Shareholdings of Board Members and Corporate Performance: A Panel Quantile Regression Analysis

Liu, Shubing; Hsueh, Shun-Jen; Wu, Tsung-Pao

doi:10.1080/1226508x.2017.1312477

Cited by 4 publications

(6 citation statements)

References 53 publications

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“…Our control variables also demonstrate significant relationships with the performance measure. Firm size exhibits a positive and significant relationship with performance, while leverage displays a negative but significant relationship, consistent with prior literature (Liu et al. , 2017; Oware, 2021).…”

Section: Resultssupporting

confidence: 89%

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The effect of MD&A disclosures on corporate performance: a panel quantile regression analysis

Singh,

Singla

2024

AJAR

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PurposeThe study aims to examine how the information disclosed by the managers in the management discussion and analysis (MD&A) reports varies at the different levels of corporate performance.Design/methodology/approachTo understand this quantile effect, first OLS technique was adopted and then, the quantile regression method was applied to explore the impact of MD&A disclosures on the firm performance across the lower and upper quantiles. The sample size for the study is 490 firms’ year observations for the period 2016–2022.FindingsThe results of the study demonstrate the negative but significant relationship between MD&A disclosures and corporate performance, supporting the two management strategies of “competitive disadvantage” in case of good performance and “management impression strategy” in case of poor performance. Furthermore, with other corporate governance variables, both the size of the board and the number of independent directors on the board are positively significant only in the case of the upper quantile indicating the heterogeneity in the relationship between the performance and the MD&A disclosures. Therefore, the overall findings of the study support that these results contradict the agency theory and the stakeholders’ theory as managers are not acting well as agents on behalf of the investors and work well only when they are controlled by the large board having more independent directors.Originality/valueTo the best of the authors’ knowledge, no study so far has incorporated quantile regression to assess the effect of MD&A disclosures on company performance at various levels of the firm performance, which gives more robust insights about the viewpoint of the managers on the different level of the firm performance. In other words, this study highlights the important information as to how the information provided in the MD&A reports varies as per the good or poor performance of the companies.

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Section: Resultssupporting

confidence: 89%

“…Additionally, leverage can affect corporate performance, as higher levels of debt require closer monitoring by creditors to ensure sound managerial practices within the companies. Therefore, in line with previous studies (Liu et al. , 2017; Usman et al.…”

Section: Theoretical Background and Hypothesis Developmentsupporting

confidence: 93%

The effect of MD&A disclosures on corporate performance: a panel quantile regression analysis

Singh,

Singla

2024

AJAR

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“…Besides this, the study compares the fixed effect GLS regression results with the QR approach. QR technique, established by Koenker and Bassett (1978), is applied when there is a presence of heterogeneity across the firm, or the data are skewed Liu et al (2017), Ramdani and Witteloostuijn (2010). QR can expeditiously evaluate the effect of the explanatory variables around various quantiles of the conditionally explained variable (Koenker and Ng, 2005).…”

Section: Model Specification and Estimationmentioning

confidence: 99%

Section: Model Specification and Estimationmentioning

confidence: 99%

Board composition and firm performance: empirical evidence from Indian companies

Goel

Dhiman

Rana

et al. 2022

APJBA

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PurposeThis study aims to know whether board composition is effective in improving firm performance and particularly to determine whether this relationship varies across different levels of performance, that is, companies with very low performance, low performance, moderate performance, high performance and very high performance.Design/methodology/approachThe authors use a data set covering 213 Indian companies registered on S&P Bombay Stock Exchange 500 Index over the period 2001 to 2019 by using Tobin's Q as a performance parameter. The study applies the quantile regression technique and compares the results with fixed effect generalized least squares (GLS) regression.FindingsThe findings reveal that board size positively affects the company's performance across all quantiles. Independent directors negatively impact the performance of companies across all quantiles. However, the strength of these relationships increases with increase in performance, thereby supporting agency theory and stewardship theory, respectively. The effect of executive directors on the performance of the companies varies across quantiles. The effect is adverse at moderate and high quantiles only.Practical implicationsThe findings provide some grounds for regulators to exercise caution while designing board composition guidelines, keeping in mind the unique internal environment of each company which ultimately affects their performance levels. Similarly, Indian companies are also suggested to compose their boards keeping in mind their performance levels.Originality/valueThe study contributes towards the debate on the board composition and firm performance relationship by adding to the agency theory and stewardship theory that all the companies cannot have the similar board composition. Rather its composition depends upon the performance levels of the companies.

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“…As a result, managers provide less information about their leverage position if they have more debt in the firm. Therefore, in line with previous studies (Laskar & Maji, 2016;Liu et al, 2017;Oware, 2021;Muhammad & Migliori, 2022;Usman et al, 2022) the following hypotheses have been set forth:…”

Section: Control Variablesmentioning

confidence: 82%

Voluntary Disclosures and their Drivers: A Study of MDA Reports in India

Singla,

Singh

2024

OMEE

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The aim of this study is to examine the impact of corporate characteristics on voluntary disclosures of management discussion and analysis (MD&A) reports in India. Using a formal tone, the data was extracted from the annual reports of the top 100 listed firms available on the CMIE Prowess database for seven years (2016–2022). After excluding 23 companies from the financial and insurance sector, a panel regression method with the assistance of Gretl software was employed to investigate the relationship between the Management Discussion and Analysis Disclosure Index (MDADI) for voluntary aspects and various corporate attributes, with a total of 490 firm years of balanced observations. In India, firms follow the mandatory compliance of the MD&A reports, but voluntary disclosures are somehow those which are not much emphasized but are a good indication of firm performance and their accountability towards their stakeholders (Mayew et al., 2015). Our empirical findings reveal that profitability as a proxy to firm performance has a significant positive relationship with MD&A voluntary disclosures. Further, an insignificant association between VDS (Voluntary Disclosure Score) and the board size, presence of independent directors and firm size was found. This indicates that firm performance plays a significant role in adding more voluntary disclosures in MD&A reports. The possible reason for this could be the use of “Management Impression Strategy” in the MD&A reports, which means managers disclose more only when the firm has earned more and use impressive language to attract stakeholders. The outcomes of this research offer valuable insights for regulators, policymakers, and listed companies in India, aiding in the enhancement of MD&A reporting quality. Additionally, this study provides a roadmap for future research on MD&A reporting quality and corporate attributes in other emerging countries that have similar regulatory frameworks. This paper makes a timely and pertinent contribution to the scholarly discourse by shedding light on the relationship between MD&A disclosures and firm attributes. Its findings provide valuable insights for both academia and industry.

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Shareholdings of Board Members and Corporate Performance: A Panel Quantile Regression Analysis

Cited by 4 publications

References 53 publications

The effect of MD&A disclosures on corporate performance: a panel quantile regression analysis

The effect of MD&A disclosures on corporate performance: a panel quantile regression analysis

Board composition and firm performance: empirical evidence from Indian companies

Voluntary Disclosures and their Drivers: A Study of MDA Reports in India

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