Parent control and ownership monitoring in publicly listed subsidiaries in Japan

Sakawa, Hideaki; Watanabel, Naoki

doi:10.1016/j.ribaf.2017.07.127

Cited by 23 publications

(40 citation statements)

References 38 publications

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“…Based on the above assumption tests, it is suggested that feasible generalized least squares (FGLS) regression provides reliable estimates in the presence of heteroscedasticity (Wooldridge, 2010). Thus, FGLS regression was used with option "panels (heteroskedastic)" to solve the problem of heteroscedasticity (Podestà, 2002;StataCorp, 2015) which has been adopted by previous studies (Buckley, Elia, & Kafouros, 2014;Cai, Luo, & Wan, 2012;Luo, Wan, Cai, & Liu, 2013;Sakawa & Watanabel, 2017Yoshikawa & Rasheed, 2010). The results of FGLS regression are shown in Table 4.…”

Section: Resultsmentioning

confidence: 99%

“…Furthermore, previous studies have included the year dummy variable in the regression (Buckley et al, 2014;Cai et al, 2012;Luo et al, 2013;Sakawa & Watanabel, 2017 in order to observe the general trend over time. It is argued that years (business cycle) may have a specific effect on the result of the regression (see Baatwah, Salleh, & Ahmad, 2015;Datta, Iskandar-Datta, & Singh, 2013).…”

Section: Robustness Testmentioning

confidence: 99%

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Corporate Governance Mechanisms, Whistle-Blowing Policy and Real Earnings Management

Al-Absy

Ismail²,

Chandren³

2019

IJFR

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The purpose of this study is to investigate whether the mechanisms of corporate governance (CG) in firms that have a policy of whistle-blowing (WBP) are more effective in mitigating real earnings management (REM) than those without WBP. To achieve this objective, the sample of the study, 288 Malaysian firms for the years 2013 to 2015, have been grouped into firms with and without WBP. In addition, the Roychowdhury Models were used to determine the abnormal levels of the REM. The results show that most of the CG mechanisms, i.e., audit committee (AC) size, AC meetings, AC independence and auditor size in firms with WBP are found to be significantly associated with low level of REM which supporting agency and resource dependence theories. However, only board independence and ownership concentration are found to be significantly associated with high level of REM. Regarding firms without WBP, most of the CG mechanisms, i.e., AC size, women in the AC, AC accenting expertise and ownership concentration, are found to be significantly associated with high level of REM. However, only board meetings, AC multiple directorships and auditor size are found to be significantly associated with low level of REM. The finding of this study suggests that having WBP in a firm could improve the monitoring role of the CG mechanisms towards mitigating REM. However, strengthening the role of WBP is still necessary to improve the efficiency of the monitoring role of CG mechanisms. Hence, there is a need for more policy and law that could encourage whistle-blowers to disclose any misconducts in firms and at the same time, prevent management from undermining the effectiveness of the whistle-blowing policy. The findings of this study will enrich the body of literature where there is no previous study has been done in respect of REM.

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Section: Resultsmentioning

confidence: 99%

Section: Robustness Testmentioning

confidence: 99%

Corporate Governance Mechanisms, Whistle-Blowing Policy and Real Earnings Management

Al-Absy

Ismail²,

Chandren³

2019

IJFR

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“…Parent-subsidiary relationships are criticized by Western media because parent firms might exploit other shareholders [73]. Parent-control of publicly-listed subsidiary firms is examined by [74]. Furthermore, management ownership, consisting of the shareholdings of the board of directors, was used as the control for the relationship between management ownership and firm value [51].…”

Section: Methodsmentioning

confidence: 99%

Institutional Ownership and Firm Performance under Stakeholder-Oriented Corporate Governance

Sakawa

Watanabel

2020

Sustainability

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This study aimed to reveal the role of institutional investors with shareholder-oriented scopes in a stakeholder-oriented economy such as Japan. With financial globalization, the increasing number of institutional shareholders in Japanese corporations enables us to investigate whether their shareholder-oriented perspectives are conducive to taking on effective monitoring roles under stakeholder-oriented corporate governance. This study’s sample included large listed firms of the TOPIX 500 in Japan during 2010-2016. Using 2924 firm-year observations, the effect of institutional investors on firm performance was analyzed to test the role of institutional investors in stakeholder-oriented corporate governance. Our study showed that the monitoring role of institutional shareholders, or foreign shareholders, functions effectively in Japanese corporations. In addition, we showed that the monitoring roles of these are expected to strengthen firms through higher growth opportunities. These results implied that institutional shareholders contribute to enhancing sustainable firm performance and constructing sustainable corporate governance mechanisms in a stakeholder-oriented system.

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“…The result of Wooldridge's test indicates that the problem of autocorrelation is insignificant. Therefore, we adopt feasible generalized least squares (FGLS) for panel data with panel-specific heteroscedasticity error structure to test our hypothesis (Yoshikawa and Rasheed, 2010;Cai et al, 2012;Luo et al, 2013;Buckley et al, 2014;Sakawa and Watanabel, 2018). The advantages of FGLS over ordinary least squares (OLS) is that FGLS provides more reliable estimates and unbiased standard errors in the presence of heteroscedasticity (Wooldridge, 2002;Petersen, 2009;Baltagi, 2011).…”

Section: Methodsmentioning

confidence: 99%

Financial restatements and sell-side analysts' stock recommendations: evidence from Malaysia

Qasem

Aripin

Wan‐Hussin

2020

IJMF

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PurposeThe purpose of this paper is to examine the influence of financial restatements on the sell-side analysts' stock recommendations.Design/methodology/approachThe sample of this study is based on a dataset from a panel of 246 Malaysian public listed companies for the period 2008 to 2013 (651 company-year observations). This study employs feasible generalized least squares regression.FindingsThis study finds a negative and significant relationship between restated companies and sell-side analysts' stock recommendations, which means that sell-side analysts issue less favorable stock recommendations for restated companies.Practical implicationsThe findings based on observations from an emerging economy complement the results of the US studies that analysts revise their earnings forecasts or recommendations downwards or drop coverage following financial restatements. The results of this study should be useful to capital market participants in understanding how analysts perceive and evaluate restated companies.Originality/valueThis paper expands the literature on financial restatements consequences in an emerging market which is largely unstudied. Prior research on analyst behavior towards restatements has focused on the consequences of restatements in terms of analyst following and forecast accuracy and dispersion. This study examines if and how the restatements affect the analysts' final output as reflected in the recommendation opinion, an area that has so far received little attention.

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Parent control and ownership monitoring in publicly listed subsidiaries in Japan

Cited by 23 publications

References 38 publications

Corporate Governance Mechanisms, Whistle-Blowing Policy and Real Earnings Management

Corporate Governance Mechanisms, Whistle-Blowing Policy and Real Earnings Management

Institutional Ownership and Firm Performance under Stakeholder-Oriented Corporate Governance

Financial restatements and sell-side analysts' stock recommendations: evidence from Malaysia

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