Browsing by Author "Houqe MN"

Now showing 1 - 10 of 10
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    Business strategy, cash holdings, and dividend payouts
    (John Wiley and Sons Australia, Ltd on behalf of Accounting and Finance Association of Australia and New Zealand., 2023-12) Houqe MN; Monem RM; van Zijl T
    Business strategy's impact on firm cash holdings and dividend payouts has largely remained unexplored. We identify a fundamental and direct link between a firm's business strategy and its cash holdings and dividend payouts. Analysing two large samples of data on US firms over the period 1992–2017, we find strong evidence that prospectors (defenders) are likely to hold more (less) cash and pay less (more) dividends than other firms. Further analysis suggests that prospectors pay dividends less frequently than do defenders. The results are robust to a battery of robustness checks and additional analysis. Overall, the results suggest that identifying a firm's business strategy significantly helps to understand a firm's cash holdings and dividend payout decisions.
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    Corruption, sustainable development goals performance and modern slavery practices: an international evidence
    (Emerald Publishing Limited, 2025-05-01) Houqe MN; Khan HZ
    Purpose: This study examines the two key research question; (1) Does country-level corruption give rise to modern slavery (MS) practices and (2) Does sustainable development goals (SDGs) performance of different jurisdictions reduce MS practices? Design/methodology/approach: Using a sample of 431 country-year observations (for the period of 2016, 2018 and 2023) from 146 countries, the study test hypotheses applying different econometrics analysis and conducts robustness tests. Findings: Our results indicate that country-level corruption practices increase MS practices in different contexts. These results hold when we use alternative measures for MS construct. Our study also reported that MS practices in different jurisdictions are lessened when country-level SDGs performance is higher. Our additional analysis finds that higher country-level debt serves as a channel between corruption and MS practices. Research limitations/implications: Practically, the findings of the study have a take-away message for different global actors, in particular, different countries’ governments, national regulators working to abate corruption and slavery issues. For other actors such as the United Nations, the ILO and others, the findings will have practical value for their new policy development and interventions. Originality/value: To the best of our knowledge, this study is the first that investigated the role of country-level corruption on MS practice at the country level. Similarly, our attempt towards exploring the impact of country-level sustainable development goals (SDGs) performance on the MS practices is also primary in the literature. Lastly, developing a single framework by integrating different countries’ MS practices with corruption and SDGs performance and providing related empirical evidence with global level data is a new initiative in the accounting and sustainability literature.
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    Impact of business strategy on carbon emissions: Empirical evidence from U.S. firms
    (ERP Environment and John Wiley and Sons Ltd, 2024-05-06) Houqe MN; Abdelfattah T; Zahir-Ul-Hassan MK; Ullah S
    This study examines the nexus between business strategy and carbon emissions by utilising a dataset of U.S. firms from 2007 to 2020. It focuses on two broad types of firms, that is, prospectors and defenders. Regarding carbon emissions, we consider total emissions (Scope 1 & 2), direct emissions (Scope 1) and indirect emissions (Scope 2). The results reveal a significant association between business strategy and total carbon emissions as well as direct carbon emissions. Notably, the results suggest that prospectors, compared to defenders, display higher levels of total and direct carbon emissions. Our findings contribute to the debate on whether prospectors in developed countries mismanage sustainability issues. The study offers valuable insights into the interplay between business strategy and carbon emissions and provides empirical evidence that business strategy is an important determinant of total and direct carbon emissions.
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    Long-tenured CEOs and firm performance: too much of a good thing? Evidence from New Zealand
    (Emerald Publishing Limited, 2025-04-11) Chikunda P; Bhuiyan MBU; Houqe MN; Nguyen LTM
    Purpose: This study aims to investigate the association between chief executive officer (CEO) tenure and firm performance. Extended CEO tenure offers the potential for organizational stability, sustained operational coherence and heightened insights into business intricacies. However, longer tenure concurrently fosters complacency and impedes innovation by engendering resistance to change and a deficiency in novel perspectives. The authors’ inquiry seeks to discern the prevailing influence between these contrasting perspectives. Design/methodology/approach: This study uses unbalanced panel data for a unique hand-collected dataset from listed firms in New Zealand (2000–2020) – a country that adopts the principles-based corporate governance regime. The authors perform ordinary least squares, two-stage least squares and propensity score matching tests to examine the relationship between CEO tenure and firm performance. Findings: The authors document a significant positive impact of CEO tenure on firm performance, implying the benefits of long tenure. However, this study further reveals a significant inverted U-shaped relationship between CEO tenure and firm performance, suggesting that such a positive impact can hold up to a certain threshold; after that, long CEO tenure can hinder firm performance. The finding is robust to alternative measures and endogeneity tests and offers important implications for corporate governance policies and practices. Practical implications: The findings highlight the importance of balancing the benefits of long CEO tenure. Practically, firms should prioritize regular evaluation of CEO performance and tenure, emphasize succession planning and foster a culture of innovation to sustain organizational success in the long term. Originality/value: This research offers valuable insights by examining the intricate relationship between CEO tenure and firm performance within the distinct setting of New Zealand. By uncovering both the benefits and drawbacks of long CEO tenure, this study contributes to a nuanced understanding of corporate governance dynamics.
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    Meta-analysis of the impact of financial constraints on firm performance
    (John Wiley and Sons Australia, Ltd on behalf of Accounting and Finance Association of Australia and New Zealand, 2023-06-17) Ahamed FT; Houqe MN; van Zijl T
    A large number of studies have investigated the relationship between financial constraints and firm performance. However, due to heterogeneity in study design factors, such as choice of measures for constraints and performance, control variables, estimation methods and study sample, the empirical results have been mixed. To mitigate this issue, this paper reports a meta-analysis of the association between financial constraints and firm performance. To assess the overall direction of the relationship and the sources of heterogeneity, we apply meta-analytic methods to 26 studies (providing 189 effect sizes) on the association between financial constraints and financial performance in listed companies. Our result shows that, overall, there is a positive relationship between financial constraints and firm performance. In addition, meta-regression results suggest that return on assets (ROA) and return on equity (ROE) as measures of financial performance, and external finance and size as measures of financial constraints, have a significant negative impact on the relationship between financial constraints and firm performance relative to the mean impact on effect size. Similarly, all of North America and Asia as regional differences, control of size and corporate governance as control variables, and journal quality as strength of results, also have a significant negative impact. On the other hand, market value as a measure of financial performance, and the Whited & Wu index as a measure of financial constraints, have significant positive impact relative to the mean impact. Similarly, cross-country and Europe as regional differences, and publication status as strength of results, all have significant positive impact. Given that firm performance is of fundamental importance to investors, this study therefore helps researchers and policymakers to understand the variation in the empirical results on the impact of financial constraints.
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    Moderating effect of carbon accounting systems on strategy and carbon performance: a CDP analysis
    (Springer-Verlag GmbH, 2022-12) Bui B; Houqe MN; Zahir-Ul-Hassan MK
    Carbon emissions bring significant risks and opportunities, and organisations have responded by adopting different strategies and environmental control systems, such as carbon accounting systems (CASs). However, it remains unclear whether a CAS can help reduce emissions, and what role is played by a CAS in the relationship between carbon strategy and carbon performance. Therefore, this paper analyses the strategy-accounting-performance nexus by drawing on 1672 firm-year observations of firms participating in the CDP in 2014 and 2015. The results suggest that the quality of a CAS is influenced by strategic choices; with a proactive carbon strategy being associated with a higher quality CAS. Further, proactive strategies and CASs are found to be associated with carbon savings and emissions reduction. The results indicate a moderating role of CASs on the strategy-performance relationship, with carbon strategy enabling higher carbon savings and lower emissions intensity in the presence of a high-quality CAS. Our findings suggest that formulation of carbon strategies and establishment of carbon measures can drive effective carbon mitigation.
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    Organic versus cosmetic efforts of the quality of carbon reporting by top New Zealand firms. Does market reward or penalise?
    (ERP Environment and John Wiley and Sons Ltd, 2023-01-06) Khan HZ; Houqe MN; Ielemia IK
    This study explores the quality of carbon reporting (QCR) by New Zealand (NZ) firms and its changes over time. It also explores the impact of QCR on the market reputation of firms. Using a sample of 300 company-year observations between 2015 and 2020 from top listed firms of NZ, the study develops a 14-item QCR index. The study finds that the company-level QCR reporting by NZ firms overall is not praiseworthy, as firms need to improve QCR in many aspects (both in-house efforts as well as external reporting). Although QCR has increased over time, firms' QCR efforts cannot be treated completely authentic. Majority of firms in NZ have disclosed unaudited carbon information to investors and other stakeholders. Additionally, our study finds that QCR positively affects the market reputations of firms, and the market behaves accordingly. Specifically, firms' organic carbon efforts are paid-off (through increased market reputation) by the market players and cosmetic/decoupled behaviour is penalised (through decreased market reputation). This study is the first on QCR reporting using a sample of NZ firms and an account of their initiatives towards the carbon emission reduction initiative and related disclosures. The study's findings have policy implications.
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    Readiness for Mandatory Climate-Related Disclosures: A Tri-Jurisdictional Analysis of Governance Attributes in Australia, New Zealand and the United Kingdom
    (ERP Environment and John Wiley and Sons Ltd, 2025-02-03) Moses O; Bui B; Houqe MN; Borghei Z
    We evaluate the preparedness of companies in Australia, New Zealand and the United Kingdom to comply with emerging mandatory climate-related disclosures (CRDs) aligned with TCFD recommendations, using their Carbon Disclosure Project (CDP) information. Our analysis also examines the corporate governance attributes influencing their readiness to disclose such information. The findings reveal a strong integration of the Governance aspect of TCFD-recommended disclosure, with an 86% alignment between CDP and TCFD disclosures in the Governance theme. However, lower alignment is observed for Strategy (50%) and Metrics and Targets (49%), highlighting the need for immediate improvements in these areas. Firms with more gender-diverse boards and the presence of a sustainability committee demonstrate greater readiness to comply with CRDs consistent with TCFD recommendations. These insights shed light on firms' readiness for emerging mandatory CRD across jurisdictions, especially considering the new IFRS sustainability standards. The results underscore the urgent need to enhance competencies in Strategy and Metrics and Targets, where alignment is weakest. Practically, by documenting these insights, we provide managers with early guidance on the implications of their current CRD practices. This is especially relevant for firms subject to, or soon to be impacted by, mandatory sustainability regulations in their jurisdictions. The findings hold paramount significance for managers, policymakers and regulators.
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    The Effects of Carbon Emissions and Agency Costs on Firm Performance
    (MDPI AG, 28/03/2022) Houqe MN; Opare S; Zahir-Ul-Hassan MK; Ahmed K
    Carbon emissions and agency costs can have an impact on firms’ financial performance. However, limited attention has been paid to the combined and gradual effects of these two factors on firms’ performance. We explore the separate and combined effects of carbon emissions and agency costs on firms’ financial performance by utilizing data from 2323 US firms that disclosed their environmental information to CDP from 2007 to 2016. The results indicate that firms with higher carbon emissions experience lower performance as the market reacts negatively. Further, firms with both higher carbon emissions and higher agency costs have lower performance. We also investigated year-on-year change in firm performance and found that, keeping agency costs constant, a change in carbon emissions leads to lower performance. Overall, the findings suggest that when the market responds negatively to firms’ environmental decisions, high agency costs exacerbate the adverse effect of high carbon emissions on firm performance.
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    What determines the quality of carbon reporting? A system-oriented theories and corporate governance perspective
    (ERP Environment and John Wiley and Sons Ltd, 2023-09-11) Houqe MN; Khan HZ
    The study examines the determinants of the quality of carbon reporting (QCR) by top listed firms of a developed country. Using a sample of the top 50 listed firms of New Zealand (NZ) sampled over a period of 6 years (2015–2020), the study measured QCR index using 14-items and analysed the data using regression analysis. The study finds that external factors, namely, carbon regulation (Emission Trading Scheme—ETS law), use of a standardised reporting format for non-financial reporting (Global Reporting Initiative, GRI) template, and environmental and social (E&S) performance, all positively influence the QCR. The study also finds that corporate governance attributes namely board diversity (women's representation on the board) and board size positively influence the QCR. Lastly, the study finds that top firms in NZ have many areas of improvement in reporting quality carbon information. The study is the first empirical research on QCR from NZ firms that evidences multiple institutional factors and governance elements as key explanatory factors driving towards making carbon reporting credible and reliable.