This article examines the effect of state ownership on labor cost stickiness firms in 22 European countries. States are more likely to interfere decision-making processes state-owned enterprises (SOEs) and demand firm activities that desirable from a socio-political perspective. For example, win political support, politicians may instruct SOEs avoid layoffs minimize unemployment rates. The varied objectives also make it difficult control managers' behavior, leaving room for managerial...

Firms across the globe are affected by red tape, but there is little academic research on how country‐level institutions shape tape perceptions. Drawing institutional theory, we argue that a variety of formal and informal affect perceptions in private sector. We test our hypotheses using six data sources, including World Economic Forum Bank. Our results indicate weakly associated with country's level formalization rule enforcement effectiveness more prevalent federal as opposed to unitary...

ABSTRACT Starting in October 2013, auditors of premium‐listed firms the United Kingdom are mandated to prepare an expanded auditor's report that provides details on audit procedures, risks material misstatement (RMMs), and materiality thresholds. This regulatory change is important study, because it aims increase informational value traditional, highly standardized, pass‐or‐fail report. We examine whether disclosures provide information relevant for adopting firms' loan contracting terms...

This article examines the overall acceptance of best practice provisions contained in Dutch corporate governance code and identifies those that receive comparably less agreement among 150 listed companies 2004. The findings indicate a high level compliance with Code. Moreover, extent is positively associated company size. Provisions related to remuneration board members, independence supervisory requirements respect internal control systems stand out when it comes non‐compliance. In...

Abstract Manuscript Type Empirical Research Question/Issue This study examines the association between national culture and amount of information on internal controls listed companies disclose in their annual reports. In particular, we argue that affects managers' perceptions costs benefits disclosing and, consequently, drive disclosure choices. addition, investigate whether indirectly, via investor protection, determines decisions. Findings/Insights Using unique hand‐collected data from a...

This paper assesses whether reducing 'readability' is an effective obfuscation strategy for influencing the level of shareholder say-on-pay voting dissent in firms with excessive CEO pay. Based on a sample UK-listed firms, our results indicate that cases pay, less readable remuneration report associated reduced dissent. However, effect diminishes as institutional ownership increases. Using obscurely written reports may even backfire (i.e. increased dissent) when firm's majority shares are...

Abstract The objective of the paper is to examine how firms have dealt with trade‐off between flexibility and uncertainty that characteristic for decision‐making in coping self‐regulatory initiatives general comply‐or‐explain principle corporate governance particular. Using unique data 126 listed Dutch firms, we find respond this initiative by largely complying code recommendation, possibly out fear firm's reputation may be damaged. Furthermore, evidence suggesting confine themselves...

The comply-or-explain principle is a common feature of corporate governance codes. While prior studies investigated compliance with codes as well the effects on firm behaviour and performance, explanations for deviations from code remain largely unexamined. This paper intends to fill that gap. draws voluntary disclosure literature agency theory examine association between characteristics informativeness Dutch code. Applying content analysis statements sample listed firms period 2005–2009,...

Drawing from corporate governance research and social identity theory, the authors argue that relationship between outside directors’ time in office director task involvement is more complex than generally anticipated. By using a unique multisource data set composed of peer ratings provided by fellow directors rating focal director’s involvement, this study analyzes at individual level analysis. The propose empirically demonstrate tenure has an inverted U-shaped with moderated identification...

SUMMARY Internationally operating audit firms rely heavily on global firm policies and methodologies to ensure consistency of audits across the globe. However, cultural differences are likely affect auditors' compliance with such firm-wide systems control. In this study we use proprietary data from a Big 4's internal quality reviews, involving 1,152 engagements 29 countries, assess impact cross-national (or not) firm's policy in specific yet crucial culturally susceptible area process: fraud...

SUMMARY Regulators and professional accounting bodies have identified auditor-in-charge involvement as one of the key indicators audit quality. A potentially important, yet overlooked, issue is that affected by numerous contextual factors. In this study, we aim at advancing our understanding what affects differences in focusing on influence national culture general power distance, (in-group) collectivism, uncertainty avoidance particular. Based archival, proprietary data from a Big 4 firm...

The paper adds to our knowledge of what non‐executive directors do, which is still in its infancy. More specifically, it reports the findings a survey among more than 250 Dutch regarding their roles and limitations. Although majority agreed that monitoring main duty, they also expressed doubts whether are really able carry out this “watchdog role” effectively. primary limitation sought asymmetry information gives rise so‐called “independence paradox”: obtaining adequate non‐executives...

Abstract In this paper we address how director expertise impacts a director's social status and conformity within the board. Our results, derived from two unique multi‐source datasets of peer ratings on non‐executive directors Dutch organizations, indicate that industry‐specific financial differently impact directors’ influence We find individual performance orientation – motivation to demonstrate acts as an important contingency for increase Additional analyses using archival data...

We investigate the association between media coverage of firms' CEO pay packages and subsequent shareholder voting on say-on-pay resolutions, find that negative is able to predict discontent over say pay. When we divide into in financial business press versus general press, resolutions mainly associated with articles from press. This suggests cannot be considered a homogeneous information source equally shareholders' behaviors. As such, our findings have important implications for studies...

This study examines the relationship between degree of external social and environmental regulatory pressures firms’ integration corporate responsibility (CSR) criteria into executive compensation contracts. Building on notion that firms operate in settings which internal governance conditions interact, we investigate how mechanisms moderate adoption CSR The analysis a worldwide, longitudinal sample 2,328 listed 37 countries during 2003 through 2015 reveals pressure to socially...

Prior cross-cultural studies indicate that the self-serving attributional bias is more prevalent in Western cultures than Eastern cultures. There is, however, a dearth of research looking into differences patterns based on publicly available archival data. This study tries to fill lacuna. It reports results content analysis corporate annual from U.S. and Japanese companies. The reported this demonstrate found experimental settings are not necessarily observed naturalistic settings....

Abstract Notwithstanding the importance of non-executives as a control mechanism to reduce potential divergence between corporate management and shareholders increasing attention they receive from both regulators well media, research concerning is still in its infancy. This dearth knowledge may account for unrealistic expectations public said have non-executive directors. However, no study has previously looked into possible gaps regarding fills that lacuna reports results survey sent more...

Prior literature shows that choices regarding board composition are associated with earnings management. We add to this by examining the effects of presence a foreign member on Using sample 3,249 firm-year observations representing 586 non-financial listed Nordic firms during 2001-2008, we find non-Nordic, director is significantly higher levels Moreover, provide preliminary evidence differences in accounting knowledge drive effect. Our results suggest it may not necessarily be beneficial...