Suchergebnisse

AbstractManuscript TypeEmpiricalResearch Question/IssueThis study investigates whether the existence of a separate risk committee and risk committee characteristics are associated with market risk disclosures. It also tests whether the role of a risk committee in affecting market risk disclosures varies for different firm life cycle stages.Research Findings/InsightsUsing 677 firm‐year observations of financial firms from Gulf Cooperation Council (GCC) countries during the years 2007–2011, we find that firms with a separate risk committee are associated with greater market risk disclosures, an effect that is more pronounced for mature‐stage firms. Furthermore, findings suggest that risk committee qualifications and size have a significant positive impact on market risk disclosures.Theoretical/Academic ImplicationsThis study complements the corporate governance literature by incorporating agency theory, legitimacy theory, stakeholder theory, and the resource‐based theory to provide more robust evidence of the impact of a separate risk committee and the firm life cycle on market risk disclosures. Our results support the monitoring effect of a separate risk committee and suggest that a separate risk committee can improve "firm‐level corporate governance" in the GCC countries characterized by a poor informational environment.Practitioner/Policy ImplicationsFindings from this study provide evidence that the existence, qualifications, and size of risk committees may be used as a channel to improve the disclosure level, suggesting a policy prescription for regulators and policymakers. Investors may also find these results useful in forming their own expectations about firm‐level risk disclosures.

ABSTRACTThis study examines the effect of tax haven utilization on the implied cost of equity capital (ICOE) based on a sample of publicly listed U.S. multinational firms over the 2006–2014 period. Our regression results show that tax haven utilization is significantly positively associated with the ICOE. In terms of economic significance, we find that, on average, a one-standard deviation increase in tax haven utilization leads to an increase in the ICOE for our sample firms by approximately 0.30 percent or 30 basis points. We also observe that our regression results are robust to a number of endogeneity checks. In additional analysis, we find that high agency costs are likely to magnify the positive association between tax haven utilization and the ICOE, while high independent director monitoring could moderate this association. Overall, this study provides unique insights into the effect of tax haven utilization on the ICOE.

This study examines whether financial analysts consider or incorporate the environmental, social and governance disclosures (thereafter ESG) in their recommendations. We then test whether royal family directors affect this relation. Using a dataset from six Gulf Cooperation Council (GCC) countries, we find evidence that analysts' recommendations are influenced by ESG information. Further, we find the political connection negatively moderates the relationship between sell-side analysts' recommendations and ESG. This suggests that financial analysts may assess the ESG disclosure in those firms with the political connection of royalty, in GCC countries, as superficial compliance rather than a genuine commitment. Our results are robust when subjected to endogeneity tests.