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Due to the importance of multinational corporations for global economic growth, studying multinational firms’ capital structure has become important. Theories have been developed to explain the variations between multinational and domestic firms’ capital structure decisions. In this context, empirical research has been conducted to study the capital structure of multinational corporations in comparison to domestic corporations in order to provide theoretical support. However, this group of capital structure literature still requires further investigation in order to enhance our understanding on the difference between the capital structure of multinational corporations compared to domestic corporations. This thesis provides three empirical studies on the capital structure of US multinational corporations compared to purely domestic corporations. More specifically, the first empirical chapter in this thesis (Chapter 5) aims to give an answer to the puzzling lower leverage ratio of US multinational firms relative to their domestic counterparts. Further, the second empirical chapter in this thesis (Chapter 6) investigates the role of the trade-off theory debt interest tax shield advantage of debt financing between multinational and domestic firms capital structure decisions by looking at the non-linear effect of the firm’s profitability on the capital structure decisions of US multinational and domestic corporations. Moreover, the third empirical chapter in this thesis (Chapter 7) considers the global financial crisis event to test the different expected bankruptcy cost of debt financing between multinational firms and domestic firms (as predicted by the trade-off theory). This is done by comparing the capital structure between US multinational firms and their domestic counterparts during the 2008-2009 global financial crisis. The thesis provides several contributions to the extant capital structure literature. More precisely, the first empirical chapter finds the first empirical evidence which reports that the effect of the multinational firms’ size on their leverage ratio is significantly lower relative to domestic firms’ size. Further, the first empirical chapter finds that the effect of the firm’s size when comparing the leverage ratio between US multinational corporations and their domestic counterparts, is moderating. These findings support the theoretical explanations of multinational firms’ higher agency cost of debt due to their higher monitoring cost as a result of the complexity of the international environment. The second empirical chapter in this thesis finds that the effect of multinational firms’ profitability on their leverage ratio is non-linear, while the effect of domestic firms’ profitability on their leverage ratio is negative. The results support the theatrical argument which reports that the debt interest tax shield plays an important role in multinational firms’ capital structure decisions in comparison to purely domestic corporations. The non-linear effect of multinational corporations’ profitability on their leverage ratio implies that higher profitability multinational firms consider tax shield advantages of debt more important, in comparison to the informational asymmetry problem, in order to benefit from a debt interest tax shield. Such findings are consistent with the theoretical view that predicts that multinational firms have higher potential tax shield advantages in comparison to purely domestic firms due to multinational firms’ operations in different countries that impose different tax systems. However, the negative effect of domestic firms’ profitability indicates that information asymmetry problems explain the causality between domestic firm’s profitability and leverage decisions. Prior research finds that multinational firms’ capital structure includes a significantly lower leverage ratio in comparison to their domestic counterparts. However, prior research did not consider comparing the leverage level of US multinational and domestic corporations during a period of poor global macroeconomics condition. The third empirical chapter in this thesis finds that US multinational and domestic firms’ market leverage ratios increased significantly during the global financial crisis but book leverage ratios had no significant effect during the global financial crisis. Furthermore, although finance theory predicts that multinational firms should have lower expected bankruptcy cost of debt financing, the third empirical chapter finds that multinational firms’ debt decisions did not have significant difference, compared to domestic firms’ leverage decisions, during the period of the 2008-2009 global financial crisis. To the best of my knowledge, this finding is considered as one of the earliest pieces of evidence that is inconsistent with the theoretical predictions for multinational firms’ lower expected bankruptcy – in comparison to domestic corporations due to multinational firms’ diversification of their operations in different uncorrelated economies. Some key implications have emerged from the research findings. First, multinational firms’ managers should consider the fact that the size of multinational firms is associated with higher agency cost of debt which can inversely influence multinational firms’ financing. Second, the finding of the second chapter implies that multinational and domestic corporations’ financing decisions are differently affected by corporate tax rates and corporation tax regulators should consider this more closely.

This research focuses on the role of audit committees among publicly listed companies in Thailand, a non-Western context when overseeing their companies’ enterprise risk management systems. A mixed methods research approach, including quantitative and qualitative methods was used to gather and analyse the research data. The results reveal that just above a quarter of the participants in the sample believe that companies in which they had worked as part of the audit committee have mature and robust risk management systems in place, while more than half of the survey audit committee chairs/members indicate that their companies have implemented risk management systems, but they require substantial work. The findings demonstrate no significant impact of the perceived higher levels of oversight responsibility for enterprise risk management on audit committees’ judgement competence. However, this study finds that audit committees who perceived higher levels of oversight responsibility of enterprise risk management have a strong positive impact on their perceptions of the quality of enterprise risk management. The findings also show that the audit committees’ judgement competence mediates the association between the audit committees’ activities in overseeing the internal and external audit functions and the audit committees’ perceptions of the quality of enterprise risk management. The qualitative interview results of this study uncover 11 processes that audit committees utilised to perform the risk oversight task: (1) scope of risk oversight, (2) risk oversight as a collective process, (3) understanding of business and risks, (4) scepticism, (5) focus on high-risk, high-impact, (6) challenging and forcing, (7) use of specialists, (8) give advice and recommendations, (9) provide support and assistance, (10) informal processes, and (11) follow-ups. In addition, the findings show that all of interviewees perceived the risk oversight responsibility as important. Such positive perceptions of the risk oversight task influenced audit committee chairs/members of this study to get involve closer in the internal and external audit functions. The findings report that they made a holistic judgement based on two components: information and perception. However, in the last step of the decision-making process, they demonstrate a willingness to accept their decisions under unknown conditions.

Over the past years, participative budgeting has attracted researchers and scholars to investigate its impact on subordinates’ behaviours. Earlier empirical studies have investigated this impact as either a direct relationship, with the influence of a moderator or an antecedent or with both moderators and antecedents. Yet, prior studies’ findings were inconsistent with each other. This study depicts that participative budgeting is governed by the concept of Social Capital and its different dimensions, relational, structural and cognitive. Scholars conceptualised social capital as a set of social resources available through subordinates’ relations, which empower their communication with a variety of individuals. Further, this study investigates the impact of participative budgeting on subordinates’ behaviours by implementing the Throughput model. This model is a decision making model with four factors, linked with six different pathways. The factors are the perception of the individual, the information available for decision making, judgement and finally the decision made. The linking pathways, moreover, would reflect the rationalisation of the individual upon the availability of those different factors. This study examines how the employment of the throughput model can assist in deducting the impact of participative budgeting on subordinates’ behaviours. This study was implemented among Saudi Arabian mid-level managers working in manufacturing listed companies. A total of 283 surveys were analysed using a second generation statistical tool, SEM-PLS. The results reveal performance and satisfaction were impacted by their relational dimension of social capital. In other words, mid-level managers’ relations with other individuals will have a significant impact on their performance and satisfaction. The usage of social capital and the implementation of the throughput model advance the understating of the thinking process of those mid-level managers and ultimately the impact on their behaviours within participative budgeting settings.

The object of this study is the processes that govern the flow of financial resources around an organisation. This is addressed in the context of the need for organisations to survive and prosper in an uncertain and dynamic world. Specifically, interest is focussed upon the mechanisms responsible for its ability to respond in an appropriate way to environmental disturbances in the short term and adapt to changes in the pattern of environmental disturbances over the longer term. The aim is to identify how this process is carried out and what implications this might have for the efficient and effective design of an organisations and practices and procedures. These are fundamental issues for any sort of social organisations. However, over the last fifty years a body of knowledge has accumulated – often described as systems theory – which seeks to identify and codify the principles that underpin all forms of organisation, whether it is sociological, biological or psychological. Advocates of systems theory claim that invariant principles can be applied, and knowledge transferred, across phenomenological domains. In academia, the study of the mechanisms that govern the flow of financial resources has received considerable attention. The study of Management Control Systems (MCS) in general and budgeting in particular is one of the most densely populated fields of accounting academic research. There has, however, been a surprisingly limited amount published on the application of systems theory to financial control processes. The broad issues that this thesis seeks to address are therefore: • What principles and concepts from systems theory can be applied to study of the management of financial resources in organisations? • How might they contribute to knowledge and understanding of such systems? • How can they be used to design and operate systems in practice?

This PhD thesis contains four main essays on financial health and firm value, with a focus on the term board structure – unitary and dual. With the exception of Chapter 1 and Chapter 6, which set out the general introduction and conclusion, each of the chapters can be considered as a standalone piece of work. In Chapter 2, we model and predict, using FTSE100 and Nasdaq100 sample data, the impact of audit committee financial experts on firm value. Model dimensions and parameters were conducted over a period of five years and allowed to change to four years, so as to ascertain lag effects. The proposed financial expert decision - making model (Throughput Model) allows us to estimate these influences. Hence, we find mixed results. Chapter 3 investigates ethical consideration influences on the role of United States, United Kingdom and German audit committees. Simultaneously, we empirically test whether financial experts may influence firm value in German Dax100 firms using the preference –based pathway. Our empirical results suggest that accounting experts exerts significant influence on firm value. Chapter 4 examines the impact of regulations on the performance of Nasdaq100 firms in the US. Our result suggest that the Sarbanes – Oxley Act has indeed changed the dynamics of business structure and improved monitoring. We find evidence of a positive significant influence of supervisory financial expert on financial health but accounting experts, negative.

The main objective of this study was to develop an algorithmic financial model to determine and examine the characteristics of key value drivers, earnings, net income, EBITDA, sales, and book value, that formulate the value aspects of a company to compute raw value multiples using multi-linear regression analyses of scaled value driver, Price-to-Earnings (PE), Price-to-Net_Income (PX_Earn_Com), Price-to-EBITDA (PEBITDA), Price-to-Sales (PS), and Price-to-Book (PB), against a comprehensive list of independent proxy variables. The resulting spectrum of raw value multiples is utilised in further computation that encompass the triangulation of the spectrum raw value multiples in a weighted process based on the adjusted coefficient of determination measurement, which would synthesise a raw market share price of the company (Adj. Vs_PX) comparable to Bloomberg-based share prices (PX). Effectively, the multi-linear regressive algorithmic financial model would be used for assessing market value signalling a buy or sell based on the position of synthesised market share price relative to current market share prices. The amalgamated data sample for this study comprises of the market indices representing the Anglo-Saxon and European markets, namely the FTSE-All-Share (ASX) of UK, S&P 500 (SPX) of the USA and STOXX Europe 600 (SXXP) of Europe with a data availability ranging from 2001 to 2011 obtained from Bloomberg. The main objective was successfully completed by the analysis of 170 regression models based on 5 scaled dependent variables regressed against 56 independent proxy variables for 8,851 company-years out of 14,340 company-years representing the 3 market indices, ASX, SPX, and SXXP. The descriptive statistics measures of the computed raw value multiples and share prices relative to the Bloomberg-based values have overall generated robust and significant results. Generally reflecting a low standard error, consistent standard deviation and yielding sample means that are very similar. Relating the computed raw value multiples of PE, PX_Earn_Com, PEBITDA, PS, and PB, against the respective Bloomberg-based multiples has mostly shown similar company values for ASX and SPX, signifying that the listed companies are efficiently valued. Whereas for the companies listed on the SXXP index, the results highlighted that there were differences in values observed between the synthesised raw multiples and the Bloomberg-based multiples, implying that companies are either over-valued or under-valued. Overall the corresponding PS and PB multiples displayed the most consistent and explanatorily significant results compared to the three earnings multiples. However, the observed discrepancies in the synthesised values relative to the Bloomberg-based values would mostly be offset collectively between PE, PX_Earn_Com, and PEBITDA, thus presenting consistent and significant results. This study concludes that the cross-sectional relative valuation analysis of any fully-listed company in the Anglo-Saxon and European markets in an identical process to be achievable. Hence, the process of valuation analysis using independent proxy variables can be standardised for the Anglo-Saxon and European markets and the triangulation of value multiples to synthesise comparable market share prices. The various aspects of the methodologies applied are founded on multi-linear regression analysis and relative valuation using a standardised database for all the data obtained from the three market indices: ASX, SPX, and SXXP. Thus, the multi-linear regressive algorithmic financial model is capable of computing cross-sectional valuation, as well as cross-market valuation for any fully-listed company, to compute value multiples that can be triangulated to synthesise respective share prices premised on standardised proxy variables.

This thesis studies capital structure of non-financial firm in the UK. It specifically examines the market timing theory of capital structure in the three different empirical chapters. Given that the market timing theory is new relative to the trade-off and pecking order explanations of firms‟ capital structure decisions; it provides an interesting discourse for the wider finance community. The thesis empirically tests the theory and provides evidence as well as theoretical implications for practising managers. The first empirical chapter looks at the timing of IPOs and SEOs in the UK as well as the reversal and persistence of timing attempts. Consistent with the findings in Barker and Wurgler (2002) we find that firms do time IPOs as well as SEOs. However, similar to Alti (2006), we do not find that the effect is persistent. In addition to that, we find that the motive for timing SEOs are distinctively different from the motive for IPO managers. Although timers in both markets are inferior (they are less profitable and have a smaller growth frontier), SEO firms appear to be over-levered and their timing attempts appear to be motivated by reaching a target level. The findings in this chapter lay out an interesting avenue that provides opportunities for future research work. The second empirical chapter studies the timing of issues as well as repurchases. Similar to Elliot et al. (2007) we use a direct measure of equity mispricing to measure how firms adjust security issues to reflect equity mispricing. Consistent with their findings in the US market, we find that firms increase debt issues during periods of undervaluation and equity issues during period of overvaluation to finance their deficit. We further investigate the impact of equity mispricing on repurchasing activities. The findings confirm those of Oswald and Young (2004) where firms repurchase activities are driven by equity mispricing and contradict Rau and Vermaelan (2002) where repurchases in the UK are tax driven. I further find that financial constraints play a critical role in timing of issues and repurchases. Constrained firms are more sensitive to equity mispricing and thus time the market more evidently. In addition to that, building from the work in Warr et al (2011) I find that firms are inclined to time security issues and repurchases to reach their target leverage levels. The third empirical chapter studies the probabilities of firms issuing and repurchasing securities to time periods of equity mispricing. I find that firms time issues and thus rely on debt issues during periods of undervaluation (and vice versa). This action leads them to deviate further from target levels. This is an intuitive finding and supports conclusions derived in Hovakimian (2006) where firms that set target leverage levels also engage in market timing. Similar to Huang and Ritter (2009) I find that equity mispricing drive the issue decision as well as the issue choice. Building on the work of Hovakimian et al. (2001) I also find that issue size is also driven by market timing considerations. Further to that I also find that equity mispricing similarly influences on the repurchasing decision, size and choice of repurchases. Contributing further, I find that firms decision to issue equity accompanied by reducing debt (or issue debt accompanied by repurchasing equity) are more likely to be driven by equity mispricing than pure issue or repurchase decisions, suggesting that managers do try to lower overall cost of capital by switching to a relatively cheaper source of financing. In brief this thesis provides empirical evidence that equity market timing influences capital structure decisions. In support of the market timing theory, I find that managers do indeed time security issues and repurchase securities to reflect equity mispricing. Their timing motivations seem to be driven by targeting behaviour and also financial capacity. I further find that managers substitute one form of financing with another due to market timing considerations. Further research into debt market timing such as Doukas et al. (2011) might shed further light into managerial timing decisions and its impact on capital structure of firms. Comparing both views simultaneously would also provide a more complete and insightful understanding of capital structure.

This research aims to analyse the direct and indirect effects of human capital, social capital and customer capital on the different types of innovations via organisational capital in the service sector. It also examines the interaction among the different types of innovations including product, process and organisational innovations and tests the role of human capital, social capital and customer capital in supporting organisational capital. This research employs the first stage of Actor Network Theory named problematisation to justify the research model. This study adopts a positivism philosophy, a deduction approach and a quantitative method as the research methodology. Hence, a questionnaire was used to gather data from 198 managers in the Egyptian banks (54% response rate). Structural Equation Modelling by Partial Least Square (warp PLS 3.0) was applied to test the research hypotheses. The research findings indicate that product, process and organisational innovation are positively associated with organisational capital. It is found that social capital and human capital have direct and indirect positive effects on both product and organisational innovation via organisational capital. It appears that social capital and human capital do not have a direct influence on process innovation whereas organisational capital fully mediates the relationship between social capital, human capital and process innovation. The study explores the direct and indirect positive effects of customer capital on three types of innovation through organisational capital. Additionally, organisational innovation has a positive relation with process and product innovation, which is significantly associated with process innovation. The most significant influence of intellectual capital is on product innovation, followed by organisational innovation, whereas the least significant influence is on process innovation. Moreover, the results also show that there are no significant differences between the public and private banks in terms of the path coefficients. The effect size of organisational capital on product and process innovation in the private banks is substantially larger than it is in the public banks. In the same way, the private banks have relatively larger effect sizes for human capital on product and process innovation via organisational capital than those in the public banks. Unexpectedly, in the public banks, the positive effect size of customer capital on product and process innovation via organisational capital is larger than it is in the private banks. This study has contributed to intellectual capital, innovation and service sector literature. It explores many benefits for the managers of the banks. It suggests that they should view intellectual capital as a catalyst for the different types of innovations. For example, banks should maintain and promote social connections amongst their employees to support innovation and to foster the cohesion of informal organisation.

This thesis is structured into two main parts to investigate the role of financial flexibility in firms’ liquidity and financing management. Financial flexibility is the most important practical determinant to managers when they make financing decisions. This missing link, financial flexibility, is identified by practitioners and used in this thesis to fill the missing gap between theory and practice in corporate finance. Part A of this thesis analyses the trends in firms’ internal financial flexibility and examines the role of this internal flexibility on investment behaviour of firms. Part B of this thesis then move on to examine the role of both internal and external financial flexibility on firms’ financing behaviour. Part A examines the relationship between debt capacity and cash as part of firms’ internal financial flexibility. Firms use both debt capacity and cash holdings for their internal flexibility management; and debt capacity is used here to explain the trends observed in cash holdings. Debt capacity is the most important determinant of cash holdings and has better ability to predict cash level compared to conventional cash determinants. Together, both debt capacity and cash contribute to firms’ internal financial flexibility and are able to explain most of firms’ investment behaviour, even during a recession period. Part B examines the role of financial flexibility in capital structure decisions. Financial flexibility is measured internally as cash and debt capacity, and externally as equity liquidity using a novel external equity flexibility index based on common equity liquidity measures. The conventional pecking order and trade-off models are used to measure the impact of financial flexibility on firms’ capital structure. The pecking order theory is contingent upon firms’ internal flexibility – debt capacity. Finally, supporting the notion that financial flexibility is the most important consideration in financing decisions, debt capacity and external equity flexibility are shown to be the most important determinants of leverage.