Browsing by Author "Salem, Rami"

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    Board Monitoring and Capital Structure Dynamics: Evidence from Bank-Based Economies
    (Springer, 2021-07-04) Ezeani, Ernest; Salem, Rami; Kwabi, Frank; Boutaine, Khalid; Komal, Bushra
    We examine the impact of board characteristics on the speed of adjustment and the capital structure dynamics of firms in bank-based economies. Using 3927 firm-year observations over a 10-year (2009-2019), we find that board characteristic influences firms' speed of adjustment in a bank-based (stakeholder-oriented) system. We also find some evidence that board characteristics have varying impacts on the capital structure of Japanese, French and German firms. We conclude that firms' capital structure reflects the corporate governance environment they operate. Our results are robust to accounting for endogeneity and alternative leverage measure.
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    Corporate board and dynamics of capital structure: Evidence from UK, France and Germany
    (Wiley, 2022-02-27) Ezeani, Ernest; Kwabi, Frank; Salem, Rami; Usman, Muhammad; Mohammad, Rateb
    Theoretical arguments suggest that capital structure will adjust to the dynamics of the corporate governance environment. In line with this prediction, we examine the impact of board characteristics on capital structure dynamics and the speed of adjustment. Using 2690 firm-year observations for 2009-2018, we find that firms in a stakeholder-oriented corporate governance environment adjust their leverage faster than those in a shareholder-oriented environment. We also find that corporate board characteristics influence firms’ capital structure and speed of adjustment towards target leverage. Our findings are robust to alternative measures of leverage and endogeneity. The overall evidence supports the relevance of the corporate board's composition in both shareholder-oriented and stakeholder-oriented CG environments. We conclude that board composition mitigates agency conflict.
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    Does the quality of voluntary disclosure constrain earnings management in emerging economies? Evidence from Middle Eastern and North African Banks
    (Emerald, 2020-08-10) Salem, Rami; Ezani, Ernest; Gerged, Ali; Usman, Muhammad; Alqatamin, Rateb Mohammad
    Purpose This study examines the influence of the quality of voluntary disclosure (QVD) on earnings management (EM) among a sample of commercial banks in the Middle East and North Africa (MENA) region. Design/methodology/approach Using a sample of 1,060 bank-year observations for the period 2006–2015, we developed a three-dimensional framework to measure the QVD, which considers the quantity, spread and usefulness of the information. Furthermore, this study examines the QVD-EM nexus employing an ordinary least squares (OLS) regression model. This technique is supplemented with conducting an instrumental variable (IV) regression model and a two-stage least squares (2 SLS) model to overcome the potential occurrence of endogeneity problems. Findings Our findings suggest that QVD is negatively attributed to EM in the context of MENA banks. The findings also confirm that the quality of financial reporting is enhanced by QVD dimensions that were considered in our framework, leading banks to less engagement in EM practices. In contrast, the influence of the quantity dimension (level) of the disclosed information has an insignificant impact on EM, while the spread and usefulness dimensions of voluntary disclosure (VD) are negatively and significantly associated with EM in the region. Originality/value Our study distinctively develops an innovative measurement for QVD using a new multidimensional model. We also bring new evidence on QVD complexity and its impact on EM practice from an under-researched developing context, namely the MENA region.
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    How Does Transparency into International Sustainability Initiatives Influence Firm Value? Insights from Anglo-American Countries
    (Wiley, 2023-01-25) Gerged, Ali Meftah; Salem, Rami; Beddewela, Eshani
    Corporations use global sustainability reporting principles, certifications, guidelines, and indices to promote corporate transparency. However, the effectiveness of adopting these global transparency approaches, either separately or collectively, in increasing firm value is as yet unclear. Thus, we examine whether different global transparency approaches engender different outcomes related to firm value and whether adopting a comprehensive or integrated global transparency approach could better enhance firm value. We use a sample comprising 6,978 firm-year observations of firms listed in the USA (S&P 500), Canada (S&P-TSX 221) and the UK (FTSE 350) from 2013 to 2019. A fixed-effects regression model is then used to examine the primary associations in this study. This technique was complemented by a two-step dynamic generalised method of moment (GMM) model to overcome the expected endogeneity concerns. Our findings indicate that adopting global sustainability reporting principles, certifications, and an integrated global transparency approach are positively attributable to the market value of firms. In contrast, firms’ adoption of international guidelines and environmental, social, and governance (ESG) ratings cannot predict the firm value in the study context. Our evidence implies that firms’ adoption of an integrated global transparency approach adds the most value to those firms when compared to adopting a standalone transparency approach across the three sampled countries. Our study provides practical implications for policymakers and corporate managers and suggests avenues for future studies to build upon our findings.