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EFFECT OF FIRM-SPECIFIC CHARACTERISTICS ON BOARD DILIGENCE: AN APPLICATION ON BIST
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Purpose- The aim of this study is to investigate the effect of firm-specific characteristics on the board diligence. In this context, it is desired to investigate how firm-specific characteristics affect the number of board meetings when certain corporate-specific and audit-specific characteristics are taken under control.
Methodology- In this study, it is desired to investigate the effect of firm-specific characteristics (independent variable) on the board diligence (dependent variable). In this context, the dependent variable was determined as the number of meetings held by the board of directors in a financial period. The independent variables are firm size, firm performance (ROA), financial leverage, firm age and export rate. OLS regression analysis was conducted using 540 observations obtained from 180 non-financial companies traded on the BIST between 2018-2020.
Findings- The research finding shows that firm size, firm age, and export rate are positively associated with board effort. On the other hand, no significant findings could be obtained that show that firm performance and financial leverage affect the effort of the board of directors statistically.
Conclusion- The findings of the study make an important contribution to the literature by providing empirical evidence on the impact of firm-specific characteristics on board effort. Larger, older and exporting companies need to work harder and be proactive.
Keywords: Board of directors, board diligence, firm-specific characteristics, firm performance, regression analysis
JEL Codes: M40, M41, M42
Title: EFFECT OF FIRM-SPECIFIC CHARACTERISTICS ON BOARD DILIGENCE: AN APPLICATION ON BIST
Description:
Purpose- The aim of this study is to investigate the effect of firm-specific characteristics on the board diligence.
In this context, it is desired to investigate how firm-specific characteristics affect the number of board meetings when certain corporate-specific and audit-specific characteristics are taken under control.
Methodology- In this study, it is desired to investigate the effect of firm-specific characteristics (independent variable) on the board diligence (dependent variable).
In this context, the dependent variable was determined as the number of meetings held by the board of directors in a financial period.
The independent variables are firm size, firm performance (ROA), financial leverage, firm age and export rate.
OLS regression analysis was conducted using 540 observations obtained from 180 non-financial companies traded on the BIST between 2018-2020.
Findings- The research finding shows that firm size, firm age, and export rate are positively associated with board effort.
On the other hand, no significant findings could be obtained that show that firm performance and financial leverage affect the effort of the board of directors statistically.
Conclusion- The findings of the study make an important contribution to the literature by providing empirical evidence on the impact of firm-specific characteristics on board effort.
Larger, older and exporting companies need to work harder and be proactive.
Keywords: Board of directors, board diligence, firm-specific characteristics, firm performance, regression analysis
JEL Codes: M40, M41, M42.
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