New Issue of the Corporate Ownership and Control Journal is Published

The recent issue of the journal Corporate Ownership and Control pays attention to issues of economic crisis, small and medium enterprises, market capitalisation, return on assets, return on equity, firm risk, firm value etc. More detailed issues are given below.

Elisa Giacosa, Estela Halili, Alberto Mazzoleni, Claudio Teodori and Monica Veneziani focuse on the several objectives: 1) to test the degree of effectiveness of the insolvency prediction models, most widely used in the literature, including recent works (Jackson and Wood, 2013), with reference to Italian manufacturing companies; 2) to modify the insolvency prediction models selected with the aim of identifying a company insolvency “alert model” which can be used by the various stakeholders; 3) to compare the effectiveness of the re-estimated models vis-à-vis the original ones. The following models were used, selected according to their diffusion and the statistical technique used: 1) Discriminant analysis: - Altman (1983), - Taffler (1983); 2) Logit Analysis: - Ohlson (1980). The study was carried out on a population of Italian companies (27,982 non-failed and 478 failed) with financial statements available for the years 2007-2012.

Abdullah Al-Maghzom, Khaled Hussainey and Doaa Aly investigate the existing risk disclosure literature in emerging economies, in particular Saudi Arabia (SA), by examining the levels of risk disclosure in the annual reports of both Islamic and non-Islamic listed banks. This investigation uses a manual content analysis method to examine all Saudi listed banks from 2009 to 2013. This study also develops two holistic risk disclosure indices to measure the levels of risk disclosure in both Islamic and non-Islamic banks. The empirical analysis shows that Islamic banks report less risk information than non-Islamic banks. However, the analysis also reveals that both Islamic and non-Islamic banks report relatively the same amount of risk information regarding the banks’ universal items. Furthermore, the empirical analysis shows that Islamic banks report very low risk disclosure items. The study’s findings have practical implications.

Celani John Nyide develops factors that affect the use of EMA by the hotel sector in South Africa. The research was an exploratory study and qualitative in nature using a single case study with embedded units approach. ABC Hotel Management Group along its 3 hotels located in the province of KwaZulu-Natal, South Africa, met the selection criteria and thus formed part of this study. There were 10 participants in this case study. Additional documents were analysed which included financial statements, policy documents, the Group website, the hotels’ websites, Group Energy Profile Analysis (GEPA) programme, and Building Monitoring Systems (BMS). The results of this research established a number of factors that affect the use of EMA by the hotel sector in South Africa. The adoption of a prototype EMA model by the hotel sector is then suggested by the study.

Abdullah Hamoud Ismail, Azhar Abdul Rahman examine how corporate environmental reporting (CER) plays important role due to the increase in public awareness of environmental issues. The quality of CER can be seen as a key value for companies and many benefits could be provided if companies released high quality environmental information. Prior environmental disclosure literature has not focused much on disclosure quality; instead, it concentrated on the quantity of disclosure. In addition, most of the few studies that focused on quality of environmental disclosure have revealed low level of quality of such disclosure. Therefore, this study aims to investigate the quality of environmental disclosure in different reporting mediums by oil and gas companies in developing countries. The results of this study reveal that the quality of the environmental disclosure of the sample companies is relatively high compared to previous studies. This study has important implications in enhancing the understanding of environmental disclosure practices of oil and gas companies in developing countries.

Alexis Esposto and John Annakis study a rationale for the emergence of green occupations as a means of transitioning Thailand’s tourism sector into a low carbon economy. A mechanism for achieving this goal is by training and retraining the workforce with a set of well-defined green knowledge and skill sets. These can be developed through the development and implementation of ‘green competencies’. This paper presents a methodology of how to transition a standard job into a green job in the tourism sector by developing green sustainable competencies.

Elizabeth Chinomona examines Small and Medium Enterprises (SMEs) which are regarded as engines of economic growth and major instruments of employment generation in Zimbabwe. However, they are hampered by a lack of resources, poor administration and the inadequate knowledge and training of employees. The primary objective of the research was to investigate the influence of organisational citizenship behaviour (OCB) and employee perception of equity (EPE) on organisational commitment (OC) in Zimbabwean SMEs. A survey design with a sample (n=464) was used. Research scales were operationalised mainly on the basis of previous work. Minor adaptations were made in order to fit the current research context and purpose. Seven-item Likert scales were used to measure OCB, EPE and OC through confirmatory factor analysis and structural equation modelling. Through structural equation modelling and path analysis, the results indicated that there are positive relationships between the posited research variables (OCB, EPE and OC).

Niraj Satnalika and S.V.D. Nageswara Rao investigate a methodology to measure good governance and value creation with the help of an index composed of two sub-indices which corresponds to corporate governance and value creation (CGVC). The proposed index measures corporate governance quality that collapse into one number (a governance rating or index) and helps in analysing the effectiveness of corporate governance index in predicting value creation. The CGVC index is constituted after investigating governance practices in BSE 100 companies which accounts for nearly 66% of the market capitalisation (as of March 2014). The study investigates corporate governance practices followed by the company in terms of 11 parameters identified (based on various recommendations given by the several committees) coupled with value created for different stakeholders.

Claudette Rabie explores if users of social media as a promotional mix element could be clustered into different groups based on characteristics they possess. A web-based self-administered questionnaire was distributed to accommodation establishments located in the Western Cape province of South Africa and a total of 361 useable responses were received. A four-step cluster analysis was performed in order to identify similar groups of respondents in their use of social media as a promotional mix element. The findings presented four distinct users of social media in the accommodation industry based on six variables identified from the literature.

Sin Huei Ng, Boon Heng Teh, Tze San Ong and Wei Ni Soh examine examines the relationship between corporate governance attributes and firm financial performance in Malaysia. The relationship between board characteristics (board tenure, board size and CEO duality) were analyzed to investigate their correlation with firm financial performances. A total of 100 public listed companies were randomly selected from Bursa Malaysia for the year 2009 to 2013. Random effect panel data regression was obtained by using Stata. This study finds that board size, board tenure were significant to Return on Equity (ROE) and Return on Assets (ROA). However, firm size has no significant relationship with firm financial performance. It is recommended that apart from including more variables as controlling effects on firm financial performance and examining few industries as sample, it is also good to examine the correlation between board characteristics and corporate governance variables (foreign listings, equity analysis, external auditors, leverage ratios, dividend policy, etc.) on one hand, and ownership structures on the other hand, that have significant impact on firm financial performance.

Kunofiwa Tsaurai investigates the relationship between stock market development and economic growth in Belgium using ARDL approach with annual time series data from 1988 to 2012. Real GDP per capita was used as a proxy for economic growth and stock market capitalization as a ratio of GDP as an approximate measure of stock market development. The relationship between stock market development and economic growth falls into four categories which are (1) stock market-led economic growth, (2) economic growth-led stock market development, (3) feedback effect and (4) neutrality hypothesis where the relationship between the two variables does not exist. Despite the existence of these four views on the relationship between stock market and economic growth, it appears from the literature review done by the author that majority of the empirical evidence support the stock market-led economic growth view. The fact that the topic on the directional causality between stock market and economic growth is still inconclusive is the major motivating factor why the author chose to investigate the relationship between the two variables in Belgium. The study observed that there exist an insignificant long run causality running from stock market development towards economic growth in Belgium.

Untung Haryono, Rusdiah Iskandar, Ardi Paminto and Yana Ulfah analyze the relationship between the sustainability performances (corporate social performance, good corporate governance, and financial performance) and the risk as well as the value of the company. Employing the data from publicly listed mining firms in Indonesia and structural equation modeling to examine the hypotheses, we find that the corporate social performance improvement can be served to increase the corporate financial performance. Implementation of good corporate governance may contribute to improve financial performance and reduce the risk of the company. In short term, investors will appreciate the social and environmental responsibility undertaken by the company only if its implementation can contribute to the improvement of the company’s financial performance. In long term, social and environmental performance improvements made by the company will be able to increase the value of the company directly.

Uwalomwa Uwuigbe, Francis Kehinde Emeni, Olubukola Ranti Uwuigbe, Ataiwrehe Chojakeme Maryjane examine whether mandatory adoption of IFRS is associated with improvement in accounting quality of banks listed on the Nigerian Stock Exchange (NSE). The study made use of secondary data; data were extracted from financial statements from 2010 – 2013. The data were analyzed using Ordinary Least Square (OLS) from SPSS. The findings of the study revealed that after the adoption of IFRS, the rate at which Nigerian banks engage in income smoothing increased, while earnings management towards small positive earnings reduced, thus reducing the quality of accounting amount disclosed in the financial statements. The findings of this study have effect on the efficiency of the stock market. Therefore, other bodies, such as SEC, BOFIA, among others should put in place measures that will limit the extent to which bank managers uses their discretion and alternatives in accounting standards to manage earnings.

To browse papers in the issue please visit this page.