This thesis contains the findings of an examination of the relationship between internal corporate governance structures and the financial performance of South African listed firms. Specifically, using a sample of 100 South African listed firms from 2002 to 2006 (a total of 500 firm-year observations) and corporate governance data collected directly from company annual reports, the thesis seeks to ascertain whether better-governed listed firms tend to be associated with higher financial returns than their poorly-governed counterparts. Unlike prior studies, the internal corporate governance-financial performance nexus is investigated by applying both the compliance-index and equilibrium-variable research methodologies. The results based on the compliance-index model suggest that there is a statistically significant and positive association between the quality of the sampled firms’ internal corporate governance structures and their financial performance. This finding is robust whether an accounting (return on assets) or a market (Tobin’s Q) based measure of financial performance is used. Distinct from prior studies, an analysis of the impact of complying with the South African context specific affirmative action and stakeholder corporate governance provisions on the financial performance of South African listed firms is also investigated. The results indicate that compliance with the affirmative action and stakeholder corporate governance provisions impacts positively on the performance of South African listed firms. By contrast, the results based on the equilibrium-variable model are generally mixed. First, regardless of the financial performance measure used, board diversity, the frequency of board meetings, and the establishment of board committees except the presence of a nomination committee seem to have no impact on firm financial performance. Second, board size is statistically significant and positively associated with Tobin’s Q (Q-ratio), but statistically insignificant and negatively related to return on assets (ROA). Third, role or CEO duality is statistically significant and positively related to ROA, but statistically insignificant and negatively associated with the Q-ratio. Director shareownership is statistically insignificant and positively related to ROA, but statistically significant and negatively associated with the Q-ratio. Finally, the findings based on both the director shareownership squared and cubed do not support the statistically significant non-linear director shareownership-financial performance association reported by Morck et al. (1988). The findings from a series of robustness or sensitivity analyses carried out suggest that the empirical results reported are generally robust to potential endogeneity problems.

Exchange Market Pressure refers to money market disequilibrium that arises due to non-zero excess demand for domestic currency in the foreign exchange market. Exchange rate changes reflect the extent of market pressure in the absence of Central Bank intervention. It is argued that nominal exchange rate changes have consequences for domestic macroeconomic variables. These include domestic output growth, increase in domestic prices, balance of trade, firms’ price-setting behaviour in high inflation countries, foreign debt burden of the country, balance of payments and the stability of the domestic financial system. It has been observed that the Central Banks generally intervene in the foreign exchange market to avoid these undesirable consequences of exchange rate changes. In this thesis, we construct exchange market pressure and intervention index for Pakistan using Weymark’s (1995) approach. The basic objective is to identify whether it is downward or upward pressure that has remained dominant over the entire sample period. Based on intervention index values, we evaluate the Central Bank’s monetary policy over the given sample period. In addition, we also calculate the actual exchange rate and predicted exchange rate using one period lagged exchange rate. We check whether monetary policy is successful in its objective of reducing exchange rate volatility. Finally, we also evaluate the determinants of exchange market pressure in a panel of ten countries. The first empirical chapter utilises difference data and the two-stage least square approach. In the second empirical chapter we adopt Johansen’s (1988) cointegration approach. Both of these provide evidence of downward pressure and active Central Bank intervention. Furthermore, these chapters show that the Central Bank’s foreign exchange intervention policy is fairly successful in achieving its objective of reducing exchange rate volatility. The initial empirical chapters use a fixed parameter approach. This has the disadvantage that it does not allow the estimated parameters to take account of structural changes. A third empirical chapter addresses this issue and uses the Kalman Filter Time Varying Parameter approach. This has the advantage of allowing the parameters to take account of the effects of structural changes on parameter constancy. The results show unstable estimated parameters. The constructed exchange market pressure and intervention index show downward pressure and the active Central Bank intervention. Thus, this chapter further confirms our earlier findings of downward pressure and active Central Bank intervention. However, despite unstable estimated parameters, Central Bank intervention policy is successful in reducing exchange rate volatility which is unexpected. In the earlier empirical chapters, we assumed direct Central Bank intervention. However, there may be the case that Central Bank may use interest rate for fending off speculative attack. In such a case it is better to include interest rate as component of exchange market pressure to truly reflect the extent of foreign exchange market disequilibrium. Last empirical chapter overcomes this issue and uses Eichengreen et al. (1996) approach for constructing exchange market pressure. It consists of percent changes in exchange rate, relative interest rate differential and relative percent changes in foreign exchange reserves. Furthermore, in this chapter, we evaluate the determinants of exchange market pressure in a panel of ten countries. The results indicate the relevancy of some macroeconomic variables and measures of openness.

What causes managers to manipulate their financial statements? How best can shareholders or prospective investors, auditors, financial analysts and regulators detect earnings manipulations? Addressing these questions is of critical importance to the efficient functioning of capital markets. For an investor it can result to improved returns, for an auditor it can mean avoiding costly litigation, for an analyst it can mean avoiding a damaged reputation, and for a regulator it can lead to enhanced investor protection and fewer investment disasters. The objective of this thesis is two-fold. The first objective is to investigate the frequency and the magnitude of earnings management. Second, is to provide an analysis of the characteristics of companies discovered to manipulate earnings and the determinants of these manipulations. Exploratory interviews with the Financial Reporting Review Panel suggest that earnings manipulation usually results from escalating earnings management that after a certain stage violates accounting principles. This is analysed in a review of a series of companies publicly criticised for applying aggressive accounting practises. It is suggested that these cases involve specific accounting standards that require increased judgement from management. In order to gain a broader view of the extent that companies manage earnings, this thesis examines the distribution of earnings among thresholds such as zero earnings and earnings decreases. This thesis documents evidence of unusually low frequencies of small decreases in earnings and small losses and unusually high frequencies of small increases in earnings and small positive earnings. Additional evidence suggests that three components of earnings, cash flow from operations, changes in working capital and discretionary accruals, are used to achieve increases in earnings. Finally, this thesis presents evidence of the characteristics of firms that manipulate earnings and proposes a model for detecting earnings manipulation. Companies found to manipulate earnings appear to have lower accrual quality, declining performance, weaker corporate governance structure, weaker balance sheet and increased leverage. The output of this investigation is a scaled logistic probability model for discriminating accounting manipulations, where higher values suggest a greater probability of manipulation.

The thesis presents my work on the modelling, explanation and prediction of credit risk through three channels: (binary) default indicator, (ordinal) credit ratings and (continuous) CDS spreads.

The primary aim of this dissertation is to research the private banking consumer perception and to analyse the impact acquisition in private banking has or might have on private banking consumer perception. A literature review discovered that existing research in the field of private banking consumer perception is relatively rare and no studies were discovered that dealt with private banking consumer perception and, in particular, the influence of an acquisition. In addition to that, private banking consumer perception is not defined by any literature. Hence, there is a gap in existing literature and the literature review resulted in research questions which were analysed and discussed by gathering primary data. A holistic case study based on the Swiss and German private banking market was used to gather primary data. This type of case study offers the researcher a holistic view(Patton, 1990) on the present subject as it considers all parties which have an influence on the topic under investigation. The first phase of the case study consisted of nonparticipant observation at a finance fair. Private banking consumers, relationship managers and consultants were observed. In the next phase semi-structured interviews were undertaken with relationship managers, banking managers, private banking clients and lawyers. Both phases were qualitative in its nature. Based on the findings it was established that private banking consumers have expectations on private banking. If the private banking service provider is able to fulfil or exceed these expectations the client perceives this as "satisfaction". Determinants of private banking consumer perception were elicited. These determinants are defined as categories and sub-categories of different criteria used by the consumer to evaluate a perceived service. Apart from that, the research findings revealed that acquisition can influence all private banking consumer perception determinants depending on the context of the acquisition. The independent advice of private banks as well as retaining the relationship manager was found to be of primary concern to the clients during an acquisition process. A model of private banking consumer perception was developed from the primary data results. With the knowledge gained from this research private banks are better able to understand bank consumers’ expectations and perceptions. This contributes to higher levels of competitiveness for banks as customers’ needs can be better met, and client movements during an acquisition process reduced.

Selling stock to the general public is one important method by which firms are able to raise new equity capital. If the firm sells stock for the first time to the general public, it is called an initial public offering (IPO). Subsequent to the IPO, firms may seek to raise further equity capital by offering to sell new shares through a seasoned equity offering (SEO). In the UK, most young/small firms initially raise equity capital from a small number of investors through private placements. If a firm prospers and needs additional equity capital, it may choose at some point to go public by selling stock through an IPO. By issuing publicly traded equity, the firm establishes both a market value for the firm and a market for its common stock. There have been many IPO studies that record the so-called “Underpricing anomaly” as a primary stylised fact of IPOs. The underpricing refers to the significance increase of the IPO market price over the first few days after the initial listing. This fact suggests that the IPO pricing is not simple very few information about the issuing firm is available to the market prior to IPO. This study is to examine the IPO valuation based on the prospectus information, which is perceived as comprehensive information about the firm prior to the IPOs. Furthermore, this study is also to observe the impact of the prospectus information on the IPO after market performances.

This research applied Ajzen´s theory of planned behaviour (TPB) to investigate the payment behaviour of over-indebted consumers within the German mailorder industry. Both imprisoned (N=41) and not-imprisoned (N=97) consumers´ attitudes, social norms, perceived behavioural control (PBC), its correspondent beliefs, and payment intention were analysed using structural equation modelling with the partial least squares approach. Although the sample size was small, the fit of the models were statistically valid and no statistical difference between imprisoned and not-imprisoned consumers was ascertained. The main predictor variables were analysed regarding gender specification and were enriched with moral norms and past behaviour. Subjective norm was the strongest predictor of payment behaviour of the not-imprisoned sample. Gender had a statistically relevant impact on payment intention. In sum, the main constructs of the TPB explained 35.8% of the variance in intention (R²) to pay further mail-order invoices on time. PBC increased the accuracy and the model was therefore superior to the theory of reasoned action (R² = 28.5%). The extension of the TPB with moral norms led to an increase of R² to 47.0%, with past behaviour to 39.5%, and with both to 49.0%. Therefore, this supports the extension of the basic model of the TPB in order to strengthen the explanation of the behaviour under consideration. In general, the outcome of this study identifies further related factors concerning payment behaviour, beyond those previously present within research and practice. From a practical perspective this study adds significant value to the understanding of over-indebtedness in Germany and its implication for the mailorder industry. It demonstrates the alarming debt situation of individuals over the last several years and the ambivalence regarding the normality of having debts in Germany. It emphasizes the complexity of payment behaviour and its personal influences. Payment of a mail-order invoice on time has no single specific causation, but typically is caused by more factors than previously thought.

To induce tax compliance, two opposite approaches are used: the coercive and the persuasive: firm action versus collaboration. Little attention has been paid to the comparative success of these two approaches – a situation this thesis seeks to remedy by investigating the effectiveness of three coercive and three persuasive instruments among large corporate taxpayers registered with the LTU of Bangladesh. Following an analysis of survey data using binary and multilevel logit and CHAID models, and an analysis of elite interviews employing an interpretivist approach, the findings suggest that coercion or persuasion are less likely to improve tax compliance when used separately than when used in combination, although coercion seems the more powerful of the two. Factors underlying the power of the coercive approach are the rationality and regularity of its application, along with its legal and financial imperatives. Reasons contributing to the appeal of the persuasive approach are a reduction in tax compliance costs, an improvement in accountability and a reduction in knowledge gaps between taxpayers and tax administrators, and coordination of the various tax laws.

This study highlights the role of cash flow forecasting process in capital budgeting decisions, where the forecasting process starts with identifying the procedures and methods used in forecasting, and ends by estimating future cash flow required by managers for decision-making. This study utilised questionnaire survey to collect data from 69 manufacturing and oil companies operating in Libya within contingency and new institutional sociology theories, which are commonly used in capital budgeting research. Further, this study seeks to ascertain the key variables associated with the forecasting process in capital budgeting decisions. In this regard, this study examined the contingent and institutional variables influencing the use of forecasting procedures and methods associated with the adoption of different capital budgeting processes. Consequently, the results of this study explored the forecasting procedures, methods and the capital budgeting techniques used in manufacturing and oil companies operating in Libya. The researcher found that most manufacturing and oil companies depend on personal and management's subjective estimates in forecasting their future cash flows. In terms of the extent of use of capital budgeting techniques, the findings indicate that most Libyan manufacturing and oil companies use the payback period (PB) and accounting rate of return (ARR) to evaluate and select the investment opportunities, as well as rely upon subjective assessments in evaluating the project risk inherent within capital budgeting decisions. In addition, this study applied the partial least squares structural equation modelling (PLS-SEM) technique to test the research hypotheses. Using the same sample of Libyan manufacturing and oil companies, the findings are as follows. First, the use of forecasting procedures/methods and components of cash flow are positively associated with the extent of use of capital budgeting techniques. Second, the forecasting horizon and the use of multiple data sources in forecasting are significantly associated with the use of forecasting procedures and methods. Third, the presence of qualified persons responsible for estimating future cash flow is positively associated with the use of forecasting procedures and methods. Fourth, the findings suggest that the influence of contingent variables differs from public to private companies. Fifth, the study findings also suggest that coercive, mimetic and normative pressures are significantly associated with the use of forecasting procedures and methods. Finally, the research findings revealed that there is a significant relationship between the procedures and methods used in forecasting (PMUF) and the firms’ financial performance (PERF), whilst the study does not find any evidence that the extent of use of capital budgeting techniques improves the firms’ financial performance. The findings of this study offer new important insights and contributions to the existing literature, as well as have useful implications for practitioners and researchers.

The study empirically examines three main issues. First, the study examines the relationship between corporate governance and risk-taking. Second, the study investigates the association between corporate governance and credit rating. Third, the study examines the link between corporate governance and cost of capital. Corporate governance was represented in this study by the mechanisms of corporate governance index, ownership structure and board structure, and firm performance was represented by risk-taking, credit rating and cost of capital. Using a sample of 200 companies from 10 OECD countries over the 2010 to 2014 period and relying on a multi-theoretical framework, the findings are as follows. First, the results suggest that firms with good corporate governance are shown to engage less risk-taking. Second, the findings indicate that firms with good corporate governance generally have higher credit ratings than firms with poor corporate governance. Third, the results suggest that firms with good corporate governance generally have lower cost of capital than firms with poor corporate governance. Ownership structure and board structure, as representatives of corporate governance, all demonstrated similar results. Differences among firms were seen in terms of legal and accounting traditions, as well as in terms of culture. Yet, the findings appeared to be relatively consistent across Anglo-American and Continental European traditions, despite the fact that there was different emphasis placed on some corporate governance mechanisms, and despite different cultural characteristics. The findings are robust to endogeneity problems, alternative measures and estimation techniques used such as two-stage least squares, lagged reports and fixed effects reports. Overall, the findings have major implications for regulators, academics and practitioners.