Fund holdings and real earnings management: An empirical analysis of the Chinese A-share market.

Drawing on data from Chinese A-share listed companies spanning 2016 to 2023, this study investigates how fund holdings influence real earnings management (REM) practices. The results indicate that: (1) There is a significant negative correlation between fund holdings and REM, suggesting strong external oversight; (2) The governance effect of fund holdings is more pronounced in non-state-owned firms and those with a balanced equity structure, underscoring the critical roles of ownership nature and equity distribution; (3) High-quality internal controls also exhibit a significant negative correlation with REM, serving as a mediating factor between fund holdings and earnings management. These findings deepen our understanding of how institutional investors contribute to corporate governance and enhance internal control systems.

Monetary policy impact on sustainability: Analyzing interest rates and corporate carbon emissions.

This study aims to investigate the impact of monetary policy on firms' carbon emissions. The primary focus is on the effect of increasing interest rates on the carbon footprint of companies, both prior to and following the implementation of the Paris Agreement in 2015. The results show that there is a positive relationship between interest rates and carbon emissions indicating that in the face of increasing interest rates, companies are more likely to choose short-term financial stability above long-term sustainability objectives. This positive relationship is less prevalent following the Paris Agreement suggesting that policymakers should continue to strengthen global climate initiatives as a pressure for companies to invest in green activities. Additional evidence suggests that the impact of interest rates on carbon emissions is particularly noticeable in situations characterized by elevated levels of economic and policy uncertainty, weak corporate governance quality, and poor investor protection. These results are robust to endogeneity concerns, alternative measures of interest rates, carbon emission, and alternative samples.

Analyst coverage and real earnings management: Does IFRS adoption matter? UK evidence.

This study examines the impact of analysts coverage on real earnings management (REM) decisions. The study further investigates the effect of mandatory IFRS adoption on the relationship between analyst coverage and REM. We constructed a sample of UK non-financial listed firms for the period 1997-2021. The results demonstrate that firms followed by a large number of financial analysts record higher levels of earnings management. This result supports the contention that high intensity of analyst coverage imposes extra pressure on firms' managers to meet analysts' earnings per share (EPS) expectations, motivating a higher level of earnings management. Contrary to expectations, the introduction of IFRS fails to strengthen the monitoring role of security analysts on firms' management: rather, managers utilize the inherent flexibility and available discretion in the principles-based IFRS to meet analysts' benchmarks by means of REM activities. These results are robust after controlling endogeneity.

Corporate governance, technological innovation, and corporate performance: Evidence from China.

Corporate governance plays an important role in achieving high-quality economic development and sustainable corporate development. In recent years, as listed companies face increasing challenges in social responsibility issues such as environmental pollution and financial fraud, corporate governance has received widespread attention from academics and practitioners. In particular, technological innovation has attracted much attention to the development of enterprises. This paper also explores the intermediary mechanism of technological innovation based on the output measurement method of technological innovation. This study selected data from companies listed on the A-share main board of the Shanghai and Shenzhen Stock Exchanges in China from 2012 to 2022, aiming to explore the relationship between corporate governance and corporate performance. At the same time, we further analyzed the impact of corporate governance on corporate performance based on the mediating role of technological innovation. The research results show that equity balance degree, board size, and executive incentives all have a positive impact on corporate performance. Technological innovation has a certain mediating effect on independent variables (equity balance degree, board size, and executive incentives) and corporate performance. This study clarifies the controversy about the relationship between corporate governance and corporate performance and deepens the understanding of this relationship. It also provides empirical support for listed companies to pay attention to and improve corporate governance levels and enhance innovation capabilities. By exploring the interplay between governance mechanisms, innovation processes, and performance outcomes, researchers can gain a deeper understanding of how organizations can leverage governance practices to drive innovation-led growth and sustainable success.

Gender diversity, corporate governance and firm-specific data of all public listed US firms during 2000-2019.

This article provides in-depth data on gender diversity, corporate governance practices and specific firm factors. The study compiles panel data for all publicly listed companies in the United States, featured in the S&P index from 2000 to 2018, except for financial and utilities firms. The data set includes variables regarding gender diversity, board characteristics, firm performance, and other crucial factors. The data was extracted from the annual reports of each firm using Compustat and BoardEX databases. Researchers can apply the data in assessing the impact of appointing female directors on the value of a firm through event studies. Moreover, the dataset can help address endogeneity issues, enabling researchers to control for potential confounding variables and draw more accurate conclusions.

An Empirical Study on Corporate ESG Behavior and Employee Satisfaction: A Moderating Mediation Model.

As the role of human capital in enhancing corporate value becomes increasingly prominent in the new economic era, employee satisfaction has garnered widespread attention in organizational behavior theory and business practices. However, constrained by the traditional governance model of "shareholder primacy", which tends to view employees instrumentally, adverse effects on employee satisfaction and organizational identification persist. Currently, corporate ESG behaviors are flourishing in China, bringing profound and extensive transformations to economic and social sustainability. Yet, the research on whether and how corporate ESG behaviors improve employee satisfaction remains unclear. This study, based on data from the "China's 100 Best Employers Award" and employing regression analysis on panel data from listed companies on the Shanghai and Shenzhen stock exchanges, reveals that corporate ESG behaviors have the potential to enhance employee satisfaction. Transparency in corporate environmental information and internal control mechanisms emerge as the primary means through which corporate ESG behaviors elevate employee satisfaction. Furthermore, heightened environmental awareness among executives and higher educational qualifications among employees strengthen the relationship between corporate ESG behaviors and employee satisfaction.

The critical role of corporate governance in sustainable development goals prioritisation: A 5 P s-based analysis for emerging economies.

The UN Sustainable Development Goals (SDGs) were developed in 2015 and serve as the main guide for achieving the 2030 Agenda. This paper analyses the impact of corporate governance (CG) and financial performance (FP) on SDG prioritisation, taking FP as a mediating variable and categorising the SDGs by the five pillars (5 Ps) commonly used for this purpose: People, Planet, Prosperity, Peace and Partnership. For this purpose, structural equations (PLS-SEM) were applied, using a sample of 312 Latin-American firms. The study results show there is a positive relationship between FP, CG and SDG prioritisation. Moreover, FP has a partial mediating role in the relationship between CG and SDG prioritisation. This study is innovative in the context of emerging Latin American economies and suggests paths for future research on this topic that would be of interest to academics, regulators and industry professionals. This paper highlights the important role of CG in helping achieve the objectives of the 2030 Agenda in Latin America. Furthermore, the study has implications for policymakers, showing that CG may enhance companies' FP and their commitment to the SDGs. Accordingly, regulators should establish minimum requirements for all companies regarding the structure and practices of CG. The study findings also have implications for stakeholders and responsible investors, suggesting that companies' level of sustainable development can be assessed via their CG policies.

A multidimensional analysis of corporate governance mechanisms and their impact on sustainable economic development: A case study of Ghana's financial sector.

Efficiency remains pivotal to the banking sector, serving as a linchpin for resource allocation and competitive prowess. This study delves into the intricate dynamics between corporate governance and banking efficiency in Ghana, with an analytical lens on cost efficiency (CE) and total efficiency (TE). Utilizing Data Envelopment Analysis (DEA), our investigation spans over a decade (2008-2019) and encompasses a data set of 23 Ghanaian banks. The study findings unveils that rigorous corporate governance mechanisms, as quantified by the Corporate Governance Index (CGI), exert a salutary influence on both cost and total efficiencies. Moreover, a well-defined Risk Management Index (RMI) positively correlates with cost efficiency, albeit without a substantial impact on total efficiency. Conversely, the study identifies a counterintuitive effect: the current make-up of supervisory boards, as gauged by the Supervisory Board Index (SBI), inversely impacts both efficiency metrics, signaling sub-optimal governance structures. Significantly, the research also highlights a pressing concern: the average total efficiency of Ghanaian banks lags behind the global benchmarks prescribed by the World Bank. This discrepancy underscores an exigency for efficiency optimization within the sector. The study thereby offers invaluable insights for multiple stakeholders-including regulatory bodies, investment communities, and policymakers-by delineating the governance variables that can enhance or impede banking efficiency. It also identifies actionable avenues for improvement, specifically in the realms of risk management and board composition, with the potential to catalyze a transformation in Ghana's banking landscape.

Crisis and environmental governance decisions amidst the COVID-19 pandemic: Lessons from European countries.

This study investigates the influence of the COVID-19 pandemic crisis on environmental governance decisions within publicly listed European companies. It utilizes a comprehensive analysis of publicly available data regarding these firms and check the environmental governance practices during the pandemic, informed by risk society theory which describes modern societies marked by ongoing risks and uncertainties primarily stemming from technological and scientific advancements. The regression and robustness analysis has been performed on how companies have responded to the crisis, specifically in terms of their approaches to environmental sustainability and governance. Covid-19 has a significantly positive impact on environmental governance (EG), with a coefficient of 18.73 and a p-value of .000. Other variables like human development (HD), size, and free cash flow (FCF) positively affect EG, while corruption (Corrupt) and leverage (Lev) have a negative influence. Robust analysis confirms the negative impact of Covid-19 on EG, with a coefficient of 18.46 and a p-value below .01, consistent across different subsamples. However, it also underscores the challenges companies have encountered in upholding their sustainability efforts amid the crisis. In sum, this research offers valuable insights into how the COVID-19 pandemic has affected environmental governance decisions, with potential implications for policymakers, regulators, and business leaders striving to advance sustainability in the post-pandemic landscape.

The impact of ownership structure on environmental information disclosure: Evidence from China.

Environmental information disclosure (EID) plays a crucial role in promoting sustainable practices and enhancing environmental accountability. The ownership structure of firms, which varies across different institutional settings, can significantly influence the extent to which they are willing and able to disclose environmental information. Drawing on voluntary disclosure theory and legitimacy theory, this study examines whether ownership structure (e.g. ownership concentration, institutional ownership, managerial ownership, and state ownership) influences the environmental information disclosure of Chinese firms. Using a panel data set of firms listed on the Shanghai Shenzhen 300 Index from 2009 to 2019, the results show that there has been an increase in environmental information disclosure in China in recent years. Furthermore, we find that managerial ownership is positively associated with environmental disclosure, whilst institutional ownership and state ownership are negatively associated with environmental disclosure. Additional analyses show that the relationship between ownership structure and EID and ownership structure is stronger in low-regulated industries, and the effects of managerial and state ownership on EID vary by firm size. The enforcement of the 2014 Environmental Protection Law of the People's Republic of China has also played a pivotal role in enhancing the nexus between ownership structure and EID and ownership structure.

Environmental, social and governance (ESG) performance of firms in the era of geopolitical conflicts.

Do geopolitical conflicts matter for the environmental, social, governance (ESG) and overall ESG performance of firms? We answer this question by studying the impact of geopolitical conflict of a country on the ESG performance, separately and collectively, of firms of that country. We use data from Refinitiv and UCDP/PRIO (Uppsala Conflict Data Program/International Peace Research Institute, Oslo) databases for the period from 2002 to 2021 for 79 countries and we use fixed effects regression as our main methodology. We find that if a country is in a geopolitical conflict, their firms are impacted in the form of lower E, S and G performance and overall ESG performance, with stronger effects for developed countries. This comes on top of the direct costs of geopolitical conflicts. Our results are robust to country, year and firm fixed effects as well as robust to endogeneity as we use Lewbel (2012) estimator to eliminate any chances of endogeneity. We provide first evidence on this topic and it has geopolitical and socioeconomical implications.

Do disclosure of ESG information policies inhibit the value of heavily polluting Enterprises?-Evidence from China.

Green governance and high-quality green development are crucial to the growth of enterprises; therefore, this paper examines how environmental, social, and corporate governance (ESG) disclosure policies affect the value of heavily polluting companies. The study's data is from the new version of the Governance Guidelines for Public Companies promulgated by the China Securities Regulatory Commission in 2018. Thus, the data of China's public companies from 2011 to 2021 is used for the study's analysis. The methods applied for our estimation analysis are the differences-in-differences (DID) and the mediation effect model. The findings depict that ESG information disclosure policies can significantly inhibit the corporate value of heavily polluting enterprises (HPE). Enterprise technological innovation plays a mediating effect in this mechanism; that is, after introducing the policy, it effectively alleviates the information asymmetry and promotes enterprise technological innovation, but it also damages the enterprise value. Further analysis shows that the inhibition effect of ESG information disclosure policy on the value of HPE is heterogeneous, and for non-state-owned enterprises, ESG information disclosure policies have a stronger inhibitory effect. Also, there is little difference between the central and western regions and the eastern region in terms of the inhibitory effect of ESG disclosure policies on the value of HPE. The conclusion of this paper is conducive to improving the information disclosure policy of listed companies and promoting the green development of enterprises.

What is the purpose of ultra-processed food? An exploratory analysis of the financialisation of ultra-processed food corporations and implications for public health.

BACKGROUND: In recent decades there has been a global rise in consumption of ultra-processed foods (UPFs) to the detriment of population health and the environment. Large corporations that have focused heavily on low-cost manufacturing and extensive marketing of UPFs to maximise profits have driven this dietary transition. The same corporations claim to serve the interests of multiple 'stakeholders', and that they are contributing to sustainable development. This paper aimed to test these claims by examining the degree to which UPF corporations have become 'financialised', focusing on the extent to which they have prioritised the financial interests of their shareholders relative to other actors, as well as the role that various types of investors have played in influencing their governance. Findings were used to inform discussion on policy responses to improve the healthiness of population diets. METHODS: We adopted an exploratory research design using multiple methods. We conducted quantitative analysis of the financial data of U.S. listed food and agricultural corporations between 1962 and 2021, share ownership data of a selection of UPF corporations, and proxy voting data of a selection of investors between 2012 and 2022. We also conducted targeted narrative reviews using structured and branching searches of academic and grey literature. RESULTS: Since the 1980s, corporations that depend heavily on manufacturing and marketing UPFs to generate profits have been increasingly transferring money to their shareholders relative to their total revenue, and at a level considerably higher than other food and agricultural sectors. In recent years, large hedge fund managers have had a substantial influence on the governance of major UPF corporations in their pursuit of maximising short-term returns. In comparison, shareholders seeking to take steps to improve population diets have had limited influence, in part because large asset managers mostly oppose public health-related shareholder proposals. CONCLUSIONS: The operationalisation of 'shareholder primacy' by major UPF corporations has driven inequity and undermines their claims that they are creating 'value' for diverse actors. Measures that protect population diets and food systems from the extractive forces of financialisation are likely needed as part of efforts to improve the healthiness of population diets.

The role of internal auditing on corporate governance: its effects of economic and environmental performance.

Internal auditing has been an elementary and powerful component of corporate governance in business strategies. It is highly acknowledged as an important business control system in the realm of quality management. Business performance does not come by itself; it needs plenty of aids and capabilities. Existing studies have investigated the business performance with fewer outcomes in corporate sustainability, firm, and environmental performance. We present analysis and validated improvised hypothesis through structural equation modeling (SEM), using analysis of a moment structures (AMOS), on empirical evidence gathered from 304 Chief Executive Officer (CEOs) in Top Multinational Companies of Pakistan (TMCP). In this paper, we examine the role of internal audit functionality as an influencing factor via corporate governance in corporate sustainability, firm performance, and environmental performance. Moreover, business quality and performance are maintained using functions such as interests of shareholders, personnel and finance. Results suggest that internal audit functionality and corporate governance significantly influence corporate sustainability, firm performance, and environmental performance. Additionally, CEOs and top managers of TMCP are advised to concentrate on internal audit functionality with a mediating role of corporate governance that in turn encourages corporate sustainability, firm performance, and environmental performance.

The mediating effect of going concern and corporate reporting in the relationship between corporate governance and investor confidence in financial institutions.

This study investigates the mediating role of going concern and corporate reporting on the relationship between corporate governance and investor confidence in financial institutions. The study employed Partial Least Squares Structural Equation Modeling (PLS-SEM) in SmartPLS 3 to analyze the data. The data for the study was collected from financial statements of selected commercial banks in Ghana, Nigeria and South Africa. The results indicate that corporate reporting partially mediates the interrelationships between corporate governance, going concern, and investor confidence. Conversely, there is neither mediation effect of going concern on the association between corporate reporting and investor confidence, nor between corporate governance and investor confidence. The results of the study have practical implications for financial institutions looking to maintain investor confidence and promote financial stability. The results also have policy implications for policymakers and regulators that oversee financial institutions. Knowledge in the field of corporate reporting and governance theoretically also is extended by highlighting the importance of transparency and disclosure in corporate reporting practices. In all, this study contributes to the literature on corporate governance and reporting by providing new insights into the mechanisms by which corporate reporting and going concern impact corporate governance and investor confidence in financial institutions.

Examining the intervening effect of earning management in governance mechanism and financial misstatement with lens of SDG and ESG: a study on non-financial firms of Pakistan.

In today's corporate world, a company's long-term viability and prosperity depend on its corporate governance practices. The present study investigates the interplay between financial misrepresentation, earnings management, and corporate governance within the context of Pakistan. To estimate the financial data of enterprises obtained from non-financial organizations listed on the Pakistan Stock Exchange a panel regression analysis was conducted. The analysis covered the time from 2009 to 2020 and employed quantitative data. The findings of the study show that the different aspects of corporate governance mechanisms have varying levels of influence. Specifically, remuneration paid to directors had a significant impact on financial misstatement, while the size of the board strongly impacts the earning management. The financial misstatement was also found affected by the earning management. The M score (statistical model used to predict the probability of financial misstatement) positively influenced when board diligence was incorporated in the mediation of earning management. It is important to note that this study only considers the internal governance mechanisms of firms, suggesting that future research could benefit from the inclusion of external governance mechanisms for a more holistic model. This study is aligned with the ESG's governance aspects and SDG-17, providing valuable insights for specialists, financial backers, policymakers, and experts. The results of this study catalyze further research in this area and can aid in achieving SDG 17 by raising awareness of the significance of good governance practices, ethical reporting that leads to sustainable firm performance, and ensuring long-term economic growth and development.

Does Venture Capital Backing Improve Disclosure Controls and Procedures? Evidence from Management's Post-IPO Disclosures.

Firm managers make ethical decisions regarding the form and quality of disclosure. Disclosure can have long-term implications for performance, earnings manipulation, and even fraud. We investigate the impact of venture capital (VC) backing on the quality and informativeness of disclosure controls and procedures for newly public companies. We find that these controls and procedures are stronger, as evidenced by fewer material weaknesses in internal control under Section 302 of the Sarbanes-Oxley Act, when companies are VC-backed. Moreover, these disclosures are informative and are more likely to be followed by subsequent financial statement restatements than are disclosures made by non-VC-backed IPO companies.

Executive Board Chairs: Examining the Performance Consequences of a Corporate Governance Hybrid.

Traditional agency theory views the proper role of the board chair exclusively as providing independent oversight to monitor and control the CEO. Recently, firms have introduced innovations in board leadership that have confounded these theoretical expectations. One notable innovation is the executive board chair, a corporate governance hybrid responsible for both oversight and strategic decision-making, challenging agency theory's prescription that the two activities remain separate. In this study, we argue that an executive board chair position can resolve the trade-off between independent oversight and involvement in strategy and therefore generate a performance advantage. We also predict that, owing to the blurring of lines between the CEO and board chair roles that the executive board chair position creates, the relationship will be stronger the greater the need to monitor and control the CEO but weaker when organizational complexity and board leadership demands are greater. Analysis of S&P 1500 firms from 2003 to 2017 provides general support for our arguments.

Effects of board characteristics on information asymmetry: Evidence from the alternative investment market.

This study aimed to investigate the effect of board characteristics on information asymmetry as well as examining whether the disclosure environment moderates the association between board structure and the information asymmetry of listed firms in the UK. We primarily focus on six characteristics of board composition (board size, board independence, board financial expertise, board busyness, CEO duality, and board gender diversity) and their impact on the bid-ask spread (employed as a proxy of information asymmetry). This study used the ordinary least squares (OLS) model to examine these associations. Moreover, we used system GMM and lag estimation models to test for endogeneity problems. Using a sample of 5950 observations representing the non-financial firms listed on the Alternative Investment Market (AIM) for 10 years from 2010 to 2019, we found a negative and significant relationship between board size; board independence; and female directors and information asymmetry. However, board busyness and CEO duality are positively related to information asymmetry. Furthermore, we demonstrate that information disclosure moderates the relationship between board characteristics and information asymmetry; that is, board size, independent directors, and female directors mitigate information asymmetry by improving the level of information disclosure. By contrast, busy directors and CEO duality increase the problem of information asymmetry by reducing firms' information disclosure. The results of this study have implications for UK regulators, firm boards of directors, and firm stakeholders.