Financial Economics

Nurul Hizetie Mohamed Nor · Anuar Nawawi · Ahmad Saiful Azlin Puteh Salin ·Pertanika Journal of Social Science and Humanities ·2018

The purpose of this study is to examine the relationship between audit characteristics and firm investment efficiency level. Audit characteristics have been characterized using audit committee (AC) independence and external auditor choice. Top 200 Malaysian listed companies based on market capitalization were selected as a sample. Binomial logistic regression analysis was employed to test the hypotheses for 3 years, that is, 2009, 2010, and 2011. The statistical results show no relationship between AC independence and investment inefficiency, while auditor choice was shown to be positively significant only in 1 year of the study, but was not significant in the other 2 years of study. The results provide further confirmation of the role of corporate governance in enhancing the investment performance of the company. This study provides an indicator to shareholders and investors that a company with strong governance structure will likely make better investment decision. Managers under strong governance are prevented from taking an aggressive investment risk approach that may result in overinvestment. In addition, the company will carefully plan to have an adequate capital so that a good opportunity investment will not being passed due to insufficient financing that will result underinvestment. This study is original, as it focuses on the direct relationship between corporate governance mechanism and firm investment efficiency level that is scarce in the literature, with a special focus on emerging markets in the process of developing their best governance practices.

Khanifah Khanifah · Pancawati Hardiningsih · Asri Darmaryantiko · Iryantika Iryantik · Udin Udin ·Journal of Asian Finance, Economics and Business ·2020 ·JEL: E44, M14, Q56

A series of corporate failures and financial crises have raised attention to organizational governance issues, especially for financial institutions. In the banking system, corporate governance further plays a unique role because of the uniqueness of the banking organizations. Therefore, this study aims to examine the effect of corporate governance disclosure on bank performance by building a corporate governance disclosure index (CGDI) for 10 Islamic banks operating in Iran, Saudi Arabia and Malaysia. The data used in this study are secondary data taken from annual reports and sourced from the official websites of each banks include Iran Exchange, Stock Market Quotes and Financial News, and Bursa Malaysia. This study uses content analysis of the annual bank report within five years (2014-2018). The results show that Islamic banks comply with 72.4% of the attributes discussed in the CGDI. The most frequently reported and disclosed elements are board structure and audit committee. The regression results provide evidence that Islamic banks with a higher level of corporate governance disclosure reported high operating performance measured by ROA. In contrast to the expectation, the financial performance of ROE and Tobins'q are not significantly related to the disclosure of sharia bank governance.