An empirical analysis of the relation between the board of director composition and financial statement fraud

Article Abstract:

The relationship between the composition of corporate boards and financial statement fraud was examined. The hypothesis provided that the admission of more outside members on the board substantially minimizes the probability of financial statement fraud. The study employed logit cross-sectional regression analysis to investigate differences in board composition between 75 fraud and 75 no-fraud firms with similar size, industry, national exchange and time period. Findings supported the aforementioned prediction. Results indicated that no-fraud firms have significantly higher percentage of outside directors than fraud firms. Moreover, an increase in outside director ownership in the firm and outside director tenure, and a decrease in the number of outside directorships in other firms held by outside directors lowers the likelihood of financial statement fraud.

Corporate directors, Corporate governance, Fraud, Financial misrepresentations, Financial misrepresentation

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International expansion through start-up or acquisition: a learning perspective

Article Abstract:

This study brings fresh approach - a learning perspective - to the literature examining whether firms expand internationally through start-ups of acquisitions. Hypotheses concern how this strategic choice is influenced by a firm's multinational diversity and product diversity. The results show that multinational diversity leads to foreign start-ups rather than acquisitions. Product diversity has a curvilinear effect on the tendency to use start-ups. The curvilinear effect becomes weaker at higher levels of multinational diversity. (Reprinted by permission of the publisher.)

International business enterprises, Multinational corporations, Diversification in industry, Industrial diversification, Industrial management

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