A review of an article to evaluate one of its arguments: for Accounting and Finance students 03

A review of an article to evaluate one of its arguments: for Accounting and Finance students [information from chatpdf.com]

The article reviewed is: "Does good corporate governance matter? Best practice in Poland" Management Research News

My question 1: "What are the research objectives of the article?"

The reply: "The research objectives of the article are to:

1. Investigate the relationship between compliance with corporate governance best practices and corporate performance among Polish public listed companies between 2004 and 2006.
2. Analyze whether companies with better corporate governance standards perform better and yield higher returns for their shareholders.
3. Assess the impact of implementing corporate governance standards in a transition economy like Poland, considering the associated costs and the context of developing institutional regimes.

The study aims to provide insights into the effectiveness of corporate governance practices in enhancing company performance in Poland, offering a perspective on the complexities involved in the adoption of these standards in a transitioning market economy."

My question 2: "What are the research methods employed in the study as reported in the article?"

The reply: "The research methods employed in the study include:

1. Sample Selection: The study analyzes a sample of Polish public listed companies that were rated by institutional investors for their corporate governance practices. The sample includes 55 companies for 2004, 65 for 2005, and 66 for 2006. A control group of companies listed in the same market segment was also included to compare results.

2. Data Collection: Data were collected from companies’ annual reports to calculate the return on investment (ROI) and the proxy for Tobin’s q (market to book value).

3. Statistical Analysis: The independent variable was the corporate governance rating, while ROI and Tobin’s q were the dependent variables. The analysis was conducted using standard SPSS software, and the variables showed a normal distribution. The key hypothesis being tested was the presumed positive relationship between corporate governance ratings and ROI.

4. Regression Analysis: The study involved regression analysis to examine the relationship between corporate governance compliance and corporate performance.

These methods collectively allow for an empirical investigation of the link between corporate governance practices and firm performance in the Polish context."

My question 3: "Could you give me one concrete example of an argument in the article, indicating its "backings", "warrants", "qualifiers", "grounds", "rebuttals" and "claims" in terms of the Toulmin argument model?"

The reply: "Certainly! Here’s a structured example from the article using the Toulmin argument model, which includes the components: claim, grounds, warrant, backing, qualifier, and rebuttal.

Claim: Complying with corporate governance best practices does not guarantee improved corporate performance in Poland.

Grounds: The research indicates a statistically significant negative relationship between corporate governance rating and return on investment (ROI) across the whole sample analyzed (2004-2006) .

Warrant: Higher compliance with corporate governance standards might lead to an increase in operational costs without providing immediate benefits, specifically in a transition economy like Poland where the institutional regime is still developing .

Backing: Previous studies suggest that costs associated with implementing corporate governance practices can outweigh the benefits, particularly in emerging markets with a lower level of investor awareness and activism .

Qualifier: While this relationship is statistically significant, it should be noted that the results are not uniformly negative across all companies, and further exploration of other performance variables is warranted.

Rebuttal: Some may argue that improved corporate governance could yield long-term benefits in performance; however, the immediate returns observed in this study show that the relationship is not straightforward, and many companies still view these standards as a cost rather than a benefit .

This breakdown highlights the complexity of the relationship between corporate governance and corporate performance in the context of the study."

My question 4: "Does the example of the argument address any of the research objectives of the article?"

The reply: "Yes, the example of the argument directly addresses one of the key research objectives of the article. The primary purpose of the study is to investigate the relationship between compliance with corporate governance best practices and corporate performance in Poland. Specifically, the article examines whether companies adhering to recommended governance standards yield better financial returns, such as ROI and Tobin’s q , .

By claiming that complying with corporate governance best practices does not guarantee improved corporate performance, the argument engages with the research question of whether a positive relationship exists between governance compliance and financial performance. The grounds provided, showing a statistically significant negative relationship in the study's findings, contribute evidence to this objective. Additionally, the warrant regarding the costs of compliance and the backing from previous studies further contextualize this relationship, emphasizing the complexity of governance impacts in the Polish market.

Overall, this argument contributes to the understanding of corporate governance's effectiveness and efficacy as a research objective of the article."

Reference: a collection of blog notes on using chatgpt for research purpose.