The joint effect of corporate risk disclosure and corporate governance on firm value

Haj-Salem, Issal; Damak-Ayadi, Salma; Hussainey, Khaled

doi:10.1057/s41310-020-00079-w

Cited by 27 publications

(42 citation statements)

References 118 publications

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“…SRAT and all the firm-characteristic variables, LEV, IVAL, TBNQ, and ROI (Step 0), by running Model 1 and Model 2. Due to the high cross-correlation between ROI and TBNQ (0.61) and previous literature (Baron, Harjoto, & Jo, 2011;Siagian, Siregar, & Rahadian, 2013;Haj-Salem et al, 2020), it appears that ROI and TBNQ reflect the same variable, i.e. firm value, so Model 1 and Model 2 were repeated by excluding ROI (Step 1) either with interactions (Model 2) or without interactions (Model 1).…”

Section: Results Of Hypotheses Testingmentioning

confidence: 99%

“…In Step 3, to shed more light on the market value of the firm effect, TBNQ -the most-recommended firm-value variable (see, e.g. Fooladi, Shukor, Saleh, & Jafar, 2014;Haj-Salem et al, 2020) -was inserted in the model with and without interactions with SRAT, while IVAL was excluded. The results still showed the same conclusion that the SRAT effect on RET is not found to be positively significant.…”

Section: Results Of Hypotheses Testingmentioning

confidence: 99%

“…Furthermore, the MRA analysis was adopted to arrive at a consistent inference. From the results of Step 0 in Model 1, all ROI effects were significant, but due to the existence of a high cross-correlation between ROI and TBNQ (0.71) and between ROI and IVAL (0.51) -with insights from the measurement of ROI and TBNQ reflecting the same firm-value variable from Baron et al (2011), Siagian et al (2013), andHaj-Salem et al (2020) -Model 1 and Model 2 were repeated from Step 0. The two models incorporated all the independent variables, i.e.…”

Section: Results Of Hypotheses Testingmentioning

confidence: 99%

“…On the other hand, a firm's value proxied by TBNQ better reflects the market price of the firm in the short run. Tobin's Q that indicates more than 1 means 'overvalued' while TBNQ that lies between 0 and 1 points to 'undervalued;' its advantage is the value being more relevant in the short-run analysis (Haj-Salem et al, 2020). As a result, the specific measurement of some variables (i.e.…”

Section: Research Methodology Population Sample and Variablesmentioning

confidence: 99%

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Do sukuk ratings non-contingently affect stock returns? Evidence from Indonesia and Malaysia

Qizam

2021

EBER

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The objective of the article is to investigate two issues. First, whether the Islamic bond (sukuk) ratings are the key determinant in affecting stock returns and, second, whether firm-characteristic variables moderate the sukuk ratings effect on stock returns. Research Design & Methods: This study applied the panel estimated generalized least squares (EGLS) regression for two samples (from Indonesia and Malaysia) spanning two years, 2015-2016, for all variables, except for the intrinsic-value variable which spanned eight years, 2009-2016. Findings: The results show that the direct and positive effect of sukuk ratings on stock returns are significantly present in Malaysia but not in Indonesia, while the positive and significant moderating effects of firm-characteristic variables -especially leverage and intrinsic value of the firm -are more pronounced in the positive sukuk rating-stock return relationship in Indonesia than in Malaysia. Implications & Recommendations:The types of firm-characteristic variables involved in determining the effect of sukuk ratings on stock returns depend on the country's characteristics. As a result, adopting sukuk ratings to determine stock returns is not constant but, instead, it is contingent -to an extent -on other variables: firm-characteristic variables. These results suggest that still many factors should be explored so as to reach a better judgment on the quality of credit, including sukuk. Contribution & Value Added: While most previous studies employed the event-study method and did not specifically consider firm-characteristic effects on analysing the relationship between sukuk ratings and stock returns, this study sought to reveal whether sukuk ratings are the key determinant in affecting prices (or stock returns), and the extent to which firm-characteristic variables moderate the relationship between sukuk ratings and stock returns. Article type:research article

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Section: Results Of Hypotheses Testingmentioning

confidence: 99%

Section: Results Of Hypotheses Testingmentioning

confidence: 99%

Section: Results Of Hypotheses Testingmentioning

confidence: 99%

Section: Research Methodology Population Sample and Variablesmentioning

confidence: 99%

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Do sukuk ratings non-contingently affect stock returns? Evidence from Indonesia and Malaysia

Qizam

2021

EBER

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“…As both governance and investment efficiency affect voluntary disclosure, we contribute to the existing literature by examining their joint impact on disclosure. Following Hussainey and Walker (2009); Enache and Hussainey (2020);and Haj-Salem et al (2020), we expect four different scenarios.…”

Section: Introductionmentioning

confidence: 99%

Governance Vis-à-Vis Investment Efficiency: Substitutes or Complementary in Their Effects on Disclosure Practice

Elberry

Hussainey

2021

JRFM

Self Cite

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Prior studies provide evidence that both corporate governance and corporate investment efficiency affect corporate disclosure practice. In this paper, we examine their joint effect on disclosure. In particular, we examine whether corporate governance quality and corporate investment efficiency act as substitutes or complements in their impact on narrative disclosure. We collect disclosure scores from Lancaster University’s Corporate Financial Information Environment (CFIE) website for a sample of non-financial UK companies for the period 2007–2014. We regress measures of corporate governance and corporate investment efficiency on two different proxies of disclosure practice (performance commentaries disclosure and the tone of narrative disclosure). Consistent with prior studies, we find that both governance and investment efficiency affect disclosure. We contribute to narrative disclosure studies in two crucial respects. First, we provide empirical evidence that governance and investment efficiency has a complementary effect on performance commentaries disclosure. Second, we contribute to the disclosure tone literature by providing empirical evidence that both governance and investment efficiency have a substitution effect on the tone of narrative disclosure.

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Understanding the multiple facets of risk in family firms: A review of the literature and a framework for future research

Mismetti,

Sangermano,

Del Bosco

et al. 2024

Journal of Business Research

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The joint effect of corporate risk disclosure and corporate governance on firm value

Cited by 27 publications

References 118 publications

Do sukuk ratings non-contingently affect stock returns? Evidence from Indonesia and Malaysia

Do sukuk ratings non-contingently affect stock returns? Evidence from Indonesia and Malaysia

Governance Vis-à-Vis Investment Efficiency: Substitutes or Complementary in Their Effects on Disclosure Practice

Understanding the multiple facets of risk in family firms: A review of the literature and a framework for future research

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