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/0000-0002-5526-6442Link to ORCID Index: https://orcid.org/0000-0001-6255-8884
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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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Cited by2 articlesJournal title: Problems and Perspectives in ManagementArticle title: Women’s role in effective business management: A comparative analysisDOI: 10.21511/ppm.21(2).2023.67Volume: 21 / Issue: 2 / First page: 758 / Year: 2023Contributors: Fellanze Pula, Saranda Tafa, Linda Ukmata SanajaJournal title: Problems and Perspectives in ManagementArticle title: The impact of fiscal policy on female labor force participation in EgyptDOI: 10.21511/ppm.21(4).2023.28Volume: 21 / Issue: 4 / First page: 361 / Year: 2023Contributors: Emad Attia Mohamed Omran, Yuriy Bilan
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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).2017.01Investment Management and Financial Innovations Volume 14, 2017 Issue #3 pp. 4-14 Views: 2819 Downloads: 2067 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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Impact of audit committee characteristics on firm performance: Evidence from Bahrain
Problems and Perspectives in Management Volume 20, 2022 Issue #1 pp. 247-261 Views: 2229 Downloads: 1168 TO CITE АНОТАЦІЯThe purpose of this study is to analyze the relationship between different audit committee attributes and company performance in Bahrain. This paper investigates the impact of audit committee independence, size, and meeting frequency on company performance (employing ROE, ROA, and Tobin’s Q). Data from all 14 non-financial publicly listed companies on Bahrain Bourse during 2005–2019 were used. The results revealed that companies with independent audit committees and big audit committees in terms of size are performing poorly. It is also shown that the number of audit committee meetings does not affect company performance. Further, this study failed to find any association between the number of audit committee meetings and company performance. The findings show that shareholders might lack knowledge of the importance of corporate governance mechanisms. The results of this study should be of potential interest to different stakeholders, including regulators, investors, and auditors, in their attempts to improve company performance and monitoring mechanisms in emerging economies.
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Corporate governance and financial performance in Islamic banks: the role of the sharia supervisory board in multiple-layer management
Darwanto , Anis Chariri doi: http://dx.doi.org/10.21511/bbs.14(4).2019.17Banks and Bank Systems Volume 14, 2019 Issue #4 pp. 183-191 Views: 2199 Downloads: 388 TO CITE АНОТАЦІЯThis study aims to investigate the impact of Good Corporate Governance (GCG) on the financial performance of sharia banking. GCG is measured by the Board of Commissioners Performance, the Board of Commissioners Composition, the Number of Audit Committees, the Board of Directors, and the Sharia Supervisory Board Performance, whereas financial performance is proxied by Return on Assets, financing risk (Non-Performing Financing), and capital (Capital Adequacy Ratio). Sharia commercial banks registered by Bank Indonesia made the sample of this study. Annual reports and GCG reports of sharia commercial banks from 2014 to 2017 are used as a data source. The study uses a panel data regression approach to analyze the data; some interesting results have been obtained. The Sharia board positively affected financial performance of Islamic banks in terms of return on assets and capital adequacy ratio, and negatively as to non-performing financing. Similarly, the board of directors had a significant impact on the financial performance of Islamic banks in the same direction as the sharia supervisory board in terms of the three components. Meanwhile, the board of commissioners had a significant and positive impact only on the return on assets of Islamic banks in Indonesia.