International Journal of Business Governance and Ethics (68 papers in press)

Regular Issues

• Corporate social responsibility, allegation of corruption, and media sentiment  
  by Suresh Kalagnanam, Abhilash Nair 
  Abstract: This study examines the two possible effects of CSR on reputation - the insurance like effect and the boomerang effect - within the context of a uniform integrity-questioning negative event through the eyes of the media. Accordingly, we tested whether prior CSR engagement prompts media to give the firm the benefit of doubt when it is accused of grand corruption. We estimated media sentiment using textual analysis on 45,000 media reports covering firms allegedly involved in grand corruption. The studys findings provide no evidence of CSR providing insurance like effect, particularly in the context of integrity-based negative events. In contrast, our results appear to support the idea of the boomerang effect or a punishment for irresponsible behaviour.
  Keywords: corporate social responsibility; CSR; insurance like effect; media sentiment; grand corruption; boomerang effect; textual analysis.
  DOI: 10.1504/IJBGE.2023.10054555
   
  
• CSR and firm performance nexus in a highly unstable political context: institutional influence and community cohesion  
  by Islam Abdeljawad, Mamunur Rashid, Nour Abdul-Rahman Arafat, Hadeel Naifeh, Nadeen Ghanem 
  Abstract: We provide evidence of the relationship between corporate social responsibility (CSR) and corporate financial performance (CFP) in Palestine, a highly unstable political context. Annual reports of all firms listed on the Palestine Exchange (PEX) for the period 2016-2019 were manually content analysed. A checklist of reported CSR items is summarised into four areas: environmental information, human resources, community involvement, and product and customer service quality. Results indicate a robust positive connection between each of the four dimensions and the composite CSR index with three performance indicators: ROA, ROE, and Tobins Q. Results also find better performing companies with a higher degree of community involvement being greatly appealing, while the environmental dimension was the least resilient. We discuss the significance of community engagement for an unstable context like Palestine from a community cohesion standpoint.
  Keywords: corporate social responsibility; CSR; corporate financial performance; CFP; unstable economies; small economies; Palestine.
  DOI: 10.1504/IJBGE.2023.10054626
   
  
• Role of technology director in boosting internationalisation and performance:an evidence from EU sustainable firms  
  by Um-E-Roman Fayyaz, Gianluca Antonucci, Raja Nabeel-Ud-Din Jalal, Michelina Venditti 
  Abstract: The present study investigates the relationship between technology director, internationalisation, and firm performance, assuming the beneficial effect of digital-sustainable corporate governance reforms. We implied the presence of a technology director on the board and empirically examined its impact on firm performance. In addition, we also test business internationalisation as a mediator between the technology director on the board and firm performance. The empirical findings rely on the data retrieved from the S&P Dow Jones Sustainability Index 2019 for 115 top sustainable EU firms and the Thomson Reuters Refinitiv Eikon database. The results reveal a significant positive relationship between the technology director’s presence on the board and firm performance. We also find business internationalisation mediates the relationship between the technology director’s presence on the board and firm performance. Overall, we try to lay a foundation for a digitally aware board and its impact on important firm decisions.
  Keywords: digitalisation; sustainability; firm internationalisation; technology director; CEO; chief digital officer.
  DOI: 10.1504/IJBGE.2023.10055007
   
  
• The impact of corporate governance on financial leverage: evidence from Egypt  
  by Rimon Micheal, K. Sandy Kyaw, Kwami H. Quao 
  Abstract: This study examines the effect of corporate governance on financial leverage of emerging market firms. This study shows the effects of corporate governance by estimating empirical model in which firms financial leverage is dependent variable, while board size, blockholder ownership, independent directorship, and duality are independent variables. The study employs the panel dataset of 50 listed non-financial firms in Egypt in the period 20082019 and the econometric method for panel data which is multiple regression model. The study suggests a significant and negative effect of board size and duality on the financial leverage relation. The impact of board independence on the financial leverage inclines to be positive significant, and the effect of blockholder ownership tends to be positive, although it is statistically insignificant. The results are inline with diverse of estimation methods. Overall, the findings are consistent with the view that in a context with weak institutional environment, internal corporate governance mechanisms play a particularly important role in the risk-taking activities of emerging market firms.
  Keywords: corporate governance; financial risk; managerial entrenchment; ownership structure; regulation; auditing.
  DOI: 10.1504/IJBGE.2023.10055063
   
  
• Corporate social responsibility and stock price crash risk: the mediating effect of accounting conservatism  
  by Emna Brahem, Florence Depoers, Faten Lakhal, Assil Guizani 
  Abstract: The purpose of this paper is to investigate the effect of corporate social responsibility on the firm-specific stock price crash risk. It also examines how this effect is driven through accounting conservatism. Based on a sample of French-listed firms from the period 2007 to 2016, the authors use GLS regression models on panel data estimated with robust standard errors, clustered at the firm level. The results show that firms’ CSR performance is negatively associated with stock price crash risk. These findings suggest that socially responsible firms are less likely to hide bad news and poor performance to comply with stakeholders’ ethical expectations, which reduces the stock price crash risk. Furthermore, we find that CSR indirectly decreases the stock price crash risk by enhancing accounting conservatism. This result suggests that accounting conservatism is a channel through which CSR decreases stock price crash risk. Our results provide practical implications for policymakers about the necessity to increase CSR activities as a good corporate governance device.
  Keywords: corporate social responsibility; stock price crash risk; accounting conservatism; mediating role.
  DOI: 10.1504/IJBGE.2023.10055064
   
  
• Mind the gap: impact of formal institutional distance and human rights differences between the host and home countries on emerging market multinationals’ choice of ownership strategy  
  by Rekha Rao-Nicholson, Liudmyla Svystunova 
  Abstract: Recent decades have witnessed a rapid expansion of emerging-market multinational enterprises (EMNEs). These newly internationalising firms are faced with challenges as they go abroad. One of the sources of this challenge is the gap between codified formal institutions and the extent to which they are upheld in practice. Drawing on recent critiques, we explore the links between EMNEs ownership strategy, the difference in the host-home countries in terms of the formal institutions and mediating role of human rights. Our analysis draws on the data for EMNEs from five emerging markets, Brazil, Russia, India, China and South Africa, between 1998-2011. The results suggest a partial mediation effect of human rights difference on the formal institutional distance and EMNEs ownership stakes, namely, when EMNEs acquired targets in the developed countries. Thus, our study contributes to the literature by evidencing the effect of formal institutions being transmitted via human rights differences between home and host countries.
  Keywords: emerging market multinationals; ownership strategy; human rights; host country institutions; formal institutional distance; cross-border acquisitions.
  DOI: 10.1504/IJBGE.2023.10055265
   
  
• Long-term evolution of business ethics in Hong Kong  
  by Tsun Se Cheong, Felix Tang, Andy Cheng, Michal Wojewodzki, Sunny Chan 
  Abstract: This paper applies the distribution dynamics analysis (DDA) technique in business ethics research using proprietary data measuring the general public’s perception of business ethics levels in 206 major companies operating in Hong Kong. The data is comprehensive and longitudinal, consisting of 10,773 interviews collected between 2012 and 2016, transformed into a summary score of the perceived business ethics standards of Hong Kong companies, i.e., the relative Confucian business ethics score (RCBES). The study documents a slow long-run convergence process in business ethics levels across the companies operating in Hong Kong towards the RCBES value of 1.02, i.e., slightly above the average RCBES equal to 1. The results also indicate the emergence and migration of two convergence clubs with a smaller and larger group of companies clustering to the RCBES values below (0.87) and slightly above (1.02) the average value. The paper offers several implications and avenues for future research directions.
  Keywords: business ethics; Confucian business ethics score; CBES; distribution dynamics analysis; DDA; convergence club; mobility probability plot; MPP; Junzi virtues; Hong Kong.
  DOI: 10.1504/IJBGE.2023.10055419
   
  
• Factors that contributes the willingness to stay in organisations  
  by Mariana Cruz, Álvaro L. Dias, Leandro F. Pereira, Renato Lopes Da Costa, Rui Gonçalves 
  Abstract: The competitive context of globalisation is arising some complex issues for companies. One of the main problems is high turnover rates, which are negatively affecting organisations’ results. The willingness to stay in a company can be affected by numerous variables and, understanding these variables can be crucial for the sustainability of any business. This research aims to address and measure willingness to stay within a company, understand if and how much it is influenced by organisational culture, specifically by commitment, happiness, justice and loyalty. Using survey data from 284 active workers, the results reveal that willingness to stay is positively influenced by organisational commitment, organisational happiness and, organisational loyalty. Although organisational justice does not directly affect willingness to stay, it acts has a mediator in the other three variables, revealing an indirect relationship between organisational justice and willingness to stay established through organisational commitment, organisational happiness and, organisational loyalty.
  Keywords: organisational commitment; organisational happiness; organisational justice; organisational loyalty; willingness to stay.
  DOI: 10.1504/IJBGE.2023.10056129
   
  
• The influence of workplace ethics training on leader decision-making  
  by Sibylla Meine Andrean 
  Abstract: This study explored the influence of ethics training on leader decision-making and was guided by two research questions: How do leaders perceive that ethics training influenced their decision-making and how can leaders enhance the effectiveness of ethics training to positively influence decision-making? The focus was on leaders’ experiences in large publicly traded companies. The study was conducted using a qualitative approach and narrative inquiry design. To gather data, open-ended interview questions were used. Thematic content analysis was used to analyse data by looking for themes in the data that offered insight into the research questions. Three major themes emerged: ethics training increases ethical awareness, ethics training reinforces existing values, and to make ethics training more effective, the training must be more interactive. Findings revealed workplace ethics training did not have a major influence on the ethical behaviour and decision-making of leaders, but it did help to increase their ethical awareness.
  Keywords: ethics training; impact of ethics training; ethics training programs; business ethics; ethics evaluation; ethical decision-making.
  DOI: 10.1504/IJBGE.2023.10056315
   
  
• The effect of individual-collective decisions and perceived organisational support on accountants whistle-blowing actions  
  by Putri Wulanditya, Bambang Subroto, Syaiful Iqbal, Yeney Widya Prihatiningtias 
  Abstract: According to ethical decision-making theory and organisational support theory, this paper examines the whistle-blowing actions of accountants from the perspective of individual or collective decision making, the presence or absence of organisational support, and the interaction of the two factors. This study uses a 2x2 factorial experimental laboratory design. The participants of this study were 109 postgraduate students in accounting programs and the accounting profession who had sufficient knowledge and experience. The Mann-Whitney and Kruskall-Wallis tests were used for hypothesis testing. The results indicate that accountants are more motivated to act collectively than individually, and accountants who have organisational support are more motivated to act as whistleblowers than those who are not. The interaction between individual or collective decision-making and the presence or absence of organisational support has also been shown to influence accountants whistle-blowing behaviour. This study will provide insights for accountants and organisations regarding whistle-blowing actions.
  Keywords: accountants; whistle-blowing action; decision making; organisational support.
  DOI: 10.1504/IJBGE.2023.10057086
   
  
• Agency problem - a missing link between corporate social responsibility reporting and firm performance  
  by Hien Thi Tran, Hanh Song Thi Pham, Hung Quang Doan 
  Abstract: This study investigates the mediating impact of agency problem on the effect of CSR reporting to firm performance. Using the OLS regression method to analyse a dataset of 5,831 firm-year observations of 833 large firms from 30 countries across seven years from 2013 to 2019, the study finds that agency problem is a missing link that mediates the influence of CSR reporting on a firm’s economic performance. The results hold in the system GMM estimations. The study unpacks the black box of CSR-firm performance relation in which CSR reporting benefits firm performance through diminishing the agency problem. Unlike the existing literature that only emphasises the role of a corporate board to handle agency problem, this study highlights the role of CSR reporting as an alternative mechanism to mitigate agency problem. Our finding confirms that CSR reporting is fruitful to shareholders; CSR reporting can be employed as a measure to improve principle-agent relationship.
  Keywords: agency problem; corporate social responsibility; CSR; CSR reporting; performance.
  DOI: 10.1504/IJBGE.2023.10057087
   
  
• Effect of managers ethical behaviour and organisational ethics on performance: a case of banking industry of Bangladesh  
  by Nowrin Dewan Asphia, Mohit Srivastava 
  Abstract: The banking and financial system primarily determine the economic performance of a country. Banking and Finance are vital in framing different policies in today’s environment. Ethical issues in the financial sector affect everyone in society positively and negatively. This paper investigates how ethical behaviour affects the banking industry and its performance in Bangladesh. This study determines the relationship between the factors that directly or indirectly influence ethical business practice. Data were derived from a questionnaire explicitly focused on the Banking sector of Bangladesh. The result shows that the code of conduct does not affect the manager’s ethical behaviour or business ethics within the organisation if it is not strongly implied. The result also suggests that the overall bank performance is highly influenced if a practice of business ethics is governed by the code of conduct content. These findings indicate that strong policies, regulations, and laws should force the organisation to follow the code of conduct to ensure ethical behaviour.
  Keywords: ethical banking; practice of business ethics; code of conduct; manager’s ethical behaviour; Bangladesh banking sector.
  DOI: 10.1504/IJBGE.2023.10057851
   
  
• Ethical perceptions and attitudes of doing business in the Middle East: an empirical study of Palestine  
  by Sonia Ammar, Jet Mboga 
  Abstract: The purpose of this study is to address the perception that business dealings with Middle Eastern nations lack ethical conduct. A research data sample of 200 was obtained from managers, employees, and college students from two major cities in the West Bank area, Ramallah and Nablus in Palestine. The results reveal that gender, ethical education, and ethics training at work among Palestinians did not have a significant PBES. Still, there was enough evidence to conclude that the number of years working significantly affected PBES. The findings provide foreign executives, their employees familiarity, and scholars with national culture within business dealings a competitive advantage. The insights of this study will contribute to upcoming research on ethics and attitudes and foreign managers towards ethics in Palestine and Middle Eastern nations.
  Keywords: Palestine; ethics; Middle East; multinational corporations; MNCs; business culture.
  DOI: 10.1504/IJBGE.2023.10058710
   
  
• Sustainability in the technology industry: board attributes, ESG and corporate financial performance in an emerging market  
  by Angela Kit-Fong Ma, Yinfei Chen, Yiming Chen 
  Abstract: This study examines the relationship between the board attributes and the corporate social responsibility (CSR) performance of listed Chinese technology firms. It also examines the relationship between firms’ CSR performance and financial performance. The sample consists of data on 1,585 listed technology firms from the 2011 to 2021 period. The CSR metrics in the form of environmental, social, and governance (ESG) scores are analysed using ordinary least squares and fixed-effects regression models. We find that board independence is the strongest driver of CSR performance. Board gender composition and board size have a significant negative effect on CSR performance. Furthermore, managerial overconfidence positively mediates the relationship between CSR and corporate financial performance. This study fills a gap in social sustainability research by applying an ESG perspective to the Chinese technology industry.
  Keywords: technology industry; social responsibility; corporate financial performance; CFP; environmental; social; and governance; ESG; corporate social responsibility; CSR; board independence; board gender.
  DOI: 10.1504/IJBGE.2023.10059239
   
  
• Ethical practices and financial reporting quality in Malaysian SMEs: the perception of financial report preparers  
  by Siti Faizah Zainal, Hafiza Aishah Hashim, Zalailah Salleh, Akmalia Mohamad Ariff, Nor Raihan Mohamad 
  Abstract: The study explores the ethical practices and the attributes of financial reporting quality among the Malaysian small and medium-sized enterprises (SMEs). The study employed phenomenological approach and purposive sampling with a face-to-face interview approach. Seven external accountants working for the Malaysian accounting firms have been interviewed. The Malaysian SMEs’ financial reporting quality is determined by faithful representation and comparability from the view of the respondents. The ethical issues concerning in SMEs are financial report adjustment, lack of knowledge, and other issues were discovered during the interview. Additionally, ethical practises help SMEs achieve high-quality financial reporting in which it is useful for decision-making and improve their performance. Understanding ethical behaviour and discovering the importance of having high quality financial reporting in SMEs would be the foundation for future research, with the current study served as its fundamental and providing a more thorough grasp of the ethics and financial reporting quality in SMEs literature.
  Keywords: ethical practices; small and medium-sized enterprises; SMEs; external accountants; preparers.
  DOI: 10.1504/IJBGE.2023.10059434
   
  
• The relationship between Arab Spring and income: Does governance matter? Evidence from Egypt and Tunisia  
  by Abdelrahman J. K. Alfar, Raad Al-Tal, Mohammed Elheddad 
  Abstract: The Arab Spring was a series of anti-government protests, uprisings and armed rebellions that spread across much of the Arab world in the early 2010s. It began in Tunisia in response to corruption and economic stagnation. This study aims to examine the causal inference of the Arab Spring in Tunisia and Egypt on economic growth using the Difference in Differences approach. Besides, it explains a mechanism of how similar conflicts can have different effects among economies. Empirical evidence shows that the Arab Spring had a positive impact on economic growth in both countries. However, when the Arab Spring interacted with the governance indicator the results vary. In Egypt, governance effectiveness has a positive impact on economic growth. For Tunisia, voice accountability promotes economic growth. These results challenge the conventional empirical results about the negative effects of the Arab Spring on economic growth. This line of research could help policymakers develop better tools to alleviate the negative impacts of revolutions.
  Keywords: Arab spring; Economic growth; Governance; Difference-in-Differences (DiD); Egypt; Tunisia.
  DOI: 10.1504/IJBGE.2023.10059442
   
  
• Environmental disclosure and financial performance: an analysis of carbonex indexed companies in India  
  by Jeevesh Sharma, Suvendu Kumar Pratihari, Suhasini Verma 
  Abstract: With the increasing rate of global warming and climate change, firms’ approach toward a better environment is a recent topic of research. The present study analyses firm’s environmental disclosure by preparing an index of five dimensions followed by examining their causal relationship with firms’ financial performance. The study adopts content analysis to measure the environmental performance reporting of firms listed in the Indian Bombay Stock Exchange (BSE) carbonex index. The study contributes to the existing environmental performance and financial performance literature in multi-fold. The results provide the extent to which the specified dimensions are disclosed in the reports and demonstrate that firms’ environmental disclosure among identified dimensions is not balanced. The results also indicate a significant association between environmental and financial performance. The findings provide new insights to managers, policymakers, and regulators as a rationale for firms’ comprehensive environmental disclosure reporting standards and go beyond the limits of sustainability reporting.
  Keywords: environment performance index; carbon disclosure; greenhouse gas emission; GHG; environment disclosure; carbonex index; corporate social responsibility; CSR; India.
  DOI: 10.1504/IJBGE.2023.10059725
   
  
• Challenges of combining non-profit and commercial organisational forms: evidence from ethical banks  
  by Anastasia Nassauer 
  Abstract: This paper examines internal and external challenges experienced by ethical banks, which combine multiple organisational forms in their simultaneous pursuit of economic profitability and social profitability. It features the global alliance for banking on values (GABV) and adopts a qualitative methodology based on interviews, participant observations and broad sources of secondary data. The research contributes to the existing literature on multiple form organisations and ethical banks by providing a detailed account of challenges brought up by their attempts to include social objectives alongside economic benefits. Evidence from this study suggests that democratic governance structures, models of ethical assessment of investments, accountability strategies and community relations techniques experience the greatest pressures in ethical banks.
  Keywords: ethical banks; responsible investment; non-profit organisations; commercial organisations.
  DOI: 10.1504/IJBGE.2023.10059783
   
  
• The moderating effect of public governance on the relationship between corporate governance and stock market development  
  by Ali Uyar, Cemil Kuzey, Mondher Bouattour 
  Abstract: This study tests the moderating effect of public governance on the association between corporate governance and stock market development. The sample size was 540 country-year records (54 countries x 10 years), and GMM and Threshold regression analysis were run. The findings confirm that corporate governance is a significant predictor of stock market development in terms of both size and liquidity. Stock markets develop with strong auditing and reporting standards, strong shareholder protection, and efficient corporate boards. Moderation effect analyses indicate that corporate governance and public governance are sometimes substitutes and sometimes complement each other depending on the type of stock market development proxy. The complementary effect implies that corporate governance and public governance should co-exist, whereas substitutive effect suggests that corporate governance is influential and sufficient in case of weak public regulatory quality. Policymakers can configure regulatory framework, corporate governance codes and market-related regulations to stimulate investment in stock markets.
  Keywords: public governance; regulatory quality; corporate governance; stock market development; complementary effect; substitutive effect.
  DOI: 10.1504/IJBGE.2023.10060366
   
  
• Governance quality and stock returns: evidence from an emerging economy-Bangladesh  
  by Md. Habibullah, Mohammad Ashraful Ferdous Chowdhury, Md Mamunur Rashid 
  Abstract: This study aims to examine the effects of governance quality on stock returns using the context of an emerging and developing economy-Bangladesh. To this end, this study collected data from 118 non-financial companies listed on the Dhaka Stock Exchange over ten years (2010 to 2019). This study applied the traditional (fixed effects and random effects) and dynamic panel models, including the system generalised method of moments (GMMs), to test the hypothesised relationship. The panel models found that governance quality has a significant and positive impact on stock returns. The quantile regression results also found that good governance plays a significant positive role in all companies irrespective of their financial performance. However, the impact of macroeconomic and corporate variables was found heterogeneous based on the firm’s profitability, as indicated by quantile regression. The study’s findings have important policy implications, specifically in developing a sound capital market by enhancing country-level governance quality.
  Keywords: stock return; governance quality; corporate factors; macroeconomic factors; quantile regression; Bangladesh.
  DOI: 10.1504/IJBGE.2023.10060602
   
  
• Charity or a diversion tactic in disguise of charity? Exploring Chinese enterprises motivation for giving in the wake of COVID-19  
  by Yunshu Tang, Mengli Zhang, Dong Andrew Li, Yajie Wang 
  Abstract: This research attempts to infer a Chinese publicly-listed enterprises motivation for giving in the wake of COVID-19. We first create an enterprises abnormal ranking by subtracting its corporate social responsibility (CSR) composite score ranking in 2019 from its COVID-19-related donation ranking in 2020. We then examine the association between the enterprises abnormal ranking and historical CSR fulfilment in three dimensions, (i.e., responsibility-to-customers, responsibility-to-employees, responsibility-toenvironment), considering enterprise ownership and executive characteristics. We find that the enterprises of historically higher responsibility-to-customers (lower responsibility-to-employees) fulfilment tend to make incremental donations in 2020, suggesting genuine, consistent charity (a diversion tactic in disguise of charity). Nevertheless, the enterprises of historically higher responsibility-to-environment fulfilment tend not to make incremental donations in 2020. Further, we note that the altruistic motivation is more pronounced in the enterprises of non-state ownership or younger-age, higher-education-level executives. Together, this study extends the corporate giving literature to a deeper, more dynamic context.
  Keywords: charity; diversion tactic; COVID-19-related donations; corporate social responsibility; CSR; responsibility to customers; responsibility to employees; China.
  DOI: 10.1504/IJBGE.2023.10060603
   
  
• Board of directors and firm performance: a dynamic approach  
  by Isabel Acero Fraile, Nuria Alcalde 
  Abstract: This paper analyses how board structure influences firm performance, considering the effect of dynamic endogeneity. For a sample of listed Spanish firms, the study did not find that board structure had any effect on the value of the firm, when controlling for dynamic endogeneity. The research results show the need to use appropriate econometric techniques (dynamic models) to avoid obtaining incorrect or biased results. They also show that each firm must determine the size and structure of the board given its own advice and control needs.
  Keywords: board of directors; firm performance; dynamic endogeneity; generalised method of moments; GMM; Spain.
  DOI: 10.1504/IJBGE.2023.10060656
   
  
• Role of eco-management practices in determining corporate sustainable development in China: a resource-based perspective  
  by Fahad Khalid, Mohit Srivastava, Khwaja Naveed, Xinhui Sun 
  Abstract: This study examines the impact of eco-management practices (EMPs) on corporate sustainable development (Wbcsd) within the Chinese A-share-listed companies from 2010 to 2019, based on a dataset comprising 7,948 firm-year observations. The findings reveal compelling insights regarding three specific EMPs: environmental innovation (EI), eco-management certification (EMC), and eco-management training (EMT). Notably, EI demonstrates a significant positive influence on CSD within environmentally sensitive industries while negatively impacting non-sensitive sectors. In contrast, EMC consistently positively and significantly affects CSD, regardless of sectoral environmental sensitivity. Intriguingly, EMT shows a pronounced influence on CSD in non-sensitive sector firms. These results emphasise the integral role of EMPs in driving CSD and highlight the importance of environmental sensitivity in determining the effectiveness of EMPs. Consequently, firms with a greater environmental focus benefit significantly from implementing EMPs, particularly EI, while EMC emerges as a universal driver of CSD across sectors. These findings underscore the significance of proactive EMPs, such as EI, EMC, and EMT, in fostering corporate sustainability and suggest avenues for further research to explore additional strategies that enhance sustainable business practices.
  Keywords: eco-management; environmental innovation; EI; eco-management certification; EMC; eco-management training; EMT; corporate sustainable development; Wbcsd; resources.
  DOI: 10.1504/IJBGE.2023.10060732
   
  
• Effects of board and audit committee characteristics on audit delay in the Nigerian oil and gas sector  
  by Ozigi Omoyi Obeitoh, Ismaila Yusuf, Mamdouh Abdulaziz Saleh Al-Faryan 
  Abstract: This study investigates the relationship between the effects of board and audit committee characteristics on audit delay in the Nigerian oil and gas sector. The study adopts Driscoll and Kraay statistical regression model with ten-year panel data for seven oil and gas firms in Nigeria. Our findings reveal the effects of board and audit committee characteristics on audit delay. Specifically, our study reveals that board independence; audit committee independence, audit committee meeting and the financial expertise of women on audit committees reduce audit delay, which promotes financial reporting timeliness while board size and board meeting have no significant association with audit delay. The findings of this study confirm agency and resource dependence theories. The findings of this study emphasise the importance of board and audit committee characteristics in mitigating audit delay.
  Keywords: audit delay; board size; board independence; board meeting; audit committee independence.
  DOI: 10.1504/IJBGE.2023.10060973
   
  
• Board demographics and performance: evidence from European Union banks  
  by Pierluigi Martino, Paola Ferretti, Cristina Gonnella 
  Abstract: This article examines the influence of board members demographics on banks performance. Specifically, building on the upper echelons theory we investigate how board members age, MBA, industry experience and diversity (gender and nationality) affect banks performance. By analysing a sample of 83 significant banks from the European Union, we find that banks performance significantly and positively relates to board members MBA and industry experience, but negatively to board members age and nationality diversity. This provides support to the argument that these directors’ personal characteristics are crucial for banks board effectiveness, and are key-factors in explaining differences in banks performance. Our study results contribute to the existing literature on the relationship between board characteristics and banks performance, by improving knowledge about the potential governance factors that affect banks performance and identifying which aspects of board demographics are associated with higher performance.
  Keywords: board of directors; demographics; banks; performance; upper echelons theory; corporate governance.
  DOI: 10.1504/IJBGE.2024.10061454
   
  
• Narcissistic tendencies of managers and its proposed impact on change-oriented organisational citizenship behaviours of employees: a study of brokerage firms  
  by Alireza Amini, Arash Haqbin, Mahdi Yari 
  Abstract: The purpose of this paper is to find different dimensions of narcissistic personality amongst managers and to prioritise the proposed impact of these personality types according to antecedents and measurements of change-oriented organisational citizenship behaviour. By adopting a qualitative metasynthesis, 12 articles were used to identify the different personality types, namely histrionic, self-accepted, incompatible, vulnerable, efficient, trader, open, and dominant. Afterward, by adopting the BWM-MULTIMOORA technique, the personality types were prioritised using an expert panel’s judgements of 11 senior brokerage firms’ managers in Shiraz, Iran. The results demonstrate that the innovative climate is the most crucial change-oriented OCB antecedent, and suggesting work improvement ideas to others is its most vital measurement. Moreover, among eight different personality types, the histrionic personalities of narcissistic managers are the most important. Their dominant personalities are the least essential obstacle in cultivating an environment to develop employees’ change-oriented organisation citizenship behaviours.
  Keywords: personality; narcissism; managers; change-oriented organisational citizenship behaviour.
  DOI: 10.1504/IJBGE.2024.10061455
   
  
• Evaluating the role of independent and female directors on the remuneration committee: evidence from LQ45 and IDX SMC liquid  
  by Josua Tarigan, Jennifer Adriana, Saarce Elsye Hatane 
  Abstract: This study uses a sample of Indonesian large and small-medium enterprises to examine the effect of independent and female directors on the relationship between remuneration and firm performance. Pooled cross-sectional data is gathered from 138 LQ45 (Liquid 45) and 142 IDX SMC (Indonesia Stock Exchange Small-Mid Cap) liquid observations, with 2017 to 2020 as the observation years. The different influence towards executive remuneration between Indonesian large and small-medium companies, but similar participation percentages, indicate that their number or presence may not determine the success of independent and female directors in influencing remuneration. This study extends earlier research on the influence of independent and female directors on remuneration committees. This is notably the first study to evaluate the influence of independent and female directors on remuneration committees that uses Indonesia as the sample, comparing large and small-medium companies.
  Keywords: independent directors; female directors; remuneration committee; remuneration; company’s performance; LQ45; IDX SMC liquid.
  
  
• Factors affecting corporate environmental performance disclosures in the Czech Republic  
  by Fahua Xu, Ivan Balogh, Ladislav Tyll, Mohit Srivastava 
  Abstract: This study investigates the factors affecting corporate environmental performance disclosure in the Czech Republic. The existing findings on factors affecting environmental disclosures cannot be applied to the CEE context since the development of institutions is very different. The sample dataset contains 200 Czech companies that meet at least two requirements for large companies by the corporate sustainability reporting directive. The Tobit model is employed for data analysis as it is a valuable tool for estimating linear relationships between variables where the dependent variable is censored or truncated. The data analysis reveals that being listed on a stock exchange, media coverage, and assurance provided by Big4, and operation in foreign markets significantly impact environmental disclosure. Profitability is negatively related to environmental disclosure. Contrary to prior research, no statistically significant relationship was observed between environmental disclosure and the sensitive industry or company size.
  Keywords: environmental; social; and governance; ESG; environmental disclosure; non-financial disclosures; environmental disclosure factors; Tobit model; Czech Republic.
  DOI: 10.1504/IJBGE.2024.10061998
   
  
• A tale of wilful malfeasance 2003-2008 - followed by recovery and resurrection in Iceland  
  by Murray J. Bryant, Throstur Olaf Sigurjonsson 
  Abstract: The collapse of the Icelandic financial system in October 2008, was unprecedented in both scale and scope, 97% of the financial system collapsed, inflation was rampant, the currency disintegrated, and unemployment was both a social and political issue. This paper endeavours to show, using documentary evidence from 2003-2008, whether the system of monitoring of the banks and economy failed applying evidence of institutional ascription. The contribution of the paper is to document that both institutional ascriptions, along with corruption and greed, were endemic from 2003-2008. The resurrection and recovery followed a transparent process, based upon objectives of wealth equality along with fairness - inclusive capitalism, to address what went wrong, address the overhang of debt and the rebuild of trust in all institutions, including government itself.
  Keywords: institutional ascription; inclusive capitalism; corruption; malfeasance; financial system collapse.
  DOI: 10.1504/IJBGE.2024.10062049
   
  
• Measuring corporate sustainability: measurement scale development based on the stakeholder theory  
  by Michael Wang, Nasser Fathi Easa 
  Abstract: In contemporary business landscapes, sustainability is gaining growing significance for companies spanning diverse industries. The purpose of the paper is twofold. First, it presents a validated measurement model of corporate sustainability based on the survey research. Second, it offers empirical evidence of the UAE corporate sustainability to support sustainable development goals 2030 in the Emirates. A comprehensive and multi-step construct development approach is applied to develop and validate the measurement model. In this study, according to the triple-bottom-line approach and the stakeholder theory, we identify a first-order latent variable corporate sustainability, which contains measurement items measuring the various stakeholders interests. The empirical findings indicate the reliability and validity of the measurement scale, affirming that the reflective measurement model effectively represents corporate sustainability. The study contributes to operationalising corporate sustainability in literature and provides fruitful avenues for future research.
  Keywords: sustainability; corporate; business performance; measurement scale.
  DOI: 10.1504/IJBGE.2024.10062319
   
  
• Gender diversity and tax avoidance: do gender quotas matter?  
  by Imen Tebourbi, Assil Guizani, Faten Lakhal 
  Abstract: In this study, we examine the impact of the presence of women on board of directors and in top executive positions on companies tax avoidance practices in French public companies. We also explore the impact of the introduction of Cope-Zimmerman law which mandates a quota of female directors on boards. Our findings suggest that CFOs gender matters as female CFOs are less inclined to tax avoidance behaviour. We also find that the presence of female directors on boards is negatively associated with tax avoidance suggesting that women can be effective monitors on boards. However, this effect was more pronounced before the introduction of a mandatory quota of female executives. This suggests that companies that rushed into adding female board members to comply with the Cope-Zimmermann law may not have reached an optimal and effective board composition.
  Keywords: gender diversity; tax avoidance; board of directors; quota; executive female.
  DOI: 10.1504/IJBGE.2024.10062320
   
  
• Non-financial disclosure and financial performance: the consequences of the EU Non-Financial Reporting Directive in Italy  
  by Michela Cordazzo, Laura Bini, Giuseppe Marzo 
  Abstract: The EU NFR Directive makes the NFD mandatory for the European largest listed firms. The paper offers an empirical analysis of the association between NFD and FP over the application of the Directive in Italy, testing the reverse causality between NFD and FP. We find a positive relationship from FP to NFD, but no evidence of a reverse relationship from NFD to FP. Furthermore, our results show a moderate impact of the Directive on NFD, as the Directive allows firms providing only a minimum amount of NFD or any information. Our study makes two main contributions. First, it contributes to the debate on the regulation of NFD. Second, it widens the scope of other studies on the relationship between NFD and FP, as it offers theoretical and empirical arguments on the relationship between NFD and FP over the transition from a voluntary to a mandatory disclosure setting.
  Keywords: ESG; EU directive; non-financial disclosure; financial performance; reverse causality.
  DOI: 10.1504/IJBGE.2024.10062321
   
  
• Delineating corporate governance and corporate social responsibilities - a bibliometric review and future directions  
  by Kashish Sharma, Shridev Devji 
  Abstract: This comprehensive review paper meticulously explores the research on corporate governance (CG) and corporate social responsibility (CSR), integrating bibliometric analysis and a theory, context, characteristics, methodology (TCCM) framework. The bibliometric analysis, encompassing performance analysis and science mapping, unveils trends, patterns, seminal contributions, and emerging intellectual patterns elucidating the evolution of CG and CSR discourse. Through a rigorous assessment of extensive literature, key themes, authors, and influential publications are identified, positioning the study at the forefront of CG and CSR research. Further, the TCCM framework facilitates a nuanced exploration, providing an in-depth understanding of theoretical, contextual, characteristic, and methodological dimensions within CG and CSR. This dual-faceted approach offers a multidimensional perspective, significantly enriching the existing body of knowledge. Also, by synergising quantitative bibliometric findings with TCCM insights, the paper highlights literature gaps, suggests future research directions, and enhances the comprehension of CG and CSR’s complex interplay. This study serves as an invaluable resource for scholars, practitioners, and policymakers, aiding in navigating the evolving CG and CSR landscape, and contributing to the advancement of responsible and ethical corporate practices.
  Keywords: corporate governance; corporate social responsibility; CSR; bibliometric; literature review; theory; context; characteristics; methodology; TCCM.
  DOI: 10.1504/IJBGE.2024.10062668
   
  
• Codes of ethics (with Mill, Kant and Aquinas)  
  by Alonso Villarán 
  Abstract: This paper aims at grounding business, professional, and other codes of ethics further, in dialogue with other foundational papers. Initially, justifications beyond moral theories, such as those proposed by Cecily Raiborn and Diana Payne, are considered. Subsequently, prominent philosophical justifications, including Jacquie LEtangs Kantian approach, are evaluated. The paper then turns to Thomas Aquinas, whose natural law theory offers the key to understanding the foundational basis of such codes through his delineation of an objective ethical code comprising three tiers of moral rules. Additional observations address the dynamic nature of both written and unwritten codes of ethics, the controversial aspects of third-level rules, and more. Concluding with a discussion on the good(s) that codes of ethics safeguard, the paper provides brief suggestions for code design.
  Keywords: business and professional ethics; codes of ethics; utilitarianism; deontology; natural law; moral law.
  DOI: 10.1504/IJBGE.2024.10062669
   
  
• Family control influences on divestment stock market performance  
  by Imene Zarrouki, Aymen Habib, Majdi Karmani, Yosra Meddeb 
  Abstract: This paper studies the relationship between family control and the stock market performance of divestitures on a sample of listed firms in France. First, event study methodology was used to compare the short-term stock market performance of divestments made by family firms and their non-family counterparts. Then, linear regression was applied to study the effects of family control on corporate stock performance. The results show that divestments undertaken by family firms generate significantly higher performance than those undertaken by non-family firms. These results are justified by the specificities of companies controlled and managed by family members. Indeed, family firms only divest when the benefits of the operation cover the financial and socio-emotional costs.
  Keywords: family business; ownership; family manager; familiness; family control; divestment; stock market performance; socio-emotional costs.
  
  
• Hide or report? When insurance agents face policyholders’ fraudulent claims  
  by Jianming Bai, Xuefeng Wang, Xin Ai, Haizhen Wang, Wanjie Niu 
  Abstract: Given insurance agents always interact with policyholders directly, they are expected to have an information advantage to identify fraud. However, agents may develop reciprocal relationships with policyholders, which may lead to agents’ concealing policyholders’ fraud. We draw on social exchange theory to analyse the decision-making mechanism of insurance agents faced with fraudulent claims. The results of two experiments reveal that policyholders’ value negatively affected agents’ disclosure intention, and the return expectation of concealing the fraudulent claim mediated such relationship. Further, we observe that agents’ reciprocal belief strengthened the relationship between policyholders’ value and the return expectation of concealing the fraudulent claim. We also discuss the theoretical and practical implications of the mechanism underlying insurance agents’ intention to report fraudulent claims.
  Keywords: insurance fraud; disclosure intention; policyholders’ value; return expectation; reciprocal belief.
  DOI: 10.1504/IJBGE.2024.10063676
   
  
• Egregious separation payments? The role of internal and external corporate governance  
  by Cyrine Ben-Hafaïedh, Pierpaolo Pattitoni, Barbara Petracci 
  Abstract: Egregious, unfair, unethical, and immoral are all adjectives that the public and shareholder activists use to describe separation payments, which are payments made to executives who leave firms for various reasons. Such complaints often cite corporate governance issues as well, noting the potentially problematic relationships between executives' and board members' compensation levels. However, some studies of separation pay agreements suggest a lack of any significant relationship between the quality of corporate governance and separation payments. Using a unique, hand-collected dataset pertaining to actual payouts received by the top executives who left their posts between 2002 and 2013 in Italy, this study reveals instead that better quality corporate governance, in both internal and external dimensions, helps regulate the level of separation payments. In turn, it can offset stakeholders' perceptions of unfairness and the resulting negative consequences for the firm; such governance also can help minimise the prevalence of pay-for-failure cases.
  Keywords: boards; corporate governance; ethics; executive compensation; separation payments.
  DOI: 10.1504/IJBGE.2022.10052221
   
  
• Governance and internal control in LGOs: a systematic literature review  
  by Stergios Galanis, Michail Pazarskis, Maria Kyriakou 
  Abstract: This research examines the literature on governance and especially internal control in local government organisations (LGOs) and responds to three interconnected research questions (RQ): How is research on governance and internal control in local government organisations being evolved? What are the important aspects and criticisms of the literature on governance and internal control in local government organisations? What does the future of governance and internal control in local government organisations look like? Using a systematic literature review technique, we examine 90 peer-reviewed journal publications between 1986 and 2021. Following 2014, we witness an increase in publications, most in a single country, in developed and emerging markets. Studies on governance and internal control in local government organisations emphasise survey/questionnaire/other empirical methods, while the majority employ agency theory as a methodology. Furthermore, we discovered that governance and operational effectiveness are highly valued by academics.
  Keywords: local governance; internal control; local government organisations; LGOs; municipalities; systematic literature review.
  DOI: 10.1504/IJBGE.2022.10052272
   
  
• Does foreign ownership affect corporate cash holdings? Evidence from Amman Stock Exchange  
  by Lara Al-Haddad, Abdullah Al-Ahmad 
  Abstract: This study investigates the impact of foreign ownership on corporate cash holdings of Jordanian companies listed on the Amman Stock Exchange. Using a sample of 83 Jordanian companies during the 2010 to 2019 period, our results reveal that there is a statistically significant negative relationship between foreign ownership and corporate cash holdings, suggesting favourable effects of foreign investors on the financing structure of Jordanian companies. That is, when Jordanian companies reduce their cash holdings levels, more financial resources became available to be assigned to other activities, (e.g., investments) that can contribute positively to the growth of these companies. Further, lower cash balances might restrict the managers' ability to overinvest in value-decreasing projects. Hence, foreign investors appeared to enhance the corporate governance quality by reducing the information asymmetry and agency costs associated with excessive cash balances. Our findings have significant policy implications for policymakers, regulators, academics, current and future investors.
  Keywords: Amman Stock Exchange; ASE; cash holdings; foreign ownership; Jordan.
  DOI: 10.1504/IJBGE.2023.10053498
   
  
• Shifting attention from 'board anatomy' to 'board physiology' to understand the roles of directors: evidence from UK companies  
  by Ioannis Gkliatis, Dimitrios N. Koufopoulos 
  Abstract: The study seeks to delineate the roles of board directors under agency and resource dependence perspectives. The literature review conducted suggests further research in clarifying the directors' roles. The results of the principal component analysis from 115 surveyed board directors in the UK suggest that while the dominant roles used in the literature are still supported, they do not capture the whole picture of directors' roles. The study advocates that future research on directors' roles should consider additional tasks and also that researchers should account these roles as a continuum, rather than independent to each other. A new set of six roles is offered, highlighting some undervalued roles. Policymakers may benefit from this study by paying further attention to the important functional aspects of the board, as current focus is mainly on the structural elements. Also, strong recommendation is made to shift attention from board characteristics (anatomy) to board functions (physiology).
  Keywords: corporate governance; board roles; agency theory; resource dependence theory; RDT; UK.
  DOI: 10.1504/IJBGE.2023.10053237
   
  
• Board characteristics and firm success: does the institutional context always matter?  
  by Maria Cristina Zaccone 
  Abstract: Relying on the core premise that the board of directors is a collective decision-making group, this study aims at expanding the literature on the influence of internal corporate governance on firm success assuming a comparative approach. Based on a sample of publicly traded companies nested in liberal market economies and coordinated market economies, the results indicate that the relationship between board eldership and firm success holds regardless of the institutional setting where the firm is nested. Similarly, I provide evidence board tenure negatively influences firm success regardless of the institutional setting where the firm is nested. In addition, the results show that directors' attendance to board meetings positively influence firm success regardless of the institutional setting where the firm is nested. Overall, the empirical findings contribute to and extend the existing literature on internal corporate governance and comparative corporate governance.
  Keywords: board of directors; firm success; liberal market economies; LMEs; coordinated market economies; CMEs.
  DOI: 10.1504/IJBGE.2023.10054084
   
  

Special Issue on: EFS 2022 Sustainable Finance Governance and Business Ethics

• Moving towards sustainable waste management: a critical analysis of corporate governance  
  by Asif Saeed, Noor Zahid, Rizwan Mushtaq, Ammar Ali Gull 
  Abstract: An increase in the level of greenhouse gases concentration has drawn global attention towards the preservation of the natural ecosystem. In response to stakeholders pressure, firms are adopting sustainable business practices for reducing their impact on the environment. Among these, firms monitor their waste management practices to reduce the ecological rucksack in their production cycles. We therefore explore the relationship between corporate governance and waste management practices. Based on a panel data set of listed firms from 33 countries during 2002-2017, the results indicate that high corporate governance quality is positively associated with effective waste management practices. Our results remain robust to alternate proxies of waste management and endogeneity concerns. Moreover, the relationship between corporate governance and waste management is eminent in firms with institutional investors, BIG4 auditors, highly intense R&D structure and during the non-crisis period. We interpret our results using stakeholder theory and triple bottom line theory and provide necessary implications.
  Keywords: corporate governance; waste management; waste recycled; greenhouse gases; GHG; waste reduction initiatives; WRI.
  DOI: 10.1504/IJBGE.2023.10055355
   
  

Special Issue on: EFS-2022 Sustainable Finance, Governance and Business Ethics

• Investment in ESG activities and bank performance: does bank ownership matter?  
  by Marc Kouzez, Ji-Yong Lee, Jomana Mahfod-Leroux 
  Abstract: In this paper, we investigate the relation between environmental, social and governance (ESG) activities and bank performance in European markets. Different from existing literature, we also explore whether ESG activities differently affect the performance of foreign-owned banks and domestic-owned banks. The results show that higher involvement in ESG activities is associated with better performance only for foreign-owned banks, and suggest that investment in ESG activities is relevant for foreign banks since it helps to obtain legitimacy in foreign markets, and enhance their reputation on international level. Our findings provide a better understanding of whether a banks ESG activities are in the interest of shareholders, and partially explain the contradictory results in previous studies.
  Keywords: bank performance; ESG; foreign banks.
  DOI: 10.1504/IJBGE.2023.10053288
   
  
• CSR investment and operating and financial leverage under competitive pressure  
  by Taher Hamza, Rym Mhadhbi, Zeineb Barka 
  Abstract: We investigate the cost of socially behaving firms and its impact on firms’ operating and financial leverage. In addition, this relationship is likely to be subject to a potential moderating effect of industry competitive pressure. Using a sample of French-listed companies over 2002-2016, our empirical findings show that: 1) CSR affects positively and significantly, via social performance, the firm operating leverage (OPLEV). Environmental performance however, has no significant impact; 2) industry competition has a significant and negative impact on the association between CSR and OPLEV. In less competitive industries, CSR policy creates a competitive advantage that reduces firm’s operating risk; 3) a negative effect of CSR on the financial leverage (FINLEV). Overall, our findings continue to hold after controlling for endogeneity and conducting alternative econometric specifications and have important policy implications.
  Keywords: corporate social responsibility; CSR; social performance; environment performance; operating leverage; OPLEV; financial leverage; competitive pressure.
  DOI: 10.1504/IJBGE.2023.10053634
   
  
• Do CEO debt-like compensation promote investment efficiency?  
  by Wajih Abbassi, Sabri Boubaker, Kaouther Chebbi, Riadh Manita 
  Abstract: This paper investigates how incentives from CEO debt-like compensations affect labour investment efficiency. Using a sample of 9,644 US firms-year observations from 2006 to 2018, we provide empirical evidence that labour investment inefficiencies, proxied by the absolute difference between the actual net hiring level and the optimal one predicted by economic fundamentals, decrease with CEO inside debt. These results are robust to using alternative proxies of CEO inside debt and the control for endogeneity. We further examine under-investment (under-hiring and over-firing) and over-investment (over-hiring and under-firing) problems and provide evidence that each form of distortion decreases as CEO inside debt increases. We also show that the positive impact of CEO inside debt on labour investment efficiency is more pronounced in firms facing lower financial constraints. Overall, our findings highlight the importance of CEO debt-like compensations in shaping firm-level employment decisions.
  Keywords: inside debt; pension; deferred compensation; investment efficiency; labour investment.
  DOI: 10.1504/IJBGE.2023.10053939
   
  
• Cost-benefit analysis economic evaluation of CSR projects: evidence from Morocco  
  by Abdelmajid Ibenrissoul, Souhaila Kammoun, Amine Lahiani 
  Abstract: In this paper, we perform a cost-benefit analysis (CBA) on a Moroccan corporate socially responsible company to evaluate not only the economic profitability of corporate social responsibility (CSR) engagement for the firm but also the environmental and societal benefits for Morocco. Our approach also offers the possibility to measure the value created by the anti-pollution system project of Casablanca area for all stakeholders and for the community. It has the advantage of evaluating, in monetary terms, a project that does not generate financial resources, which allows calculating the economic value of the CSR project. The obtained results show that the project is viable regardless of the considered benefits and costs subcategories. Important policy implications can be drawn from our analysis.
  Keywords: corporate social responsibility; CSR; cost-benefit analysis; CBA; anti-pollution system; APS; economic evaluation; Morocco.
  DOI: 10.1504/IJBGE.2023.10054123
   
  
• Financial expert CEOs and corporate social responsibility decoupling  
  by Sana Akbar Khan, René P. Orij, Nhung Vu 
  Abstract: We study CEOs with a financial background in relation to firms corporate social responsibility (CSR) decoupling, referred to the gap between the actual and reported CSR performance. Using a sample of 2,513 firms operating in 29 countries from 2006 to 2017, we examine whether financial expert CEOs facilitate firms to tackle the institutional pressure and mitigate CSR decoupling. The result shows that financial expert CEOs reduce the CSR gap. We provide evidence suggesting that financial expert CEOs only affect the environmental dimension since this dimension is at the most concern of stakeholders. Moreover, board independence strengthens the relationship between financial expert CEOs and CSR decoupling, especially in the environmental dimension. Overall, the results suggest that CEOs with financial background matter to improve the CSR reporting quality and reduce the information asymmetry between firms and their stakeholders, contributing to the upper echelons theory.
  Keywords: financial expert CEOs; CSR decoupling; upper echelons theory; corporate governance.
  DOI: 10.1504/IJBGE.2023.10054533
   
  
• The effect of corporate social responsibility on European bank credit ratings  
  by Islem Arous, Nidhaleddine Ben Cheikh, Salah Ben Hamed 
  Abstract: The possible influences of corporate social responsibility (CSR) on corporate credit ratings have been the subject of several studies in recent years, but no work has yet analysed this relationship among banks. As a result, this research aims to identify the effect of CSR on bank credit ratings in a sample of 27 European banks over the annual period 2007-2016. We suggest implementing a panel quantile regression analysis, where the impact of CSR is provided for low, medium, and high credit ratings, respectively. The empirical results show that the importance of CSR differs according to the credit rating level of each bank. Our findings point out that poorly rated banks need to develop and improve their environmental, social, and governance performance. In addition, we highlight that the environmental score has the strongest effect on European banks credit ratings in comparison to the social and governance scores.
  Keywords: corporate social responsibility; CSR; credit ratings; quantile regression; European banks.
  DOI: 10.1504/IJBGE.2023.10054630
   
  
• Politically connected CEOs and risk-taking behaviour: comparative evidence from private and foreign-owned banks in China  
  by Haithem Awijen, Hachmi Ben Ameur, Nidhaleddine Ben Cheikh, Younes Ben Zaied 
  Abstract: This study investigates the effect of CEOs political connections on the risk-taking behaviour of banks in China over the period 20032017. Using both credit and insolvency risk measures, we show that political connections have a positive effect on banks risk-taking behaviour. Bank ownership structure also positively moderates the relationship between political connections and risk-taking. Our empirical results have important policy implications for investors and the government. We highlight the importance of CEOs political connections, which potentially play a role in determining a banks risk-taking behaviour. Finally, our results are robust to alternative bank risk and ownership variables.
  Keywords: political connections; bank risk-taking; ownership structure; ownership concentration; China.
  DOI: 10.1504/IJBGE.2023.10054872
   
  
• Corporate social responsibility and debt maturity: the moderating role of CSR reporting quality  
  by Sonia Boukattaya, Abdelwehed Omri 
  Abstract: The present paper aimed to examine the moderating effect of CSR reporting quality on the relationship between corporate social responsibility (CSR) and debt maturity. Here, we relied on a sample of French listed firms on the SBF120 index from 2013 to 2019. The collected data were analysed using the system GMM estimation to eliminate endogeneity problems when testing the research hypotheses. Based on the agency and signalling theories, our findings provide evidence that CSR performance has a negative effect on corporate debt maturity. High CSR firms use short-term debt financing to signal their high quality to the market and control the CSR overinvestment problems. Furthermore, we show that the negative effect of CSR on debt maturity is more pronounced in high CSR reporting quality firms. Our results are robust to alternative debt maturity measures.
  Keywords: capital structure; debt maturity; corporate social responsibility; CSR; global reporting initiative; GRI; CSR disclosure.
  DOI: 10.1504/IJBGE.2023.10056457
   
  
• Stock market integration in emerging markets in the spectre of the global financial crisis  
  by Najlae Bendou, Jean-Jacques Lilti, Khalid El Badraoui 
  Abstract: The article examines stock market integration of emerging markets around the global financial crisis of 2007-2008. The rationale of our study is to evaluate whether the level of integration of emerging markets can provide incentives for investors in order to diversify their portfolio to hedge against unsystematic risk. We measure integration in 46 emerging countries between 2000 and 2018 using the mean adjusted R-square methodology. We find that the integration of emerging countries increases at the commencement of the crisis. It reaches a maximum point in the middle of the crisis and then tends to revert to its pre-crisis level. This result provides clear evidence of the benefits of international portfolio diversification in emerging markets which allows to hedge against unsystematic risk during periods of global crises.
  Keywords: determinants of integration; diversification; emerging markets; financial crisis; markets co-movement.
  DOI: 10.1504/IJBGE.2023.10058075
   
  
• ESG dimensions, firm performance and corporate governance systems  
  by Zied Ftiti, Maher Jeriji, Waël Louhichi, Yasmine Mensi, Amel Zenaidi 
  Abstract: This study aims to investigate the ambiguous relationship between corporate sustainable practices [in the environmental, social and governance (ESG) dimensions] and their financial performance in four countries (the USA, Germany, Italy, and Japan) with different national corporate governance systems (Anglo-Saxon, Germanic, Latin, and Japanese) over the period 2010-2018. We analyse the impact of the global ESG score and disaggregated ESG scores on firm performance with both accounting and market measures. Using a panel generalised method of moments system model, we show the existence of a positive relationship between ESG performance and corporate financial performance only for countries representing the Germanic and Latin governance systems, and this is mainly explained by the significant effect of the governance pillar.
  Keywords: environmental; social and governance; ESG performance; corporate financial performance; CFP; market value; national governance systems.
  DOI: 10.1504/IJBGE.2024.10058645
   
  

Special Issue on: Social Impact of Social Responsibility of Business

• Assessing the impact of the global financial crisis on CSR expenditure in India  
  by Samy Belaid, Ratikant Bhaskar, Faten Moussa, Dharen Kumar Pandey 
  Abstract: We analysed the impact of the global financial crisis on the corporate social responsibility (CSR) expenditure of Indian firms using a difference-in-differences regression design. Our study drew on 11,816 firm-year observations from the National Stock Exchange from 2004 to 2012. Our findings indicate that the most affected firms (financial and infrastructure firms) were engaged in higher CSR spending pre-crisis, which sharply decreased post-crisis. More specifically, our analysis reveals that the CSR expenditure post-GFC has decreased by 15.55%. Our results indicate that GFC significantly impacted the CSR activities in India, and highly leveraged firms face significant constraints. Additionally, older and large firms spend more on CSR. These findings highlight the need for policymakers to create a supportive environment for firms to engage in CSR activities, especially for highly leveraged and small and medium enterprises. Furthermore, companies should prioritise CSR activities as a long-term investment rather than a short-term cost.
  Keywords: corporate social responsibility; CSR; global financial crisis; GFC; difference-in-differences; DiD; crisis; CSR expenditure; India.
  
  
• Impact of CSR and risk of expropriation on accounting quality  
  by Ahmed Imran Hunjra, Mohammad Kabir Hassan, Mahnoor Hanif, Mamdouh Abdulaziz Saleh Al-Faryan 
  Abstract: The study investigates the relationship between the risk of expropriation, CSR and accounting quality in the manufacturing sector of South Asian countries. Panel data of 430 firms is collected from the DataStream and financial statements of individual companies for the years 2010 to 2020. We analysed data through descriptive statistics, correlation and regression techniques. The Hausman test was applied to select the fixed-effect model for hypotheses testing. The findings of the study suggest that the risk of expropriation has a significant negative impact on accounting quality which leads to misinterpretation of financial components. There is a need to enforce strict adherence to accounting standards by South Asian firms. Furthermore, it is found that CSR positively influences accounting quality. The study suggests that improved accounting standards lower the earning management issues and ultimately increase the profitability and reputation of the firms.
  Keywords: accounting quality; risk of expropriation; corporate social responsibility; CSR; South Asian countries.
  DOI: 10.1504/IJBGE.2023.10060242
   
  
• Revisiting the association between corporate governance and environmental performance: does the level of boardroom orientation matter?  
  by Asif Saeed, Ramsha Basharat, Sabri Boubaker, Rizwan Mushtaq 
  Abstract: This study examines the relationship between corporate governance and the environmental performance of firms. We explore benchmarks for best-in-class and medium-in-class corporate governance structures among industry peers. The sample consists of firms from 22 countries from 2003 to 2017. The results indicate that the environmental performance of firms with best-in-class corporate governance structures is higher than medium-in-class corporate governance firms. We used three dimensions of environmental performance, i.e., emission reduction, resource reduction, and product innovation. The results of this study suggest that diverse, large, and independent boards are more effective in enhancing the environmental performance of firms. The research provides important implications for managers, investors, and researchers regarding the importance of relative benchmarking of corporate governance structures. Insights also include the expectation that environmental performance will change with time and that investors see more value in firms with best-in-class corporate governance mechanisms.
  Keywords: best-in-class; corporate governance; environmental performance; medium-in-class; emission reduction; product innovation; resource reduction.
  DOI: 10.1504/IJBGE.2023.10060604
   
  
• Nexus between corporate governance, CSR and earnings management: moderating role of leverage and firm size  
  by Suha Mahmoud Alawi 
  Abstract: This study aims to investigate the connection between corporate governance (CG), corporate social responsibility (CSR) and earnings management (EM) and how the firm size and leverage moderate this relationship. The data is collected from 520 South Asian listed manufacturing firms from 2010 to 2020. Descriptive statistics, correlation matrix and panel regression are used for data analysis. Further, GMM is employed to confirm the robustness of our results. The findings of the study reveal that corporate governance and CSR have a significant impact on earnings management and other factors like firm size and leverage also have a significant impact on earning management. Firm size and leverage play moderating role in the relationship between corporate governance, CSR and earnings management.
  Keywords: earning management; corporate governance; CG; CSR; leverage; firm size; FZ.
  DOI: 10.1504/IJBGE.2024.10061456
   
  
• CSR exposures of Bangladesh Small and Cottage Industries Corporation enlisted firms during COVID-19  
  by Humaira Begum, Md Mostafizur Rahman, Mohammad Samiul Haque, Babor Ahmad 
  Abstract: This study examines how much the pandemic affects the corporate social responsibility (CSR) activities of the Bangladesh Small and Cottage Industries Corporation (BSCIC). It also identifies determinants of CSR of BSCIC. For conducting this analysis, 110 BSCIC firms are randomly selected as samples. Results of multivariable regression reveal that the age of the firm, size of the firm, profit of the firm, and sales of the firm due to the pandemic has a significant positive influence on firms’ CSR expenditures. The logit model estimates the factors affecting the decisions of firms towards CSR practice. The perception index (PI) reveals the manager’s attitude and psychological intentions in the practice of CSR. The economic perspective of this study suggests that firms should involve more in CSR as it reduces the reputational risk, ensures sustainable operation, and helps firms to escape technically from environmental conflicts. This study notifies several problems in the CSR practice of the firms during the pandemic situations. This study also provides a guide for improving CSR activities on a larger scale in any crisis.
  Keywords: corporate social responsibility; CSR; COVID-19; Bangladesh Small and Cottage Industries Corporation; BSCIC; performance; perception index; Bangladesh.
  DOI: 10.1504/IJBGE.2024.10061659
   
  
• The impact of corporate social responsibility practices disclosure on financial performance  
  by Muhammad Aldaas Marwan, Suresh Ramakrishnan 
  Abstract: The current research explores the relationship between corporate social responsibility (CSR) practices disclosure and corporate financial performance in the Saudi Financial sector. The sample from the financial sector includes the licenced entities listed in the Saudi stock market exchange, TADAWUL, which are banks and insurance companies. The data is analysed using pooled OLS, fixed effect estimation (FEE) and system generalised method of moment (GMM) estimation. According to the findings, total CSR disclosure has a statistically significant positive link with all accounting and market-based performance indicators (ROA, EPS, MVA, and Tobin’s Q). This evidence enriches the understanding of the regulatory authorities regarding how companies deal with social responsibility practices, which is necessary for the formulation of appropriate strategies and legislation. As a consequence of this, the outcomes of the current research will have a substantial impact on empirical development, the implementation of policy, and practical usage.
  Keywords: CSR disclosure; CSRD; firm performance; Saudi Arabia; panel data.
  DOI: 10.1504/IJBGE.2024.10061908
   
  

Special Issue on: Corporate Governance and Social Responsibility in the Post-Pandemic World

• Micro, small and medium enterprises recovery policy after COVID-19 pandemic: case study in developing and developed countries affected by COVID-19  
  by Muzalifah Muzalifah, Kamsi Kamsi, Ali Sodiqin 
  Abstract: This article aims to map and explore the effect of the COVID-19 pandemic on the development and economic recovery policies of post-pandemic micro, small, and medium enterprises in developing and developed countries. This study uses a qualitative method, with literature studies taken from several sources, including print and electronic media, books, research findings, and the authorities’ reports on the official website regarding the COVID-19 handling. Data analysis has four stages which are data collection, condensation, presentation, and conclusion. The results of the study show that the pandemic has attacked all sectors of the MSME economy in several countries, including developed and developing countries. The policies used in the economic recovery of MSMEs in several countries affected by COVID-19 tend to be the same. The difference lies in the priority of the procedures that must be completed, namely: prioritising economic considerations over social or vice versa and economic-social considerations simultaneously.
  Keywords: micro; small and medium enterprises; MSMEs; economic recovery; COVID-19.
  DOI: 10.1504/IJBGE.2023.10059460
   
  
• Leveraging CSR to achieve SDGs during COVID-19: a study of selected Indian companies  
  by Vijaya Sinha, Shinu Vig 
  Abstract: COVID-19 posed an enormous socio-economic crisis and decelerated the attainment of sustainable development goals (SDGs). Indian companies, through their corporate social responsibility (CSR) initiatives, helped the country fight against the pandemic. This study examines the relief measures undertaken through CSR during COVID-19 by the Indian corporate sector. This paper elucidates the intrinsic connection that exists among the endeavours of the Indian corporate sector with respect to CSR and their harmonisation with the SDGs. The relief measures undertaken during 20202022 were examined through an in-depth content analysis of 100 NSE-listed companies and were mapped with SDGs to assess the potential of CSR in achieving them. Findings revealed that out of 17 goals of SDGs, 11 goals were targeted through CSR activities. The study finds an association between CSR and SDGs and, therefore suggests CSR, as a major assisting tool for the government in the attainment of SDGs.
  Keywords: COVID-19; sustainable development goals; SDG; corporate social responsibility; CSR; NIFTY 100; India.
  
  
• Social responsibility through responsible banking strategy  
  by Syed Asim Ali Bukhari, Syeda Nazish Zahra Bukhari 
  Abstract: The purpose of this study is to empirically examine the outcomes of responsible banking strategy. This study is aimed to highlight the various benefits responsible banking to facilitate its adoption in Pakistan. The research framework was based on the natural resource-based view of the firm. The study adopted a quantitative methodology in which data was collected through self-administered questionnaires through the survey method. The unit of analysis was bank branch and branch managers were the respondents of the study. This study conducted a disjoint two-stage analysis for the higher-order dependent variable, i.e., responsible banking. The findings of the study showed a positive relationship between the adoption of responsible banking practices by the bank branches and ecological, operational, social, and financial outcomes. The strongest influence of responsible banking was on the branch’s operational outcomes which highlighted the importance of these benefits in the eyes of the branch manager.
  Keywords: ecological outcomes; financial outcomes; green banking; higher-order construct; operational outcomes; Pakistan banking industry; responsible banking; social outcomes; two-stage analysis.
  DOI: 10.1504/IJBGE.2023.10061257
   
  
• Corporate governance mechanisms and integrated reporting: evidence from Indian companies  
  by Puja Kaura, Ambuj Gupta 
  Abstract: Integrated reporting (IR) is a reporting format that companies are adopting to fulfil the need for comprehensive information arising from global competition, regulatory requirements, and stakeholders’ expectations. Previous research revealed that corporate governance (CG) variables, including board size, gender diversity, frequency of board meetings, audit committee, and board independence, contribute significantly to IR quality. However, most of these studies concentrated on developed economies, underlining a research gap in developing economies such as India, where IR is still in its voluntary adoption phase. This study examines the relationship between CG variables and the extent of disclosures in integrated reports of 80 Indian companies listed in the BSE S&P 100 Index between 2020 to 2022. Results uncovered that all variables positively and significantly impacted level of disclosure, with board independence having the most significant impact, followed by frequency of board meetings and board size. This highlights the significance of considering CG variables while transitioning to IR for enhancing stakeholder relationships.
  Keywords: integrated reporting; agency theory; regression analysis; corporate governance.
  DOI: 10.1504/IJBGE.2024.10062371
   
  

Special Issue on: Current Issues in Crises Business, Governance and Ethics Perspectives

• Are CSR-compliant firms more resilient during health crises?  
  by Sabri Boubaker, Vineeta Kumari, Riadh Manita, Dharen Kumar Pandey 
  Abstract: The study examines the relationship between corporate social responsibility (CSR) and stock returns during times of crisis, such as pandemics. During these times, companies often experience decreased demand, reduced profits, and increased financial risk, leading to lower stock returns. Studying 869 Indian-listed firms during 2019?2020, we show that the global pandemic negatively affected firms’ returns and that CSR-compliant firm tend to perform better than non-compliant firms after the event. The study also shows that CSR expenditure positively impacts stock returns during the pandemic. The findings contribute to the existing literature on the role of CSR in firm resilience and provide evidence of the impact of CSR on stock returns during times of crisis.
  Keywords: corporate social responsibility; CSR; COVID-19; event study; abnormal returns.
  DOI: 10.1504/IJBGE.2023.10057276
   
  
• Business strategy, enterprise risk management, organisational innovation performance and organisational performance: comparing fsQCA with PLS-SEM  
  by Nguyen Vinh Khuong, Le Huu Tuan Anh, Luong Ho Quynh Giang, Le Thi Thuan An, Nguyen Le Ngoc Hang, Pham Van Nguyen, Huynh Le Hoang Nhi 
  Abstract: The purpose of this research is to clarify the relationship between business strategy (BS), enterprise risk management (ERM), organisational innovation performance (OIP), and organisational performance (OP) in Vietnam. We also compare the PLS-SEM findings to a recently developed panel data fuzzy-set qualitative comparative analysis technique (fsQCA). According to the findings, the BS factor has a substantial impact on OP. The ERM factor mediates the relationship between BS and OP along with the relationship between BS and OIP. In the link between BS and OP, as well as the relationship between ERM and OP, the OIP factor serves as an intermediate. This work adds to the scientific literature by providing empirical evidence with a deeper understanding of the level of influence and importance of using a combination of BS and risk management implementation to improve OP in the market.
  Keywords: business strategy; organisational innovation performance; OIP; organisational performance; enterprise risk management; ERM.
  DOI: 10.1504/IJBGE.2023.10057451
   
  
• Board diversity and corporate risk disclosure during the COVID-19 outbreak  
  by Issal Haj-Salem, Salma Damak-Ayadi, Fatma Ouertani 
  Abstract: We investigate the impact of board diversity on corporate risk disclosure practices during the COVID-19 health crisis. We used manual content analysis to measure the risk disclosure on the websites of 91 French-listed companies. We found a positive relationship between risk disclosure and, respectively, the COVID-19 health crisis and the diversity of expertise within the board. While, we found a negative and significant impact of the presence of women on the board of directors, diversity of nationalities, and the tenures’ term, on risk disclosure. To the best of our knowledge, this research is the first study that, firstly, investigated the impact of board diversity on risk disclosure, secondly, to be investigated during the COVID-19 crisis and, thirdly, relied on corporate websites. The empirical findings make both the regulators and managers aware of the board diversity attributes that have to be reinforced to promote risk disclosure, particularly during health crises.
  Keywords: risk disclosure; COVID-19; board diversity; content analysis; websites.
  DOI: 10.1504/IJBGE.2023.10057774
   
  
• How do global financial markets react to the variants of the COVID-19?  
  by Shamima Ahmed, Rima Assaf, Molla Ramizur Rahman 
  Abstract: Previous studies have explored the impact of COVID-19 on financial markets. However, it fails to examine the different variants of concerns (VOCs) of COVID-19 on financial markets. As these VOCs have varying severity on public health with heterogeneity in behaviour across stock markets of different geographies, our study analyses the effects of these VOCs such as Alpha, Beta, Gamma, Delta, and Omicron on the global financial markets. The study uses the ten most-affected countries’ stock market daily returns to examine the effects of the VOCs on the financial markets. The stock returns of Brazil, France, Germany, India, Italy, Russia, Spain, Turkey, the UK, and the USA are negatively affected by the first wave of the COVID-19 pandemic. However, other variants of concern of the COVID-19 do not affect the global financial markets except for the Delta variant affecting the Brazilian Stock Market negatively. Unlike during the first wave of the pandemic which negatively affected the financial markets, the effects on global financial markets became subdued during the later phases of the pandemic.
  Keywords: financial contagion; spillover; variants of concern VOCs; COVID-19; pandemic.
  DOI: 10.1504/IJBGE.2023.10057869
   
  
• The impact of governance on equity funds performance during stable and turbulent market conditions  
  by Nawazish Mirza, Jasmina Mangafic, Muhammad Umar, Danijela Martinović 
  Abstract: There is scant literature that explores the impact of corporate governance on the performance of equity funds. Furthermore, the evidence is nonexistent for emerging markets and in this study; we address this void by assessing the impact of corporate governance on funds’ performance. Using the Morningstar Stewardship grades, we segregate the equity funds with exposure in emerging markets into high and low-governance funds. The study employs a comprehensive sample between 2012 and 2021 to evaluate the comparative risk adjustment performance and market and volatility timing ability of these funds. Our findings reveal that better-governed funds exhibit higher risk-adjusted returns and demonstrate superior market and volatility timing compared to their counterparts. The results remained robust during the pandemic outbreak highlighting an even more profound role of governance for mutual funds. These findings have actionable implications for the mutual fund industry that can help in optimising fiduciary responsibilities.
  Keywords: equity funds; corporate governance; COVID-19; market timing; volatility timing.
  DOI: 10.1504/IJBGE.2023.10059974
   
  
• International trade and exchange rate during war: a retrospective review  
  by Varun Kumar Rai, Madan Lal 
  Abstract: The main purpose of this review is to find the effect of war on the international trade and exchange rate, based on the analysis of 126 Scopus published documents using VOSviewer before that performance analysis reveals that during 2010-2020 more documents have published while the more citations received by the documents published during 1990-2000. Of these publications only 46.04% publications are in collaboration and 1.59% documents have received at least 100 citations. The article (Klemperer, 1995) is most influential article in this study. The network analysis presents the co-authorship analysis where the USA has highest link strength and co-authored with the UK and Germany. Further, the author keyword co-occurrence analysis and bibliographic coupling reveals the four different thematic clusters. The major limitation of this review is that it considers war in general and includes the data only from Scopus database.
  Keywords: VOSviewer; bibliometric; international trade; war; exchange rate.
  DOI: 10.1504/IJBGE.2024.10061583