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Vol.7 No.1
March 2019

 Page Number

 Article Information

1-10

The Information Asymmetry and Corporate Social Responsibility Disclosure

Juniarti

DOI: 10.15604/ejbm.2019.07.01.001

Abstract

CSR become one of the highlighted activities, aligned with the requirement to adopt the interest of stakeholders. This study aims to search whether the earnestness of companies to manage CSR as disclosed in their sustainability reporting reduces information asymmetry. The sample consists of the companies that have published sustainability reporting for the period 2008-2014 and listed in Indonesia Stock Exchange. The finding of this research are as follow: (1) unlike the previous research that found a reducing of information asymmetry after the issuing of sustainability reporting, this study finds the opposite, that the higher the disclosure of CSR activities, the wider the spread, (2) further, this study finds that the companies which have a negative earning tend to disclose more CSR information (3) The presence of institutional investors representing well-informed investors help the company to ensure the reliability of CSR activity information delivered through Sustainability Reporting.

Keywords: Bid-Ask Spread, Information Asymmetry, Sustainability Reporting

11-17

Board of Directors And Profitability: The Case of Tunisian Private Banks

Mouna Gouia Ben Zina

DOI: 10.15604/ejbm.2019.07.01.002

Abstract

The issue of the impact of the Board of Directors on banking performance is still being discussed. There is indeed a controversy on the topic to the point that drawing clear conclusions is a bit rash. In this paper, our aim then is to extend the issue by measuring the impact of the presence of independent directors, board structure and duality of functions on banking performance. To this end, we use a Generalized Method of Moment (GMM) estimation to study these relationships in a sample of seven private banks in Tunisia observed over the 2008 – 2017 period. We found evidence pointing to the presence of a negative correlation between duality of functions, board size and performance. Conversely, the relationship between independent directors and performance is found to be positive and significant.

Keywords: Banking Performance, Profitability, Independent Director, Board Size

18-30

Intention to Implement Corporate Social Responsibility – The Role of Religiousness And Ethical Idealism

Marija Ham, Ana Pap, and Helena Stimac

DOI: 10.15604/ejbm.2019.07.01.003

Abstract

The awareness of the importance of corporate social responsibility is highly increasing and it has become clear that it is an essential element of sustainable development and social progress. Also research has shown that socially responsible behavior is not anymore a competitive advantage, but an important precondition for competitive parity or surviving in the market. The aim of this research is to determine influential factors of business students’ intention to implement corporate social responsibility in their future companies. There is a vast research base dealing with the corporate social responsibility of managers. However, this research is based on the assumption that from the perspective of the possible positive influence, it is necessary to investigate the influences during the time before they become managers in order to develop an effective educational program to increase the awareness and positive attitudes towards corporate social responsibility. The model is based on the theory of planned behavior and extended with two variables: representation of corporate social responsibility in education which has been determined in previous research, and religiousness and ethical idealism which is a new variable proposed in the present research. Two models were tested, one using three original TPB constructs (attitudes, subjective norms and perceived behavioral control) and the other using the extended version of TPB. The latter model confirms the importance of the inclusion of CSR in education and explains the positive role of religiousness and ethical idealism. The level of students’ religiousness and ethical idealism is proved to be significant influential factors on students’ intention to implement CSR in their future companies.

Keywords: Corporate Social Responsibility, Theory of Planned Behavior, Religiousness, Ethical Idealism

31-43

Advisor Choice: Influences of Personality Traits, General Attitudes and Suggested Biases

Katarina Kostelic

DOI: 10.15604/ejbm.2019.07.01.004

Abstract

While decision-making process and influences are extensively researched, linking those insights to real-life choices opens various research questions that have yet to be answered. The purpose of this paper is to examine the correlation of personality traits to advisory first-choice in two context situations: solving a financial and a legal issue. The goal is to identify individual’s choices, as well as personality traits that correlate to specific advisory choice and offer theoretical and practical insights, as well as to implicitly examine the base for further research regarding the connection of personality traits and general attitudes to biases. Personality traits, value scales and advisory choice preferences were collected online and analyzed using logistic binomial regression models to determine statistically significant variables and possibility of choice prediction. Respondents’ answers are also observed regarding biases occurrence, where overconfidence, anchoring, familiarity and trust biases are discussed. Although advisor first–choice models offer a correlation of the personality traits and general attitudes with moderate and high prediction, which enables specific and practical implications; they also indicate a theoretical contribution: it is not possible to outline generalization of influencing variables on similar observed choices. This can mean that two seemingly similar questions represent completely different decision-making contexts for individuals. Theoretical and practical implications are discussed.

Keywords: Advisory Choice, Personality Traits, General Attitudes, Biases

44-64

Corporate Governance and Fraud Detection: A Study from Borsa Istanbul

Burcu Birol

DOI: 10.15604/ejbm.2019.07.01.005

Abstract

Governments give high priority to corporate governance principles after important business scandals. Since the ultimate goal is to enable sustainable life span for the corporations, new regulations and sanctions has been introduced about transparency, and accountability all over the world. The basic corporate governance principles are applied for establishing more reliable financial reporting of firms. In this study, the relationship between corporate governance practices and fraud risk is investigated. There are some studies conducted in literature that investigating fraudulent financial statements, and detection models are tried to be constructed. They are generally based on financial indicators. The aim of this study is to combine financial data with non-financial variables about corporate governance applications, and to construct a fraud detection model via measuring the effectiveness of corporate governance on fraud risk. The hypotheses have been created based on assumptions and tested with the logistics regression. 134 companies listed in Istanbul Stock Exchange have been studied via benefiting their financial statements published between 2010 and 2014, and their corporate governance applications announced. Findings show that the new regulations about corporate governance principles and their applications in Turkey have not made the expected effect on fraud risk yet. On the other hand, profitability and indebt positions of companies have an impact on the risk of preparing fraudulent financial statements, and give clues about the misstatements, consistently with literature.

Keywords: Corporate Governance, Fraud, Fraud Detection, Fraudulent Financial Statements, Financial Ratio Analysis

65-73

The Impact of Financial Leverage on Firm Growth: Empirical Evidence from Bosnia & Herzegovina

Jasmina Dzafic and Nedzad Polic

DOI: 10.15604/ejbm.2019.07.01.006

Abstract

Referring to the permanent need for investigation of the corporate finance principles effects on firm growth performance, we present the research of financial leverage effects on firms’ growth in Bosnia and Herzegovina. For that purpose, we collect a sample of 18,007 firms from B&H. The sample includes all firms being active in the period 2008-2016, classified in twelve industries, three size levels and situated in two entities (Federacija BiH and Republika Srpska). Along with the impact investigation, we tend to confront the findings with theoretical expectations and suggest certain incentives policy development if appropriate. We apply Stata 15 throughout the empirical research analysis. The findings of the paper call for comprehensive and decisive response in order to turn potentials of external operations and investments financing into true development supporting tool, instead of being temporary solution to cover loss of assets and imbalanced assets to debt structure as the main findings reveal.

Keywords: Financial Structure, Financial Leverage, Firm Growth, Bosnia & Herzegovina

74-84

The Effect of Person-Organization Fit on the Organizational Identification: The Mediating Role of Organizational Attractiveness

Esra Cinar

DOI: 10.15604/ejbm.2019.07.01.007

Abstract

The aim of this study was to investigate the mediator effect of organizational attractiveness on the relationship between organizational identification and person- organization (P-O) fit. To examine the research model, data were collected from 221 employees working in different sectors. By using structural equation model (SEM), the hypothesis of the research was analyzed. The results indicated that there was a significant and positive relationship between P-O fit and organizational identification and organizational attractiveness. Also, a positive and significant relationship was found between organizational attractiveness and organizational identification. Results of SEM showed that organizational attractiveness had a partial mediation effect on the relationship between P-O fit and organizational identification.

Keywords: Organizational Identification, Organizational Attractiveness, Person-Organization Fit

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