The relationship between corporate governance and cost of equity: evidence from the ISIS era in Iraq

Salehi, Mahdi; Moradi, Mahdi; Faysal, Saad Raad Faysal

doi:10.1108/ijoem-07-2020-0739

Cited by 17 publications

(2 citation statements)

References 57 publications

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“…Accordingly, OCM systematically overestimate the return on their projects, thus investing excessively in the presence of internal funds (since they are not disciplined by stock markets or constrained by corporate governance mechanisms (e.g. Salehi et al, 2023;Bui and Krajcs ak, 2023). This argument is consistent with Miglo and Brodziak (2019), in the sense that they analysed different scenarios regarding the efficiency of entrepreneurs' decisions.…”

Section: Overconfident Managermentioning

confidence: 68%

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Does managerial overconfidence affect capital structure rebalancing for entrepreneurial firms?

Carvalho,

Pacheco,

Sardo

et al. 2024

JSBED

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PurposeThe behavioural theory adds a new paradigm of analysis with the assumptions of the decision maker’s cognitive biases and their repercussions on financing decisions. The aim of the study is to analyse the repercussions of these biases on the adjustment speed of firm’s capital structure toward the optimal level.Design/methodology/approachBased on a partial adjustment model, the study uses the Dynamic Panel Fractional estimator to analyse panel data from 4,990 Portuguese entrepreneurial firms.FindingsThe results show that the cognitive overconfidence bias impacts the entrepreneurial firm’s capital structure. In fact, the firms run by overconfident managers adjust more slowly than their counterparts. Furthermore, the findings suggest that entrepreneurial firms make relatively fast adjustments toward the optimal debt level and follow a hierarchical financing order in the funding process.Practical implicationsThe results of this paper are not only interesting to the academia, but also contain practical implications for corporate, institutional and business policy and governance. First, the paper introduces a new measure of cognitive bias in optimistic managers, which is useful for current and future academic research. Also, in practical terms, the findings of the paper reveal that when a company is contemplating hiring a manager, it should consider whether they need an optimistic or non-optimistic manager based on the company's present life cycle or situation.Originality/valueThe current analysis extends the existing literature. The study suggests that financial classical and behavioural paradigms should not be separated, which can provide evidence to help narrow the gap between these two major perspectives.

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Section: Overconfident Managermentioning

confidence: 68%

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Does managerial overconfidence affect capital structure rebalancing for entrepreneurial firms?

Carvalho,

Pacheco,

Sardo

et al. 2024

JSBED

View full text Add to dashboard Cite

show abstract

Revisiting the nexus between corporate social responsibility and corporate value: Evidence from China

Wu,

Liew

2023

Corp Soc Responsibility Env

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PurposeUnder the concept of sustainable development guided by ‘carbon peak’ and ‘carbon neutral’, corporate social responsibility (CSR) performance has become the focus of attention in all sectors of society. With the gradual deepening of China's ‘new economic normal’ development, firms face increasing environmental uncertainty in the market. This study aims to embed CSR, financial flexibility (FF), institutional investors (INST), and corporate value into the same theoretical framework and conduct heterogeneity analysis on the nature of property rights, heavily polluting industries, and marketisation level.Design/Methodology/ApproachBased upon the observation data of listed firms in Shanghai and Shenzhen A‐shares in China from 2011 to 2021, this study uses Stata software for data processing, analysis, and two‐stage least‐squares (2SLS) models to solve endogenous problems.FindingsThe research results show that improving CSR performance increases corporate value, while INST and FF moderate the relationship between them. Further heterogeneity analysis found that the nature of property rights, heavily polluting industries, and marketisation level have different impacts on these moderating effects. This result provides ideas for clarifying the economic impact of enhancing the firms' CSR performance in the current era.Originality/ValueFirst, from the standpoint of CSR performance, it enhances the literature on the key corporate values in China. Second, from the perspective of corporate value, it has enriched the CSR literature and provided a new perspective for further clarifying the significance of improving the CSR performance of firms at this stage. Third, from the perspective of INST and FF, this research examines the moderating mechanism of CSR performance on corporate value. Hence, it provides a reference for further improving the efficiency of resource allocation in the capital markets.

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Does corporate governance influence readability of the report by the chairman of the board of directors? The case of Jordanian listed companies

Herenia,

Julián,

Al‐mohareb

2024

Corp Soc Responsibility Env

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This study investigates whether readability of the president's statement is linked to both company performance and factors related to corporate governance in an emerging market context. We analyse Jordanian manufacturing companies listed on the Amman Stock Exchange (ASE) during the period 2017–2021. An exploratory study using panel data from ASE, parametric correlations, and regression models shows the relationship between readability of the president's statement, corporate governance, and characteristics of the board of directors. The results indicate that corporate governance significantly moderates readability of the president's statement and the firm's performance. The results also show a relationship between readability of the chairman's statement and directors' accounting experience and confirm that independence of the board of directors and concentration of ownership affect readability of the accounting disclosures in the chairman's statement. Finally, poor board compliance significantly mitigates the association between board features and readability of the chairman's statement. These findings help to explain how and why firms adjust their information disclosure and transparency practices, affecting corporate reporting credibility and efficacy. This study is one of few to examine how board features affect readability of the president's statement within the Jordanian legal framework, which is plagued by poor board compliance due in part to constant amendments.

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The relationship between corporate governance and cost of equity: evidence from the ISIS era in Iraq

Cited by 17 publications

References 57 publications

Does managerial overconfidence affect capital structure rebalancing for entrepreneurial firms?

Does managerial overconfidence affect capital structure rebalancing for entrepreneurial firms?

Revisiting the nexus between corporate social responsibility and corporate value: Evidence from China

Does corporate governance influence readability of the report by the chairman of the board of directors? The case of Jordanian listed companies

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