The impact of family-firm structure and board composition on corporate transparency: Evidence based on segment disclosures in Malaysia
AbstractThe aim of this study is to contribute to the growing literature on the quality of accounting disclosures by family firms by investigating whether the alignment (entrenchment) effect leads to high (low) corporate transparency. Unlike previous studies, this study also examines the relationship between board composition and corporate transparency by distinguishing between the two types of nonexecutive directors, namely independent and affiliated directors. Using the enhanced segment disclosures by Malaysian firms in 2001/2002 as a proxy of corporate transparency, the results indicate that family firms are more inclined to disclose all the required items for the primary basis of segment reporting, consistent with Ali, Chen, and Radhakrishnan (2007) and Wang (2006). The result also indicates that firms with higher proportion of affiliated directors are more likely to make greater segment disclosures. However, no evidence is found to support the contention that independent directors and institutional investors promote corporate transparency, consistent with previous Malaysian studies.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal The International Journal of Accounting.
Volume (Year): 44 (2009)
Issue (Month): 4 (December)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/620179
Family firm Affiliated director Independent director Segment Early adopt Malaysia;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jennifer C. Ireland, 2003. "An Empirical Investigation of Determinants of Audit Reports in the UK," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 30, pages 975-1016.
- Shuping Chen & Xia Chen & Qiang Cheng, 2008. "Do Family Firms Provide More or Less Voluntary Disclosure?," Journal of Accounting Research, Wiley Blackwell, vol. 46(3), pages 499-536, 06.
- Fan, Joseph P. H. & Wong, T. J., 2002. "Corporate ownership structure and the informativeness of accounting earnings in East Asia," Journal of Accounting and Economics, Elsevier, vol. 33(3), pages 401-425, August.
- Ali, Ashiq & Chen, Tai-Yuan & Radhakrishnan, Suresh, 2007. "Corporate disclosures by family firms," Journal of Accounting and Economics, Elsevier, vol. 44(1-2), pages 238-286, September.
- Annalisa Prencipe, 2004. "Proprietary costs and determinants of voluntary segment disclosure: evidence from Italian listed companies," European Accounting Review, Taylor and Francis Journals, vol. 13(2), pages 319-340.
- Lorenzo Patelli & Annalisa Prencipe, 2007. "The Relationship between Voluntary Disclosure and Independent Directors in the Presence of a Dominant Shareholder," European Accounting Review, Taylor and Francis Journals, vol. 16(1), pages 5-33.
- Cheng, Eugene C.M. & Courtenay, Stephen M., 2006. "Response to discussion of "board composition, regulatory regime and voluntary disclosure"," The International Journal of Accounting, Elsevier, vol. 41(3), pages 293-294.
- Benjamin E. Hermalin & Michael S. Weisbach, 2003.
"Boards of directors as an endogenously determined institution: a survey of the economic literature,"
Economic Policy Review,
Federal Reserve Bank of New York, issue Apr, pages 7-26.
- Benjamin E. Hermalin & Michael S. Weisbach, 2001. "Boards of Directors as an Endogenously Determined Institution: A Survey of the Economic Literature," NBER Working Papers 8161, National Bureau of Economic Research, Inc.
- Cheng, Eugene C.M. & Courtenay, Stephen M., 2006. "Board composition, regulatory regime and voluntary disclosure," The International Journal of Accounting, Elsevier, vol. 41(3), pages 262-289.
- Smith, Clifford Jr. & Warner, Jerold B., 1979. "On financial contracting : An analysis of bond covenants," Journal of Financial Economics, Elsevier, vol. 7(2), pages 117-161, June.
- Roszaini Haniffa & Mohammad Hudaib, 2006. "Corporate Governance Structure and Performance of Malaysian Listed Companies," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 33(7-8), pages 1034-1062.
- García Lara, Juan Manuel & García Osma, Beatriz & Penalva, Fernando, 2007.
"Board of directors' characteristics and conditional accounting conservatism : Spanish evidence,"
Open Access publications from Universidad Carlos III de Madrid
info:hdl:10016/7425, Universidad Carlos III de Madrid.
- Juan Manuel Garcia Lara & Beatriz Garcia Osma & Fernando Penalva, 2007. "Board of Directors' Characteristics and Conditional Accounting Conservatism: Spanish Evidence," European Accounting Review, Taylor and Francis Journals, vol. 16(4), pages 727-755.
- Shleifer, Andrei & Vishny, Robert W, 1997.
" A Survey of Corporate Governance,"
Journal of Finance,
American Finance Association, vol. 52(2), pages 737-83, June.
- Andrei Shleifer & Robert W. Vishny, 1996. "A Survey of Corporate Governance," NBER Working Papers 5554, National Bureau of Economic Research, Inc.
- Andrei Shleifer & Robert W. Vishny, 1995. "A Survey of Corporate Governance," Harvard Institute of Economic Research Working Papers 1741, Harvard - Institute of Economic Research.
- Jaggi, Bikki & Leung, Sidney & Gul, Ferdinand, 2009. "Family control, board independence and earnings management: Evidence based on Hong Kong firms," Journal of Accounting and Public Policy, Elsevier, vol. 28(4), pages 281-300, July.
- R.M. Haniffa & T. E. Cooke, 2002. "Culture, Corporate Governance and Disclosure in Malaysian Corporations," Abacus, Accounting Foundation, University of Sydney, vol. 38(3), pages 317-349.
- Jung, Kooyul & Kwon, Soo Young, 2002. "Ownership structure and earnings informativeness: Evidence from Korea," The International Journal of Accounting, Elsevier, vol. 37(3), pages 301-325.
- Singh, Manohar & Davidson III, Wallace N., 2003. "Agency costs, ownership structure and corporate governance mechanisms," Journal of Banking & Finance, Elsevier, vol. 27(5), pages 793-816, May.
- Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
- Wendy Beekes & Philip Brown, 2006. "Do Better-Governed Australian Firms Make More Informative Disclosures?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 33(3-4), pages 422-450.
- Pik Kun Liew, 2007. "Corporate Governance Reforms in Malaysia: the key leading players' perspectives," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(5), pages 724-740, 09.
- Boone, Audra L. & Casares Field, Laura & Karpoff, Jonathan M. & Raheja, Charu G., 2007. "The determinants of corporate board size and composition: An empirical analysis," Journal of Financial Economics, Elsevier, vol. 85(1), pages 66-101, July.
- Byard, Donal & Li, Ying & Weintrop, Joseph, 2006. "Corporate governance and the quality of financial analysts' information," Journal of Accounting and Public Policy, Elsevier, vol. 25(5), pages 609-625.
- Dechun Wang, 2006. "Founding Family Ownership and Earnings Quality," Journal of Accounting Research, Wiley Blackwell, vol. 44(3), pages 619-656, 06.
- Villalonga, Belen & Amit, Raphael, 2006. "How do family ownership, control and management affect firm value?," Journal of Financial Economics, Elsevier, vol. 80(2), pages 385-417, May.
- Cheng, Shijun, 2008. "Board size and the variability of corporate performance," Journal of Financial Economics, Elsevier, vol. 87(1), pages 157-176, January.
- Byrd, John W. & Hickman, Kent A., 1992. "Do outside directors monitor managers? *1: Evidence from tender offer bids," Journal of Financial Economics, Elsevier, vol. 32(2), pages 195-221, October.
- Coles, Jeffrey L. & Daniel, Naveen D. & Naveen, Lalitha, 2008. "Boards: Does one size fit all," Journal of Financial Economics, Elsevier, vol. 87(2), pages 329-356, February.
- Cornett, Marcia Millon & Marcus, Alan J. & Tehranian, Hassan, 2008. "Corporate governance and pay-for-performance: The impact of earnings management," Journal of Financial Economics, Elsevier, vol. 87(2), pages 357-373, February.
- Chung, Richard & Firth, Michael & Kim, Jeong-Bon, 2002. "Institutional monitoring and opportunistic earnings management," Journal of Corporate Finance, Elsevier, vol. 8(1), pages 29-48, January.
- Ahmed, Anwer S. & Duellman, Scott, 2007. "Accounting conservatism and board of director characteristics: An empirical analysis," Journal of Accounting and Economics, Elsevier, vol. 43(2-3), pages 411-437, July.
- Wendy Beekes & Peter Pope & Steven Young, 2004. "The Link Between Earnings Timeliness, Earnings Conservatism and Board Composition: evidence from the UK," Corporate Governance: An International Review, Wiley Blackwell, vol. 12(1), pages 47-59, 01.
- Fleming, Grant & Heaney, Richard & McCosker, Rochelle, 2005. "Agency costs and ownership structure in Australia," Pacific-Basin Finance Journal, Elsevier, vol. 13(1), pages 29-52, January.
- Irene Karamanou & Nikos Vafeas, 2005. "The Association between Corporate Boards, Audit Committees, and Management Earnings Forecasts: An Empirical Analysis," Journal of Accounting Research, Wiley Blackwell, vol. 43(3), pages 453-486, 06.
- Claessens, Constantijn A. & Djankov, Simeon & Lang, Larry H. P., 1999. "Who controls East Asian corporations ?," Policy Research Working Paper Series 2054, The World Bank.
- Eliezer M. Fich, 2005. "Are Some Outside Directors Better than Others? Evidence from Director Appointments by Fortune 1000 Firms," The Journal of Business, University of Chicago Press, vol. 78(5), pages 1943-1972, September.
- Morck, Randall & Shleifer, Andrei & Vishny, Robert W., 1988. "Management ownership and market valuation : An empirical analysis," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 293-315, January.
- Vassili Joannides & Nicolas Berland & D. T. Wickramasinghe, 2010. "Post-Hofstede diversity/cultural studies: what contributions to accounting knowledge?," Grenoble Ecole de Management (Post-Print) hal-00676570, HAL.
- Joannidès, Vassili & Wickramasinghe, Danture & Berland, Nicolas, 2012. "Critiques on gray-hofstede’s model: what impact on cross-cultural accounting research?," Economics Papers from University Paris Dauphine 123456789/9497, Paris Dauphine University.
- Vassili Joannides & Danture Wickramasinghe & Nicolas Berland, 2012. "Critiques On Gray-Hofstede'S Model: What Impact On Cross-Cultural Accounting Research?," Grenoble Ecole de Management (Post-Print) hal-00690933, HAL.
- repec:ner:dauphi:urn:hdl:123456789/9497 is not listed on IDEAS
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wendy Shamier).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.