34 research outputs found
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Cash is queen? Impact of gender-diverse boards on firms' cash holdings during COVID-19
Get PDFData availability: Data available on request from the authors.JEL classification: G01; G34; M14.This study examines the role of gender-diverse boards in preserving cash holdings during crises. Using a sample of UK firms during the COVID-19 period, we find that firms with more female directors had higher cash holdings. This increase in cash reserves is primarily driven by reduced board compensation, reflecting the careful stewardship associated with gender-diverse boards. Interestingly, we find no evidence of female directors reducing acquisition activity or capital expenditures, suggesting that these firms did not compromise on growth prospects while building their cash buffer. Our study underscores the value of gender-diverse boards in navigating firms through crises without sacrificing shareholder value. Our results remain robust even after controlling for endogeneity and alternative estimation techniques. The findings hold significant implications for investors, policymakers, and advocates of gender diversity in boardrooms, emphasizing the financial prudence that gender diversity can bring in crisis management.The authors received no financial support for the research, authorship, and/or publication of this article
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Board gender diversity and ESG performance: The mediating role of temporal orientation in South Africa context
Get PDFData Availability Statement: Data available on request from the authorsPrevailing research on the interaction between board gender diversity (BGD) and Environmental, Social, and Governance (ESG) performance presents equivocal findings, particularly in the context of developing countries. This study ventures into an exploratory examination of this association, situated in the socio-cultural milieu of South Africa, a region where the lower social status of women often leads to a bias towards short-term perspectives. Drawing on the role congruity theory of prejudice toward female leaders, this study aims to investigate the mediating role of short-term orientation (SHRT) in the BGD-ESG relationship. We further explore how the preference of female directors toward SHRT varies depending on their tenure on the board and across family and non-family firms. The empirical findings, drawn from an examination of publicly listed non-financial firms on the Johannesburg Stock Exchange (JSE) from 2015 to 2020, indicate a negative relationship between BGD and ESG, with SHRT predominantly mediating this association. Additionally, the tenure of female directors attenuates their preference for SHRT. Notably, we found the effect of BGD on SHRT is less pronounced in family firms, where the choices of female directors are more aligned with the family firm's long-term orientation. Our findings contribute to both theory and practice by advancing our understanding of the BGD-ESG relationship and providing practical implications for organizations, leaders, and policymakers.The authors received no financial support for the research, authorship, and/or publication of this article
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Green gold or carbon beast? Assessing the environmental implications of cryptocurrency trading on clean water management and carbon emission SDGs
Get PDFData availability: Data will be made available on request.This study addresses the ongoing debate concerning the environmental implications of cryptocurrencies. Specifically, it investigates the impact of Bitcoin trading volume on water and sanitation (Sustainable Development Goal (SDG) 6) and climate action (SDG 13). The research employs Ordinary Least Squares (OLS) panel data analysis to examine these relationships using a sample of 32 countries with available Bitcoin trading volume data from 2013 to 2020. The findings indicate that Bitcoin trading significantly and positively impacts progress towards SDG 6, suggesting potential benefits for water and sanitation initiatives. However, the study reveals a significant negative impact of higher Bitcoin trading volume on increased carbon emissions, underscoring the environmental costs associated with cryptocurrency activities. Similar impacts are observed for gold reserves, as their mining necessitates substantial energy consumption. These results highlight the need to regulate cryptocurrency trading and promote voluntary sustainable practices, particularly given the disparities between developed and emerging markets based on their governance frameworks. Additionally, the study considers the disparities between countries based on technology exports and economic policy uncertainty as influential determinants. The study's results emphasize the importance of proactive measures to ensure the responsible and sustainable use of cryptocurrencies. While cryptocurrencies offer significant economic returns, their early adoption stage necessitates further investigation into environmentally friendly approaches. Potential strategies include directing financial returns from cryptocurrencies towards alternative energy projects and supporting other environmental SDGs, thereby fostering a positive impact on the overall ecosystem. The study's implications extend to policymakers, regulators, and stakeholders, advocating for comprehensive and collaborative efforts to integrate sustainability into the rapidly evolving cryptocurrency market. This integration is crucial to ensure that the economic benefits of cryptocurrencies do not come at the cost of our environment.The authors received no financial support for the research, authorship, and/or publication of this article
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Audit(or) type and audit quality in emerging markets: evidence from explicit vs. implicit restatements
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This paper aims to examine the link between audit(or) type and restatements in Egypt, a complex and multifaceted auditing market. The usual big 4 versus non-big 4 comparison is insufficient as Egypt has a unique mix of private audit firms, one governmental agency (Accountability State Authority) and mandatory/nonmandatory audit services, including single, joint and dual audits.
Design/methodology/approach:
The study uses a sample of listed companies in Egypt and analyzes the impact of auditor type and audit type on explicit, implicit and total restatements. The study uses logistic regression model to examine the underlying relationship.
Findings:
Results show no relationship between auditor type and audit quality, positive association between non-big foreign CPA firms and total/implicit restatements and mixed results for the impact of dual audits on audit quality. The study found no link between auditor type and audit quality in Egypt. Egyptian audit firms linked to non-big 4 foreign Certified Public Accounting firms were positively linked to total and implicit restatements. Joint audits did not improve audit quality and were directly related to total and explicit restatements. Dual audits showed mixed results, positively associated with implicit restatements but inversely associated with explicit restatements.
Originality/value:
The study provides valuable insights into the complexities of the auditing market in emerging markets and offers valuable insights for stakeholders in the financial statement users, audit firms and governmental agencies
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Revolutionizing green business: The power of academic directors in accelerating eco-innovation and sustainable transformation in China
Get PDFData Availability Statement: Data are available on request from the authors.This study investigates the relationship between academic directors and corporate eco-innovation in Chinese A-listed firms in the context of the growing urgency of climate change. Based on the argument that academic directors bring advanced knowledge, skills, experience, and expertise to a corporate board and are more socially responsible and ethical, we hypothesized that academic directors would have a positive influence on corporate eco-innovation. We also examine how this nexus is moderated by pollutant firms and firms having qualified foreign institutional investors (QFIIs). Our results suggest that academic directors have a positive and significant impact on corporate eco-innovation. The findings remain robust even after employing alternate proxies for both independent and dependent variables, minimizing reverse causality and endogeneity concerns, and addressing self-selection bias through the entropy balancing method. Additionally, our study reveals that the positive nexus between academic directors and eco-innovation is more pronounced in pollutant firms and firms having QFIIs. This study contributes to the literature on corporate governance, eco-innovation, and emerging markets by providing evidence of the positive influence of academic directors on eco-innovation, highlighting the importance of their contribution to enhancing corporate governance mechanisms to promote environmentally friendly activities and sustainability practices. Furthermore, our findings offer insight into the role of QFIIs in strengthening the positive association between academic directors and eco-innovation, suggesting that foreign investors can support and encourage firms to adopt environmentally friendly practices for long-term benefits.Funds for High-Level Talents of Xijing University (2019). Grant Number: XJ19B02;
National Natural Science Foundation of China. Grant Number: 72073024;
Fundamental Research Funds for the Central Universities. Grant Number: CXTD12-03
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Financing sustainability: How environmental disclosures shape bank lending decisions in emerging markets
Get PDFJEL Classification: G21; G32; O31; M41.As global awareness of environmental responsibilities intensifies, the significance of corporate Environmental information disclosure (EID) in decision-making becomes increasingly prominent. However, its influence on bank lending decisions, especially in emerging markets like China, remains debated. Using 27,095 firm-year observations between 2008 and 2020, this study examines the impact of both voluntary and mandatory EID on bank lending decisions. Findings indicate that banks incorporate EID into their lending decisions, offering favorable bank loan terms, both in terms of size and costs to firms with strong EID. To mitigate endogeneity concerns, we employ propensity score matching and a difference-in-difference methodology grounded in China's newly amended Environmental Protection Law, with consistent results across both tests. Our research identifies two possible economic mechanisms to explain why EID influences bank loan features: EID's potential to reduce firm-specific risks and its alignment with local governmental incentives for green finance. Furthermore, our research suggests that voluntary EID, previously overlooked, proves more valuable than mandatory EID. We also find that the effectiveness of EID relies on banks' evaluations of the firm's sincerity and incentives behind the disclosure. Banks show a preference for voluntary EID from firms with minimal adverse selection concerns and mandatory EID from those highly motivated to disclose voluntarily. Moreover, we identify a synergy between EID and bank loans in fostering green innovation. This research not only bridges gaps in the existing bank financing literature but also offers insights into how EID can drive sustainable economic activities in developing economies.Chongqing Social Science Project. Grant Number: 2023BS021;
Humanities and Social Science Projects of Chongqing Education Commission. Grant Number: 23SKGH188;
Humanities and Social Science Research Launch Project of Chongqing Technology and Business University. Grant Number: 2255034
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Exploring the mediating role of corporate social responsibility in the connection between board competence and corporate financial performance amidst global uncertainties
Get PDFCopyright © 2023 The Authors. Despite the growing literature on corporate social responsibility (CSR), little is known about how the board of directors' competence can affect the CSR-financial performance relationship during severe uncertainties such as the COVID-19 outbreak. This paper focuses on exploring the mediating role of CSR in the connection between board competence and corporate financial performance amidst global uncertainties. The sample consists of Jordanian companies listed on the Amman Stock Exchange. Data were analyzed using the partial least square structural equation modeling. The findings show that boards' CSR competence has a direct and indirect positive impact on financial performance. Therefore, boards of directors' CSR competence can be seen as enablers for CSR activities. In this regard, companies could invest more in qualifying board directors to be socially responsible and enhance their role in improving corporate financial performance. This study identifies and provides empirical evidence on a critical enabler of CSR activities (i.e., boards of directors' CSR competence) from a developing country perspective. This, in turn, could widen the management and other stakeholders' understanding of CSR-enhancing factors and therefore increase its efficiency. We provide theoretical and practical implications to guide regulators and businesses to ensure sustainable development
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Roles of board of directors and earnings management across SMEs life cycle: evidence from the UK
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This study aims to examine the role of the board of directors in affecting earnings management practices across small- and medium-sized enterprises (SMEs) life cycle.
Design/methodology/approach:
Data is collected from 280 SMEs listed on the London Stock Exchange during the period of 2009–2016. Fixed effects regression analysis is used to test the hypotheses.
Findings:
This study shows that the impact of the board of directors' roles on earnings management practices varies depending on the SMEs life cycle stage. In the introduction, growth and decline stages of SMEs, the wealth creation role of the board is negatively significant with earnings management, while the wealth protection role of the board is positively significant in the growth and maturity phases. Results suggest that the board's responsibility to create wealth deters early-stage earnings management strategies, while protecting shareholder interests, in latter stages, leads to a decrease in earnings management.
Practical implications:
The findings suggest that corporate governance should be customized to the specific stage of the SMEs life cycle. Additionally, different life cycle stages may impose different requirements on corporate boards to shape the effectiveness of these mechanisms and constrain earnings management practices.
Originality/value:
To the best of the authors’ knowledge, this study offers one of the first insights on the UK SMEs to understand how board functions and earnings management practices vary over SMEs life cycles. It will offer important information on the effect of board features on earnings management in SMEs in the UK and is anticipated to be of importance to policymakers, regulators, investors and practitioners
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Reinvigorating research on sustainability reporting in the construction industry: A systematic review and future research agenda
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Data available on request from the authors.Copyright © 2023 The Author(s).. This study investigates sustainability reporting (SR) in the construction industry, which is vital to achieving sustainable development goals. Despite extensive research on sustainability practices, scant attention has been paid to SR, a crucial channel for communicating and managing sustainability performance. Aiming to advance SR research, this study systematically reviews 150 articles on the topic in 73 journals. The review reveals significant knowledge gaps and methodological limitations, highlighting the need for a more diversified theoretical lens for evaluating the complex nature of SR. The investigation identifies four study themes: assessment and indicators, determinants, strategic management, and outcomes of SR. The review offers a comprehensive analysis of the current literature and presents an integrated framework that encompasses sustainability attributes and reporting in the construction sector. The study’s contributions include directions for future research and practical implications for managers and policymakers that can support the transition toward sustainable development in the construction industry
Gender Diversity, Corporate Governance and Financial Risk Disclosure in the UK
Get PDFPurpose – This study investigates the impact of corporate governance mechanisms on financial risk reporting in the UK.
Design/methodology/approach – The study uses a panel data of 50 non-financial firms belonging to ten industrial sectors listed on the London Stock Exchange in the period 2011-2015. Multivariate regression techniques are used to examine the relationships. Additionally, to alleviate the concern of potential endogeneity, we use two-stage least squares and fixed effect estimators.
Findings – The findings of this study reveal that corporate governance has a significant influence on financial risk disclosure. Specifically, we find that block ownership and board gender diversity have a positive effect on the level of corporate financial risk disclosure. While, there is no significant relationship between board size and corporate financial risk disclosure.
Originality/value – This study adds to the emerging body of literature on corporate governance–risk disclosure relationship in UK context using content analysis. The study also highlights that gender diversity enhances financial risk disclosure
