The Impact of Corporate Governance Characteristics On Earnings Management In Palestine: The Moderating Effects Of Political Instability

Severe political and economic instability greatly impact the effectiveness of corporate governance (CG) mechanisms and ownership structure (OS). This study extends prior CG and EM literature by examining whether political instability moderates the relationship between CG effectiveness and EM practic...

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Main Author:	Ali Hassan Ibraheem Aljadba
Format:	Thesis
Language:	en_US
Subjects:	Corporate governance > Palestine > Case studies earnings management,
Online Access:	https://oarep.usim.edu.my/bitstreams/d6eec938-59a7-4c2f-9b4d-a13f7d6d2a07/download https://oarep.usim.edu.my/bitstreams/c6fffd50-fc52-4623-af22-c8da6564ce9c/download https://oarep.usim.edu.my/bitstreams/7c09631a-b97a-4574-8abe-6eaaba2dffdf/download https://oarep.usim.edu.my/bitstreams/59df09c1-0a96-4c82-b9f3-2e9684592534/download https://oarep.usim.edu.my/bitstreams/afe4a7fb-7e2e-4fc3-bc7b-8e467da02250/download https://oarep.usim.edu.my/bitstreams/70bbefb0-dff8-4616-81ee-226a9849ff2b/download https://oarep.usim.edu.my/bitstreams/363ea5c4-8799-4276-b8a9-073c4bf6303e/download https://oarep.usim.edu.my/bitstreams/f89f9fc0-f922-44d4-9b17-08c24c4b1bfa/download https://oarep.usim.edu.my/bitstreams/86ae0925-c06e-4842-bfd1-169e9d3a980b/download https://oarep.usim.edu.my/bitstreams/2337f598-7170-4e8c-baf6-aa5325053df1/download
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id	my-usim-ddms-12980
record_format	uketd_dc
institution	Universiti Sains Islam Malaysia
collection	USIM Institutional Repository
language	en_US
advisor	Norhaziah Nawai [supervisor]
topic	Corporate governance -- Palestine -- Case studies earnings management,
spellingShingle	Corporate governance -- Palestine -- Case studies earnings management, Ali Hassan Ibraheem Aljadba The Impact of Corporate Governance Characteristics On Earnings Management In Palestine: The Moderating Effects Of Political Instability
description	Severe political and economic instability greatly impact the effectiveness of corporate governance (CG) mechanisms and ownership structure (OS). This study extends prior CG and EM literature by examining whether political instability moderates the relationship between CG effectiveness and EM practices. In addition, few studies have dealt with the issues of CG and EM in Palestine. Hence, the purpose of this study is to introduce empirical evidence from Palestine by examining the relationship between CG mechanisms and EM practices. The current study focuses, first, on investigating the relationship between the internal CG mechanisms related to the board of director's (BOD) characteristics, the audit committee (AC) characteristics, ownership structure (OS), and EM practices. Second, this study examines whether BOD and AC quality influence EM practice by using an aggregate measure. Third, this study investigates whether political instability affected the association of BOD quality and AC quality with EM. The study uses a panel data approach to examine a total sample of 29 non-financial companies listed on the Palestine Exchange (PEX) for 8 years from 2011 to 2018. The data of CG were collected manually from the published annual reports on the website of PEX. Moreover, the DataStream from Thompson Reuters is used to collect some of the financial data related to EM calculations. Using a Pooled OLS regression of panel data, the findings show that BOD independence, BOD nationality diversity, BOD meetings, the existence of remunerations and governance committee, and institutional ownership are negatively and significantly associated with EM. Foreign ownership is associated positively and significantly with EM practices. Furthermore, the findings reveal that AC characteristics, BOD size, CEO duality, and ownership concentration are not significantly associated with EM practices. The random-effects panel data model reveals inconclusive results in the Palestinian setting; the results show that the quality of BOD is positively associated with EM, which is unlike the agency theory perspective, while the quality of AC is associated negatively with EM, which is in line with agency theory. The results indicate that political instability increases EM practices in Palestine. Based on the regression analysis, the findings indicate that the relationship between the quality of BOD is stronger in reducing EM practices under political instability effects. In contrast, the quality of AC becomes weak under a situation of political instability. This research extends the existing literature by providing a unique contribution to CG and EM literature by filling this gap by examining this relationship between CG mechanisms and EM due to limited studies that have been conducted in Palestine. Moreover, the results can be generalized to other developing countries with political instability like Palestine, such as Arab Spring countries.
format	Thesis
author	Ali Hassan Ibraheem Aljadba
author_facet	Ali Hassan Ibraheem Aljadba
author_sort	Ali Hassan Ibraheem Aljadba
title	The Impact of Corporate Governance Characteristics On Earnings Management In Palestine: The Moderating Effects Of Political Instability
title_short	The Impact of Corporate Governance Characteristics On Earnings Management In Palestine: The Moderating Effects Of Political Instability
title_full	The Impact of Corporate Governance Characteristics On Earnings Management In Palestine: The Moderating Effects Of Political Instability
title_fullStr	The Impact of Corporate Governance Characteristics On Earnings Management In Palestine: The Moderating Effects Of Political Instability
title_full_unstemmed	The Impact of Corporate Governance Characteristics On Earnings Management In Palestine: The Moderating Effects Of Political Instability
title_sort	impact of corporate governance characteristics on earnings management in palestine: the moderating effects of political instability
granting_institution	Universiti Sains Islam Malaysia
url	https://oarep.usim.edu.my/bitstreams/d6eec938-59a7-4c2f-9b4d-a13f7d6d2a07/download https://oarep.usim.edu.my/bitstreams/c6fffd50-fc52-4623-af22-c8da6564ce9c/download https://oarep.usim.edu.my/bitstreams/7c09631a-b97a-4574-8abe-6eaaba2dffdf/download https://oarep.usim.edu.my/bitstreams/59df09c1-0a96-4c82-b9f3-2e9684592534/download https://oarep.usim.edu.my/bitstreams/afe4a7fb-7e2e-4fc3-bc7b-8e467da02250/download https://oarep.usim.edu.my/bitstreams/70bbefb0-dff8-4616-81ee-226a9849ff2b/download https://oarep.usim.edu.my/bitstreams/363ea5c4-8799-4276-b8a9-073c4bf6303e/download https://oarep.usim.edu.my/bitstreams/f89f9fc0-f922-44d4-9b17-08c24c4b1bfa/download https://oarep.usim.edu.my/bitstreams/86ae0925-c06e-4842-bfd1-169e9d3a980b/download https://oarep.usim.edu.my/bitstreams/2337f598-7170-4e8c-baf6-aa5325053df1/download
_version_	1812444922206224384
spelling	my-usim-ddms-129802024-08-23T18:05:01Z The Impact of Corporate Governance Characteristics On Earnings Management In Palestine: The Moderating Effects Of Political Instability Ali Hassan Ibraheem Aljadba Norhaziah Nawai [supervisor] Severe political and economic instability greatly impact the effectiveness of corporate governance (CG) mechanisms and ownership structure (OS). This study extends prior CG and EM literature by examining whether political instability moderates the relationship between CG effectiveness and EM practices. In addition, few studies have dealt with the issues of CG and EM in Palestine. Hence, the purpose of this study is to introduce empirical evidence from Palestine by examining the relationship between CG mechanisms and EM practices. The current study focuses, first, on investigating the relationship between the internal CG mechanisms related to the board of director's (BOD) characteristics, the audit committee (AC) characteristics, ownership structure (OS), and EM practices. Second, this study examines whether BOD and AC quality influence EM practice by using an aggregate measure. Third, this study investigates whether political instability affected the association of BOD quality and AC quality with EM. The study uses a panel data approach to examine a total sample of 29 non-financial companies listed on the Palestine Exchange (PEX) for 8 years from 2011 to 2018. The data of CG were collected manually from the published annual reports on the website of PEX. Moreover, the DataStream from Thompson Reuters is used to collect some of the financial data related to EM calculations. Using a Pooled OLS regression of panel data, the findings show that BOD independence, BOD nationality diversity, BOD meetings, the existence of remunerations and governance committee, and institutional ownership are negatively and significantly associated with EM. Foreign ownership is associated positively and significantly with EM practices. Furthermore, the findings reveal that AC characteristics, BOD size, CEO duality, and ownership concentration are not significantly associated with EM practices. The random-effects panel data model reveals inconclusive results in the Palestinian setting; the results show that the quality of BOD is positively associated with EM, which is unlike the agency theory perspective, while the quality of AC is associated negatively with EM, which is in line with agency theory. The results indicate that political instability increases EM practices in Palestine. Based on the regression analysis, the findings indicate that the relationship between the quality of BOD is stronger in reducing EM practices under political instability effects. In contrast, the quality of AC becomes weak under a situation of political instability. This research extends the existing literature by providing a unique contribution to CG and EM literature by filling this gap by examining this relationship between CG mechanisms and EM due to limited studies that have been conducted in Palestine. Moreover, the results can be generalized to other developing countries with political instability like Palestine, such as Arab Spring countries. 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The Impact of Corporate Governance Characteristics On Earnings Management In Palestine: The Moderating Effects Of Political Instability

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