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Research Question/Issue: This study investigates the impact of family governance, including founder directors and their ties to family members on the board, on the social performance of microfinance institutions (MFIs), a special kind of social enterprise with dual objectives. Research Findings/Insights: Using a dataset of 735 MFIs operating in Bangladesh from 2007 to 2017, we find that founder directors and board members with family ties to the founder have an adverse impact on MFIs' social performance. These findings hold when we perform several robustness tests and endogeneity tests. Theoretical/Academic Implications: We contribute to the corporate governance literature on MFIs and social enterprises in two ways. First, our findings suggest that, when MFIs are confronted with dual performance objectives, founder directors may "trade off" social outcomes in favor of economic outcomes and therefore adversely affect MFIs' social performance. Second, our findings extend the literature by showing that the presence of board members with family ties to founder directors also adversely affects MFIs' social performance. Practitioner/Policy Implications: This study suggests that MFIs' board composition influences their governance and ability to oversee their social and financial performance effectively. If MFIs' social performance is a major concern of national policy makers, then regulation should be put in place to limit board recruitment with family ties. [ABSTRACT FROM AUTHOR]

We examine the relationship between brand capital and firms' credit ratings. Using a sample of 5,787 publicly listed U.S. firm-year observations over the 1994–2017 period, we provide evidence that firms with higher levels of brand capital are associated with more favorable credit ratings. In cross-sectional analyses, we find that this relationship is more salient for firms with higher levels of information asymmetry and more financial and distress risk, and for firms with weak governance. In additional analysis, we find a negative relationship between brand capital and the implied cost of equity capital. Our results are robust to alternative measures of brand capital, an alternative regression model and endogeneity tests. Overall, our findings suggest that brand capital captures important financial and non-financial information, and that credit rating agencies, sensibly, consider brand capital in their assessment of firms' credit worthiness. [ABSTRACT FROM AUTHOR]

This systematic literature review critically analyzes studies on the determinants of short selling and the implications for information distribution, real economic decisions, financial reporting, and external auditing. We select and review studies within a research framework, identifying two of the most important areas in the literature: short sellers as important information intermediaries and short sellers' influence on accounting, auditing, and other corporate decisions as the 'spillover effect' of the information distribution. Of the two, the former has a strong emphasis on financial markets, whereas the latter extends this traditional topic in finance to financial economics, corporate governance, and accounting. Our review highlights that, although short sellers use both private information and public information in selecting stocks for shorting, we know little about how they use private and non-financial information to influence managerial economic decisions and firms' financial reporting decisions. In discussing potential future research, we emphasize that penetrating the information 'black box' and positioning research regarding the information that short sellers use and how they use it are necessary to advance the short-selling literature. [ABSTRACT FROM AUTHOR]

We survey the burgeoning literature on the determinants and consequences of firm‐specific future stock price crash risk. We synthesise a vast body of literature on the determinants of crash risk, identify weaknesses, and offer future research opportunities. We categorise the determinants into: (i) financial reporting and corporate disclosures, (ii) managerial incentives and managerial characteristics, (iii) capital market transactions, (iv) corporate governance mechanisms, and (v) informal institutional mechanisms. Despite a large body of research into the determinants of crash risk, very little research attention has been directed towards understanding the consequences of stock price crash. [ABSTRACT FROM AUTHOR]

• We examine how strategic deviation affects idiosyncratic return volatility (IRV). • Firms that strategically deviate from industry peers are related to higher IRV. • This relationship is weaker for firms with transparent information environments and better corporate governance. • Strategic deviation increases earnings volatility and cash flow volatility. This study examines the relationship between strategic deviation and idiosyncratic return volatility (IRV). Using a large sample of U.S. public firms, we find that firms that strategically deviate from industry peers are related to higher IRV. This relationship is weaker for firms with transparent information environments and better corporate governance. Robustness tests show that our results are not affected by endogeneity problems. Additional analyses reveal that strategically deviant firms are associated with higher earnings volatility and cash flow volatility. Taken together, we reveal that strategic deviation has important implications for firms' risk. [ABSTRACT FROM AUTHOR]

• We examine the relationship between strategic deviation and debt maturity structure. • Strategic deviation is positively associated with short-term debt. • This relationship is driven by both information asymmetry and corporate governance. • Strategic deviation has important implications for corporate financing decisions. We examine the relationship between strategic deviation and debt maturity structure. Using a large sample of US publicly listed firms from 1981 to 2020, we find that strategic deviation is positively associated with short-term debt. We also find that this relationship is driven by both direct and indirect channels (information asymmetry and corporate governance channels). Our finding remains robust to a series of sensitivity analyses and endogeneity tests. Taken together, we show that strategic deviation has crucial effects on corporate financing decisions. [ABSTRACT FROM AUTHOR]

Manuscript Type Empirical Research Question/Issue This study investigates whether the existence of a separate risk committee and risk committee characteristics are associated with market risk disclosures. It also tests whether the role of a risk committee in affecting market risk disclosures varies for different firm life cycle stages. Research Findings/Insights Using 677 firm-year observations of financial firms from Gulf Cooperation Council (GCC) countries during the years 2007-2011, we find that firms with a separate risk committee are associated with greater market risk disclosures, an effect that is more pronounced for mature-stage firms. Furthermore, findings suggest that risk committee qualifications and size have a significant positive impact on market risk disclosures. Theoretical/Academic Implications This study complements the corporate governance literature by incorporating agency theory, legitimacy theory, stakeholder theory, and the resource-based theory to provide more robust evidence of the impact of a separate risk committee and the firm life cycle on market risk disclosures. Our results support the monitoring effect of a separate risk committee and suggest that a separate risk committee can improve 'firm-level corporate governance' in the GCC countries characterized by a poor informational environment. Practitioner/Policy Implications Findings from this study provide evidence that the existence, qualifications, and size of risk committees may be used as a channel to improve the disclosure level, suggesting a policy prescription for regulators and policymakers. Investors may also find these results useful in forming their own expectations about firm-level risk disclosures. [ABSTRACT FROM AUTHOR]

• We examine the relationship between corporate culture and the use of bank debt. • Firms with superior corporate culture are associated with less bank debt. • Both information asymmetry and corporate governance channels explain the result. • Corporate culture has important implications for firms' bank debt. We examine the relationship between corporate culture and the use of bank debt. We find that U.S. firms with superior corporate culture are associated with less bank debt. We also find that this finding is driven mainly by the teamwork, innovation, and quality dimensions of corporate culture. Our channel analysis shows that the negative relation between corporate culture and bank debt is driven by both information asymmetry and corporate governance channels. Overall, we show that corporate culture has important implications for firms' bank debt. [ABSTRACT FROM AUTHOR]