous empirical studies on the policies effectively adopted by companies, the dividend distribution policy (DDP) remains largely unexplained. In this regard, the main purpose of the current study is to empirically examine the effects of both CEO duality and ownership concentration on DDP during a crisis period. Furthermore, we test, using an interaction variable, the moderating effect of the crisis period on the association between both the degree of CEO duality and the ownership concentration on the DDP by analyzing panel data on selected listed firms in an emerging economy, namely, Tunisia. Based on a sample made up of 576 firm-year observations over the period 1996–2019, the findings of this research indicate that the crisis period plays an important role in mitigating the positive effect of both CEO duality and ownership concentration on DDP. The findings confirm furthermore that the crisis period on the one hand and both CEO duality and ownership concentration on the other represent two competing forces influencing DDP. Our results also support the agency theory on which DDP depends, among other things, family ownership, board and company size, and ROE.

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Section: Discussionmentioning

confidence: 74%

Section: Multivariate Analysismentioning

confidence: 99%

Do CEO Duality and Ownership Concentration Impact Dividend Policy in Emerging Markets? The Moderating Effect of Crises Period

Ammari¹

2021

IJFS

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“…Endogeneity bias constitutes a common concern in corporate governance research (Khlif et al, 2019;Usman et al, 2019;Sellami and Cherif, 2020). To address this concern, we use instrumental variables and two-stage least-squares (2SLS) regression.…”

Section: Endogeneity and Other Robustness Testsmentioning

confidence: 99%

Female board directorship and earnings management

Mnif

Cherif

2020

PAR

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Purpose This paper aims to examine the impact of female board directorship on the extent of earnings management. Design/methodology/approach The research hypotheses have been tested using both univariate and multivariate analyzes based on a sample of 198 firm-year observations from closely-held family firms listed on the SBF 120 over the period 2010–2018. Findings The empirical results first indicate that female board participation reduces the level of earnings management. When looking at women positions in the companies’ boardrooms, the authors reveal that the negative linkage between female board directorship and earnings management remains constant for independent female directors while the opposite holds for their family-affiliated counterparts. Further, the gender quota reform is shown to mitigate the adverse relationship between gender-diverse corporate boards and the extent of earnings management. These results seem sound, as they hold unchanged for the several measures of, both, boardroom gender diversity and earnings management used in the empirical study. In a supplementary analysis, the authors provide evidence that the association between the presence of women directors on the companies’ boards and earnings management depends, in a different way, on the size of the audit firm in a joint auditing context. Originality/value The country and the period considered in this paper are noteworthy characteristics that enhance the value of this research. The present study is relevant because it examines the relationship between female boardroom participation and earnings management using a homogeneous sample of family-owned and -managed companies within which shareholders and board members share identical motives for manipulating earnings in one of the leading countries in the world with regard to family ownership dominance (i.e. France). Moreover, this paper is considered to be very timely, as it explores, contrarily to previous related studies, the years following the implementation of a mandatory gender quota reform in one of the less available countries, to date, that have amended a gender quota law. To the knowledge, besides France, there are a few markets (Norway, Belgium, Finland and Iceland) that have implemented such legislation.

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“…Beta measures the security risk in relation to the overall market risk (Sharpe 1964). The beta is included in the model because of its positive impact on the COE (Khlif, Samaha & Soliman 2019). The market-to-book (MB) value could influence the COE (Fama & French 1993).…”

Section: Control Variablesmentioning

confidence: 99%

Effects of integrated reporting on the cost of capital and analysts’ forecasts errors: A study of Johannesburg Stock Exchange listed mining firms

Ngcobo

Sibanda

2021

J. econ. financ. sci.

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Orientation: Integrated reporting (IR) has gained traction over the last decade. Although IR became mandatory for all firms listed on Johannesburg Stock Exchange (JSE) in 2010, the International Integrated Reporting Council (IIRC) issued the IR framework in December 2013.Research Purpose: The study seeks to investigate the effects of IR on the cost of equity capital and analysts’ forecast errors for the mining firms listed on JSE.Motivation for the study: A large part of empirical evidence highlights benefits of IR; however, some studies still find no link between the quality of integrated reports and economic benefits for the reporting firm. It is against this backdrop that the study investigates effects of integrated reports on the cost of equity capital and analysts’ forecast errors.Research approach, design and method: We use a quantitative research design to test effects of IR on the cost of equity capital and analysts’ forecast errors. We study used a panel regression to analyse relationship amongst IR, cost of equity capital and analysts’ forecast errors.Main findings: The study found a significant negative relationship between IR scores and cost of equity and analysts’ forecast errors.Practical or managerial application: The findings of the study could incentivise managers in other jurisdictions where IR is not mandatory. Furthermore, findings may contribute to the existing discourse on firm-based benefits related to the quality of IR.Contribution or value addition: The study contributes to the body of knowledge with regard to possible benefits associated with compliance with the IR reporting framework.

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Internal control quality, voluntary disclosure, and cost of equity capital: The case of an unregulated market

Cited by 28 publications

References 61 publications

Do CEO Duality and Ownership Concentration Impact Dividend Policy in Emerging Markets? The Moderating Effect of Crises Period

Do CEO Duality and Ownership Concentration Impact Dividend Policy in Emerging Markets? The Moderating Effect of Crises Period

Female board directorship and earnings management

Effects of integrated reporting on the cost of capital and analysts’ forecasts errors: A study of Johannesburg Stock Exchange listed mining firms

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