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This paper investigates the impact of management team stability on corporate financing constraints, based on the data of Chinese listed companies from 2008 to 2020. The results show that management team stability has a negative effect on financing constraints. Mechanism test shows that this effect operates through reducing agency cost. This paper combines internal human capital team characteristics with resource acquisition efficiency in the capital market, which represents a novel finding in the literature on financing constraints determinants. [ABSTRACT FROM AUTHOR]

Biodiversity is important to human's future survival and global sustainability. One way to achieve corporate sustainability is for firms to report its impacts on biodiversity. However, fear of litigation arising from reporting potentially deters corporations to disclose such information. Motivated by the importance of biodiversity and mixed evidence of shareholder litigation rights as a corporate governance tool, we explore whether the universal demand laws (UDLs) have any effect on corporate biodiversity reporting in the United States. Supporting our short‐termism, risk aversion and agency hypotheses, we find that an exogenous decline in the threat of derivative litigation, reducing a chance for shareholders to file a lawsuit against top management and intensifying agency costs, economically and significantly decreases a corporate's biodiversity reporting by 87%. When the disciplining effect of shareholder litigation drops, the self‐interest manager may want to live a quiet life and disclose less information of biodiversity impact. A proactive business strategy to mitigate litigation and reputational risks is to voluntarily disclose more biodiversity‐related information. Regulators around the world should also promote rigorous reporting requirements to reverse biodiversity loss and save our humanity. [ABSTRACT FROM AUTHOR]

This paper explores the association between directors’ and officers’ liability insurance (D&O insurance) and management tone manipulation. This study uses data from A-share listed non-financial companies from 2009 to 2021 as its sample for empirical tests. In addition, the study relies on text analysis and the construction of models to investigate the relationship between D&O insurance and management tone manipulation. The authors find that the purchase of D&O insurance will lead to management tone manipulation in the “management discussion and analysis” part of companies’ annual reports, and operating risk and agent cost are the two paths for the effect. Further analysis shows that having a male CEO and employing high-quality auditors can weaken the positive impact of D&O insurance on tone manipulation. This paper provides a new approach for studying the literature related to D&O insurance and management behavior, and the findings enrich our understanding of the influencing factors and the mechanism of management tone manipulation, thus revealing policy implications for further standardization of the terms and system of D&O insurance in China.

Outsourcing, which has become an important employment strategy, is of increasing interest in both management theory and practice. This paper investigates the determinants of outsourcing from the perspective of CEO overconfidence using manually collected outsourcing data from Chinese A-share listed companies for the period 2012–2020. The empirical results show that firms with overconfident CEOs are more likely to adopt outsourcing strategies, and the asset specificity mitigates the positive effect of CEO overconfidence on outsourcing decisions. Furthermore, we find the moderating effect of asset specificity occurs mainly in private firms rather than SOEs and in large firms rather than small firms. Our results indicate inefficiencies associated with overconfidence should be classified as honest mistakes rather than deliberate actions, and strong corporate governance mechanisms help overconfident CEOs avoid making honest mistakes. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to examine the effects of agency cost on auditor choice. This paper also deals with the moderating role of the board's financial expertise (Bfe) and the status of the internal control (Intecon) system on the relationship between agency cost and auditor selection. Design/methodology/approach: This study's sample consists of 1,040 firm-year observations of Iranian nonfinancial companies listed on the Tehran Stock Exchange from 2012 to 2019. The information required for this research is mainly extracted from Comprehensive Database of All Listed Companies (in Iran Stock Exchange). Data from 130 companies were obtained during the research period. This study used logistic regression to test the hypotheses. Findings: The findings indicate that companies with higher agency costs choose the auditor from lower classes. As the proportion of financial expert members on the board increases, the intensity of this relationship will be reduced. Companies with higher agency costs choose the auditor from the lower classes, but the higher the ratio of financial expert board members, the more these companies will choose high-quality auditors. However, findings showed that the status of the Intecon system has no moderating effect on the relationship between agency costs and auditor selection. Originality/value: The results of this study can expand the existing literature on the relationship between auditor selection and agency costs and the factors affecting this relationship, especially the Bfe and Intecon. This research has significant suggestions for regulators, stakeholders, shareholders and analysts in emerging economies that may encounter similar contextual implications. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this study was to explore the motives (especially the agency motives) for corporate diversification from the perspective of corporate executives who make such strategic decisions and manage the diversified firms daily. Design/methodology/approach: A qualitative research approach was adopted, and 12 chief executive officers (CEOs) of diversified firms in Nigeria were interviewed for their perspectives on the motives for corporate diversification. Findings: Stewardship motives – diversification to use excess capacities in assets and resources to exploit opportunities in the market and defend against adverse environmental developments – were the most cited reasons for diversification. The relevant agency problem related to corporate diversification motive in Nigeria is the principal–principal (majority shareholder-minority shareholder) one. CEOs with substantial holdings in their firms indicated that they use diversification to reduce their investment risk and retain control of their portfolio. Practical implications: The findings suggest that in corporate environments such as Nigeria that feature blockholding prominently, the corporate strategy-related agency problem that policymakers should pay greater attention to is the principal–principal conflict rather than the traditional agent–principal problem that has influenced corporate governance over the years. There is also a need to revise the dominant view that diversification is a value-destroying strategy motivated by the self-seeking behavior of managers who have little or no shares in the companies they manage. Originality/value: The few studies on motives for corporate diversification that incorporated the perspectives of corporate executives did not address the agency motives of diversification. To the best of the authors' knowledge, this is the first study that has done so. [ABSTRACT FROM AUTHOR]

This study investigates whether directors' and officers' liability insurance (D&O insurance) misleads creditors' lending decisions by examining its effect on corporate debt maturity structure. We find that purchasing D&O insurance leads to increased corporate debt maturity, and this effect is more pronounced for firms with weaker corporate governance. These results suggest that creditors may view D&O insurance as an external monitoring tool that helps improve corporate governance. However, D&O insurance induces higher firm risk, but cannot help decrease agency costs or improve firm performance, that is, it results in more severe managerial opportunism. Our findings suggest that D&O insurance, to some extent, misguides creditors' lending decisions. [ABSTRACT FROM AUTHOR]

This paper investigates the relationship between cross-shareholding networks and internal controls quality using a sample of all listed A-share firms in China during 2007–2020. We find that the higher the centrality of cross-shareholding networks, the lower the quality of internal control. This finding passes a series of robustness regressions. Moreover, we further test the influence channel of cross-shareholding on the internal control quality and find that the agency cost is the corresponding intermediary. That is, the cross-shareholding network increases the agency cost of the firm and thus reduces the quality of internal control. [ABSTRACT FROM AUTHOR]

M&As are significant corporate events that lead to changes in ownership structure and management. These events result in a "change" in conflict of interest (agency cost) among owners. In the context of M&A, agency cost could be affected by many factors. The aim of this research is to review the existing literature on factors affecting agency costs in the context of M&A. The impact of agency cost is elucidated in M&A context by examining its impact on M&A performance. A conceptual framework is developed based on review and synthesis of evidence from 38 research papers. Three factors were identified that affect agency costs in the M&A context and they are firms' financials, corporate structure, and deal characteristics. Additionally, agency cost is classified according to nature of conflict among stakeholders such as shareholder-manager conflict (AC-1), shareholder-director conflict (AC-1.1), shareholder-shareholder conflict (AC-2) and shareholder-creditor conflict (AC-3). This classification of agency cost furthers our understanding of the impact of different factors. The synthesis of evidence identifies research gaps that can extend future research avenues and improve comprehension of the effects of agency costs in M&A context. This study's findings have significance for analysts focusing on post-M&A returns and policymakers seeking to devise and implement policies reducing post-M&A agency costs. This systematic review contributes to the current reservoir of knowledge in the field of M&A research by identifying the factors influencing agency costs and their influence on post-M&A performance. The provided insights may facilitate the development of strategies for managing agency costs in M&A transactions. [ABSTRACT FROM AUTHOR]

As the concept of balancing environmental protection and maintaining sustainable economic development has been widely recognized, the green bond is assuming an increasingly significant role within China's financial market. We utilize the data from China's A-share listed enterprises that issued bonds in the period 2010 to 2021 and try to examine whether and how green bond issuance facilitates the spillover effect of green technology innovation in industry. The results show that: (1) Green bond issuance can generate a spillover effect, greatly enhancing green technology innovation within the industry. (2) The spillover effect of green technology innovation from green bond issuance within an industry is more pronounced for state-owned enterprises, and relatively weaker for enterprises in Northeast China in the same industry. Relative to non-high-pollution industries, high-pollution industries reinforce the spillover effect. (3) Financing cost and agency cost are important influencing mechanisms for green bond issuance to improve peer enterprises' level of green technology innovation. Overall, the results provide theoretical support for encouraging the market for green bonds to maintain their development over the long term and for effectively promoting the transformation of the economy and society to a green and low carbon one. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Social Sciences Research / Sosyal Bilimler Arastirmalari Dergisi is the property of ODU Journal of Social Sciences Research and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The agricultural industry in Russia demonstrated a notable growth since 2010. Russian policymakers strive to further increase agricultural production and set new targets for the industry for the years ahead. While agroholdings are regarded as one of the main driving forces behind the recent success in the agricultural sector, they are also believed to be the main locomotive that will move agriculture towards the set goals. In spite of their growing importance, the literature on agroholdings is still relatively immature and fails to provide clear evidence of their financial efficiency as opposed to non-agroholding farms. The current study utilizes a manually sourced longitudinal dataset of 203 corporate farms in Russia and provides a new empirical evidence on the financial performance of agroholding farms through the prism of an agency problem. Our findings reveal a significant positive relationship between agroholding membership and financial performance, as indicated by two accounting indicators – return on assets (ROA) and return on sales (ROS). We further observe that agroholdings face lower agency costs, which to a certain extent, explain their higher financial performance compared to stand-alone farms. The study offers empirical recommendations for policymakers and corporate executives in the Russian agricultural sector.

Stock Prices Crash RiskThe of risk the stock price crash, which indicates the possibility of a sharp and sudden drop in price, is affected by the risk of financial distress, and agency costs intensify this relationship. Empirical investigation of this issue is the aim of the present studyTo achieve the goal of the research, the data of 211 corporations active in the Tehran Stock Exchange were selected during a 10-year period from 2012 to 2021, and multivariate linear regression method and mixed data model were used to test the hypothesis. The findings showed that the risk of financial distress (criterion based on market information) does not increase the risk of stock prices crash. .Also the existence of agency costs does not intensify the relationship between the risk of financial distress and risk of stock prices crash. In addition to this test and additional analyzes showed that the risk of financial distress (criterion based on Altman's accounting information) increases the risk of stock prices crash (criterion of negative skewness of stock returns). Investigating the effect of agency costs on the relationship between the risk of financial distress and risk of stock prices crash and measuring the risk of crash with the two criteria of negative skewness of stock returns and downward volatility, the risk of financial distress with the two criteria of Merton and Altman, as well as adjusting the agency costs of each company. With industry average, research innovation is considered

This paper investigated how hiring one of the Big 4 auditing firms helps initial public offering (IPO) owners attract venture capitalists' (VCs) backing when going public to address the gap in auditing and venture capital literature. For this, the paper examined a large dataset from 1995 to 2019 consisting of 33,536 IPO firms from 22 countries with diverse socioeconomic, political, and cultural contexts. The study found that hiring Big 4 auditors increases IPO owners' chances of recruiting VCs by up to 50%. The analysis also supports prior findings, which state that IPO owners strategically choose Big 4 audit firms to lower agency costs and send quality signals to improve openness and disclosure as well as boost VCs' confidence in the IPO market. This research offers multiple benefits to academics, policymakers, investors, and issuers. [ABSTRACT FROM AUTHOR]

The advent of the digital economy has ushered in unprecedented opportunities for corporate development. Utilizing a comprehensive data set comprising Chinese listed companies spanning the period 2011–2020, this study empirically examines the impact of digital transformation on corporate illegality. The findings reveal a significant reduction in corporate illegality attributable to digital transformation. This empirical result retains its significance even when subjected to a battery of robustness tests. In terms of the underlying mechanisms, this paper conjecture that digital transformation reduces the internal and external information asymmetry, thereby curbing corporate illegality. Further heterogeneous analysis shows that digital transformation is more effective among corporates with higher agency cost (state‐owned or large corporates) or corporates located in regions with lower degree of marketization level. These heterogeneous effects provide supportive evidence to the above conjecture. The implications of this study extend the boundaries of digital transformation research and furnish novel and actionable insights into the prevention of corporate illegality. [ABSTRACT FROM AUTHOR]

This paper investigates the interrelationship between institutional investors' information competition, accounting information transparency, and corporate governance in the context of Chinese A-share listed companies from 2008 to 2020. Institutional investors are considered informed traders due to their access to valuable information and professional research teams. They play a critical role in reducing information asymmetry between listed companies and investors, influencing investment decisions. Previous research has primarily focused on the impact of institutional investors' shareholding on accounting information transparency, but less attention has been paid to the influence of their information competition. This study addresses this gap by examining the competition among institutional investors to acquire exclusive information and the effect on the transparency of corporate accounting information. The study finds that when information competition is low, institutional investors with larger shareholdings tend to decrease the transparency of financial information to gain a private information advantage. Additionally, the paper explores the mediating factors that influence the quality of management disclosure, which is affected by institutional investors. The research contributes to the understanding of institutional investors' information competition, accounting information transparency, and corporate governance. It reveals that agency cost is a critical linkage factor for institutional investors to influence accounting information transparency to obtain an information competition advantage. It also highlights the impact of stock liquidity and non-Big Four independent audits on the degree of information asymmetry resulting from information competition. Furthermore, the paper suggests that the competitive rivalry between institutional investors determines their tendency to disrupt the market information environment and increase information asymmetry to gain private information advantages. This behavior contradicts the concept of developing institutional investors to foster a healthy and orderly capital market in China. The paper emphasizes the need for regulators to guide and regulate the market behavior of institutional investors. [ABSTRACT FROM AUTHOR]

The implementation of the Ecological Conservation and High-Quality Development of the Yellow River Basin (YBCD) can provide the institutional context for economic outcomes of environmental regulations and influences on corporate financial asset allocation. The basic objective of this study is to examine the impact of the YBCD on corporate financialization, analyzing the influencing mechanisms and heterogeneity. Using the data of A-share listed companies spanning 2015 to 2022 in China, this study employs the differences-in-differences method to investigate the impact of the YBCD on corporate financialization. The findings reveal that (1) the YBCD could significantly inhibit corporate financialization and suppress financial asset allocation driven by arbitrage motivation. It will help corporate financial asset allocation shift towards physical businesses, emphasizing long-term development. (2) The YBCD could inhibit corporate financialization by reducing corporate agency costs and fostering environmental, social, and governance (ESG), leading to crowding-out effects on financial assets. (3) The heterogeneity analysis indicates that the YBCD could generate significant inhibitory effects on corporate financialization in non-state-owned enterprises, high-polluting companies, and companies located in regions with stronger environmental regulations. [ABSTRACT FROM AUTHOR]

This study investigates the relationship between institutional investor association and stock price crash risk, using data from all listed non-financial sector companies in the Chinese capital market. The findings indicate a significant positive correlation between institutional investor association and stock price crash risk. Moreover, property rights and agency costs play significant moderating roles in this relationship. Specifically, the impact of institutional investors on stock price crash risk is more pronounced in non-state-owned enterprises (non-SOEs) than in state-owned enterprises (SOEs). Furthermore, this impact is more pronounced in firms with high agency costs and prominent agency problems compared to firms with low agency costs. This research contributes to financial regulators being able to identify better and prevent stock price crashes, ensuring the stability of investors' returns from their invested enterprises. [ABSTRACT FROM AUTHOR]

This research aims to test and analyze the influence of agency costs, intellectual capital, managerial ownership, and institutional ownership on firm value with financial performance as a moderating variable. The population in this study are LQ45 index companies listed on the Indonesia Stock Exchange (BEI) for the 2020-2022 period. This research used a purposive sampling technique with a sample size of 18 companies for three consecutive years for a total of 54 observations. Partial research results show that agency costs and intellectual capital have no effect on firm value. Meanwhile, managerial ownership and institutional ownership have a positive effect on firm value. Financial performance is unable to moderate the influence of agency costs on firm value, nor is it able to moderate the influence of intellectual capital on firm value. However, financial performance can moderate the influence of managerial ownership and the influence of institutional ownership on firm value. [ABSTRACT FROM AUTHOR]

In 2025, forecasts indicate that Asian companies, especially from China and India, will dominate the IPO market. Understanding global capital cost drivers is essential, particularly as energy sector costs increase. Research highlights that superior accounting information can narrow the investor-management gap, reducing equity and debt. This study investigates the impact of Other Comprehensive Income (OCI) volatility, Research and Development (R&D) investment, and earnings management on cost of capital, considering the potential moderating effect of agency costs. The analysis includes 1,565 observations across 313 firms from 2018 to 2022, focusing on the energy sector in China, India, the United States, and Indonesia. The study uses panel data regression to examine the relationships between OCI volatility, R&D investment, earnings management, and cost of capital, focusing on agency costs’ moderating role. Initial findings reveal that earnings management significantly and negatively influences cost of capital. Further, R&D investments in China and Indonesia show a negative and significant impact on cost of capital, contrary to positive and significant findings in India and the United States. Companies are advised to sustain efficient, future-oriented project selections. [ABSTRACT FROM AUTHOR]

The food and beverage industry is a vital contributor to Indonesia's economy, yet faces challenges in optimizing performance. This study investigates the impact of operating capacity, agency costs, and intellectual capital on firm performance within this sector. Analyzing financial data from 12 out of 26 listed companies spanning 2018 to 2022, with convenience sampling, panel data regression in EViews 12 reveals significant findings. Higher operating capacity positively influences revenue generation, marketing efficacy, and customer satisfaction. Agency costs serve as incentives for managerial alignment with shareholders' interests, enhancing governance and transparency practices. Intellectual capital fosters innovation, operational efficiency, and brand reputation, driving firm performance. The study underscores the strategic importance of these factors in managing firms within the food and beverage industry. For practitioners, insights gleaned from this research offer guidance in formulating effective strategies to enhance operational capacity, manage agency costs, and bolster intellectual capital. Moreover, investors gain valuable insights into assessing investment opportunities in this sector. Policymakers can utilize these findings to formulate policies conducive to fostering growth and sustainability within the food and beverage industry. By addressing these key determinants, firms can bolster their competitive edge and achieve sustained success in the dynamic landscape of the food and beverage sector in Indonesia.

This study investigates whether CEOs' early adverse experience could explain cross‐sectional heterogeneity in the financialization of non‐financial firms. We utilize whether the CEO lived through the Great Chinese Famine as a proxy for the adverse experience. We find that non‐financial firms led by CEOs with such experience are significantly less likely to be involved in financialized activities than those led by CEOs without such experience. Experienced CEOs are prone to develop conservative preference for the short‐term financial assets over long‐term ones. The famine effect is more pronounced in enterprises with less competitive industries, less ownership of controlling shareholders, and non‐Big 4 audit firms. Furthermore, channel tests demonstrate that the famine experience reduces CEO overconfidence and lowers the agency cost of their firms, resulting in a lower financialization level. [ABSTRACT FROM AUTHOR]

With the increasing public attention being paid to corporate social responsibility and global advocacy of sustainable development, corporate governance issues centered on corporate social responsibility, especially the relationship between corporate social responsibility and financial sustainability, are important topics of concern for managers. By taking companies listed in Shanghai and Shenzhen A-share indices between 2010 and 2020 in China as samples, this study investigated the effect and mechanism of corporate social responsibility implementation on financial sustainability, examined the intermediate roles of agency cost and green innovation on this effect, and explored the heterogeneity in different contexts. The results indicated that: (1) implementing corporate social responsibility has significantly promoted financial sustainability, and fulfilling responsibilities to shareholders showed the most significant effect; (2) active pursuit of corporate social responsibility objectives can alleviate corporate agency conflicts, increase green innovation, and thus promote corporate financial sustainability; and (3) the positive impact of implementing corporate social responsibility on financial sustainability is more significant in non-state-owned enterprises and non-heavily polluting enterprises. This study revealed the specific effect of fulfilling corporate responsibility objectives for different stakeholders on financial sustainability, confirmed the mediating role of agency cost and green innovation on this effect, and discussed the intensity of the impact of fulfilling corporate social responsibility objectives on financial sustainability in different contexts. This study enhances the understanding of the effect and mechanism of fulfilling corporate social responsibility obligations on financial sustainability, which can guide the advancement of future theory-building in corporate governance. [ABSTRACT FROM AUTHOR]

Copyright of Pan-Pacific Journal of Business Research is the property of Pan-Pacific Business Research Institute (PPBRI) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study has reviewed the literature related to corporate governance (CG) and blockchain technology (BCT). Theoretical and conceptual arguments are used to develop the link between CG mechanisms and BCT. The author identifies that BCT helps firms in reducing the unethical and harmful effects of entrenched managers and the information asymmetry between management and shareholders in firms. BCT, which is a distributed and decentralised ledger for recording transactions, does this by providing an advanced level of security, accuracy, transparency, and accountability in record-keeping. Thus, BCT has the potential to lower agency costs and the roles and functions of traditional CG practices in firms. However, empirical studies on this particular area are scant. Therefore, this study proposed a model for future researchers to test empirically that develops a mechanism between CG practices and BCT. This study will raise awareness among shareholders, practitioners, and policymakers about the need and importance of inducting BCT and modifying CG mechanisms in order for them to survive and be competitive. [ABSTRACT FROM AUTHOR]

As real enterprises make continued efforts to reduce costs, the capital market raises stricter requirements on their performance of corporate social responsibility (CSR). This paper attempts to disclose the dynamic impact of CSR performance level on the cost stickiness of enterprises, and clarify the mechanism of that influence. Therefore, China's A-share listed manufacturers in 2010–2019 were taken as the samples, and the relevant data were empirically analyzed by panel data regression models. The results show that, overall, CSR performance is not an immature investment that wastes resources, or hinders corporate cost management; rather, the performance of CSR greatly benefits the cost management of enterprises. Specifically, the CSR suppresses cost stickiness, that is, the higher the performance level, the less sticky the cost. Further analysis shows that agency cost partially mediates the relationship between CSR and cost stickiness. That is, CSR can suppress cost stickiness by reducing the agency cost. Thus, the positive effect of CSR performance is verified from the perspective of cost reduction. [ABSTRACT FROM AUTHOR]

In this study, we explore the impact of ownership structure on a firm's earnings quality in emerging markets. Using the Chinese manufacturing industry sample set, we demonstrate that higher profitability performance could increase earnings quality. Higher concentrated shareholding and institutional shareholding reduce information asymmetry and improve external monitoring, improving earnings quality. Well-studied independent board members do not improve but contribute negatively to earnings quality. Such a result may be due to the lack of variation in the number of independent board members in each list of firms. Almost all firms choose to have three independent board members. Finally, bond debt increases asset size and agency costs; the impact of bond debt on earnings quality is negative. When considering the interaction between bond covenants and external monitoring, including independent board members and institutional shareholdings, the interactive effects reduce the negative effect of the bond debt on earnings quality. This study contributes to discovering that both direct and indirect monitoring of ownership structure contributes to the firm's management and provides some useful insight to reduce agency costs.

This study is to analyze the effect of dividend policy, good corporate governance mechanisms, and audit quality on agency costs in manufacturing companies that conduct IPOs on the Indonesia Stock Exchange in the 2017-2020 period. In Indonesia, there are many companies that have relationships with agency costs, especially companies whose managers and owners of capital are different, such as companies listed on the Indonesia Stock Exchange (IDX). This research is essentially a form of quantitative research that uses secondary data, namely the company's annual report. This study used a sample of 132 companies in the manufacturing sector. The technique for analyzing the data in this study test a regression model selection test, classical assumption test, multiple linear regression, f test, and individual hypothesis testing (t test). According to the results of data analysis, it can be concluded that dividend policy, audit committee, audit quality, and institutional ownership has no effect on agency costs. In the other hand, independent commissioners have a significant negative effect on agency costs.

ABSTRACTUsing listed companies from 2010 to 2019 in China, we investigate whether firms engage in opinion shopping activities when firms dismiss the auditors following a goodwill impairment. We find that firms tend to dismiss the incumbent auditors after receiving a goodwill impairment opinion and engage in opinion shopping with their successor auditors. Furthermore, the successor’s auditor quality is similar to the predecessor’s audit quality following a dismissal. Moreover, firms with low-quality internal control system and low analyst coverage level are more motivated to engage in opinion shopping subsequently after receiving a goodwill impairment opinion. Our findings would be of interest to corporate governance activists, auditors, investors and regulators.

Objective: In the competitive business landscape, companies seek a distinctive competitive edge by diverging from conventional industry strategies and embracing alternative methods that prove more advantageous. This departure from traditional approaches is termed strategic deviation in accounting literature. According to this, our study aimed to investigate the relationship between strategic deviation and audit quality. In addition, the consequences of choosing high-quality auditors in firms with strategic deviation were investigated, too. In this research, the consequences of choosing high-quality auditors include investigating its effect on earning management, accumulation of capital in the hands of the institutional investors, cost of capital, and market value of listed firms.Methods: The research methodology is characterized as descriptive and correlational, with a practical orientation in terms of its purpose. To test the hypotheses, the regression model was used. Based on this, the financial statements of listed firms for a 9-year period from 2012 to 2019 were examined. In this research, the statistical sample was selected by the systematic elimination method. According to this, 134 firms were selected based on the consolidated/combined data of the test and statistical analysis. For this purpose, five regression models were defined.Results: Firms with high levels of strategic deviance were chosen quality auditors due to controlling the high level of agency conflict. This showed that firms with high levels of strategic deviation have most likely selected quality auditors. Therefore, based on agency theory, it seems that the high level of information asymmetry in firms with high levels of strategic deviation led firms to choose and employ quality auditors. In addition, in firms with strategic deviation, the selection of quality auditors has led to the reduction of the capital cost and the market value. Employing and selecting quality auditors was not found to be effective in limiting capital accumulation in the hands of major shareholders and earning management, especially in firms with high levels of strategic deviation, but audit quality was proved to be effective in explaining the status of firms’ earning management.Conclusion: Firms with high levels of strategic deviation chose quality auditors due to the high level of agency conflict and reducing the firms’ capital costs. In addition, the selection of quality auditors led to a decrease in the market value of the firms. In other words, shareholders are also aware of the effect of strategic deviation of firms in competitive conditions and the possibility of more restrictions in such firms by highly qualified auditors. Also, in firms with strategic deviation, the selection of quality auditors led to limiting the amount of earning management, and the selection of quality auditors led to the reduction of the company's capital cost. In other words, auditor quality, along with strategic deviation, has been an effective factor in reducing a firm’s capital costs.

At present, there are few studies exploring the impact of market-based environmental regulation on ESG performance based on the perspective of carbon emission trading scheme (CETS). This paper aims to supplement this research field through empirical analysis. Taking Shanghai-Shenzhen A-share listed companies from 2012 to 2022 as the research object, this paper studies the impact of CETS, a market-based environmental regulation tool, on the ESG performance of enterprises by constructing a time-varying DID model and examines the mediating roles of green technology innovation, agency cost and analyst attention. The results show that the implementation of CETS can significantly boost ESG performance, and green technology innovation, agency cost, and analyst attention play a partial intermediary role between the two, while the mediating effects of green total factor productivity and green total factor energy efficiency are not significant. In terms of heterogeneity analysis, the study shows that CETS implementation has a more substantial promotion effect on ESG performance in non-state-owned enterprises, non-politically connected enterprises and non-high-tech enterprises. In this paper, the robustness test was carried out through PSM-DID, placebo test and replacement of explained variables, and the test results further supported the hypothesis in this paper. This study enriched the research on the impact of market-based environmental regulation on ESG from the perspective of CETS. It provided enlightenment for enterprises to improve ESG performance to a strategic level, improve the level of green technology innovation, and the government to implement differentiated environmental governance policies.

This paper examines the impact of debt in the capital structure on agency costs and therefore on the performance of a company. The efficiency of companies was estimated using two parametric techniques: Ordinary Least Squares (OLS) methods and a Stochastic Frontier Analysis (SFA). The estimated efficiency represents a measure of (inverse) agency costs. Agency costs cause a lower level of efficiency compared to companies that have minimized these costs, and companies that reach the efficiency frontier, in the observed context of this research, are viewed as those that have minimized agency costs. A panel regression model was applied in order to determine the direction and intensity of the influence of leverage and control variables on the initially estimated efficiency of the company. The results of this research on Serbian manufacturing companies show the expected positive effect of capital structure (leverage) on the efficiency of the company, which is in accordance with the predictions of the agency cost theory. The contribution of this research is reflected in the application of efficiency as a performance indicator in the observed context of examining the theory of agency costs, bearing in mind that the measure of efficiency is closer to the theoretical view of these costs. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Financial Accounting Research is the property of University of Isfahan and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Purpose: Given South Africa's expanding salary inequality, combined with excessive risk-taking by bank executives, this study investigated whether banks' chief executive officer (CEO) remuneration is justified, by the performance of the banking institution. Design/Methodology/Approach: This study used panel data analysis to determine if there is a long-term relation between CEO remuneration and company performance, in the South African banking sector. Research limitations/Implications: The detailed analysis, spanning 2009-2021 considered market- and accounting performance, to measure company performance. Agency theory and optimal contract theory were used to consider the historical and current tendency in CEO remuneration, including King IV and its "say-onpay" provision. Findings: This study found a long-term relation between CEO total remuneration and company performance in the South African banking sector, but not between CEO short-term and long-term remuneration and company performance. Originality/Value: The result of this study offers a better understanding of the relationship between CEO remuneration and company performance in the South African banking sector. [ABSTRACT FROM AUTHOR]

Acquisitions constitute substantial corporate investments, often leading to changes in ownership and top management giving rise to possible conflicts of interest. The impacts of such conflicts following an acquisition are absorbed by the acquirer and are referred to as agency costs. This study focuses on exploring the influence of the target companies on changes in the post-acquisition agency costs of acquiring companies. A panel fixed effects model is used to analyze acquisitions that took place between 2008–09 and 2019–20. The study's findings indicate that post-acquisition changes in the agency costs of acquirers significantly vary based on the presence of domestic and foreign promoters in the target company. Further promoter groups such as domestic promoters and foreign promoters contribute to conflicting interests, exacerbating post-acquisition agency costs. The monitoring role assumed by foreign promoters of target companies plays a pivotal part in reducing the post-acquisition agency costs of acquirers. Foreign promoters also positively influence post-acquisition profitability by adversely affecting operating expenses, suggesting that they mitigate agency costs by exerting control over management through the monitoring of debt, cash, and profitability. The post-acquisition utilization of the target's cash reserves positively correlates with the operating expenses of the acquirer. It is observed that the acquisition of larger targets magnifies agency costs. [ABSTRACT FROM AUTHOR]

In the digital economy era, digital empowerment is a crucial measure to enhance capital allocation efficiency (CAE). To examine the effect of digital empowerment on CAE, we conducted a study using Chinese listed firms as a research sample. Our findings indicate that (1) Digital empowerment significantly enhances the CAE. (2) Digital empowerment improves the CAE in enterprises by reducing agency costs and enhancing operational capabilities. (3) This effect is even more pronounced in non-state-owned enterprises, enterprises with low leverage, and those with weak levels of external oversight. (4) Further research suggests that digital empowerment leads to a reduction in under investments and reduces operating investments. The research in the article provides a theoretical framework for enterprises to enhance CAE and governance level. It also offers policy insights for promoting effective digital transformation of businesses and presents valuable references for advancing digital economy in China. [ABSTRACT FROM AUTHOR]

Using listed companies from 2010 to 2019 in China, we investigate whether firms engage in opinion shopping activities when firms dismiss the auditors following a goodwill impairment. We find that firms tend to dismiss the incumbent auditors after receiving a goodwill impairment opinion and engage in opinion shopping with their successor auditors. Furthermore, the successor's auditor quality is similar to the predecessor's audit quality following a dismissal. Moreover, firms with low-quality internal control system and low analyst coverage level are more motivated to engage in opinion shopping subsequently after receiving a goodwill impairment opinion. Our findings would be of interest to corporate governance activists, auditors, investors and regulators. [ABSTRACT FROM AUTHOR]

An agency problem is defined as a conflict of interest arising due to a misalignment of interests among the managers and other stakeholders of the company. This article aims to review the articles addressing the agency problem and their impact on business performance. This article reviews the contributions of prominent theorists on agency problems and agency costs. Using bibliometric attributes of 740 articles from the Scopus database, this study highlights the publishing trend and outlets, along with leading contributors and collaborators in terms of authors, institutions, and countries. This study identifies the clusters through the bibliographic coupling technique and a trend topics analysis. Most researchers have focused on corporate governance and expressed the agency problem as one of the impact areas. This study is unique as no study to date specifically focuses solely on agency theory or the agency problem through the lens of bibliometric analysis. Future research directions on agency problems and their solutions conclude this study. [ABSTRACT FROM AUTHOR]

The current economic realities of the business world require firms to focus on all areas of organizational activities necessary to implementing a chosen course of action. It has been asserted that deploying information technology strategy can be quite helpful in engendering sustainable growth, greener corporate environment, and promoting environmental consciousness. In corporate governance, Chief Executive Officers (CEOs) are saddled with the responsibility of designing firm's strategies for competitiveness and they do this based on their assessment of risk involved, the long term nature, and uncertainty connected with IT strategies. This study therefore examined whether IT strategy moderates the nexus between CEO equity based compensation and firm's competitiveness. To investigate this, the study used firm-level secondary data of 106 quoted firms on the Nigerian Exchange Group for the period 2011 - 2020. Ordinary least square and panel data estimation techniques were used. The Hausman test conducted to choose between fixed effect and random effect models revealed the appropriateness of the random effect model. In the OLS and random effect models, the coefficient of CEO equity compensation was negative, implying that higher CEO compensation is not contemporaneous with higher firm's competitiveness. However, this estimate is not statistically significant and so the weight of this negative relationship is rather insignif icant. The introduction of IT strategy as a moderator into the model produced positive interaction effect on firm's competitiveness. Overall, there is the tendency for CEO compensation to enhance firm's competitiveness in the presence of IT strategy. Accordingly, IT enabled greener corporate environment encourages competitiveness and firm's sustainable growth. [ABSTRACT FROM AUTHOR]

Taking China's A-share listed manufacturing enterprises from 2014 to 2020 as objects, this paper discusses the impact and mechanism of corporate digital transformation on supply chain relationship transactions from the perspectives of information asymmetry and agency costs. The findings show that digital transformation significantly inhibits the supply chain relational transactions; the mechanism testing results reveal that digital transformation is conducive to the alleviation of information asymmetry and agency costs, which thereby reduces the degree of supply chain relational transactions; the regulatory effect analysis demonstrates that the impact of digital transformation on supply chain relationship transactions becomes more significant in non-high-tech enterprises and enterprises with less fierce industry competition. Finally, this paper confirms that a decline in the proportion of supply chain relationship transactions can significantly reduce the operational risk of enterprises. [ABSTRACT FROM AUTHOR]