1. Corporate governance practices and capital structure
Author:
N.Sivathaasan
Discussion
Searat Ali
Griffith University

2. What this paper does?
Do the corporate governance practices impact the capital structure decision of Australian listed firms positively or negatively?
Are firm-specific determinants of leverage in other developed economies portable to Australia?
Determinants of capital structure
Corporate governance
Capital structure
Firm specific

3. Structure of literature
2.1 Research in global markets
2.1.1 International studies on corporate governance quality (CGQ) and leverage
International studies on the determinants of capital structure
Single-country analysis on the determinants of capital structure
Cross-country analysis on the determinants of capital structure
2.2 Research on corporate governance and leverage in Australia

4. Research Gaps Corporate governance and capital structure
Studies in relation to corporate governance and capital structure yield mixed results even in an international context.
The investigation of these concepts in Australia is totally unexplored and has been paid inattention until recently.
Particularly, a narrow focus on the concepts of ownership structure, board structure, investment opportunity and leverage has been researched by some of the scholar.
Firm-specific characteristics and capital structure
a few research reports findings by employing field and non-field research approaches (Akhtar, 2005; Allen, 1991; Chiarella et al., 1991)
Suffer from small sample, and sample period.

5. Contributions
First, this study is the first to provide a comprehensive picture  on the impacts of corporate governance practices on capital structure in the Australian framework at two different scenarios.  
The second contribution is the development of a framework towards firm-specific determinants to the current literature.

6. Some of the paper’s strengths
Thorough literature review covering studies in and outside Australia.
Overall structure of the paper
Introduction
Literature
Research gaps
Contributions

7. Comments/suggestions
1-Introduction
2-Literature review
3-Gap in the literature
4-Contributions
5-Theoretical linkage
6-Motivation of study
7-Terminalogies
8-Referencing and proofreading
9-Proposed idea

8. Comments/suggestions
1-Introduction

9. Comments/suggestions
Introduction
Introduction mentions about corporate governance and capital structure.
However, firm specific determinants are not mentioned.
You should mention firm-specific determinants of capital structure.

10. Comments/suggestions
2-Literature review

11. Comments/suggestions
Suggestions for literature review
Mixed results in literature
There are number of studies examining the relationship between CG and CS.
Gap: The results are mixed. Either positive or negative. Most of the studies find……..? (check list)
How your study is resolving the issue of mixed findings?
Suggestion: Try to figure out why there are mixed results in the literature?
Because of country?
Because of industries?
Because of sample period? Data after GFC?
Sample size?
Methodology? OLS; RE, FE, GMM.
Variable definition? CG; CS?

12. Comments/suggestions
Suggestions for literature review
Chronological or thematic order?

13. My suggestion:
Use chronological order in the early phase and then transit to the thematic order in the later phase.
Overall, try to be consistent through out the document.
What are the most recent findings? How your study can extend the literature?

14. Comments/suggestions
Suggestions for literature review
Check list to summarize and criticize
When you are summarizing and criticizing any paper, you should be clear what you are looking into. You should have a check list of the items (use excel grid).
Idea (RQ and hypothesis etc.)
Data (sample and variables etc.)
Tool (estimation methods etc.)
Your contribution will come from one of the above three IDIOTs (Faff, 2015)

15. Comments/suggestions
Suggestions for literature review
Reading complete paper
If the article is relevant to your research than read complete article instead of just relying on the abstract.
This study is not on leverage but on cost of debt
Governance proxy is antitakeover provisions
This study is mainly on executive incentives and leverage. If your focus is not on compensation, then you may avoid this study in your literature so that you are not lost in the forest of different ideas

16. Comments/suggestions
Suggestions for literature review
Consistency in literature
When you discuss literature in international context, you do not pay attention to the proxies of governance, however when you discuss the literature in Australia, you mention the proxies of governance.
Better to mention proxies in international context as well.
It will help you to better draw the research gap.
Is there any study of ownership structure and leverage in U.S.?

17. Comments/suggestions
Suggestions for literature review
Structure of the literature
Studies on CG and CS outside Australia
Studies on CG and CS in Australia
Gaps in these studies?
and so on
Studies on firm specific determinants of CS outside Australia
Single-country studies
multi-country studies
Studies on firm specific determinants of CS in Australia
Gap in these studies?
and so on....

18. Comments/suggestions
Suggestions for literature review
Structure of the literature
Studies on CG and CS outside Australia
Studies on CG and CS in Australia
Studies on firm specific determinants of CS outside Australia
Studies on firm specific determinants of CS in Australia
Gap in these studies?
Contributions

19. Suggestions
3-Gap in the literature

20. Comments/suggestions
Gap in the literature
Studies in relation to corporate governance and capital structure yield mixed results even in an international context.
The investigation of these concepts in Australia is totally unexplored and has been paid inattention until recently.
Particularly, a narrow focus on the concepts of ownership structure, board structure, investment opportunity and leverage has been researched by some of the scholars.
What is sample? Any study on pre and post governance reforms?
Even though corporate governance mechanisms are similar to all the listed firms, they do not perform similarly. Because in large firms corporate governance settings may be strong, whereas weak governance settings may prevail in the small and medium sized firms. Hence, it is important to further extend this analysis of leverage decision under two different governance mechanisms.

21. Suggestions
4-Contributions

22. Comments/suggestions
Contributions

23. Suggestions
5-Theoretical linkage

24. Comments/suggestions
Challenge in theoretical linkage: Pay attention
CG reduce leverage in CS
CG reduces leverage because leverage as a substitute monitoring mechanism?
CG reduces leverage because better corporate governance enhances the ability of a firm to gain access to equity finance, reducing dependence on debt finance?
CG increases leverage in CS
CG improves leverage because CG reduces the cost of debt?
CG improves leverage because leverage as a proxy of risk taking?

25. Suggestions
6-Motivation of study

26. Comments/suggestions
Challenge in motivation of study
Why studying capital structure is important?
Why studying the relationship between corporate governance and capital structure in Australia is important?
Institutional factors
Different; stronger or weaker

27. Chang, Y. K. , Chou, R. K. , & Huang, T. H. (2014)
Chang, Y. K., Chou, R. K., & Huang, T. H. (2014). Corporate governance and the dynamics of capital structure: New evidence. Journal of Banking & Finance, 48,
Discuss this paper
Optimal capital structure?

28. Suggestions
7-Terminalogies

29. Comments/suggestions
Be consistent in the use of terminologies
Replace “this study” with “we”
Agency conflict, Agency cost, Agency problem
Capital structure or leverage or debt. You are using leverage in RQ1. You are using capital structure in RQ2.
Corporate governance, aspects of corporate governance, Corporate governance practices, governance structure, governance mechanisms.
Strong corporate governance, higher governance, good corporate governance, poor governance, governance quality, quality of corporate governance, better corporate governance, governance index

30. 8-Referencing and proofreading
Suggestions
8-Referencing and proofreading

31. Comments/suggestions
Update the references (Time and Journal)
Minor issues: proof reading required…
Year
Frequency
2015 3
2014 1
2013 8
2012 6
2011
2010
<2010 30
Total 50
Journals
Frequency JF 6
JFE
JFQA
RFS
JCF 3
JBF 2

32. Suggestions
9-Proposed idea

33. Proposed Idea Cost of debt Corporate governance Firm specific
Capital structure
Stock liquidity
Financial distress

34. GOOD LUCK with your research!!!!