Board characteristics and firm value: The moderating role of capital adequacy
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Received February 15, 2023;Accepted May 15, 2023;Published May 26, 2023
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Author(s)Link to ORCID Index: https://orcid.org/0000-0002-5526-6442
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Link to ORCID Index: https://orcid.org/0000-0001-6255-8884, Zunarni Binti Kosim
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DOIhttp://dx.doi.org/10.21511/imfi.20(2).2023.18
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Article InfoVolume 20 2023, Issue #2, pp. 205-214
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The global financial crisis increased corporate world uncertainties. Therefore, to meet these challenges, firms take a more proactive approach to tackling various corporate governance and firm value initiatives and policies. This study aims to explore the moderating effect of capital adequacy on the relationship between board characteristics and the firm value of listed banks in Pakistan. To obtain a more robust empirical model and results, this study incorporates moderator and control variables. This study is based on half-yearly secondary data of 560 sample observations from 2009 to 2021. Multiple regression and panel data estimation techniques were employed for the analysis. The study used firm value as a dependent variable, proxied by Tobin’s Q, along with five independent variables, one moderating variable, and two control variables. The results of this study indicate that a higher capital adequacy ratio (CAR) increases firm value and has a moderating effect on board characteristics and firm value. Low proportions of women and independent directors on board affect firm value. The presence of risk management and audit committees in listed Pakistani banks, on the other hand, increases firm value. The banks in Pakistan have no problem with CEO duality. The study also found that bank size has a positive relationship with firm value, while bank age has a negative relationship with firm value.
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JEL Classification (Paper profile tab)M21, G32, O16
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References32
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Tables8
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Figures2
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- Figure 1. Logical relationship between variables
- Figure 2. Graphical representation of correlated variables
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- Table 1. Half-yearly observations of listed banks of Pakistan
- Table 2. Summary of variables and measurements
- Table 3. Descriptive statistics
- Table 4. Goodness of fit test
- Table 5. Regression results of financial risks and firm value
- Table 6. Pearson correlation
- Table 7. Moderating effects of CAR on board characteristics and Tobin’s Q
- Table 8. Hypotheses testing results
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Conceptualization
Tahir Saeed Jagirani, Lim Chee Chee, Zunarni Binti Kosim
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Data curation
Tahir Saeed Jagirani, Lim Chee Chee
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Formal Analysis
Tahir Saeed Jagirani, Zunarni Binti Kosim
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Investigation
Tahir Saeed Jagirani, Lim Chee Chee
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Methodology
Tahir Saeed Jagirani, Lim Chee Chee, Zunarni Binti Kosim
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Project administration
Tahir Saeed Jagirani, Zunarni Binti Kosim
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Software
Tahir Saeed Jagirani
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Visualization
Tahir Saeed Jagirani, Lim Chee Chee
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Writing – original draft
Tahir Saeed Jagirani
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Writing – review & editing
Tahir Saeed Jagirani
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Supervision
Lim Chee Chee, Zunarni Binti Kosim
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Validation
Lim Chee Chee, Zunarni Binti Kosim
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Conceptualization
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Inventory management, cost of capital and firm performance: evidence from manufacturing firms in Jordan
Ashraf Mohammad Salem Alrjoub, Muhannad Akram Ahmad doi: http://dx.doi.org/10.21511/imfi.14(3).2017.01
Investment Management and Financial Innovations Volume 14, 2017 Issue #3 pp. 4-14 Views: 2351 Downloads: 1697 TO CITE АНОТАЦІЯSeveral studies have examined the relationship between inventory management and firm performance. However, most of these studies ignore the impact of inventory types on the relationship. Moreover, the relationship is influenced by some factors such as cost of capital which has not been considered. This study examines the moderating effect of cost of capital on the relationship between inventory types and firm performance. The data of 48 firms for the period 2010-2016 which formed 279 firm-year observations were used in this study. With the use of Pearson correlation and panel Generalized Method of Moments (GMM) estimation, the findings show that inventory management with consideration of its types influence firm performance in the long term. In addition, it is also found that cost of capital moderates the relationship between inventory management and firm performance. However, the interaction between cost of capital and inventory types has different implications. It is suggested that firms should consider cost of capital when making decision on inventory types and align their inventory control to fit in to the changes in their business environment.
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The impact of foreign ownership on corporate governance: evidence from an emerging market
Investment Management and Financial Innovations Volume 16, 2019 Issue #2 pp. 101-115 Views: 1642 Downloads: 219 TO CITE АНОТАЦІЯThis research explores the influence of foreign ownership on non-financial public shareholding firms in the Amman Stock Exchange (ASE). The study involved an investigation into the connection between non-Jordanian ownership and the company growth opportunity, stock liquidity, leverage, dividend policy and business output. The results highlight that foreign ownership can provide improved corporate governance practices by playing a decisive role in increasing the growth opportunity and enhancing the firms’ market valuation, as measured by Tobin’s Q. Moreover, the findings indicate that companies with foreign board membership have better operating performance and higher firm value. The rewards were reaped by foreign investors based on their superior monitoring ability, which affects the decisions made and actions taken by management.
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Is audit committee expertise connected with increased readability of integrated reports: Evidence from EU companies
Problems and Perspectives in Management Volume 16, 2018 Issue #2 pp. 23-41 Views: 1635 Downloads: 346 TO CITE АНОТАЦІЯThis study contributes to the recent “managerial ability” literature and analyses the impact of audit committees’ financial and sustainability expertise (i.e. combined and separately as individuals) on the readability of integrated reports. Analyses were conducted with data on a sample of European Union (EU) public interest entities (PIE) from the Examples Database of the International Integrated Reporting Council (IIRC) for the fiscal years 2014–2016 (i.e. 215 firm-year observations). Correlation and regression analyses were conducted to evaluate possible links between either financial or sustainability expertise and combined financial and sustainability expertise in audit committees and the readability of integrated reports, as measured by the Flesch Reading Ease and Gunning Fog indices. While audit committees’ financial and sustainability expertise has a positive impact on the readability of integrated reports, combined expertise has a stronger effect compared with either financial or sustainability expertise. This finding is in line with the idea that, to combine financial and sustainability information in integrated reports, audit committees need to have more diverse expertise. Companies, regulators and researchers could be significantly affected by the finding that managerial ability variables such as audit committee expertise can have a considerable impact on integrated reporting.