Business Commons^™

Effect Of Corporate Tax Avoidance Activities On Firm Bankruptcy Risk, Anirudh Dhawan, Liangbo Ma, Maria H. Kim

Faculty of Business - Papers (Archive)

Corporate tax avoidance has been shown to raise the cost of bank debt and lower credit and bond ratings. However, it is unclear whether tax avoidance actually increases a firm’s bankruptcy risk or whether it is just viewed negatively by banks and rating agencies. We find that firms engaging in tax avoidance and firms that are thinly capitalized face higher bankruptcy risk. To account for endogeneity and functional form misspecification, we verify our results using instrumental variable and propensity score matching methods. Our findings are consistent with the view that tax avoidance is a risk-enhancing activity.

Stock Liquidity, Corporate Governance And Leverage: New Panel Evidence, Sivathaasan Nadarajah, Searat Ali, Benjamin Liu, Allen Huang

Faculty of Business - Papers (Archive)

We examine the effect of stock liquidity and corporate governance on the firm's leverage decision in the order-driven stock trading system and less stringent governance environment of Australia. Using a sample of 1207 non-financial firms from 2001 to 2013, resulting in 9855 firm-year observations, we find the posited negative stock liquidity-leverage relation, confirming prior research observations that firms with more liquid stocks are significantly less leveraged. We also find a significant and negative relation between corporate governance quality (CGQ) and leverage, indicating that firms with high CGQ significantly reduce leverage. In a closer analysis, we find that the significantly negative …

Does Corporate Governance Quality Affect Default Risk? The Role Of Growth Opportunities And Stock Liquidity, Searat Ali, Benjamin Liu, Jen Je Su

Faculty of Business - Papers (Archive)

A series of defaults, a distinctive corporate environment and inconclusive findings in literature make Australia an interesting case in which to investigate the association between corporate governance and default risk. Using a large panel of 1086 non-financial firms from 2001 to 2013, we find that better governed firms are strongly associated with a lower level of default risk, and that the association is stronger among firms with more growth opportunities. Moreover, empirical evidence supports the role of stock liquidity as a channel of the relationship. Overall these findings have practical implications for the stakeholders in Australia.

Corporate Governance And Stock Liquidity Dimensions: Panel Evidence From Pure Order-Driven Australian Market, Searat Ali, Benjamin Liu, Jen Je Su

Faculty of Business - Papers (Archive)

Our newly constructed index of corporate governance quality (CGQ) provides comprehensive and robust evidence for the association between CGQ and stock liquidity in the pure order-driven Australia market. By using a large sample of 1207 firms from 2001 to 2013, we find a significant positive relationship between CGQ and stock liquidity, suggesting that better governed firms have greatly improved stock liquidity. Specifically, we find that better governed firms have a lower trading cost, smaller price impacts of trade, and higher trading speed. Moreover, the empirical results reveal that CGQ improves stock liquidity because it is associated with higher information disclosure.

Corporate Governance And Stock Liquidity In Australia: A Pitch, Searat Ali

Faculty of Business - Papers (Archive)

This pitch research letter (PRL) applies the pitch template developed by Faff to an academic project in corporate finance; that is, corporate governance and market microstructure, namely, stock liquidity for Australian firms. The pitch template is useful in identifying the core elements that form the framework of research project. This PRL encloses a brief background about the pitcher and pitch, followed by a brief commentary on the pitch and personal reflections of the pitcher on the pitch exercise itself.

Corporate Governance And The Insolvency Risk Of Financial Institutions, Searat Ali, Jamshed Iqbal

Faculty of Business - Papers (Archive)

We investigate whether corporate governance is related to insolvency risk of financial institutions. Using a large sample of U.S. financial institutions over the 2005-2010 period, we find that corporate governance is positively related with insolvency risk of financial institutions as proxied by Merton's distance to default measure and credit default swap spread. We also find that "better" corporate governance increased insolvency risk relatively more for larger financial institutions and during the period of the global financial crisis. Our findings suggest that too-big-to fail and deposit insurance policies encourage excessive risk taking by financial institutions.

Is Asio's Corporate Governance An Oxymoron?, Mark Rix

Faculty of Business - Papers (Archive)

This paper investigates corporate governance in the Australian Security Intelligence Organisation (ASIO), Australia's domestic intelligence agency. The paper seeks to determine and understand the extent to which ASIO's approach to corporate governance emulates that of organisations in the wider public sector and the private sector. This examination of ASIO's corporate governance considers the organisation's purpose, functions and extraordinary powers focusing on the importance of secrecy to achieving its objectives. The paper will also assess whether it is appropriate to attempt to assess ASIO's corporate governance in the same terms, and according to like standards, as are used to evaluate governance …

Utilising A Change Management Perspective To Examine The Implementation Of Corporate Rebranding In A Non-Profit Sme, Paul A. Chad

Faculty of Business - Papers (Archive)

The purpose of this article is to use a change management perspective to investigate how a non-profit SME conducted corporate rebranding and determine in this important new context the usefulness of the principles of corporate rebranding developed by Merrilees and Miller primarily in relation to large for-profit organisations. Research is based upon case study of an Australian non-profit SME health insurance organisation that recently conducted corporate rebranding. Via a change management perspective incorporating a discourse transformation framework, semi-structured in-depth interviews with managers and employees examined the rebranding process and explored manager and employee experiences of the journey. The rebranding was …

Corporate Opacity And Cost Of Debt For Family Firms, Liangbo Ma, Shiguang Ma, Gary G. Tian

Faculty of Business - Papers (Archive)

This paper uses a sample of Chinese firms to examine the impact of corporate opacity on the relationship between family control and firms' cost of debt. We find that family control is associated with a lower cost of debt on average, and a negative impact exists mainly in firms with relatively low corporate opacity. We further provide evidence that the moderating effect of corporate opacity becomes more pronounced when investors' perception of controlling families' moral hazard of expropriation is higher. Our results are robust to alternative opacity proxies and controlling for endogeneity of family control using the instrumental variable method. …

Role Of Non-Executive Directors In Implementing Non-Regulatory Codes On Corporate Governance In Smes Listed In The Alternative Investment Market In The Uk: A Content Analysis, Palli Mulla K A Chandrakumara, Gunetilleke Walter

Faculty of Business - Papers (Archive)

This study explores roles of NEDs of SMEs listed in the Alternative Investment Market (AIM) in the London Stock Exchange. It extends the literature on NEDs’ roles relevant to a context where the adherence to the principles of non-regularity corporate governance is not compulsory. We adopted a content analysis approach as a novel method for exploring roles of NEDs using details of 1220 NEDs recorded in 75 annual reports. It revealed that NEDs meet the expectations of several stakeholders simultaneously by playing multiple roles. A conceptual model depicting testable relationship between cognitive tasks and key roles of NEDs is also …

U.S. Corporate Management System And Managerial Accounting: A Brief History Of The Aircraft Industry Company, Aida Sy, Tony Tinker, George Michel Ezzie Mickhail

Faculty of Business - Papers (Archive)

The article investigates the financial statements of the aircraft industry in the USA. Boeing Corporation has a long history of managerial accounting system which makes it unique in the industry. The paper seeks to show the main challenges the company have been facing. We also investigate the regulation aspects of the firm. More research showed that an error with the 787 aircraft battery that is manufactured in Japan jeopardized the finances of Boeing. After financial struggles Boeing was able to turn their revenues around which is seen in their current financial statements from the past years. As a result of …

Corporate Governance And Stock Liquidity: Panel Evidence From 2001 To 2013, Searat Ali, Benjamin Liu, Jen Je Su

Faculty of Business - Papers (Archive)

Constructing a new index of corporate governance quality (CGQ), we provide comprehensive and robust evidence for the association between governance quality and stock liquidity in the pure order-driven stock market of Australia. We hypothesize that governance quality affects stock liquidity because effective governance alleviates information asymmetries between insiders (e.g., managers) and outsiders (e.g., investors), as well as among outsiders by improving the financial transparency of a firm. Consistent with this theoretical argument, by using a large sample of 1,207 firms (10,179 firm-year observations) over the long period from 2001 to 2013, we find a significant positive relationship between governance quality …

Effectiveness Of The Sri Lankan Corporate Governance System: A Stakeholder Perspective, Athula Manawaduge, Anura De Zoysa, Kathleen Rudkin

Faculty of Business - Papers (Archive)

Poor corporate governance is often viewed as one of the main factors contributing to the weak company performances and failures in emerging markets (Johnson, 2000). Most of studies which have examined various aspects of corporate governance systems in emerging markets have assessed such practices from the point of view of companies and have paid little attention to examine how such practices are viewed by various stakeholders of the companies in these markets. To fill the gap in accounting literature, this study aims to examine the perceptions of various stakeholder groups in relation to the current status, issues, strategies and practices …

Mobilisation Of Externalities Into Corporate Accountability Frameworks: A Critical Discursive Analysis Of Royal/Dutch Shell Oil Spills In Nigeria, Sanja Pupovac, Mary Kaidonis, Lee Moerman

Faculty of Business - Papers (Archive)

In this paper we demonstrate a Fairclough-inspired analysis of environmental narrative disclosures of Royal/Dutch Shell oil spills in Nigeria. Our focus is on the construction of meaning of oil spills as presented in corporate narrative disclosures. As well as serving to illustrate a Fairclough-inspired discourse analysis, the analysis is a critical attempt to explore the mobilisation of externalities such as oil spills into corporate accountability frameworks discourse. Findings of this paper indicate that Shell mobilises externalities into its accountability frameworks, controls the 'official' discourse and attempts to determine the nature of oil spills and, in doing so discursively creates the …

The Relationship Between Corporate Social Responsibility Disclosure And Financial Performance: Evidence From Thailand, Wisuttorn Jitaree, Sudhir C. Lodh, Shyam S. Bhati

Faculty of Business - Papers (Archive)

This study examines the relationship between corporate social responsibility (CSR) disclosure and financial performance in Thailand during the period 2009-2011. Four measures of financial performance were used based on data extracted from the annual reports of 232 firms listed on the Stock Exchange of Thailand. A CSR disclosure index was constructed to measure the extent and dimensions of CSR disclosure. Overall, the results from the empirical analysis provide some evidence of positive relationship between financial performance and CSR disclosure. This study adds further evidence to the literature on the relationship between the CSR and financial performance in an emerging country. …

Stakeholders' Power, Corporate Characteristics, And Social And Environmental Disclosure: Evidence From China, Yingjun Lu, Indra Abeysekera

Faculty of Business - Papers (Archive)

This paper investigates the influences of stakeholders' power and corporate characteristics on social and environmental disclosure practices of socially responsible Chinese listed firms identified by a social responsibility ranking list. A stakeholder-driven, three-dimensional social and environmental disclosure index including disclosure quantity, disclosure type quality and disclosure item quality, is constructed to assess sample firms' social and environmental disclosures in their two public reports: annual reports and corporate social responsibility reports. Findings indicate that corporate social and environmental disclosures have significant and positive associations with firm size, profitability, and industry classification. The roles of various powerful stakeholders in influencing corporate social …

Implementing Corporate Rebranding: Mis-Understood By Practitioners, Paul A. Chad

Faculty of Business - Papers (Archive)

Corporate rebranding is a crucial but academically under-researched organisational activity. The purpose of this paper is to examine, via case study, the rebranding process and subsequently identify key managerial learnings. Within an organisation that recently conducted a rebranding, in-depth interviews with employees from all organisational levels and functions were utilised to ascertain the actual step-by-step process utilised to rebrand. Aspects of the process that worked smoothly, and problems encountered were identified. Findings highlight the generally infrequent nature of rebranding results in employees having little if any previous rebranding experience upon which to draw. External consultants with appropriate rebranding knowledge should …

Advertising Corporate Social Responsibility: Results From An Experimental Manipulation Of Key Message Variables, Alan Pomering, Lester W. Johnson, Gary Noble

Faculty of Business - Papers (Archive)

Purpose: The purpose of this paper is to examine how social topic information (STI) and corporate social responsibility commitment (CSRC) substantiate the firm's CSR claims and promote message persuasion.

Design/methodology/approach: A 2x2 between-subjects experimental design was used to examine the impact of STI and CSRC on output variables using an online sample of 176 participants in Australia.

Findings: The study found that manipulation of STI had a statistically significant impact on outcome variables, but that CSRC did not.

Research limitations/implications: The study was limited to Australia and used a fictitious brand in the experiment. Practical implications: For marketing communications and …

The Puzzle Of Negative Association Of Earnings Quality With Corporate Performance: A Finding From Chinese Publicly Listed Firms, Shiguang Ma

Faculty of Business - Papers (Archive)

Introduction

- Earnings management - Accounting data management. - Real earnings management.

- Earnings quality - Financial statement accurately and unbiased reports corporate operating status and financial position. - Earnings quality as the degree to which earnings persists or sustains into next period.

- Corporate performance - Low earnings quality leads to low corporate performance. - Theoretically approved, but empirical evidences are not consistent.

- The Puzzle of Negative Association of Earnings Quality with Corporate Performance in China - Probably, it is rational in an emerging market.

A Discussion Of The Suitability Of Only One Vs More Than One Theory For Depicting Corporate Governance, Abdullah Al Mamun, Qaiser Rafique Yasser, Md. Ashikur Rahman

Faculty of Business - Papers (Archive)

Agency theory predicts that the Chief Executive Officer (CEO) and the chairman positions should be held by different individuals in order to protect shareholder's interest. Though there are mixed evidences on CEO duality and firm performance, most research have found that there is negative relationship between CEO duality and firm performance. Although, in the last decades of the twentieth century, agency theory became the dominant force in the theoretical understanding of corporate governance, it does not however cover all aspects of corporate governance. This paper aims to explore whether it is better to combine various theories in order to describe …

Website Intangibles Disclosure And Corporate Growth Reputation Of Small Businesses, Indra Abeysekera

Faculty of Business - Papers (Archive)

Abstract presented at the European Accounting Association 35th Annual Congress, Ljubljana, Slovenia, 9-11 May 2012.

From Logo-Centrism To Corporate Branding?: The (R)Evolution In Organisational Identity, Shirley Leitch

Faculty of Business - Papers (Archive)

When the archaeologists of the next millennium dig down into the landfills of the past 100 yeors, in between the mountains of perfectly preserved disposable diapers and other detritus of our instant civilisation, they will find mounds of unused business cards, envelopes, and letter- heads. These costly rejects of corporate revamps litter the last decade of the millennium as the fall-out of countless restructuring exercises. It is not surprising that cynicism about the point of 011 this frenetic activity is widespread. Consultants grow fatter as corporations get leaner and meaner (but with mare up-market typefaces). In this paper, I explore …