Does board committee independence affect financial distress likelihood? A comparison of China with the UK
Autor(a) principal: | |
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Data de Publicação: | 2021 |
Outros Autores: | , |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10174/29148 https://doi.org/10.1007/s10490-020-09747-5 |
Resumo: | This study explores the relationship between board committees’ independence and the financial distress of firms in China and the UK. Akin to previous literature, we estimate this relationship between 2007 and 2016 using a conditional logit model on a sample of matched pair firms. For China, the results indicate that there is a positive and statistically significant association between the percentage of independent audit committee members and the financial distress of firms. In Contrast, the opposite relationship was found for independent compensation and nomination committee members. For the UK, the relationships are the same, but the results are significant only for nomination committee independence. Our overall results suggest that independent audit committee members are not favorable for firm survival. In contrast, the independent compensation and nomination committee members are beneficial for the financial health of firms, as they are responsible for designing fair compensation packages and for selecting the most suitable persons to decide the strategic moves of the firm, respectively. A robustness test demonstrates that the results are robust to the assumed functional form imposed by the conditional logit model and confirms our core findings for both Chinese and UK firms. |
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Does board committee independence affect financial distress likelihood? A comparison of China with the UKFinancial distressconditional logit analysispropensity score matchingcorporate governanceboard independenceboard committeesThis study explores the relationship between board committees’ independence and the financial distress of firms in China and the UK. Akin to previous literature, we estimate this relationship between 2007 and 2016 using a conditional logit model on a sample of matched pair firms. For China, the results indicate that there is a positive and statistically significant association between the percentage of independent audit committee members and the financial distress of firms. In Contrast, the opposite relationship was found for independent compensation and nomination committee members. For the UK, the relationships are the same, but the results are significant only for nomination committee independence. Our overall results suggest that independent audit committee members are not favorable for firm survival. In contrast, the independent compensation and nomination committee members are beneficial for the financial health of firms, as they are responsible for designing fair compensation packages and for selecting the most suitable persons to decide the strategic moves of the firm, respectively. A robustness test demonstrates that the results are robust to the assumed functional form imposed by the conditional logit model and confirms our core findings for both Chinese and UK firms.Asia Pacific Journal of Management2021-02-18T11:30:12Z2021-02-182021-01-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articlehttp://hdl.handle.net/10174/29148http://hdl.handle.net/10174/29148https://doi.org/10.1007/s10490-020-09747-5engAshraf, S., Félix, E.G.S. and Serrasqueiro, Z., 2021. Does board committee independence affect financial distress likelihood? A comparison of China with the UK. Asia Pacific Journal of Management, forthcoming.drsumairaa@gmail.comefelix@uevora.ptzelia@ubi.pt256Ashraf, SumairaFélix, Elisabete G. S.Serrasqueiro, Zéliainfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2024-01-03T19:26:02Zoai:dspace.uevora.pt:10174/29148Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-20T01:18:52.788784Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
Does board committee independence affect financial distress likelihood? A comparison of China with the UK |
title |
Does board committee independence affect financial distress likelihood? A comparison of China with the UK |
spellingShingle |
Does board committee independence affect financial distress likelihood? A comparison of China with the UK Ashraf, Sumaira Financial distress conditional logit analysis propensity score matching corporate governance board independence board committees |
title_short |
Does board committee independence affect financial distress likelihood? A comparison of China with the UK |
title_full |
Does board committee independence affect financial distress likelihood? A comparison of China with the UK |
title_fullStr |
Does board committee independence affect financial distress likelihood? A comparison of China with the UK |
title_full_unstemmed |
Does board committee independence affect financial distress likelihood? A comparison of China with the UK |
title_sort |
Does board committee independence affect financial distress likelihood? A comparison of China with the UK |
author |
Ashraf, Sumaira |
author_facet |
Ashraf, Sumaira Félix, Elisabete G. S. Serrasqueiro, Zélia |
author_role |
author |
author2 |
Félix, Elisabete G. S. Serrasqueiro, Zélia |
author2_role |
author author |
dc.contributor.author.fl_str_mv |
Ashraf, Sumaira Félix, Elisabete G. S. Serrasqueiro, Zélia |
dc.subject.por.fl_str_mv |
Financial distress conditional logit analysis propensity score matching corporate governance board independence board committees |
topic |
Financial distress conditional logit analysis propensity score matching corporate governance board independence board committees |
description |
This study explores the relationship between board committees’ independence and the financial distress of firms in China and the UK. Akin to previous literature, we estimate this relationship between 2007 and 2016 using a conditional logit model on a sample of matched pair firms. For China, the results indicate that there is a positive and statistically significant association between the percentage of independent audit committee members and the financial distress of firms. In Contrast, the opposite relationship was found for independent compensation and nomination committee members. For the UK, the relationships are the same, but the results are significant only for nomination committee independence. Our overall results suggest that independent audit committee members are not favorable for firm survival. In contrast, the independent compensation and nomination committee members are beneficial for the financial health of firms, as they are responsible for designing fair compensation packages and for selecting the most suitable persons to decide the strategic moves of the firm, respectively. A robustness test demonstrates that the results are robust to the assumed functional form imposed by the conditional logit model and confirms our core findings for both Chinese and UK firms. |
publishDate |
2021 |
dc.date.none.fl_str_mv |
2021-02-18T11:30:12Z 2021-02-18 2021-01-01T00:00:00Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10174/29148 http://hdl.handle.net/10174/29148 https://doi.org/10.1007/s10490-020-09747-5 |
url |
http://hdl.handle.net/10174/29148 https://doi.org/10.1007/s10490-020-09747-5 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
Ashraf, S., Félix, E.G.S. and Serrasqueiro, Z., 2021. Does board committee independence affect financial distress likelihood? A comparison of China with the UK. Asia Pacific Journal of Management, forthcoming. drsumairaa@gmail.com efelix@uevora.pt zelia@ubi.pt 256 |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.publisher.none.fl_str_mv |
Asia Pacific Journal of Management |
publisher.none.fl_str_mv |
Asia Pacific Journal of Management |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
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Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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RCAAP |
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RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
collection |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
repository.name.fl_str_mv |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
repository.mail.fl_str_mv |
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1799136670635786240 |