New issue of the Corporate Ownership and Control journal
The recent issue of the journal Corporate Ownership and Control is devoted to the questions of operating leases, constructive capitalisation, market power, structure theory-behaviour-performance, internet corporate reporting, revenue model, valuation metrics, stochastic simulation, balanced scorecard, performance evaluation, internal audit function, asset-liability management, canonical correlation analysis, good-governance, heritage management systems, corporate environmental reporting, cross-border acquisitions, bidder returns etc. More detailed issues are given below.
Roberto Maglio, Valerio Rapone, Andrea Rey investigate the lease accounting which will never be the same again. The endorsement of on November 2017 sets out new rules for the recognition and measurement of the lease. The standard IFRS 16 removes the lessee’s distinction between operating and financial lease and it will have a substantial impact for companies have previously kept a large proportion of their financing off balance sheets. The purpose of this research is to analyse the potential impact of the new accounting rules on key financial ratios of Italian listed companies using a refined constructive capitalisation method. The results of the study show that the reflection of the operating leases on the balance sheet shall cause a significant increase in the assets and liabilities and for this reason, there shall be a significant effect on the main debt, liquidity and profitability ratios.
Bahaa Sobhi AbdeLatif Awwad aims to test the theories of market power and its role in interpreting the performance of Islamic banks in the GCC countries. Based on data from 22 Islamic banks for the period 2012-2017, using standard models, market power theories were unable to explain the returns of Islamic banks in the Gulf. Accordingly, these results deny the existence of an impact of monopoly in the structure of the Islamic banking sector in the performance of this sector, as well as the impact of traditional efficiency in its performance.
Krayyem Al-Hajaya, Nedal Sawan examine the develop a generic framework for the adoption of Internet corporate reporting (ICR), in developing countries, and to test the applicability of this framework by undertaking an empirical study in a developing country, namely Jordan. The key literature focuses mainly on economic-based theories in explaining different ICR practices as a voluntary disclosure channel. This study presents an assessment framework for ICR adoption, which enables managers to evaluate the current status of a company in respect of three aspects of readiness to engage in ICR, these being: organisation, technology, and environment.
Roberto Moro Visconti, Giuseppe Montesi, Giovanni Papiro investigate the links between Internet of Things and related big data as input parameters for stochastic estimates in business planning and corporate evaluation analytics. Financial forecasts and company appraisals represent a core corporate ownership and control issue, impacting on stakeholder remuneration, information asymmetries, and other aspects. Optimal business planning and related corporate evaluations derive from an equilibrated mix of top-down and bottom-up approaches. Stochastic modeling is traditionally used for budgeting and business planning, this probabilistic process is seldom nurtured by big data that can refresh forecasts in real time, improving their predictive ability. Combination of big data and stochastic estimates for corporate appraisal and governance issues represents a methodological innovation that goes beyond the traditional literature and practice.
Kaïs Lassoued examines how to present a basis for a more general BSC model helping higher education managers in UAE environment for evaluating and managing the performance of their institutions. This paper is based on the case study as a research method. However, the relevance of this case study lies in the use of a joint approach combining SWOT analysis and BSC and generating an integrated strategic management system. The study comes up with a strategic evaluation plan considering the 4 BSC perspectives and designs the strategy map for it in the case of the Emirates College of Business. In this research, the traditional customer perspective of Kaplan and Norton is replaced by the students and stakeholders perspective. It is found that there is a limitation in the effective strategic problem that leads to the recruitment and placement issues, increased costs, student retention, lack of partnerships, a decrease in annual growth of income and poor performance management that can be managed through effective strategic planning.
Marc Eulerich, Nicole Ratzinger-Sakel explore how the national culture has an effect on different characteristics of the internal audit function (IAF). Using an international sample of companies from different industries together with the five cultural dimensions of Hofstede as proxies for national culture, this study analyzes how cultural differences across countries affect the structure and work of the internal audit function (IAF). In the study, estimate linear, logistic and ordered logistic regressions to test the effects of the different country-level cultural variables on our dependent IAF variables. The results show a positive association between the different cultural dimensions, e.g. long-term orientation and uncertainty avoidance, and an objective and independent IAF. The findings can help internal audit practitioners and their stakeholders to double-check if specific dimensions of national culture have an impact on IAFs’ characteristics. In the paper uses a unique research focus and an international dataset to examine the influence of national culture on IAF in multiple dimensions.
Houda Ben Said, Rim Zouari-Hadiji analyse the asset-liability management behaviour in Tunisian banks between 2000 and 2014. The liberalization process in the Tunisian economy coupled with global developments exposed banks for various kinds of risks (interest rate risk, liquidity risk, exchange risk, etc.) which have a direct impact on their profitability and efficiency. A sample consisting of public, private, and foreign banks operating in the Tunisian territory was considered and the multivariate statistical technique, canonical correlation analysis has been used to capture the nature and strength of the relationship between the assets and liabilities in these banks. From the analysis, different degrees of the association have been found among various constituents of assets and liabilities and among banks. Further, the most Tunisian banks were asset-managed: these banks were actively managing assets and liabilities and were dependent on how well the assets are managed.
Nabiela Noaman, Johan Christiaens, Hassan Ouda, Dina El Mehelmy aim to answer what constitutes “good governance in the heritage sector” by identifying and testing measurable determinants for good governance (GG) of heritage management (HM), with special attention to financial management and accountability. The deductive approach is used to discern the determinants, while Lawshe method is used to quantify the results of the content validity. The checklist applicability is investigated, by comparing the appropriated determinants to the practices of the pioneer countries mainly, England and Australia. The compliance of Egypt with GG of HM is assessed to identify the variation in GG of HM between developed and less-developed countries. The results of which reveal much deficiencies and flaws in Egypt’s heritage governance and management and the urgent need for reform.
Probal Dutta reviews the corporate environmental reporting practices in Finland. This paper outlines the studies conducted to date on Finnish firms’ environmental reporting practices with a view to discovering research gaps in the literature concerning environmental accounting and reporting in the Finnish context. The paper adds to the existing literature by identifying research gaps such as the antiquity of datasets used in the previous studies, the risk of failure to generalize the findings of the prior investigations and most importantly the research negligence towards the impact of Finnish firms’ activities and operations on climate change and changes in biodiversity. Hence, the paper has implications for researchers, who could address the identified void in future research and thereby advance further the literature concerned with environmental accounting and reporting.
Kotaro Inoue, Robert Ings explore the shareholder wealth effect in domestic and cross-border acquisitions involving Japanese acquiring firms over the period from 2000 to 2010. The results of the study reveal that cross-border acquisitions create larger returns for the acquirers’ shareholders than domestic deals. Furthermore, although acquisitions of firms in G7 countries create larger value, in the period between 2008 and 2010, which corresponds to a period of slow economic growth in G7 countries after the US financial crisis, acquisitions involving target firms in non-G7 countries created greater wealth gains for shareholders than deals that targeted firms in G7 countries. In the paper, results highlight the growing importance of M&A target firms in growing markets for mature firms in advanced and slow-growth economies.
To browse the issue, please, visit the following link.
We hope that you will enjoy reading the journal and in future we will receive new papers, outlining the most important issues and best practices of corporate governance!
