This study aims to demonstrate how different country and industry-level variables affect the value-creating abilities of CSR initiatives. It contributes to the growing body of literature about CSR as it directly compares the moderating effects of the quality of country-level institutions with the moderating effects of the respective industry sector. The study amongst 3,670 firms in a sample period from 2006-2014 shows that CSR initiatives have a superior value-creating ability in environments with weak capital markets and country governance standards. Firms in controversial industry sectors have a superior ability to create value through CSR because they display a higher potential for reputational gains through CSR due to the nature of their business. The results of the study suggest a supremacy of country-level determinants over industry-level determinants of the CSR-firm value relationship.

We derive empirical predictions from the standard investment-cash flow framework on the functioning of internal capital markets (ICM), but circumvent its criticism by focusing on parent cash flow and investment opportunities. We test these predictions using a unique data set of parent firms and their listed and unlisted subsidiaries in 90 countries over the period 1995-2006. We find that company and country institutional structures matter. (1) Ownership participation of the parent firm in the subsidiary plays a crucial role for the proper functioning of ICMs. The larger the ownership stake of the parent, the better the functioning of the ICM. (2) The best functioning cross-border ICMs can be found in the sub-sample of firms with parents from a country with "strong" institutions and subsidiaries from a country with "weak" institutions. (3) Unlisted subsidiaries are much more dependent on the ICMs their parents provide than listed subsidiaries. Thus, ICMs are not per se "bright" or "dark", their proper functioning depends on how they are set up. (authors' abstract)

Yes / This study examines the impact of multi-layer governance mechanisms on the level of bank risk disclosure. Using a large dataset from 14 Middle East and North Africa (MENA) countries over a period of 8 years, our findings are three-fold. First, our results suggest that the presence of a Sharia supervisory board is positively associated with the level of risk disclosure. Second and at the bank-level, we find that ownership structures have a positive effect on the level of risk disclosure. At the country-level, our evidence suggests that control of corruption has a positive effect on the level of bank risk disclosure. Our study is, therefore, a major departure from much of the existing accounting literature that offers new crucial insights that show that firms’ disclosure choices are not mainly shaped by firm-level (internal) governance arrangements, but also country-level (external) governance and religious factors. Our findings have important implications for corporate boards, investors, regulatory authorities, standards-setters and governments relating to the development, implementation and enforcement of corporate and national governance standards.

Este estudo buscou evidenciar os efeitos da adoção mandatória do IFRS sobre a qualidade das informações contábeis relevantes para a avaliação do risco de crédito das empresas. Neste contexto foram analisados três aspectos de interesse: (1) a capacidade dos números contábeis explicarem os ratings de crédito atribuídos pelas três principais agências de classificação de risco (Moody\'s, S&P e Fitch), (2) a diferença em termos de ganhos informacionais entre países emergentes e desenvolvidos com a adoção mandatória do IFRS, e (3) a identificação de aspectos de governança nacional capazes de explicar tais diferenças. As análises se basearam nos ratings e dados contábeis anuais de 571 empresas domiciliadas em 37 países durante o período de 2005 a 2017, o que constitui uma amostra de 4.683 empresas-anos. Os aspectos 1 e 2 foram testados por meio de comparações entre as qualidades dos ajustes (goodness of fit) de modelos do tipo probit ordenado. O método de reamostragem por bootstrap foi aplicado para testar a significância estatística das diferenças entre os modelos. Para a terceira análise foram estimados modelos de MQO para o teste dos coeficientes de regressão das interações entre a adoção do IFRS e indicadores de governança nacional fornecidos pelo Banco Mundial (WGI). Os resultados sugerem que a adoção mandatória do IFRS aumentou a capacidade dos dados contábeis explicarem as notas de crédito atribuídas pelas agências de rating às empresas. Ademais, foi evidenciado que este efeito é em média mais acentuado em economias emergentes em comparação com as desenvolvidas. Quanto a influência dos aspectos institucionais dos países, os modelos indicaram relação significativa entre os níveis de controle da corrupção, a adoção mandatória do IFRS e a capacidade dos dados contábeis explicarem os ratings de crédito. O estudo reforça a relevância da informação contábil para a análise do risco de crédito das empresas, traz novas contribuições à literatura relacionada aos efeitos da adoção do IFRS e evidencia a influência do ambiente institucional sobre esta relação / This research aims to find evidence about the effects of IFRS mandatory adoption on credit relevant accounting information. In this context three aspects of interest were analyzed: (1) the capability of accounting numbers to explain credit ratings assigned by the big three credit rating agencies (Moody\'s, S&P and Fitch), (2) the difference between emerging and developed markets in terms of informational gains after the mandatory adoption of IFRS, and (3) the identification of national governance aspects that might explain this difference. The analysis was based on credit rating and annual accounting data on 571 companies in 37 countries from 2005 to 2017, resulting in a sample of 4.683 firm-years. Aspects 1 and 2 were tested by comparing ordered probit model\'s goodness of fit. The bootstrap method was applied to test the statistical significance of the difference between models. For the third analysis, OLS models were estimated to test the regression coefficients from interactions between IFRS adoption and country governance indicators provided by the World Bank (WGI). The results suggest that IFRS mandatory adoption increased the capability of accounting information to explain credit ratings assigned by rating agencies. Additionally, evidence points out that this effect is greater on average for companies in emerging markets compared to others in developed markets. Regarding the influence of countries institutional characteristics, models indicated a significant relationship between corruption control levels, IFRS mandatory adoption, and capability of accounting data to explain credit ratings. This study supports the relevance of accounting information to assess credit risk, brings new contributions to existing literature about the effects of IFRS adoption, and provides new evidence related to the influence of institutional environment on this relationship