Browse > Article
http://dx.doi.org/10.13106/jafeb.2020.vol7.no11.853

The Influences of Participatory Management and Corporate Governance on the Reduction of Financial Information Asymmetry: Evidence from Thailand  

LATA, Pannarai (Accounting Program, Faculty of Business Administration, King Mongkut's University of Technology North Bangkok)
Publication Information
The Journal of Asian Finance, Economics and Business / v.7, no.11, 2020 , pp. 853-866 More about this Journal
Abstract
The purposes of this research were: 1) to investigate the effect of participatory management on financial information asymmetry, 2) to investigate the effect of corporate governance on financial information asymmetry, 3) to examine the influences of benefits incentives on financial information asymmetry, and 4) to test the mediating effects of benefits incentive that influences the relationship between participatory management, corporate governance, and financial information asymmetry. The research sample consisted of 388 Thai-listed firms. Data were collected through a survey questionnaire. Descriptive analysis, Multiple Regression Analysis, and Structural Equation Modeling were used for the data analysis. The results revealed: 1) participatory management and participation in evaluation had a negative influence on financial information asymmetry. 2) Corporate governance and the rights of shareholders had a negative influence on financial information asymmetry. 3) Benefits incentive was negatively associated with financial information asymmetry. 4) The model's influences of participatory management, corporate governance on the reduction of financial information asymmetry through benefits incentive as mediator fit the empirical data (Chi-square = 104.459, df = 84, p = 0.065, GFI = 0.967, RMSEA = 0.025). The variables in the model explained 78.00% and 4.70 % of the variance of benefits incentive and financial information asymmetry, respectively.
Keywords
Participatory Management; Corporate Governance; Benefits Incentives; Financial Information Asymmetry;
Citations & Related Records
Times Cited By KSCI : 6  (Citation Analysis)
연도 인용수 순위
1 Thorne, L., Mahoney, L., & Manetti, G., (2014). Motivations for issuing standalone CSR reports: A survey of Canadian firms. Accounting, Auditing and Accountability Journal, 27(4), 686-714.   DOI
2 Tong, P. Y., & Crosno, J. L. (2016). Are information asymmetry and sharing good, bad, or context dependent? A meta-analytic review. Industrial Marketing Management, 56, 167-180.   DOI
3 Ulibarri, N. (2018). Collaborative model development increases trust in and use of scientific information in environmental decision-making. Environmental Science & Policy, 82, 136-142.   DOI
4 Wang, W., & Yang, X. (2015). Does informal participation increase job satisfaction in public organizations? A study on civil servants in Beijing, China. Public Personnel Management, 44(3), 356-374. DOI: 10.1177/0091026015586264   DOI
5 Neter, J., Wasserman, W., & Kutner, M. H. (1989) Applied Linear Regression Models (2nd ed.). Homewood, IL: Richard D. Irwin, Inc.
6 Nunnally J. C., & Bernstein I. H. (1994). Psychometric Theory. New York, NY: McGraw Hill.
7 Phornlaphatrachakorn, K., & Na-Kalasindhu, K. (2020). Strategic management accounting and firm performance: Evidence from finance businesses in Thailand. Journal of Asian Finance, Economics and Business, 7(8), 309-321. https://doi.org/10.13106/jafeb.2020.vol7.no8.309   DOI
8 Phornlaphatrachakorn, K., & Peemanee, J. (2020). Integrated performance measurement as a strategic management accounting approach: A case of beverage businesses in Thailand. Journal of Asian Finance, Economics and Business, 7(8), 247-257. https://doi.org/10.13106/jafeb.2020.vol7.no8.247   DOI
9 Randall, P. M., Saurage-Altenloh, S., & Osei, E. T. (2020). The relationship between leadership ethics and organizational success: A global perspective. IGI Global, 106-137. DOI: 10.4018/978-1-7998-2377-3.ch005
10 Rezaee, Z. (2005). Causes, consequences, and deterrence of financial statement fraud. Critical Perspectives on Accounting, 16(3), 277-298. DOI: 10.1016/S1045-2354(03)00072-8   DOI
11 Sprinkle, G. B. (2000). The effect of incentive contracts on learning and performance. The Accounting Review, 75(3), 299-326. https://doi.org/10.2308/accr.2000.75.3.299   DOI
12 Rowley, T. J. (1997). Moving beyond dyadic ties: A network theory of stakeholder influences. Academy of Management Review, 22, 887-910.   DOI
13 Shagholi, R., Hussin, S., Siraj, S., Naimie, Z., Assadzadeh, F., & Moayedi, F. (2010). Current thinking and future view: Participatory management a dynamic system for developing organizational commitment. Procedia-Social and Behavioral Sciences, 2(2), 250-254.   DOI
14 Signori, A. & Vismara, S. (2018). Does success bring success? The post-offering lives of equity-crowdfunded firms. Journal of Corporate Finance, 50, 575-591.   DOI
15 Chong, V. K., & Law, M. B. (2016). The effect of a budget-based incentive compensation scheme on job performance. Journal of Accounting & Organizational Change. 16, 590-613.   DOI
16 Armstrong S. J., & Overton T. S. (1977). Estimating non-response bias in mail surveys. Journal of Marketing Research. 14(3), 396-402.   DOI
17 Balkin, D. B., & Gomez-Mejia, L. R. (1990). Matching compensation and organizational strategies. Strategic Management Journal, 11(2),153-169.   DOI
18 Bhagat, S., & Bolton, B. (2008). Corporate governance and firm performance. Journal of Corporate Finance, 14(3), 257-273.   DOI
19 Brazel, J. F., Jones, K. L., & Zimbelman, M. F. (2009). Using nonfinancial measures to assess fraud risk. Journal of Accounting Research, 47(5), 1135-1166.   DOI
20 Chong, V. K., & Eggleton, I. R. C. (2007). The impact of reliance on incentive-based compensation schemes, information asymmetry and organizational commitment on managerial performance. Management Accounting Research, 18, 312-342.   DOI
21 Connelly, L., Certo, T., Ireland, D., & Reutzel, R. (2011). Signalling theory: A review and assessment. Journal of Management, 37(1), 39-67.   DOI
22 Cumming, D. J., Hornuf, L., Karami, M., & Schweizer, D. (2020). Disentangling crowdfunding from fraud funding. Max Planck Institute for Innovation & Competition Research Paper, (16-09), 1-83. https://www.hec.ca/finance/Fichier/Schweizer2017.pdf
23 Ajina, A., Sougne, D., & Lakhal, F. (2015). Corporate disclosures, information asymmetry and stock-market liquidity in France. Journal of Applied Business Research, 31(4), 1223-1238.   DOI
24 Fernandez, S., & Moldogaziev, T. (2013). Using employee empowerment to encourage innovative behavior in the public sector. Journal of Public Administration Research and Theory, 23, 155-187. https://doi.org/10.1093/jopart/mus008   DOI
25 Hair, J. F., Black, W. C., Babin, B., Anderson, R. E., & Tatham, R. L. (2010). Multivariate Data Analysis. Englewood Cliffs, NJ: Pearson Education Inc.
26 Freeman, R. E. (1984). Strategic Management: A Stakeholder Approach. Boston, MA: Pitman.
27 Gillan, S. L. (2006). Recent Developments in Corporate Governance: An overview. https://edisciplinas.usp.br/pluginfile.php/2731503/mod_resource/content/1/gillan2006.pdf
28 Hafez, S. (2015). The integration of six sigma and balanced scorecard in internal auditing. Integration, 6(18), 43-54.
29 Hedelin, B., Evers, M., Alkan-Olsson, J., & Jonsson, A. (2017). Participatory modelling for sustainable development: Key issues derived from five cases of natural resource and disaster risk management. Environmental Science & Policy, 76, 185-196.   DOI
30 Jantadej, K., & Wattanatorn, W. (2020). The effect of corporate governance on the cost of debt: Evidence from Thailand. Journal of Asian Finance, Economics and Business, 7(9), 283-291. https://doi.org/10.13106/jafeb.2020.vol7.no9.283   DOI
31 Lata, P., & Ussahawanitchakit, P. (2015). Management accounting system effectiveness and goal achievement: Evidence from automotive businesses in Thailand. The Business and Management Review, 7(1), 322-334.
32 Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics. 3(4), 305-360.   DOI
33 Joe, S. W. (2010). Assessing job self-efficacy and organizational commitment considering a mediating role of information asymmetry. The Social Science Journal, 47(3), 541-559.   DOI
34 Kimmich, C., Gallagher, L., Kopainsky, B., Dubois, M., Sovann, C., Buth, C., & Brethaut, C. (2019). Participatory modeling updates expectations for individuals and groups, catalyzing behavior change and collective action in water-energyfood nexus governance. Earth's Future, 1337-1352. DOI:10.1029/2019EF001311   DOI
35 Laan, S. (2009). The role of theory in explaining motivation for corporate social disclosures: Voluntary disclosure vs 'Solicited' Disclosures. Australasian Accounting Business and Financial Journal. 3(4), 12-29.
36 Lata, P. & Jiraphatthanaponsin, T. (2018). Information asymmetry, incentive-based compensation plans, sustainable organizational commitment and managerial performance: Empirical evidence from industrial estate authority of Thailand. RMUTT Global Business and Economics Review, 13(2), 101-116.
37 Marashdeh, Z. M. S. (2014). The effect of corporate governance on firm performance in Jordan. Doctoral dissertation, University of Central Lancashire, UK.
38 Mori, N. (2010). Roles of stakeholders in strategic decision-making of microfinance organization. International Business and Economics Research, 9(7), 51-63.
39 Marc, M., Peljhan, D., Ponikvar, N., Sobota, A., & Tekavcic, M. (2010). Determinants of integrated performance measurement systems usage: An empirical study. The Journal of Applied Business Research, 26(5), 63-75.
40 Markl-Davis, D. M., & Brennan, N. M. (2007) Discretionary Disclosure Strategies in Corporate Narratives: Incremental Information or Impression Management? Journal of Accounting Literature, 26, 116-196.
41 Ndofor, H. A., Wesley, C. & Priem, R. L. (2013). Providing CEOs with opportunities to cheat: The effects of complexity-based information asymmetries on financial reporting fraud. Journal of Management, 41, 1774-1797. https://journals.sagepub.com/doi/10.1177/0149206312471395   DOI
42 Nel, G. F., Smit, E., & Brummer, L. M. (2018). The link between internet investor relations and information asymmetry. South African Journal of Economic and Management Sciences, 21(1), 1-10.