Suchergebnisse

ABSTRACTManuscript Type: EmpiricalResearch Question/Issue: This paper takes a theory building approach to highlighting variations of agency theory in the unique and complex context of Islamic banks, mainly stemming from the need to comply with Sharia and the separation of cash flow and control rights for a category of investors.Research Findings/Results: The paper provides insights that agency structures in the context of Islamic banking might give rise to trade‐offs between Sharia compliance and mechanisms protecting investors' rights. Alternative models of idiosyncratic governance might be effective in balancing the two cornerstones of the agency dynamic. In practice, the paper finds that most of the surveyed Islamic banks appear to recognize the value of governance and institute some basic mechanisms. Nonetheless, some governance flaws relating to audit, control, and transparency are observed, a situation further exacerbated by the fact that investment account holders are not represented on the board, and are not granted control or monitoring rights. This leads to a discussion on the tradeoff between the costs and benefits of such a practice.Theoretical Implications: This study contributes to the agency theory literature by providing theoretical propositions highlighting challenges to this theory whereby mechanisms with the purpose of mitigating agency problems might lead to a divergence from Islamic principles of Sharia.Practical Implications: The paper motivates Islamic banks to improve governance practices currently in place. It alerts policy makers to the need to tailor the regulations to safeguard the interests of all investors without violating the principles of Sharia.

PurposePrior research suggests that corporations in countries with a weak and illiquid stock market rely either on internal resources or on loans from the banking system, while family businesses, in their desire to maintain control, prefer debt to equity. Owing to the weak external monitoring role played by the financial markets in Lebanon, this paper aims to goes beyond the financial role played by Lebanese banks by investigating their role in monitoring corporate clients.Design/methodology/approachA survey was conducted which included 12 questions and focused on the role of banks in Lebanon in fostering proper practices of governance amongst their corporate clients. The completed surveys represent 24 banks, with more than 85 percent of the total deposits, 89 percent of the total loan portfolio, and spanning all bank groupings.FindingsThe paper finds that, in addition to their financing role, Lebanese banks are both active monitors of and resource providers to their corporate clients, which is consistent with Hillman and Dalziel.Originality/valueThe paper contributes to prior research on the role played by the banking system in supporting economic growth in developing countries, as well as the large number of reports and recommendations on corporate governance in the MENA region. The empirical findings indicate that developing‐country banks have a substitution role that allows them to act as channels for implementing good corporate governance practices. Specifically, the greater involvement of banks with their larger corporate clients may ensure better oversight of the risks encountered by banks in their clients' operating activities.

AbstractIn this paper, we find that individual stock momentum varies almost monotonically with industry growth. Firms in the highest industry growth quintile have significantly higher momentum compared to those in the lowest growth quintile. We find that the above‐average growth group within each quintile has significantly higher momentum profits than the below‐average group. Further, momentum profits of the highest industry growth quintile are always higher than those for the universe of firms, suggesting an economic benefit to stratifying firms based on industry growth and relative company growth intra‐industry, while following a momentum investment strategy.

PurposeThe purpose of this paper is to examine the relationship between intellectual capital (IC) and corporate governance (CG) in a university setting. In particular, the aim is to argue that the lack of good CG can lead to an inability to attract and retain IC.Design/methodology/approachThe article tests the CG/IC relationship at the American University of Beirut (AUB) by surveying the perceptions of full‐time faculty members. The survey addresses, in particular, the factors that attract IC to AUB and their perception of several aspects of CG at the institution.FindingsThe results suggest that CG and IC are indeed related and that faculty members view CG as a major factor for IC attraction. Respondents also consider that existing IC enhances the institution's ability to attract more IC. However, the mixed perceptions of the governance structure in place at AUB, as revealed by faculty responses, weaken the support for a strong relation between CG and IC at the university. The results also unveil some areas to be improved in the way resources are run.Research limitations/implicationsThe response rate for the survey was limited. The findings may be more substantive and conclusive if the sample was larger. As the study was done for one organization only, more research is needed to further explore the relationship between CG and IC.Originality/valueThe paper is the first to provide empirical evidence on the influence of CG practices on attracting and retaining IC from a general as well as from an academic institution perspective.

AbstractWe examine how the wealth effects of equity offers are influenced by investors' expectation of the equity type (public or private) to be issued. Firms deviating to the public market may be issuing when information asymmetry or agency costs are high, and their wealth effects are more negative than for firms that are anticipated to issue equity publicly. Firms deviating to the private market, however, may signal firm undervaluation or monitoring benefits and experience more positive wealth effects than firms that are expected to issue equity privately. For the private issues, public market accessibility appears to influence the wealth effects.

AbstractWe examine the long‐run operating and stock price performance of 828 convertible debt issuers. Relative to matched, nonissuing firms, convertible debt issuers have small improvements in operating performance before the offer and significant declines in operating performance from pre‐ to post‐issue. We examine the relation between several factors and operating performance. We find that for some pre‐ to post‐issue periods, operating performance changes are positively related to firm leverage and the callability of the bond, and negatively related to performance run‐up before the offer and investment in new assets. We also find some evidence that firms that issued equity in the three years before their convertible debt issue have larger declines in performance after the offer. Relative to matched, nonissuing firms, convertible debt issuers have superior stock price performance before the offer and significantly poor performance after the issue.