This section presents the descriptive statistics of the data (see Table 4.1). Table 4.1 discusses the descriptive results of the dependent variables (ROA, ROE, and TQ's) followed by the explanatory variables for WCM (CCC, ACP, APP, and ICP) and CG (NID, ACM, BAA and EC), for the six developed markets.
The mean value of CCC varies from 43.00 to 303.50 days, with an overall average mean of 106.09 days. In light of Theodore Farris and Hutchison (2002) work, firms with a lower number of CCC days are better and more efficient than firms with a higher number of CCC days. Hong Kong exhibits the highest number of days (303.50), while Canada exhibits the lowest (43.00) number of days. This implies that Canadian firms are more efficient in terms of CCC than the rest of the five developed markets. The mean values of CCC days are consistent with Deloof (2003)study Belgium (on average 44 days), Juan García-Teruel and Martinez-Solano (2007)on Spain (on average 76 days), Tingbani (2015)on the UK (on average 66 days) and Pais and Gama (2015)on Portugal(on average 179 days).
In terms of the ACP, the mean value varies from 45.00 days to 154.79 days, for the six developed markets, with an overall mean value of 74.57 days. Firms which collect their credit sales at the earliest possible time are considered to be the most efficient in the context of WCM. The result shows that the US is the most efficient market in collecting credit sales, with an average collection period of 45 days, in comparison to its counterparts in the research
47 sample. Australia is the least efficient market with an average collection period of 154.79 days. The result is consistent with Uyar (2009)work on Turkey.
The mean value for APP varies from 62.01 to 95.19 days, with an overall mean of 76.35 days. The UK market exhibits an average of 95.19 days delay in making payments to creditors, followed by the US market with 62.01 days. The result is consistent with Tingbani (2015) study on the UK (on average 96 days).
In terms of ICP, the mean value varies from 59.08 days to 101.98 days, with an overall mean of 76.72 days. The UK firms hold inventory for a longer period of time (101.98 days), while Canadian firms hold it for a shorter period of time (59.08 days). This is consistent with Juan García-Teruel and Martinez-Solano (2007)work on Spain (on average 77 days) and Tingbani (2015)work on the UK (on average 102 days).
The other important independent variable of this research is CG components. In terms of NID, the mean value varies from 3.57 to 8.41, with an overall mean value of 5.64 of independent directors. The US exhibits the highest (8.41), while Hong Kong exhibits the lowest number (3.57) of independent directors on boards. The results are consistent with those reported by Liu, Miletkov, Wei, and Yang (2015)for China (3.00 independent directors on board) and Armstrong, Core, and Guay (2014) for the US (8.00 independent directors on board). The minimum value of zero in France and Hong Kong means that some of the firms either do not have independent directors or they have not provided this information.
The mean value for ACM varies from 3.07 to 7.90, with an overall mean value of 4.72 for audit committee meetings. The US exhibits a higher number of ACM’s, with an average of eight meetings per year, while Hong Kong exhibits the lowest number (3.07) of meeting per year. This means that ACM’s are more frequent in the US than the rest of the developed markets. The minimum value of ACM in Australia and Hong Kong is zero, meaning that either some of the firms still do not have any audit committee meetings, or some firms have not provided this information. The results are consistent with those reported by Allegrini and Greco (2013) for Italy (4.56 audit committee meetings on average),Bansal and Sharma (2016) for India (5.02 audit committee meetings on average) and by Jermias and Gani (2014) for the US (5.62 audit committee meetings on average).
In terms of BAA of members, the mean value varies from 55.08 to 62.02 years, with an overall mean value of 59.17 years for developed markets. The US has the oldest on average, board
48 of director members (62.02 years), whereas Hong Kong has youngest (55.08 years). The minimum value for board members’ age is 33.60 years, while the maximum is 83.11 years. The results are consistent with those reported by Bonn (2004) for Australia (average age for board of directors is 60 years) and Carter, D'Souza, Simkins, and Simpson (2010) for the US (average age is 59.35 years).
The logarithm function has been used to analyse the data for EC, because log function helps to measure propionate values of variables rather than their dollar values (Core, Holthausen, & Larcker, 1999). It also helps to refine the quality of statistical analysis(Osborne, 2005; Osborne, 2002). The EC mean value varies from $14.75 to $17.02, with an overall mean value of $15.76. The US exhibits the highest number of EC paid, with an average of $17.02 whereas France has the lowest ($14.75) among the sample countries. This is consistent with O'Reilly, Doerr, Caldwell, and Chatman (2014) results for the US ($13).
Finally, for the dependent variables, the mean value of ROA varies from 3.08% to 9.27%, with an overall mean value of 5.74%. The ROE mean value varies from 7.69% to 24.98%, with an overall mean value of 14.13%. The results are consistent with those reported by Juan García- Teruel and Martinez-Solano (2007) for Spain (ROA is 7.9%), and Tingbani (2015) for the UK (ROA is 6.9%) and by Nadeem, Gan, and Nguyen (2017b), for Australia (ROE is 21.99%). Similarly, Tobin’s Q mean value varies from 1.44% to 2.31%, with an overall mean value of 1.73%.
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Table 4.1 Descriptive Statistics
Countries Obs. Variables ROA ROE TQ CCC ACP APP ICP NID ACM BAA EC
The United States 2936 Mean 9.27 24.98 2.31 60.04 45.00 62.01 64.53 8.41 7.90 62.02 17.02 Median 8.33 18.73 1.92 63.69 7.732 8.82 6.10 9.00 8.00 62.11 17.02 Minimum 0.02 0.16 0.81 0.15 1.35 0.89 0.55 3.00 2.34 33.60 13.39 Maximum 46.70 527.88 13.63 716.70 251.29 929.77 53.70 14.00 14.00 83.11 19.89 Canada 544 Mean 3.08 7.69 1.56 43.00 54.44 69.46 59.08 6.59 4.64 61.53 16.07 Median 4.12 9.21 1.36 35.03 7.81 5.92 8.28 7.00 5.00 62.00 16.04 Minimum -105.70 -89.76 0.00 -871.60 0.82 -1.03 0.86 4.00 7.00 36.20 9.79 Maximum 35.66 81.18 8.35 4057.47 874.66 586.06 35.54 14.00 18.00 72.22 19.50 The United Kingdom 1323 Mean 6.84 18.35 1.84 63.67 62.47 95.19 101.98 5.09 4.06 56.94 14.87 Median 6.10 14.40 1.53 51.79 8.40 7.61 51.18 5.00 4.00 57.00 14.82 Minimum -53.54 -101.85 0.00 -5088.28 1.40 0.97 0.19 3.12 2.00 44.80 9.95 Maximum 67.10 467.64 8.70 5864.25 4404.5 599.38 568.39 14.00 14.00 70.00 18.24 France 428 Mean 3.80 9.83 1.44 99.53 57.51 78.40 69.15 5.86 4.34 59.17 14.75 Median 3.95 10.99 1.29 62.55 5.76 4.50 5.04 6.00 4.00 59.61 14.68 Minimum -23.06 -98.77 0.758 -6177.98 0.02 -1.31 0.32 0.00 2.12 50.33 12.66 Maximum 35.25 15.20 5.49 19026.39 507.01 629.55 109.27 14.00 15.00 68.60 17.59 Australia 599 Mean 5.06 10.59 1.69 66.81 154.79 79.15 73.81 4.37 4.32 60.30 15.38 Median 5.98 11.26 1.40 55.78 9.77 7.46 4.97 4.00 4.00 60.33 15.32 Minimum -90.50 -172.41 .3415 -6259.89 1.13 -3.87 0.47 2.25 0.00 51.00 12.99 Maximum 49.10 183.30 8.43 7871.75 730.32 157.42 42.99 8.00 14 68.88 17.33 Hong Kong 877 Mean 6.43 13.36 1.58 303.50 73.25 73.90 91.82 3.57 3.07 55.08 16.51 Median 5.20 12.84 1.18 91.43 9.65 6.67 4.18 4 3.00 54.88 16.57 Minimum -36.37 -87.25 0.37 -3409.29 0.53 -231.00 0.75 0.00 0.00 36.07 10.30 Maximum 49.38 58.53 35.34 4991.56 314.06 173.36 36.26 8.00 16.00 76.80 19.35 Average Overall Mean 5.74 14.13 1.73 106.09 74.57 76.35 76.72 5.64 4.72 59.17 15.76
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