Template-Type: ReDIF-Article 1.0
Author-Name: Belton M. Fleisher
Author-X-Name-First: Belton M.
Author-X-Name-Last: Fleisher
Title: Introduction
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1-3
Issue: 1
Volume: 20
Year: 2013
Month: 3
X-DOI: 10.1080/16081625.2013.760434
File-URL: http://hdl.handle.net/10.1080/16081625.2013.760434
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Handle: RePEc:taf:raaexx:v:20:y:2013:i:1:p:1-3
Template-Type: ReDIF-Article 1.0
Author-Name: Belton M. Fleisher
Author-X-Name-First: Belton M.
Author-X-Name-Last: Fleisher
Author-Name: William H. McGuire
Author-X-Name-First: William H.
Author-X-Name-Last: McGuire
Author-Name: Adam N. Smith
Author-X-Name-First: Adam N.
Author-X-Name-Last: Smith
Author-Name: Mi ZHOU
Author-X-Name-First: Mi
Author-X-Name-Last: ZHOU
Title: Patent law, TRIPS, and economic growth: evidence from China
Abstract:
We analyze the impact of intellectual property rights
protection on factors contributing to China's economic growth. We use a
difference-in-difference estimation procedure and hold constant the
effects of Deng Xiaoping's South Trip and China's accession to World Trade
Organization. The null hypothesis that the 1992 and 2002 patent laws,
including China's adoption of Trade-Related Aspects of Intellectual
Property Rights standards did not directly affect China's productivity,
inward foreign direct investment, or domestic research and development
activity is not rejected.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 4-19
Issue: 1
Volume: 20
Year: 2013
Month: 3
X-DOI: 10.1080/16081625.2013.760435
File-URL: http://hdl.handle.net/10.1080/16081625.2013.760435
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Handle: RePEc:taf:raaexx:v:20:y:2013:i:1:p:4-19
Template-Type: ReDIF-Article 1.0
Author-Name: Kai Wu
Author-X-Name-First: Kai
Author-X-Name-Last: Wu
Author-Name: Hong Cai
Author-X-Name-First: Hong
Author-X-Name-Last: Cai
Author-Name: Renai Jiang
Author-X-Name-First: Renai
Author-X-Name-Last: Jiang
Author-Name: Gary H. Jefferson
Author-X-Name-First: Gary H.
Author-X-Name-Last: Jefferson
Title: Trade and intellectual property rights as channels for economic growth
Abstract:
This paper investigates two prominent potential drivers of
long-run economic growth: a country's trade regime and its intellectual
property rights (IPR) regime, as well as their interaction. We
characterize the combination of these policy-driven regimes as a country's
technology development regime. To test the importance of our specification
of the technology regime, the paper derives a parsimonious model for
testing their impact on the growth of living standards. The empirical
analysis is conducted using a panel of 24 developed countries and 78
developing countries spanning 1980-2005. Our estimates highlight the
importance of the technology development regime variables in driving the
growth of gross domestic product per capita. In particular, the IPR regime
stands out for its direct impact on growth and as a channel through which
trade interacts to impact growth. The results support the view that a
country's graduating into the ranks of higher income status may require
that both IPR and trade regimes, particularly the former, be well
developed.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 20-36
Issue: 1
Volume: 20
Year: 2013
Month: 3
X-DOI: 10.1080/16081625.2012.744709
File-URL: http://hdl.handle.net/10.1080/16081625.2012.744709
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Template-Type: ReDIF-Article 1.0
Author-Name: Keith E. Maskus
Author-X-Name-First: Keith E.
Author-X-Name-Last: Maskus
Author-Name: Tsunehiro Otsuki
Author-X-Name-First: Tsunehiro
Author-X-Name-Last: Otsuki
Author-Name: John S. Wilson
Author-X-Name-First: John S.
Author-X-Name-Last: Wilson
Title: Do foreign product standards matter? Impacts on costs for developing country exporters
Abstract:
We estimate the impact on production costs of firms in
developing countries from conforming to regulations imposed by major
importing countries, using firm-level data from 16 developing countries.
The findings indicate that standards increase variable production costs by
requiring additional labor and capital. A 1% increase in initial
investment to meet foreign compliance costs raises variable costs by
between 0.06 and 0.13%. Fixed costs of compliance are non-trivial,
averaging about 4.7% of annual variable costs. The cost impacts might be
an important determinant of export success for firms in developing
countries. The results may provide one indication of the potential
barriers to trade facilitation that technical regulations can pose.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 37-57
Issue: 1
Volume: 20
Year: 2013
Month: 3
X-DOI: 10.1080/16081625.2013.744685
File-URL: http://hdl.handle.net/10.1080/16081625.2013.744685
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Handle: RePEc:taf:raaexx:v:20:y:2013:i:1:p:37-57
Template-Type: ReDIF-Article 1.0
Author-Name: Linxiu Zhang
Author-X-Name-First: Linxiu
Author-X-Name-Last: Zhang
Author-Name: Eli Pollak
Author-X-Name-First: Eli
Author-X-Name-Last: Pollak
Author-Name: Ross Darwin
Author-X-Name-First: Ross
Author-X-Name-Last: Darwin
Author-Name: Matthew Boswell
Author-X-Name-First: Matthew
Author-X-Name-Last: Boswell
Author-Name: Scott Rozelle
Author-X-Name-First: Scott
Author-X-Name-Last: Rozelle
Title: Are elite university graduates aiding China's transition to an innovation-based economy? Results from a career choices survey among would-be innovators in China and the USA
Abstract:
This paper reports on a survey conducted among more than 800
engineering students at elite universities in China and the USA. Results
from the survey reveal that US and Chinese students are roughly equivalent
in their desire to form or join start-up ventures. Far more US students,
however, plan on actually doing so. In contrast, Chinese students are more
likely to join the state/government sector. Our results also reveal a wide
gap in perceptions on the availability of financing, mentorship, and other
innovation resources. The findings suggest that the innovation ecosystem
in China remains underdeveloped in certain important respects.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 58-69
Issue: 1
Volume: 20
Year: 2013
Month: 3
X-DOI: 10.1080/16081625.2013.748436
File-URL: http://hdl.handle.net/10.1080/16081625.2013.748436
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Handle: RePEc:taf:raaexx:v:20:y:2013:i:1:p:58-69
Template-Type: ReDIF-Article 1.0
Author-Name: Jiandong Ju
Author-X-Name-First: Jiandong
Author-X-Name-Last: Ju
Author-Name: Li Su
Author-X-Name-First: Li
Author-X-Name-Last: Su
Title: Market structure in the Chinese steel industry
Abstract:
Trade in intermediate goods has become a significant feature
of the international economy. Nevertheless, questions regarding price
negotiation and the determinants of importing firms' profitability remain
unanswered. Using firm-level data, we attempt to address these issues in
the context of the Chinese steel industry. Despite being the largest
producer of steel in the world, the Chinese steel industry has maintained
a very low level of profitability. This paper suggests that the low
profitability of Chinese steel producers results from the abnormally high
degree of market segmentation in China. Using a recently developed
econometric method in panel data spatial analysis, we explain the level of
geographic fragmentation in the Chinese steel industry. Our results reveal
that local steel production depends only on local demand rather than on
cross-regional demand. Production is responsive, as a 10% increase in
local GDP induces more than 8% increase in local steel production, while
the cross-province spill-over demand is insignificant under several
reasonable model specifications. Less efficient firms survive because of
the segmented market. As a result, Chinese steel producers realize lower
profit in the face of high input prices.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 70-84
Issue: 1
Volume: 20
Year: 2013
Month: 3
X-DOI: 10.1080/16081625.2013.763201
File-URL: http://hdl.handle.net/10.1080/16081625.2013.763201
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Handle: RePEc:taf:raaexx:v:20:y:2013:i:1:p:70-84
Template-Type: ReDIF-Article 1.0
Author-Name: Maoliang Bu
Author-X-Name-First: Maoliang
Author-X-Name-Last: Bu
Author-Name: Zhibiao Liu
Author-X-Name-First: Zhibiao
Author-X-Name-Last: Liu
Author-Name: Marcus Wagner
Author-X-Name-First: Marcus
Author-X-Name-Last: Wagner
Author-Name: Xiaohua Yu
Author-X-Name-First: Xiaohua
Author-X-Name-Last: Yu
Title: Corporate social responsibility and the pollution haven hypothesis: evidence from multinationals' investment decision in China
Abstract:
This paper tests the pollution haven hypothesis by examining
the relationship between environmental regulation and foreign investment
with consideration of the role of corporate social responsibility, which
has so far been neglected. Using multinationals' investment data from
China, our results in general support the pollution haven hypothesis that
less stringent environmental regulation is more attractive for
multinationals to invest in China, but high social responsibility can
counteract attractiveness of weak environmental regulation.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 85-99
Issue: 1
Volume: 20
Year: 2013
Month: 3
X-DOI: 10.1080/16081625.2013.759175
File-URL: http://hdl.handle.net/10.1080/16081625.2013.759175
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Handle: RePEc:taf:raaexx:v:20:y:2013:i:1:p:85-99
Template-Type: ReDIF-Article 1.0
Author-Name: Henry He Huang
Author-X-Name-First: Henry He
Author-X-Name-Last: Huang
Author-Name: Sakthi Mahenthiran
Author-X-Name-First: Sakthi
Author-X-Name-Last: Mahenthiran
Author-Name: Xiaonong Zhang
Author-X-Name-First: Xiaonong
Author-X-Name-Last: Zhang
Title: Takeover possibility and market response to loss news under Chinese ST delisting regulation
Abstract:
This study examines whether the market reaction to firms'
second consecutive loss news is influenced by the firms' likelihood of
being taken over. Firms with two consecutive losses in China are subject
to the "special-treatment (ST)" delisting regulation. We have two
important findings. First, ST firms with certain characteristics (i.e.
smaller firms with lower beta, lower accounting performance, higher
leverage, and larger ownership concentration) are more likely to be taken
over. Second, the market returns for the second consecutive loss news are
higher for firms with a higher likelihood of being taken over.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 101-117
Issue: 2
Volume: 20
Year: 2013
Month: 6
X-DOI: 10.1080/16081625.2012.667386
File-URL: http://hdl.handle.net/10.1080/16081625.2012.667386
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Handle: RePEc:taf:raaexx:v:20:y:2013:i:2:p:101-117
Template-Type: ReDIF-Article 1.0
Author-Name: Audrey Wen-hsin Hsu
Author-X-Name-First: Audrey Wen-hsin
Author-X-Name-Last: Hsu
Author-Name: Steve Lin
Author-X-Name-First: Steve
Author-X-Name-Last: Lin
Title: A test of the market's pricing of nontransitory dirty surplus flows
Abstract:
This study examines whether the market correctly prices
nontransitory dirty surplus flows. Unlike the US Generally Accepted
Accounting Principle (GAAP) and International Accounting Standards,
Taiwanese Company Law allows employees' bonuses under the profit-sharing
scheme to be directly taken to retained earnings, bypassing the income
statement. We find that these compensation costs are positively associated
with share price and return, indicating that the market values the
incentive effect of the profit-sharing scheme. More importantly, we find
that the market correctly prices the persistence of these compensation
costs. Overall, this study indicates that investors are able to correctly
price nontransitory dirty surplus flows.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 118-143
Issue: 2
Volume: 20
Year: 2013
Month: 6
X-DOI: 10.1080/16081625.2012.719855
File-URL: http://hdl.handle.net/10.1080/16081625.2012.719855
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Handle: RePEc:taf:raaexx:v:20:y:2013:i:2:p:118-143
Template-Type: ReDIF-Article 1.0
Author-Name: Tae Hee Choi
Author-X-Name-First: Tae Hee
Author-X-Name-Last: Choi
Author-Name: Jinhan Pae
Author-X-Name-First: Jinhan
Author-X-Name-Last: Pae
Author-Name: Sunghwa Park
Author-X-Name-First: Sunghwa
Author-X-Name-Last: Park
Author-Name: Younghyo Song
Author-X-Name-First: Younghyo
Author-X-Name-Last: Song
Title: Asset revaluations: motives and choice of items to revalue
Abstract:
A recent revision of the local accounting standard for
property, plant, and equipment (PP&E) has conferred Korean companies a
revaluation option for PP&E without the early adoption of International
Financial Reporting Standards, which will be mandatory in 2011. The stock
market generally reacts favorably to the announcement of an asset
revaluation. We examine the motives and characteristics of companies that
revalue PP&E and their choice of assets for revaluation. First, we find
that Korean companies are more likely to revalue PP&E to improve their
financial position or reduce debt contracting costs rather than lessen
political costs or signal better future prospects. Second, we report a
pecking order in the choice of assets to revalue. Companies prefer land
for revaluation to other depreciable assets. When companies select
depreciable assets for revaluation, most of them revalue land at the same
time suggesting that companies are likely to select depreciable assets for
revaluation only after they select land. Third, we posit and find that
revaluing companies are more likely to elect depreciable classes of PP&E
when they are highly levered, experience equity depletion, and report
losses. We also find that revaluing companies are more likely to recognize
revaluation decrements in addition to increments when they are large and
are revaluing depreciable classes of PP&E.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 144-171
Issue: 2
Volume: 20
Year: 2013
Month: 6
X-DOI: 10.1080/16081625.2012.719858
File-URL: http://hdl.handle.net/10.1080/16081625.2012.719858
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Handle: RePEc:taf:raaexx:v:20:y:2013:i:2:p:144-171
Template-Type: ReDIF-Article 1.0
Author-Name: Shigemi Yabuuchi
Author-X-Name-First: Shigemi
Author-X-Name-Last: Yabuuchi
Title: Tourism, the environment, and welfare in a dual economy
Abstract:
Tourism promotion has greater significance for developing or
emerging countries, which are experiencing extensive unemployment, than
for developed countries. Therefore, the spread of tourism and the
accompanying introduction of foreign tourists have been top priorities in
some labor-surplus developing economies. On the other hand, the
destruction of the environment due to tourism promotion has been a serious
problem in those countries. Thus, this paper formulates a general
equilibrium model with unemployment à la Harris-Todaro
and a tourism sector that generates environmental pollution. The effects
of tourism promotion and a pollution tax on pollution emission,
unemployment, and welfare are examined.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 172-182
Issue: 2
Volume: 20
Year: 2013
Month: 6
X-DOI: 10.1080/16081625.2012.719857
File-URL: http://hdl.handle.net/10.1080/16081625.2012.719857
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Template-Type: ReDIF-Article 1.0
Author-Name: Munirul H. Nabin
Author-X-Name-First: Munirul H.
Author-X-Name-Last: Nabin
Author-Name: Pasquale M. Sgro
Author-X-Name-First: Pasquale M.
Author-X-Name-Last: Sgro
Title: Illegal immigration, technology adoption and welfare
Abstract:
A debate in the illegal immigration and technology adoption
literature suggests that hiring illegal immigrants may be hindering the
adoption of new technology, which in turn harms a country's productivity
growth. This paper analyses an individual firm's behaviour regarding new
technology adoption in the presence of illegal immigrants. We assume a
Ricardian economy and analyse immigration of illegal unskilled workers in
a model of Cournot duopoly where firms are producing homogenous and
non-traded goods, and hiring illegal immigrants. A two-stage simultaneous
move game is set up: in Stage 1, given the opportunity of hiring illegal
immigrants, an individual firm decides whether to adopt the new technology
or not, where technology adoption is costly. In Stage 2, each firm will
choose the Cournot output level. Solving this two-stage game, we conclude
that (i) given the opportunity of hiring illegal immigrants, an individual
firm may adopt the new technology and (ii) in the case of zero tolerance
of illegal immigration, technology adoption may increase but such
technology adoption is immiserizing as it reduces the total surplus.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 183-198
Issue: 2
Volume: 20
Year: 2013
Month: 6
X-DOI: 10.1080/16081625.2012.738803
File-URL: http://hdl.handle.net/10.1080/16081625.2012.738803
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Handle: RePEc:taf:raaexx:v:20:y:2013:i:2:p:183-198
Template-Type: ReDIF-Article 1.0
Author-Name: Sam Han
Author-X-Name-First: Sam
Author-X-Name-Last: Han
Author-Name: Tony Kang
Author-X-Name-First: Tony
Author-X-Name-Last: Kang
Author-Name: Lynn Rees
Author-X-Name-First: Lynn
Author-X-Name-Last: Rees
Title: The association between institutional ownership and audit properties
Abstract:
We are interested in channels through which institutional
ownership affects corporate governance and in particular whether financial
statement audit is one of them. We hypothesize that institutional
investors can influence corporate policy to employ governance mechanisms
that reduce their monitoring costs. Our evidence shows that firms are more
likely to hire a Big 4 auditor (our proxy for audit quality) when
long-term institutional ownership is high, suggesting that long-term
institutional investors view high-quality audits as a viable means of
improving corporate governance while reducing their direct monitoring
costs. We find no association between auditor choice and short-term
institutional ownership. Next, we find that auditors charge higher fees
(our proxy for audit risk) when short-term institutional ownership is
high, consistent with short-term investors creating greater incentives for
managers to act myopically. We find no association between audit fees and
long-term institutional ownership. Taken together, our evidence suggests
that long-term institutional investors demand higher quality audits to
enhance corporate monitoring, and that short-term institutional ownership
is positively associated with higher audit risk.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 199-222
Issue: 2
Volume: 20
Year: 2013
Month: 6
X-DOI: 10.1080/16081625.2012.748449
File-URL: http://hdl.handle.net/10.1080/16081625.2012.748449
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Handle: RePEc:taf:raaexx:v:20:y:2013:i:2:p:199-222
Template-Type: ReDIF-Article 1.0
Author-Name: Jae Wook Jeong
Author-X-Name-First: Jae Wook
Author-X-Name-Last: Jeong
Author-Name: Gil Bae
Author-X-Name-First: Gil
Author-X-Name-Last: Bae
Title: Do acquiring firms knowingly pay too much for target firms? Evidence from earnings management in member-firm mergers in Korean business groups
Abstract:
In a typical stock-for-stock merger between the firms
belonging to the same business group (member-firm mergers), the
controlling shareholder's holdings in the target firm are more than twice
those in the acquiring firm. This difference in the controlling owner's
holdings in the acquiring firm and the target firm creates a strong
incentive for the controlling owner to knowingly pay more for the target
firm than the target firm is actually worth. We find that acquiring firms
deflate earnings in order to increase the numbers of shares to be issued
to the target firm's shareholders. Furthermore, the level of earnings
deflation is systematically related with the controlling owner's expected
benefits measured in several different ways. We also find that the stock
price reaction to member-firm merger announcements is negatively
correlated with the pre-issue-period earnings deflation. In addition, the
results show that post-merger performance in member-firm mergers is lower
than that in independent firm mergers.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 223-251
Issue: 3
Volume: 20
Year: 2013
Month: 9
X-DOI: 10.1080/16081625.2012.761938
File-URL: http://hdl.handle.net/10.1080/16081625.2012.761938
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Handle: RePEc:taf:raaexx:v:20:y:2013:i:3:p:223-251
Template-Type: ReDIF-Article 1.0
Author-Name: Abdorreza Soleymani
Author-X-Name-First: Abdorreza
Author-X-Name-Last: Soleymani
Author-Name: Soo Y. Chua
Author-X-Name-First: Soo Y.
Author-X-Name-Last: Chua
Title: S-curve at the industry level: evidence from Malaysia's bilateral trade with its major trading partners in East Asia
Abstract:
This study investigates the relationship between the terms of
trade and trade balance for Malaysia with its three major trading partners
namely China, Japan and Singapore using the S-curve. The lead and lag
cross-correlations between the terms of trade and the trade balance
resemble a horizontal S-curve. We evaluate the S-curve in 70 industries
over the period 1974-2009. Initial results with aggregated bilateral trade
data did not show any S-curve pattern. However, by using the industry
level data, we found the existence of the S-curve pattern in some of these
industries. Most of these are small and intermediate goods industries.
Finally, our findings support that durables are more sensitive to real
exchange rate changes than non-durables only in the case of China.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 252-269
Issue: 3
Volume: 20
Year: 2013
Month: 9
X-DOI: 10.1080/16081625.2013.791032
File-URL: http://hdl.handle.net/10.1080/16081625.2013.791032
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Handle: RePEc:taf:raaexx:v:20:y:2013:i:3:p:252-269
Template-Type: ReDIF-Article 1.0
Author-Name: Ray-Yun Chang
Author-X-Name-First: Ray-Yun
Author-X-Name-Last: Chang
Author-Name: Cheng-Hau Peng
Author-X-Name-First: Cheng-Hau
Author-X-Name-Last: Peng
Title: Cost asymmetry and vertical product licensing
Abstract:
This paper investigates the optimal licensing contract for a
product innovation in a vertically differentiated duopoly. The two firms
have different marginal costs and the high-quality firm can license its
technology on product quality to the low-quality firm. It is found that
the optimal form of licensing contract depends on the relative marginal
costs of the two firms. If the marginal cost of the high-quality firm is
relatively high (low), fixed-fee licensing is superior (inferior) to
royalty licensing from the viewpoint of the licensor. Surprisingly,
consumers are worse off if the quality difference between the two firms is
small. This result is in contrast to the received wisdom in the product
licensing literature.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 270-280
Issue: 3
Volume: 20
Year: 2013
Month: 9
X-DOI: 10.1080/16081625.2013.782809
File-URL: http://hdl.handle.net/10.1080/16081625.2013.782809
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Handle: RePEc:taf:raaexx:v:20:y:2013:i:3:p:270-280
Template-Type: ReDIF-Article 1.0
Author-Name: Yun-Sheng Hsu
Author-X-Name-First: Yun-Sheng
Author-X-Name-Last: Hsu
Author-Name: Cathy Zishang Liu
Author-X-Name-First: Cathy Zishang
Author-X-Name-Last: Liu
Author-Name: Yan-Jie Yang
Author-X-Name-First: Yan-Jie
Author-X-Name-Last: Yang
Author-Name: Yan-Yu Chou
Author-X-Name-First: Yan-Yu
Author-X-Name-Last: Chou
Title: Implications of the British petroleum oil spill disaster for its industry peers - evidence from the market reaction and earnings quality
Abstract:
As one of the worst environmental catastrophes in US history,
the British Petroleum (BP) Deepwater Horizon explosion and oil spill have
profound implications for the oil and gas industry. This study examines
the stock market reaction and earnings quality of BP's peers in response
to the imminence of regulatory threats. Our empirical evidence indicates
that a significantly negative intra-industry reaction occurred. In
addition, petroleum companies with more extensive pre-disaster
environmental disclosures experienced a less negative reaction. Finally,
our analysis finds that petroleum companies tended to depress earnings via
discretionary accruals post the BP oil spill. Our study is motivated by
mounting attention to the increase in environmental risks and the need for
enhancement in environmental accounting reporting requirements (The
Securities and Exchange Commission 2010).
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 281-296
Issue: 3
Volume: 20
Year: 2013
Month: 9
X-DOI: 10.1080/16081625.2012.739963
File-URL: http://hdl.handle.net/10.1080/16081625.2012.739963
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Handle: RePEc:taf:raaexx:v:20:y:2013:i:3:p:281-296
Template-Type: ReDIF-Article 1.0
Author-Name: Chen-Lung Chin
Author-X-Name-First: Chen-Lung
Author-X-Name-Last: Chin
Author-Name: Yu-Ju Chen
Author-X-Name-First: Yu-Ju
Author-X-Name-Last: Chen
Author-Name: Jia-Wen Liang
Author-X-Name-First: Jia-Wen
Author-X-Name-Last: Liang
Title: International diversification and conference calls
Abstract:
This paper explores the impact of international
diversification on the decision to hold conference calls. In addition, we
examine the mitigating roles of legal environment and agency problems in
holding conference calls. Using a sample drawn from Taiwan, we find that
greater corporate internationalization (INT) is associated with a higher
likelihood of holding conference calls. We also find that firms are more
likely to conduct conference calls when companies invest in a higher
proportion of common law countries. We also find that the positive
association between the likelihood of holding conference calls and
corporate INT is less pronounced when the control divergence of
controlling owners increases.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 297-314
Issue: 3
Volume: 20
Year: 2013
Month: 9
X-DOI: 10.1080/16081625.2012.719856
File-URL: http://hdl.handle.net/10.1080/16081625.2012.719856
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Handle: RePEc:taf:raaexx:v:20:y:2013:i:3:p:297-314
Template-Type: ReDIF-Article 1.0
Author-Name: Chien-Ju Lu
Author-X-Name-First: Chien-Ju
Author-X-Name-Last: Lu
Author-Name: Chen-Lung Chin
Author-X-Name-First: Chen-Lung
Author-X-Name-Last: Chin
Author-Name: Yuanchen Chang
Author-X-Name-First: Yuanchen
Author-X-Name-Last: Chang
Title: Weather effects on earnings response coefficients: international evidence
Abstract:
We examine the relationship between weather effects and
investor response to a firm's quarterly earnings announcements using data
from 20 countries. Our results show that market cumulative abnormal
returns are associated with unexpected earnings and with weather measures.
Investors in some countries respond more negatively (less positively) to
bad (good) earnings news when earnings are announced on cloudy days than
on sunny days. We also find an asymmetric weather effect that is more
significant for bad earnings announcements, on average. Moreover, the
extent of this weather effect is less for countries with higher financial
information transparency and those with common-law systems.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 315-333
Issue: 3
Volume: 20
Year: 2013
Month: 9
X-DOI: 10.1080/16081625.2012.667526
File-URL: http://hdl.handle.net/10.1080/16081625.2012.667526
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Handle: RePEc:taf:raaexx:v:20:y:2013:i:3:p:315-333
Template-Type: ReDIF-Article 1.0
Author-Name: Nan Hu
Author-X-Name-First: Nan
Author-X-Name-Last: Hu
Author-Name: Baolei Qi
Author-X-Name-First: Baolei
Author-X-Name-Last: Qi
Author-Name: Gaoliang Tian
Author-X-Name-First: Gaoliang
Author-X-Name-Last: Tian
Author-Name: Lee Yao
Author-X-Name-First: Lee
Author-X-Name-Last: Yao
Author-Name: Zhen Zeng
Author-X-Name-First: Zhen
Author-X-Name-Last: Zeng
Title: The impact of ineffective internal control on the value relevance of accounting information
Abstract:
This paper investigates the value relevance of accounting
information in the presence of ineffective internal control (IIC). Based
on Ohlson's valuation model, this paper first documents that IIC can
directly affect a firm's market value after control cost of capital,
corporate governance, and other, value-relevant variables. Second, this
paper finds that the value relevance of earnings and book value in
determining a firm's market value are significantly reduced. Collectively,
the results of this paper indicate that the effectiveness of internal
controls can directly affect a firm's market value and the value relevance
of accounting information.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 334-347
Issue: 3
Volume: 20
Year: 2013
Month: 9
X-DOI: 10.1080/16081625.2013.765026
File-URL: http://hdl.handle.net/10.1080/16081625.2013.765026
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Handle: RePEc:taf:raaexx:v:20:y:2013:i:3:p:334-347
Template-Type: ReDIF-Article 1.0
Author-Name: Anup Srivastava
Author-X-Name-First: Anup
Author-X-Name-Last: Srivastava
Title: Do CEOs possess any extraordinary ability? Can those abilities justify large CEO pay?
Abstract:
Do CEOs possess any extraordinary ability critical to organizational
success? Do CEOs receive large pay because of their unique abilities? We
examine those questions using one such ability - the ability to forecast
future firm risks - because over the last 40years, firms' survival and
success has become highly dependent on firms' preparedness to face
uncertain future business environments. We measure CEOs' risk-forecasting
ability by the information contained in their personal equity trades. We
find that CEOs' earlier-than-normal stock-option exercises often represent
modifications of their personal portfolios in anticipation of future risks
unknown to the market today. These results suggest that on average, CEOs
can forecast at least some future firm risks better than the market can,
and they use that information to modify their personal portfolios.
Additional tests show that firms design incentive-compatible compensation
contracts by tying high-powered components of CEO compensation to their
risk-forecasting abilities, arguably, to competitively sort and attract
CEOs with better risk-forecasting abilities and/or to motivate them to
expend greater efforts on forecasting risks. We conclude that increases in
CEO pay over the last 40years can be explained, at least partly, by the
increasing importance of risk-forecasting skills, especially because firms
have become smaller and are more susceptible to failure due to sudden
changes in the business environment, but are also more likely to benefit
from opportunities created by those changes.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 349-384
Issue: 4
Volume: 20
Year: 2013
Month: 12
X-DOI: 10.1080/16081625.2013.828670
File-URL: http://hdl.handle.net/10.1080/16081625.2013.828670
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Handle: RePEc:taf:raaexx:v:20:y:2013:i:4:p:349-384
Template-Type: ReDIF-Article 1.0
Author-Name: Kuo-Jung Lin
Author-X-Name-First: Kuo-Jung
Author-X-Name-Last: Lin
Author-Name: Sheng-Ming Hsu
Author-X-Name-First: Sheng-Ming
Author-X-Name-Last: Hsu
Author-Name: Ching-Cheng Chang
Author-X-Name-First: Ching-Cheng
Author-X-Name-Last: Chang
Author-Name: Shih-Hsun Hsu
Author-X-Name-First: Shih-Hsun
Author-X-Name-Last: Hsu
Title: The China syndrome? The impact of China's growth on wage inequality in East Asian economies
Abstract:
In this paper, the opening and rapid growth of China is examined for its
effects on output, employment, GDP, social welfare, and wage inequality
within major East Asian economies like Japan, South Korea, Singapore,
Taiwan, and Hong Kong. Simulation results show a tendency toward rising
relative real wages between skilled and unskilled workers. However, GDP
and social welfare in major East Asian economies have tended to rise with
China's openness and growth. Outputs of almost all non-agricultural
industries but the moderately human capital (unskilled labor)-intensive
manufacturing groups have declined. It seems that income effects from
China's growth overpower factor substitution effects, so that a larger
China has made all the other economies, and the agents within them, better
off. On an elemental level, this stands to reason since China's expansion
confers on the rest of the world a large term of trade gain.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 385-404
Issue: 4
Volume: 20
Year: 2013
Month: 12
X-DOI: 10.1080/16081625.2012.762969
File-URL: http://hdl.handle.net/10.1080/16081625.2012.762969
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Handle: RePEc:taf:raaexx:v:20:y:2013:i:4:p:385-404
Template-Type: ReDIF-Article 1.0
Author-Name: Hsihui Chang
Author-X-Name-First: Hsihui
Author-X-Name-Last: Chang
Author-Name: Ruey-Dang Chang
Author-X-Name-First: Ruey-Dang
Author-X-Name-Last: Chang
Author-Name: Chun-Ju Fang
Author-X-Name-First: Chun-Ju
Author-X-Name-Last: Fang
Title: The effects of information transparency on analysts& forecasts: evidence from the information disclosure and transparency ratings system in Taiwan
Abstract:
In an attempt to reduce the information asymmetry between corporate
insiders and outsiders, the Taiwan Stock Exchange Corporation (TSEC) and
the Gre Tai Securities Market (GTSM) requested the Securities and Futures
Institute to implement an information disclosure and transparency ratings
system (IDTRS) for all publicly traded companies listed on the TSEC and
the GTSM. This study investigates the effects of the IDTRS on the
properties of analysts' forecasts. The results indicate that analysts'
earnings forecasts are more accurate and the earnings forecast dispersion
among analysts decreases after the implementation of the IDTRS.
Additionally, the results estimated from the post IDTRS period show that
the analysts' earnings forecast errors and dispersion of the "more
transparent" companies are smaller than those of the "less transparent"
companies.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 405-428
Issue: 4
Volume: 20
Year: 2013
Month: 12
X-DOI: 10.1080/16081625.2012.747237
File-URL: http://hdl.handle.net/10.1080/16081625.2012.747237
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Handle: RePEc:taf:raaexx:v:20:y:2013:i:4:p:405-428
Template-Type: ReDIF-Article 1.0
Author-Name: Vincent Y.S. Chen
Author-X-Name-First: Vincent Y.S.
Author-X-Name-Last: Chen
Author-Name: Shou-Min Tsao
Author-X-Name-First: Shou-Min
Author-X-Name-Last: Tsao
Author-Name: Guang-Zheng Chen
Author-X-Name-First: Guang-Zheng
Author-X-Name-Last: Chen
Title: Founding family ownership and innovation
Abstract:
This study empirically examines the extent to which family ownership
affects innovation. Using a sample of Taiwanese listed firms, we find that
family firms invest more in innovation than nonfamily firms, suggesting
that family firms' incentives to encourage innovation investment (e.g.
long-run presence concern) outweigh families' risk diversification concern
in making innovation decisions. Our results are more pronounced in
families that have voting-cash flow rights divergence and that operate in
high-tech industries. Our study suggests that the family ownership
structure is not necessarily detrimental to shareholder interests,
although prior research indicates that the agency cost of large and small
shareholders is high in East Asian countries where family ownership can
exacerbate this type of agency conflict.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 429-456
Issue: 4
Volume: 20
Year: 2013
Month: 12
X-DOI: 10.1080/16081625.2012.762971
File-URL: http://hdl.handle.net/10.1080/16081625.2012.762971
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Handle: RePEc:taf:raaexx:v:20:y:2013:i:4:p:429-456
Template-Type: ReDIF-Article 1.0
Author-Name: Ta-Cheng Chang
Author-X-Name-First: Ta-Cheng
Author-X-Name-Last: Chang
Author-Name: Yun-Chia Yan
Author-X-Name-First: Yun-Chia
Author-X-Name-Last: Yan
Author-Name: Li-Chuan Chou
Author-X-Name-First: Li-Chuan
Author-X-Name-Last: Chou
Title: Is default probability associated with corporate social responsibility?
Abstract:
The paper applies a compound option-based structural credit risk model to
estimate the short-run and forward default probability for a sample of
listing companies from Taiwan. We contribute to the literature by linking
the relationship between the corporate social responsibility (CSR) rating
and the firm's default risk. Our empirical results show that good CSR
companies have very low short-term default probability and forward default
probability. In terms of regression analyses, we find that there is a
negative and significant association between CSR score and forward default
probability.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 457-472
Issue: 4
Volume: 20
Year: 2013
Month: 12
X-DOI: 10.1080/16081625.2013.825228
File-URL: http://hdl.handle.net/10.1080/16081625.2013.825228
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Handle: RePEc:taf:raaexx:v:20:y:2013:i:4:p:457-472
Template-Type: ReDIF-Article 1.0
Author-Name: James E. Rauch
Author-X-Name-First: James E.
Author-X-Name-Last: Rauch
Title: Introduction
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1-3
Issue: 1
Volume: 21
Year: 2014
Month: 3
X-DOI: 10.1080/16081625.2014.875509
File-URL: http://hdl.handle.net/10.1080/16081625.2014.875509
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Handle: RePEc:taf:raaexx:v:21:y:2014:i:1:p:1-3
Template-Type: ReDIF-Article 1.0
Author-Name: James E. Rauch
Author-X-Name-First: James E.
Author-X-Name-Last: Rauch
Title: Employee spinouts, social networks, and family firms
Abstract:
Recently collected data show that, within any manufacturing industry,
vertically integrated firms tend to have larger, higher productivity
plants, account for the bulk of sales, and also sell externally most of
the inputs they produce. In a weak contracting environment characteristic
of developing countries, vertically integrated firms are vulnerable to
employee "spinouts": managers of input divisions can start their own
firms, making customized inputs formerly provided internally subject to
hold-up and capturing the profits formerly made from external sales of
generic inputs. This vulnerability is shown to lead to inefficiently low
entry. Vertically integrated firms can fight back by hiring managers for
their input divisions who are members of networks that informally sanction
hold-ups or children who keep profits "in the family" even if they spin
out. This is shown to predict the association of co-ethnic networks with
high rates of entrepreneurship and the prominence of family-owned business
groups in developing country manufacturing.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 4-17
Issue: 1
Volume: 21
Year: 2014
Month: 3
X-DOI: 10.1080/16081625.2014.872980
File-URL: http://hdl.handle.net/10.1080/16081625.2014.872980
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Handle: RePEc:taf:raaexx:v:21:y:2014:i:1:p:4-17
Template-Type: ReDIF-Article 1.0
Author-Name: Larry D. Qiu
Author-X-Name-First: Larry D.
Author-X-Name-Last: Qiu
Author-Name: Mohan Zhou
Author-X-Name-First: Mohan
Author-X-Name-Last: Zhou
Title: R&D, offshoring, and slicing along a global production chain
Abstract:
This paper analyzes the decision of a multinational firm from a developed
country to slice a production chain and to allocate different tasks in the
production chain globally. The process involves a wide range of tasks that
varies from very routine jobs to research and development (R&D) intensive
work. We find that under certain conditions, a drop in offshoring costs
(1) leads to more slicing (an increase in the length of production chain)
and more offshoring, (2) stimulates R&D, and (3) raises employment in the
developed country.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 18-34
Issue: 1
Volume: 21
Year: 2014
Month: 3
X-DOI: 10.1080/16081625.2014.848510
File-URL: http://hdl.handle.net/10.1080/16081625.2014.848510
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Handle: RePEc:taf:raaexx:v:21:y:2014:i:1:p:18-34
Template-Type: ReDIF-Article 1.0
Author-Name: Marc-Andreas Muendler
Author-X-Name-First: Marc-Andreas
Author-X-Name-Last: Muendler
Title: Export or merge? Proximity vs. concentration in product space
Abstract:
This paper proposes a proximity-concentration tradeoff in product space as
a determinant of horizontal foreign direct investment (FDI). Firms that
enter a foreign market by exporting are able to capture consumer surplus
by introducing a differentiated product with characteristics that the
incumbent cannot match. In relatively globalized product space, in
contrast, consumers perceive an entrant's difference to existing products
as less pronounced so a consumer's virtual distance costs in product space
are lower and a merger with an incumbent (horizontal FDI) offers pricing
power that allows the entrant to extract consumer rent. Lower physical
trade costs of shipping make Bertrand price competition fiercer in
differentiated product space and can provide an additional incentive for a
merger. A basic product space model with a linear Hotelling setup can
therefore explain why FDI has become more frequent in recent periods in
the presence of falling trade costs. Cross-border merger and acquisitions
data support the model's prediction that horizontal FDI grows relatively
faster than exports in differentiated goods industries, compared to
homogeneous goods industries.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 35-57
Issue: 1
Volume: 21
Year: 2014
Month: 3
X-DOI: 10.1080/16081625.2014.874939
File-URL: http://hdl.handle.net/10.1080/16081625.2014.874939
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Handle: RePEc:taf:raaexx:v:21:y:2014:i:1:p:35-57
Template-Type: ReDIF-Article 1.0
Author-Name: Kong-Pin Chen
Author-X-Name-First: Kong-Pin
Author-X-Name-Last: Chen
Author-Name: Hung-pin Lai
Author-X-Name-First: Hung-pin
Author-X-Name-Last: Lai
Author-Name: Ya-Ting Yu
Author-X-Name-First: Ya-Ting
Author-X-Name-Last: Yu
Title: Do consumers discount parallel imports?
Abstract:
Using data from Taiwan's Yahoo! auctions of Nikon cameras, this paper
investigates whether there exists any difference in transaction results
between commodities which are sold by authorized sellers and those which
are parallel imports. We find that the parallel imports and the authorized
products differ not only in the warranty duration offered by the sellers,
but also in the formats in which they are listed, both of which
substantially affect trade probability and transaction price. We show
that, after taking into account the endogenous choice of listing formats
and the characteristics of the sellers and the items, an authorized
product has a 7% higher trade probability than that of a parallel import
and, if there is a sale, the transaction price as a ratio of the
manufacturer's suggested retail price is 0.093 higher. A small number of
less-experienced parallel import sellers, in an attempt to maintain a
price comparable to the authorized product, list their items in pure
auction with unusually high starting bids. This accounts for the overall
lower trade probability for the parallel imports. If we disregard these
sellers who adopt pure auction, the authorized product has higher
transaction price than, but about the same trade probability as, the
parallel import.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 58-77
Issue: 1
Volume: 21
Year: 2014
Month: 3
X-DOI: 10.1080/16081625.2014.862906
File-URL: http://hdl.handle.net/10.1080/16081625.2014.862906
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Handle: RePEc:taf:raaexx:v:21:y:2014:i:1:p:58-77
Template-Type: ReDIF-Article 1.0
Author-Name: Arijit Mukherjee
Author-X-Name-First: Arijit
Author-X-Name-Last: Mukherjee
Title: Patent protection under endogenous product differentiation
Abstract:
It is generally believed that, if weak patent protection does not affect
innovation, it makes consumers and society better off compared to strong
patent protection by increasing the intensity of competition. We show that
this conclusion may not be valid if the innovator can take other
non-production strategies, such as product differentiation, which helps to
reduce the intensity of competition. Weak patent protection may reduce
consumer surplus and social welfare by inducing product differentiation.
We show that the type of product-market competition and the market demand
function play important roles in this respect. Hence, there can be an
argument for strong patent protection even if it does not affect
innovation.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 78-93
Issue: 1
Volume: 21
Year: 2014
Month: 3
X-DOI: 10.1080/16081625.2014.858389
File-URL: http://hdl.handle.net/10.1080/16081625.2014.858389
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Handle: RePEc:taf:raaexx:v:21:y:2014:i:1:p:78-93
Template-Type: ReDIF-Article 1.0
Author-Name: Sugata Marjit
Author-X-Name-First: Sugata
Author-X-Name-Last: Marjit
Author-Name: Lei Yang
Author-X-Name-First: Lei
Author-X-Name-Last: Yang
Author-Name: Moushakhi Ray
Author-X-Name-First: Moushakhi
Author-X-Name-Last: Ray
Title: Credit constraints, fragmentation, and inter-firm transactions
Abstract:
In this paper, we develop a model to illustrate the effects of credit
constraints on changes in organizational form and firm entry. We find net
borrowers to have a greater incentive to specialize in producing fragments
within the production process when internal finance plays an important
role (the specialization effect). Moreover, such credit
constraint-induced specialization encourages the entry of new firms (the
entry effect). When the entry effect dominates the
specialization effect, total output is greater under fragmentation, which
is contrary to the conventional wisdom that fragmentation may lead to the
double-marginalization problem and reduce output.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 94-103
Issue: 1
Volume: 21
Year: 2014
Month: 3
X-DOI: 10.1080/16081625.2014.870462
File-URL: http://hdl.handle.net/10.1080/16081625.2014.870462
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Handle: RePEc:taf:raaexx:v:21:y:2014:i:1:p:94-103
Template-Type: ReDIF-Article 1.0
Author-Name: Belton M. Fleisher
Author-X-Name-First: Belton M.
Author-X-Name-Last: Fleisher
Author-Name: William H. McGuire
Author-X-Name-First: William H.
Author-X-Name-Last: McGuire
Author-Name: Adam N. Smith
Author-X-Name-First: Adam N.
Author-X-Name-Last: Smith
Author-Name: Mi Zhou
Author-X-Name-First: Mi
Author-X-Name-Last: Zhou
Title: Patent law, TRIPS, and economic growth: evidence from China
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 104-104
Issue: 1
Volume: 21
Year: 2014
Month: 3
X-DOI: 10.1080/16081625.2013.780702
File-URL: http://hdl.handle.net/10.1080/16081625.2013.780702
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Handle: RePEc:taf:raaexx:v:21:y:2014:i:1:p:104-104
Template-Type: ReDIF-Article 1.0
Author-Name: James E. Rauch
Author-X-Name-First: James E.
Author-X-Name-Last: Rauch
Title: Employee spinouts, social networks, and family firms
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 105-105
Issue: 1
Volume: 21
Year: 2014
Month: 3
X-DOI: 10.1080/16081625.2014.882810
File-URL: http://hdl.handle.net/10.1080/16081625.2014.882810
File-Format: text/html
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Handle: RePEc:taf:raaexx:v:21:y:2014:i:1:p:105-105
Template-Type: ReDIF-Article 1.0
Author-Name: Lynn Rees
Author-X-Name-First: Lynn
Author-X-Name-Last: Rees
Author-Name: Anup Srivastava
Author-X-Name-First: Anup
Author-X-Name-Last: Srivastava
Author-Name: Senyo Tse
Author-X-Name-First: Senyo
Author-X-Name-Last: Tse
Title: Seemingly opportunistic management earnings guidance before stock option grants: does it misrepresent firms' underlying performance?
Abstract:
The exercise price of stock options is typically the closing stock price
on the option grant dates, so managers can potentially benefit from low
stock prices on those dates. Prior studies find that on average, managers
issue more pessimistic guidance before than after grant dates. They
interpret this asymmetric pattern as representing managers' opportunistic
behavior. Nevertheless, it is not clear whether this pattern reflects
managers' selective timing of bad news disclosures or a deliberate
misrepresentation of underlying firm performance. This paper extends the
literature by examining the effects of managerial stock option incentives
on the accuracy and the information content of firms' voluntary earnings
guidance. We find that pre-grant guidance significantly improves existing
consensus earnings forecasts, and is similar in bias and accuracy to
post-grant guidance. Moreover, investors and analysts react similarly to
pre-grant vs. post-grant guidance, suggesting that the main consumers of
earnings guidance view these two types of guidance to be equally
informative. Our results are consistent with the notion that managers may
opportunistically select the type or the timing of disclosures, but when
they opt to disclose, they do not misrepresent the underlying firm
performance. On the contrary, the seemingly opportunistic guidance before
option grants improves overall firms' information environment, because it
is at least as truthful and informative as post-grant guidance, and is
issued more frequently than by managers who do not have incentives to
report bad news before earnings announcements.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 107-133
Issue: 2
Volume: 21
Year: 2014
Month: 6
X-DOI: 10.1080/16081625.2013.766126
File-URL: http://hdl.handle.net/10.1080/16081625.2013.766126
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Handle: RePEc:taf:raaexx:v:21:y:2014:i:2:p:107-133
Template-Type: ReDIF-Article 1.0
Author-Name: Yan-Jie Yang
Author-X-Name-First: Yan-Jie
Author-X-Name-Last: Yang
Author-Name: Qian Long Kweh
Author-X-Name-First: Qian Long
Author-X-Name-Last: Kweh
Author-Name: Ruey-Ching Lin
Author-X-Name-First: Ruey-Ching
Author-X-Name-Last: Lin
Title: Earnings quality of Taiwanese group firms
Abstract:
This study examines the relationship between group firms and earnings
quality. For the period 2000-2010, we examine the earnings quality of
Taiwanese group and non-group firms through accrual persistence, earnings
management, and conservatism. We show that group firms exhibit a lower
quality of accrual persistence, have greater propensity to manage
earnings, and are less conservative relative to non-group firms.
Furthermore, we confirm the possible effects of group vertical relatedness
and deviation of control rights from voting rights on earnings quality.
These findings support the information asymmetry hypothesis that
controlling shareholders have greater room to manage earnings in group
firms.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 134-156
Issue: 2
Volume: 21
Year: 2014
Month: 6
X-DOI: 10.1080/16081625.2013.871771
File-URL: http://hdl.handle.net/10.1080/16081625.2013.871771
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Handle: RePEc:taf:raaexx:v:21:y:2014:i:2:p:134-156
Template-Type: ReDIF-Article 1.0
Author-Name: Soo Young Kwon
Author-X-Name-First: Soo Young
Author-X-Name-Last: Kwon
Author-Name: Nam Ryoung Lee
Author-X-Name-First: Nam Ryoung
Author-X-Name-Last: Lee
Author-Name: Eunsun Ki
Author-X-Name-First: Eunsun
Author-X-Name-Last: Ki
Title: Effects of agency costs on the relationship of corporate governance with audit quality and accounting conservatism in the Korean audit market
Abstract:
This study examines the effects of agency costs (AC) on
the relationship of corporate governance with audit quality and accounting
conservatism. We employ audit hours and audit fees as proxies for audit
quality, and accounting conservatism as a proxy for financial reporting
quality. We find that the positive relation between corporate governance
and audit quality is attenuated in the presence of AC. We
also document that AC tend to weaken the negative
relation between corporate governance and accounting conservatism. These
results demonstrate that the relationship of corporate governance with
audit quality and accounting conservatism is conditional on
AC.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 157-185
Issue: 2
Volume: 21
Year: 2014
Month: 6
X-DOI: 10.1080/16081625.2012.762970
File-URL: http://hdl.handle.net/10.1080/16081625.2012.762970
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Handle: RePEc:taf:raaexx:v:21:y:2014:i:2:p:157-185
Template-Type: ReDIF-Article 1.0
Author-Name: Junxiong Fang
Author-X-Name-First: Junxiong
Author-X-Name-Last: Fang
Author-Name: In-Mu Haw
Author-X-Name-First: In-Mu
Author-X-Name-Last: Haw
Author-Name: Veicheng Yu
Author-X-Name-First: Veicheng
Author-X-Name-Last: Yu
Author-Name: Xu Zhang
Author-X-Name-First: Xu
Author-X-Name-Last: Zhang
Title: Positive externality of analyst coverage upon audit services: evidence from China
Abstract:
Using China's data, we find that analyst coverage helps reduce audit fees,
and such effect is more pronounced for small firms, less-educated
auditors, and small auditors. Our findings reveal positive externality of
analyst coverage upon audit services in China, especially for those
auditors weak in professional expertise, or hard to resist the pressure
from their clients. Such evidence implies that the reputation protection
hypothesis seems less applicable in an emerging market where the market
share of big auditors is low. Our findings also provide alternative
evidence justifying exchange-sponsored analyst coverage in practice
intended to improve information environment of small firms.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 186-206
Issue: 2
Volume: 21
Year: 2014
Month: 6
X-DOI: 10.1080/16081625.2013.854949
File-URL: http://hdl.handle.net/10.1080/16081625.2013.854949
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Handle: RePEc:taf:raaexx:v:21:y:2014:i:2:p:186-206
Template-Type: ReDIF-Article 1.0
Author-Name: Chi-Chur Chao
Author-X-Name-First: Chi-Chur
Author-X-Name-Last: Chao
Author-Name: Li-Ju Chen
Author-X-Name-First: Li-Ju
Author-X-Name-Last: Chen
Author-Name: Shih-Wen Hu
Author-X-Name-First: Shih-Wen
Author-X-Name-Last: Hu
Author-Name: Ching-Yi Huang
Author-X-Name-First: Ching-Yi
Author-X-Name-Last: Huang
Author-Name: Vey Wang
Author-X-Name-First: Vey
Author-X-Name-Last: Wang
Title: Stock prices, foreign reserves, and regime collapse
Abstract:
Using a regime collapse model, this paper analyzes the impact of foreign
financial disturbances in the foreign exchange market on the economy under
the assumption of perfect foresight. When there are foreign financial
disturbances and the amount of foreign exchange reserves reaches the
threshold, the government contracts the domestic credit so as to prevent
an additional decrease in foreign reserves. The results show that the
relative scale of the threshold for foreign reserves influences the timing
of the regime collapse, the extent of domestic credit contraction and the
dynamic adjustment of the economy.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 207-225
Issue: 2
Volume: 21
Year: 2014
Month: 6
X-DOI: 10.1080/16081625.2014.886655
File-URL: http://hdl.handle.net/10.1080/16081625.2014.886655
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Handle: RePEc:taf:raaexx:v:21:y:2014:i:2:p:207-225
Template-Type: ReDIF-Article 1.0
Author-Name: Chen Chen
Author-X-Name-First: Chen
Author-X-Name-Last: Chen
Author-Name: Li Li
Author-X-Name-First: Li
Author-X-Name-Last: Li
Author-Name: Mary L.Z. Ma
Author-X-Name-First: Mary L.Z.
Author-X-Name-Last: Ma
Title: Product market competition and the cost of equity capital: evidence from China
Abstract:
This study examines how product market competition affects the cost of
equity capital in the incomplete competition and transitional economy
setting in China, and reports that firms in more competitive industries
have lower the cost of equity. We explain that technical innovation,
production efficiency, external governance, and managerial incentives
induced by increased competition reduce systematic economic uncertainty in
China, and find their mediating effects on the competition cost of equity
relation. We also find that better development of non-state economy, less
government intervention, entrance to the World Trade Organization, and
higher banking competition strengthen the competition cost of equity
relation.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 227-261
Issue: 3
Volume: 21
Year: 2014
Month: 9
X-DOI: 10.1080/16081625.2014.893197
File-URL: http://hdl.handle.net/10.1080/16081625.2014.893197
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Handle: RePEc:taf:raaexx:v:21:y:2014:i:3:p:227-261
Template-Type: ReDIF-Article 1.0
Author-Name: Rong-Ruey Duh
Author-X-Name-First: Rong-Ruey
Author-X-Name-Last: Duh
Author-Name: Audrey Wen-hsin Hsu
Author-X-Name-First: Audrey Wen-hsin
Author-X-Name-Last: Hsu
Author-Name: Chee W. Chow
Author-X-Name-First: Chee W.
Author-X-Name-Last: Chow
Title: World-class manufacturing, management accountants' cross-functional participation, and firm performance
Abstract:
This study examines whether management accountants' extent of
cross-functional participation increases with their firms' world-class
manufacturing (WCM) implementation and how such participation affects
financial and nonfinancial firm performance. Results from applying
structural equations modeling (SEM) to archival and survey data from 209
listed firms in Taiwan indicate that management accountants'
cross-functional participation increases with their firms' use of WCM, and
that both WCM and management accountants' cross-functional participation
have positive links to firm performance, with the latter also partially
mediating WCM's performance effect. These results suggest that management
accountants are responsive to the demands of their firms' manufacturing
practices and that this participation not only helps to enhance the
benefits of WCM, but also firm performance in other ways.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 262-283
Issue: 3
Volume: 21
Year: 2014
Month: 9
X-DOI: 10.1080/16081625.2012.751868
File-URL: http://hdl.handle.net/10.1080/16081625.2012.751868
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Handle: RePEc:taf:raaexx:v:21:y:2014:i:3:p:262-283
Template-Type: ReDIF-Article 1.0
Author-Name: Jung-Wha Lee
Author-X-Name-First: Jung-Wha
Author-X-Name-Last: Lee
Author-Name: Minjung Kang
Author-X-Name-First: Minjung
Author-X-Name-Last: Kang
Author-Name: Yunsook Oh
Author-X-Name-First: Yunsook
Author-X-Name-Last: Oh
Author-Name: Gyungmin Pyo
Author-X-Name-First: Gyungmin
Author-X-Name-Last: Pyo
Title: Does continuous auditing enhance the quality of financial reporting? Korean evidence
Abstract:
This study examines the effects of audit efforts through interim reviews
of financial reports. Using Korean data, we specifically investigate the
relationship between the number of audit hours worked during the first
three quarters and the quality of interim and annual financial reports.
Our results show that continuous auditing efforts are negatively
associated with interim and annual discretionary accruals
(DA). Moreover, the results from the positive and
negative DA of annual financial reports also support the
notion that continuous auditing efforts restrict upward earnings
management more than downward earnings management. Overall, our results
complement prior research and regulators' assertions by highlighting the
importance of continuous audit efforts for interim and annual financial
reports.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 284-307
Issue: 3
Volume: 21
Year: 2014
Month: 9
X-DOI: 10.1080/16081625.2014.884483
File-URL: http://hdl.handle.net/10.1080/16081625.2014.884483
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Handle: RePEc:taf:raaexx:v:21:y:2014:i:3:p:284-307
Template-Type: ReDIF-Article 1.0
Author-Name: Shu-Miao Lai
Author-X-Name-First: Shu-Miao
Author-X-Name-Last: Lai
Author-Name: Chih-Liang Liu
Author-X-Name-First: Chih-Liang
Author-X-Name-Last: Liu
Author-Name: Taychang Wang
Author-X-Name-First: Taychang
Author-X-Name-Last: Wang
Title: Increased disclosure and investment efficiency
Abstract:
This paper investigates the relation between increased disclosure level
and capital investment efficiency. We hypothesize that increased
disclosure level can reduce information asymmetry, which in turn improves
capital investment efficiency. Consistent with our hypothesis, we document
a significantly negative association between disclosure level and measures
of inefficient investments, such as level of investment inefficiency,
overinvestment, and underinvestment, indicating that firms increased
disclosure level are found to improve investment efficiency. These results
are robustness after using various measures for level of investment
inefficiency and increased disclosure and considering different types of
disclosure such as voluntary disclosure. Overall, our findings suggest
that through reducing information asymmetry, increased disclosure level
induces managers to act in the best interest of shareholders, which
improves capital investment efficiency.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 308-327
Issue: 3
Volume: 21
Year: 2014
Month: 9
X-DOI: 10.1080/16081625.2012.741791
File-URL: http://hdl.handle.net/10.1080/16081625.2012.741791
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Handle: RePEc:taf:raaexx:v:21:y:2014:i:3:p:308-327
Template-Type: ReDIF-Article 1.0
Author-Name: In Tae Hwang
Author-X-Name-First: In Tae
Author-X-Name-Last: Hwang
Author-Name: Sun Min Kang
Author-X-Name-First: Sun Min
Author-X-Name-Last: Kang
Author-Name: Shun Ji Jin
Author-X-Name-First: Shun Ji
Author-X-Name-Last: Jin
Title: A delisting prediction model based on nonfinancial information
Abstract:
The purpose of this study is to develop a model for predicting firm
delistings based on nonfinancial information. The delisting model using
nonfinancial information is more meaningful in that it can provide diverse
stakeholders with earlier warning signals for predicting delistings.
Nonfinancial information is generally disclosed to the public in a timely
manner because it requires no procedure involving the settlement of
accounts and audits. The results suggest that stakeholders should pay
close attention to various qualitative factors that are not expressed in
financial to predict delistings as early as possible and thus to minimize
social losses from delistings.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 328-347
Issue: 3
Volume: 21
Year: 2014
Month: 9
X-DOI: 10.1080/16081625.2014.882322
File-URL: http://hdl.handle.net/10.1080/16081625.2014.882322
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Handle: RePEc:taf:raaexx:v:21:y:2014:i:3:p:328-347
Template-Type: ReDIF-Article 1.0
Author-Name: Feng Xu
Author-X-Name-First: Feng
Author-X-Name-Last: Xu
Author-Name: Zinan Zhu
Author-X-Name-First: Zinan
Author-X-Name-Last: Zhu
Title: A Bayesian approach for predicting material accounting misstatements
Abstract:
In this paper, we develop prediction models of material accounting
misstatements in a Bayesian framework. Outputs of the Bayesian approach
are probabilistic descriptions for the propensity of conducting an
accounting misstatement and for a riskiness comparison across different
companies. The models are applied to a comprehensive sample of firms that
have been subject to enforcement actions by the Securities and Exchange
Commission for allegedly misstating their financial statements between
1982 and 2005. The results suggest that while maintaining a comparable
Type-I error, out-of-sample predictions of the Bayesian models improve in
terms of sensitivity and the Type-II error. This study provides a useful
tool to assess material accounting misstatement risks.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 349-367
Issue: 4
Volume: 21
Year: 2014
Month: 12
X-DOI: 10.1080/16081625.2014.946063
File-URL: http://hdl.handle.net/10.1080/16081625.2014.946063
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Handle: RePEc:taf:raaexx:v:21:y:2014:i:4:p:349-367
Template-Type: ReDIF-Article 1.0
Author-Name: Rong-Ruey Duh
Author-X-Name-First: Rong-Ruey
Author-X-Name-Last: Duh
Author-Name: Hsiao-Lun Lin
Author-X-Name-First: Hsiao-Lun
Author-X-Name-Last: Lin
Author-Name: Chee W. Chow
Author-X-Name-First: Chee W.
Author-X-Name-Last: Chow
Title: Connotative meaning and the challenges of international financial reporting/auditing standards convergence: the case of Taiwan's Statement of Auditing Standards Number 33
Abstract:
Translating international standards into local languages is a big obstacle
to the global convergence of financial reporting and auditing practices.
This study uses Taiwan's promulgation of Statements on Auditing Standards
No. 33 to examine an important component of this challenge: the need for
local standard setters to anticipate how domestic constituents would
interpret local words used to translate original English terms. Data
collected from samples of Taiwanese auditors, public prosecutors, and
investors revealed that as compared to the auditors, financial statement
users ascribe different connotative meanings to a Chinese term that was
originally proposed, and one that was chosen as its replacement after
objections from the accounting profession. Further, the words' connotative
meanings significantly mediated the link between the local term and
financial statement users' judgments about auditor legal liability.
Significantly, the connotative meaning that financial statement users
ascribed to the replacement term was associated with a higher level of
ascribed auditor liability, such that in successfully pushing for a
wording change, members of Taiwan's accounting profession may have
increased, rather than reduced, their exposure to liability from audited
financial statements. These findings have a number of implications for
standard setters, the standard setting process, and accounting firms.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 368-388
Issue: 4
Volume: 21
Year: 2014
Month: 12
X-DOI: 10.1080/16081625.2014.929267
File-URL: http://hdl.handle.net/10.1080/16081625.2014.929267
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Handle: RePEc:taf:raaexx:v:21:y:2014:i:4:p:368-388
Template-Type: ReDIF-Article 1.0
Author-Name: Emeka Nwaeze
Author-X-Name-First: Emeka
Author-X-Name-Last: Nwaeze
Author-Name: Rachana Kalelkar
Author-X-Name-First: Rachana
Author-X-Name-Last: Kalelkar
Title: Directors and officers liability insurance: an analysis of determinants of disclosure
Abstract:
In this paper, we investigate factors that explain the disclosure of
Directors and officers liability (D&O) insurance. D&O insurance is used
extensively in top management compensation. Surprisingly, only a handful
of firms listed in the US disclose their D&O insurance practices (based on
our extensive search of publicly available databases on corporate
disclosure). Using a sample of firms from 2004 to 2008, we focus on level
of competition, threat of increase in lawsuit, and internal governance to
examine the determinants of the disclosure practices. Consistent with the
hypothesis, the results show that firms in competitive industries, firms
with a high threat of lawsuits, big firms, and firms with weak internal
governance are less likely to disclose D&O insurance. We further find that
variations in the scope and nature of disclosure are associated with the
firms' litigation risk and governance structure.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 389-411
Issue: 4
Volume: 21
Year: 2014
Month: 12
X-DOI: 10.1080/16081625.2014.925404
File-URL: http://hdl.handle.net/10.1080/16081625.2014.925404
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Handle: RePEc:taf:raaexx:v:21:y:2014:i:4:p:389-411
Template-Type: ReDIF-Article 1.0
Author-Name: Kwangwuk Oh
Author-X-Name-First: Kwangwuk
Author-X-Name-Last: Oh
Author-Name: Wooseok Choi
Author-X-Name-First: Wooseok
Author-X-Name-Last: Choi
Author-Name: Seok Woo Jeong
Author-X-Name-First: Seok Woo
Author-X-Name-Last: Jeong
Author-Name: Jinhan Pae
Author-X-Name-First: Jinhan
Author-X-Name-Last: Pae
Title: The effect of different levels of internal control over financial reporting regulation on the quality of accounting information: evidence from Korea
Abstract:
This study investigates the effect of different levels of internal control
over financial reporting (ICFR) regulations on accounting information
quality. Stricter ICFR regulation restricts the opportunistic behavior of
managers, leading to better accounting information quality. Strictly
regulated firms tend to report lesser discretionary accruals. The results
of this study indicate that the accounting information quality of less
strictly regulated firms deteriorated, while there was no significant
change in the accounting information quality of strictly regulated firms.
This implies that the effect of ICFR regulation depends more on the
enforcement rather than the adoption of the regulations.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 412-442
Issue: 4
Volume: 21
Year: 2014
Month: 12
X-DOI: 10.1080/16081625.2014.880203
File-URL: http://hdl.handle.net/10.1080/16081625.2014.880203
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Handle: RePEc:taf:raaexx:v:21:y:2014:i:4:p:412-442
Template-Type: ReDIF-Article 1.0
Author-Name: Ruei-Shian Wu
Author-X-Name-First: Ruei-Shian
Author-X-Name-Last: Wu
Author-Name: Hsiou-wei W. Lin
Author-X-Name-First: Hsiou-wei W.
Author-X-Name-Last: Lin
Title: Security analysts' incentive and cognitive processing bias: evidence from analysts' recommendations
Abstract:
This study examines how incentive- and behavior-based variables affect
analyst recommendation revisions. We use duration analysis to test
analysts' underreaction to information by isolating the effects of
incentives and cognitive processing biases on the timing of recommendation
revisions. By controlling for favorable (unfavorable) preceding
recommendations, we find that analysts delay conveying bad (good) news,
which is consistent with the predictions of both the incentives and
cognitive dissonance hypotheses (only the cognitive dissonance
hypothesis). We also find that analysts delay responses to favorable
information for outperformers with lower representative information,
suggesting that analysts' underreaction to new favorable information is
partially explained by the effect of psychological conservatism. Our
results are robust after taking into account analyst affiliations, NASD
Rule 2711 and SEC Rule 472, and market conditions.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 443-471
Issue: 4
Volume: 21
Year: 2014
Month: 12
X-DOI: 10.1080/16081625.2012.749776
File-URL: http://hdl.handle.net/10.1080/16081625.2012.749776
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Handle: RePEc:taf:raaexx:v:21:y:2014:i:4:p:443-471
Template-Type: ReDIF-Article 1.0
Author-Name: Beth Webster
Author-X-Name-First: Beth
Author-X-Name-Last: Webster
Author-Name: Paul H. Jensen
Author-X-Name-First: Paul H.
Author-X-Name-Last: Jensen
Title: Introduction to the Special Issue on "Innovation and Good Policy"
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1-3
Issue: 1
Volume: 22
Year: 2015
Month: 3
X-DOI: 10.1080/16081625.2015.1010266
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1010266
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Handle: RePEc:taf:raaexx:v:22:y:2015:i:1:p:1-3
Template-Type: ReDIF-Article 1.0
Author-Name: Adam B. Jaffe
Author-X-Name-First: Adam B.
Author-X-Name-Last: Jaffe
Title: Science and innovation in small countries: speculation and research agenda
Abstract:
The phenomenon of "spillovers" of R&D means that small countries can
benefit from the research and innovation investment of larger countries,
but also need a strategy for capturing locally the benefits of local
research and innovation investments. The Science of Science Policy
provides models, measurement tools and insights to inform this process.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 4-12
Issue: 1
Volume: 22
Year: 2015
Month: 3
X-DOI: 10.1080/16081625.2015.1010267
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1010267
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Handle: RePEc:taf:raaexx:v:22:y:2015:i:1:p:4-12
Template-Type: ReDIF-Article 1.0
Author-Name: Jonathan Haskel
Author-X-Name-First: Jonathan
Author-X-Name-Last: Haskel
Title: Understanding innovation better: an intangible investment approach
Abstract:
We set out a way of understanding innovation using the intangible asset
approach. It attempts to set out a framework that is married to national
accounts and understands innovation and its consequences in particular
where innovation might not be patented.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 13-23
Issue: 1
Volume: 22
Year: 2015
Month: 3
X-DOI: 10.1080/16081625.2015.1010268
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1010268
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Handle: RePEc:taf:raaexx:v:22:y:2015:i:1:p:13-23
Template-Type: ReDIF-Article 1.0
Author-Name: Lei Cheng
Author-X-Name-First: Lei
Author-X-Name-Last: Cheng
Author-Name: Zhen Lei
Author-X-Name-First: Zhen
Author-X-Name-Last: Lei
Title: Does the expansion of Chinese state-owned enterprises affect the innovative behavior of private enterprises?
Abstract:
State-owned enterprises (SOEs) have expanded rapidly in China since 2003.
Through an empirical study using Chinese Industrial Enterprises Database
and Patent Application Database from 2004 to 2007, we found that the
expansion of SOEs negatively affected the innovation of private
enterprises. Chinese private enterprises usually do not have extensive
assets or strong ability to obtain debt financing, and thus are less
likely to maintain investments in R&D when SOEs expand. Considering
private enterprises are the main contributors of innovation in China, it
is important to note the negative effect of the expansion of SOEs on the
innovation of private enterprises. We further distinguished the SOEs along
two dimensions: holding type and affiliation type. Based on the first
dimension, we divided the SOEs into absolutely controlled SOEs and
relatively controlled SOEs (RSOEs); based on the second dimension, we
divided the SOEs into those belonging to higher level governments (central
or provincial) (HSOEs) and those belonging to lower level governments such
as municipal governments (LSOEs). We found that only RSOEs and LSOEs
expanded rapidly from 2004 to 2007, and that it is the expansion of RSOEs
and LSOEs that led to a decrease in innovation of private enterprises.
Moreover, we found that the expansion of SOEs increased the
average interest rate faced by private enterprises and
that the increase in average interest rate was the
primary reason for the decrease in innovation of private enterprises.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 24-54
Issue: 1
Volume: 22
Year: 2015
Month: 3
X-DOI: 10.1080/16081625.2015.1010269
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1010269
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Handle: RePEc:taf:raaexx:v:22:y:2015:i:1:p:24-54
Template-Type: ReDIF-Article 1.0
Author-Name: Su-Hua Lee
Author-X-Name-First: Su-Hua
Author-X-Name-Last: Lee
Title: Enforcement of essential patents and industry standards: more economic or innovative approach?
Abstract:
This paper analyzes the interface between industry standards and
enforcement of patent rights. When a patent is incorporated into a
standard, the patent holder has economic power to exclude its competitors
from the markets and increase prices of products and services
deliberately. Under this circumstance, competition laws provide effective
remedy against the anti-competitive practice. Nevertheless, this paper
asserts that an innovative perspective and the incentive to innovate might
need to be taken into consideration.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 55-77
Issue: 1
Volume: 22
Year: 2015
Month: 3
X-DOI: 10.1080/16081625.2015.1010270
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1010270
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Handle: RePEc:taf:raaexx:v:22:y:2015:i:1:p:55-77
Template-Type: ReDIF-Article 1.0
Author-Name: Tae-Young Park
Author-X-Name-First: Tae-Young
Author-X-Name-Last: Park
Author-Name: Illyong Ji
Author-X-Name-First: Illyong
Author-X-Name-Last: Ji
Title: From mass production to complex production: case of the Korean telecom equipment sector
Abstract:
This study addresses the following question: why did Samsung and LG fail
to transition from the mass-produced goods sector production to complex
product system sector production? In general, there are four necessary
factors to facilitate successful operation in complex product systems:
research and development capability, organic networking among various
actors, the capability to leverage suitable support from government and
the establishment of a large demand base. Samsung and LG has strong R&D
capabilities and engaged in useful networking and their failure to succeed
in the complex product system sector can be attributed to inappropriate
support from government and their failure to establish a large demand
base. We conclude that technological factors are necessary but
insufficient to facilitate the successful transition from a mass-produced
goods sector to a complex product system.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 78-102
Issue: 1
Volume: 22
Year: 2015
Month: 3
X-DOI: 10.1080/16081625.2015.1010271
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1010271
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Handle: RePEc:taf:raaexx:v:22:y:2015:i:1:p:78-102
Template-Type: ReDIF-Article 1.0
Author-Name: Myung-In Kim
Author-X-Name-First: Myung-In
Author-X-Name-Last: Kim
Author-Name: Catherine Heyjung Sonu
Author-X-Name-First: Catherine Heyjung
Author-X-Name-Last: Sonu
Author-Name: Jong-Hag Choi
Author-X-Name-First: Jong-Hag
Author-X-Name-Last: Choi
Title: Separation of corporate ownership and control and accounting conservatism: evidence from Korea
Abstract:
This study analyzes how the separation of corporate ownership and control
affects financial reporting conservatism using unique data on Korean
chaebol-affiliated firms. The presence of severe agency
problems generated by the wedge between ownership and control may increase
the demand for conservatism, while the greater managerial motivation and
latitude in making accounting choices borne by the entrenchment problems
can adversely affect the degree of financial reporting conservatism. We
find that the ownership-control wedge is negatively associated with
various proxies for conservatism, consistent with the entrenchment
argument. Additional analyses reveal that a wide divergence between
ownership and control adversely affects the corporate governance of a
firm. Further, we find that the negative effects of the ownership-control
wedge on conservatism are particularly strong for firms with weak
corporate governance. Overall, we provide evidence that controlling
shareholders act as a mechanism to mitigate the role of corporate
governance, thus reducing implementation of conservatism.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 103-136
Issue: 2
Volume: 22
Year: 2015
Month: 6
X-DOI: 10.1080/16081625.2014.912374
File-URL: http://hdl.handle.net/10.1080/16081625.2014.912374
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Handle: RePEc:taf:raaexx:v:22:y:2015:i:2:p:103-136
Template-Type: ReDIF-Article 1.0
Author-Name: Pei-Gi Shu
Author-X-Name-First: Pei-Gi
Author-X-Name-Last: Shu
Author-Name: Tsung-Kang Chen
Author-X-Name-First: Tsung-Kang
Author-X-Name-Last: Chen
Author-Name: Wen-Jye Hung
Author-X-Name-First: Wen-Jye
Author-X-Name-Last: Hung
Title: Audit duration quality and client credit risk
Abstract:
Using Taiwanese listed firms, we examined how auditor-related
idiosyncratic risk affects clients' credit risks from the perspective of
audit duration quality, including the level and volatility of audit report
lag (ARL). We find that both the level and the volatility of ARL are
positively related to clients' credit risks when other well-known
determinant variables are controlled. In addition, the level (volatility)
of ARL has weaker (greater) power in predicting the financial crisis of
client firms associated with the Big-4 auditing firms than the non-Big-4
ones. Moreover, the results are robust to the issue that ARL may be long,
the concern of initially engaged clients, different estimation periods of
ARL volatility, and another credit risk measure.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 137-162
Issue: 2
Volume: 22
Year: 2015
Month: 6
X-DOI: 10.1080/16081625.2014.981936
File-URL: http://hdl.handle.net/10.1080/16081625.2014.981936
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Handle: RePEc:taf:raaexx:v:22:y:2015:i:2:p:137-162
Template-Type: ReDIF-Article 1.0
Author-Name: Andreas Simon
Author-X-Name-First: Andreas
Author-X-Name-Last: Simon
Author-Name: John Nowland
Author-X-Name-First: John
Author-X-Name-Last: Nowland
Title: Long-term growth forecasts and stock recommendation profitability
Abstract:
We investigate whether analysts' long-term growth (LTG) forecasts are a
signal of analyst effort to better understand the future prospects of
firms, which is reflected in the long-term profitability of their stock
recommendations. We develop a one-year-ahead LTG forecast likelihood score
and execute a trading strategy that generates average abnormal returns of
2.9% per annum over our sample period (1995-2005). Furthermore, in
out-of-sample testing without portfolio rebalancing during the 2006-2011
period, our trading strategy earns abnormal returns of 2.5% per annum. In
summary, this study illustrates previously undocumented long-term benefits
accruing to investors from the information inherent in analyst LTG
forecasts.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 163-190
Issue: 2
Volume: 22
Year: 2015
Month: 6
X-DOI: 10.1080/16081625.2014.937561
File-URL: http://hdl.handle.net/10.1080/16081625.2014.937561
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Handle: RePEc:taf:raaexx:v:22:y:2015:i:2:p:163-190
Template-Type: ReDIF-Article 1.0
Author-Name: Karim Jamal
Author-X-Name-First: Karim
Author-X-Name-Last: Jamal
Author-Name: Hanwen Chen
Author-X-Name-First: Hanwen
Author-X-Name-Last: Chen
Author-Name: Le Luo
Author-X-Name-First: Le
Author-X-Name-Last: Luo
Title: Are evaluations of audit quality influenced by management's intentions and outcomes?
Abstract:
One major regulatory device for improving audit quality is to require
auditors to assess the 'Tone at the Top' (that is, the integrity and
especially top management's intentions and attitude towards earnings
management), but prior audit research suggests that auditors are quite
poor at assessing the knowledge, preferences and intentions of others. In
this study, we report results of two experiments in which a material
misstatement occurs intentionally (fraud) or inadvertently (error).
Shareholders suffer a loss (or no adverse consequence). Experienced
auditors (Certified Public Accountants [CPAs]) and a control group of
university students assess the appropriateness of the auditor's conduct
and specify a penalty. Experiment 1 results show that CPAs are not
influenced by management's intentions or outcomes. Students are responsive
to outcomes but not to management's intentions. In Experiment 2, we re-ran
Experiment 1 using a within-subjects design to make management's
intentions more salient. Experiment 2 results indicate that, this time,
both CPAs and students respond to intention but in a manner opposite of
that prescribed by professional standards. Students also respond to
outcomes, though CPAs do not.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 191-212
Issue: 2
Volume: 22
Year: 2015
Month: 6
X-DOI: 10.1080/16081625.2014.928988
File-URL: http://hdl.handle.net/10.1080/16081625.2014.928988
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Handle: RePEc:taf:raaexx:v:22:y:2015:i:2:p:191-212
Template-Type: ReDIF-Article 1.0
Author-Name: In Kang
Author-X-Name-First: In
Author-X-Name-Last: Kang
Author-Name: Cheolbeom Park
Author-X-Name-First: Cheolbeom
Author-X-Name-Last: Park
Title: Soccer sentiment and investment opportunities in the Korean stock market
Abstract:
We have found a significant sentiment effect from national soccer match
outcomes on the Korean stock market, consistent with studies on other
countries. Further investigation reveals, however, that such sentiment
effect is extremely short-lived and the magnitude of ensuing expected
returns based on the sentiment effect is about the same as the transaction
costs. Therefore, we conclude that although a significant soccer-sentiment
effect from losses exists, it seems almost impossible to devise reliable
arbitrage opportunities from it due to its short duration and the small
magnitude of expected returns.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 213-226
Issue: 2
Volume: 22
Year: 2015
Month: 6
X-DOI: 10.1080/16081625.2014.960432
File-URL: http://hdl.handle.net/10.1080/16081625.2014.960432
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Handle: RePEc:taf:raaexx:v:22:y:2015:i:2:p:213-226
Template-Type: ReDIF-Article 1.0
Author-Name: Keith E. Maskus
Author-X-Name-First: Keith E.
Author-X-Name-Last: Maskus
Title: Introduction
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 227-230
Issue: 3
Volume: 22
Year: 2015
Month: 9
X-DOI: 10.1080/16081625.2015.1057946
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1057946
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Handle: RePEc:taf:raaexx:v:22:y:2015:i:3:p:227-230
Template-Type: ReDIF-Article 1.0
Author-Name: Keith E. Maskus
Author-X-Name-First: Keith E.
Author-X-Name-Last: Maskus
Title: Intellectual property in a globalizing world: issues for economic research
Abstract:
This paper documents and describes the major changes in recent decades of
global norms for protecting intellectual property rights (IPRs). Largely
due to the World Trade Organization and regional trade agreements, there
has been a significant upward harmonization of regulations in this area. I
review recent econometric work studying the effects of IPRs on innovation,
trade, and technology transfer. While this work has illuminated important
effects, there are many other unexplored areas. I set out a research
agenda for international trade specialists in order to encourage deeper
empirical work into areas of policy complementarity, market entry,
knowledge transfer costs, and other issues.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 231-250
Issue: 3
Volume: 22
Year: 2015
Month: 9
X-DOI: 10.1080/16081625.2015.1057947
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1057947
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Handle: RePEc:taf:raaexx:v:22:y:2015:i:3:p:231-250
Template-Type: ReDIF-Article 1.0
Author-Name: Keith Head
Author-X-Name-First: Keith
Author-X-Name-Last: Head
Author-Name: John Ries
Author-X-Name-First: John
Author-X-Name-Last: Ries
Author-Name: Xiaonan Sun
Author-X-Name-First: Xiaonan
Author-X-Name-Last: Sun
Author-Name: Junjie Hong
Author-X-Name-First: Junjie
Author-X-Name-Last: Hong
Title: The legacy of nineteenth century treaties on the current trade of Chinese cities
Abstract:
We examine the effect of treaty linkages established between Chinese
cities and foreign countries during the nineteenth century on China's
trade today. We hypothesize that these historical arrangements created
relationship-specific capital that continues to facilitate trade. In the
full sample of bilateral trade between 335 cities and 212 countries, there
are significant linkage effects. However, ensuing analysis indicates that
greater trade among cities and countries who are linked by treaties
largely reflects the propensity of higher income partners to trade more
with each other. These findings underscore the importance of controlling
for trade complementarity related to the level of development of trading
partners in cases where lack of time-series variation in the key
explanatory variable prevents inclusion of bilateral fixed effects.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 251-270
Issue: 3
Volume: 22
Year: 2015
Month: 9
X-DOI: 10.1080/16081625.2015.1057948
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1057948
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Handle: RePEc:taf:raaexx:v:22:y:2015:i:3:p:251-270
Template-Type: ReDIF-Article 1.0
Author-Name: Bo-Young Choi
Author-X-Name-First: Bo-Young
Author-X-Name-Last: Choi
Author-Name: Deborah L. Swenson
Author-X-Name-First: Deborah L.
Author-X-Name-Last: Swenson
Title: Globalization, ownership, and the effects of trade liberalization on Chinese import prices
Abstract:
This paper studies the differential effects of trade liberalization
following China's accession to the World Trade Organization. While China's
tariff liberalization was uniformly implemented as a matter of national
policy, our results show that the pass-through of tariff reductions to
import prices was more pronounced for products that were imported by
purchasers in China's provinces that were more exposed to globalization.
In addition, we find that the strength of tariff pass-through was also
affected by firm ownership: tariff pass-through was lower for products
imported by Chinese state-owned enterprises than it was for products
imported by foreign-owned enterprises (FOEs). Finally, we show that tariff
pass-through increased as provinces became more exposed to globalization -
an effect that was more pronounced for imports purchased by private
Chinese firms than it was for the imports purchased by FOEs.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 271-290
Issue: 3
Volume: 22
Year: 2015
Month: 9
X-DOI: 10.1080/16081625.2015.1057950
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1057950
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Handle: RePEc:taf:raaexx:v:22:y:2015:i:3:p:271-290
Template-Type: ReDIF-Article 1.0
Author-Name: Audrey Wen-hsin Hsu
Author-X-Name-First: Audrey
Author-X-Name-Last: Wen-hsin Hsu
Author-Name: Suz-Jung Huang
Author-X-Name-First: Suz-Jung
Author-X-Name-Last: Huang
Author-Name: Sophia Hsintsai Liu
Author-X-Name-First: Sophia
Author-X-Name-Last: Hsintsai Liu
Title: Investment layers, regional environments, and investment efficiency: evidence from FDI in China
Abstract:
This study investigates whether the length of investment layers for FDI in
China is related to capital investment efficiency. We measure the length
of investment layers of a multinational firm using the number of layers
from the parent firm to the lowest-tier subsidiary. We argue that the
agency problems and information asymmetry between corporate insiders and
outside capital providers increase with the number of layers, and reduce
the creditors' willingness to provide capital. Using the sensitivity of
investment to cash flow to measure investment efficiency, we find that
investment layers decrease investment efficiency. In addition, we also
find that the strength of legal environments and the level of market
development in each province can attenuate the negative association
between investment layers and investment efficiency .
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 291-310
Issue: 3
Volume: 22
Year: 2015
Month: 9
X-DOI: 10.1080/16081625.2015.1057951
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1057951
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Handle: RePEc:taf:raaexx:v:22:y:2015:i:3:p:291-310
Template-Type: ReDIF-Article 1.0
Author-Name: Ruei-Shian Wu
Author-X-Name-First: Ruei-Shian
Author-X-Name-Last: Wu
Author-Name: Chuan-San Wang
Author-X-Name-First: Chuan-San
Author-X-Name-Last: Wang
Title: Does minority shareholder protection matter? Evidence from open-market share repurchases
Abstract:
This study examines the impact of minority shareholder protection on the
signaling effect of open-market share repurchases, the post-repurchase
operating performance, and the subsequent investment decisions. When
controlling owners retain tight control of their firms by insufficient
equity investment, the discrepancy between voting rights and cash flow
rights induces an entrenchment problem and undermines minority shareholder
protection. This study finds that the market reaction to share repurchase
announcements is contingent on minority shareholder protection. The
signaling effect of repurchase announcements is weak for firms subjected
to poor minority shareholder protection, especially for the repurchase
purposes of converting debt to equity and signaling undervaluation.
Moreover, the results show that poor minority shareholder protection is
negatively associated with the long-term operating performance following
repurchase announcements. We also find that repurchasing firms with poor
minority shareholder protection experience notably declines in R&D
expenses, cash holdings, and inventory when they repurchase shares to
convey undervaluation.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 311-330
Issue: 3
Volume: 22
Year: 2015
Month: 9
X-DOI: 10.1080/16081625.2015.1057952
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1057952
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Handle: RePEc:taf:raaexx:v:22:y:2015:i:3:p:311-330
Template-Type: ReDIF-Article 1.0
Author-Name: Po-Lu Chen
Author-X-Name-First: Po-Lu
Author-X-Name-Last: Chen
Title: Intellectual property rights protection, ownership structure and vertically related markets
Abstract:
This article considers the protection of intellectual property rights
(IPR) as a determinant of the mode of foreign direct investment. By
analyzing wholly owned investment and equity joint venture (JV) in
vertically related industries, I find that as IPR protection gets more
stringent, the propensity to choose equity JV decreases. Analysis of the
firm-level data set from Taiwanese multinational manufacturing enterprises
in 2006 lends supports to this result. This article also finds that local
welfare increases after entry of a multinational enterprise (MNE) if the
local market size is not too large. In addition, after MNE's entry,
further strengthening of IPR is beneficial to the MNE but is detrimental
to local welfare.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 331-345
Issue: 3
Volume: 22
Year: 2015
Month: 9
X-DOI: 10.1080/16081625.2015.1057953
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1057953
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Handle: RePEc:taf:raaexx:v:22:y:2015:i:3:p:331-345
Template-Type: ReDIF-Article 1.0
Author-Name: Young-Soo Choi
Author-X-Name-First: Young-Soo
Author-X-Name-Last: Choi
Title: First voluntary disclosure: is it less opportunistic?
Abstract:
The objective of voluntary disclosure regulation is to mitigate
information asymmetry between the management and outside users. However,
prior studies on voluntary disclosures provide mixed evidences on
managers' incentives. Using a setting of voluntary non-generally accepted
accounting principles earnings per share (GAAP EPS) reporting, this study
attempts to examine whether the first non-GAAP EPS reporting is less
dominated by opportunistic incentives. Consistent with the predictions of
this research, it reveals that the duration to the first adjusted EPS
disclosure is not more sensitive to negative transitory items, and
moreover investors' perception on the first non-GAAP EPS is more positive
compared to subsequent ones. The less opportunistic behaviour on the first
disclosure can be well explained by the management's awareness of
intensified monitoring by outside stakeholders.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 347-367
Issue: 4
Volume: 22
Year: 2015
Month: 12
X-DOI: 10.1080/16081625.2014.896187
File-URL: http://hdl.handle.net/10.1080/16081625.2014.896187
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Handle: RePEc:taf:raaexx:v:22:y:2015:i:4:p:347-367
Template-Type: ReDIF-Article 1.0
Author-Name: Alicia Garcia-Herrero
Author-X-Name-First: Alicia
Author-X-Name-Last: Garcia-Herrero
Author-Name: Le Xia
Author-X-Name-First: Le
Author-X-Name-Last: Xia
Title: RMB Bilateral Swap Agreements: how China chooses its partners?
Abstract:
As part of the measures taken to foster the internationalization of the
RMB, China has signed RMB Bilateral Swap Agreements (BSAs) with a number
of countries. Although the Chinese Government has stressed the importance
of trade as the key driver of signing RMB BSAs, its validity hasn't been
tested yet. This paper analyzes empirically the key determinants for China
to choose its RMB BSA partners. We find that the gravity factors are
predominant (closeness to China and a bigger size increase a country's
likelihood of signing an RMB BSA). In addition, closer trade links also
have a positive impact on China's choice of BSA partners, as claimed by
the authorities. Institutional strength is not relevant although China
does seem to have a preference for countries with a sovereign default
history and financial closedness.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 368-383
Issue: 4
Volume: 22
Year: 2015
Month: 12
X-DOI: 10.1080/16081625.2014.960059
File-URL: http://hdl.handle.net/10.1080/16081625.2014.960059
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Handle: RePEc:taf:raaexx:v:22:y:2015:i:4:p:368-383
Template-Type: ReDIF-Article 1.0
Author-Name: Yu-Lin Chen
Author-X-Name-First: Yu-Lin
Author-X-Name-Last: Chen
Author-Name: Chao-Jung Chen
Author-X-Name-First: Chao-Jung
Author-X-Name-Last: Chen
Title: Family firms and the incentive contracting role of accounting earnings
Abstract:
We investigate how family controls affect the sensitivity
of the variable pay of top management to the firm's
accounting-based performance (PPS) in order to deal with
both the traditional agency problem between owners and
managers, and the central agency problem between
controlling and minority shareholders. Using five-year data from
Taiwan-listed firms, our results show that PPS is stronger for both
non-family managers employed by family firms, and family managers, and is
weakest for managers in non-family firms. Additionally, PPS is more
pronounced in family firms with potential central agency problems, when
the CEO is not a family member than when the CEO is.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 384-405
Issue: 4
Volume: 22
Year: 2015
Month: 12
X-DOI: 10.1080/16081625.2014.995769
File-URL: http://hdl.handle.net/10.1080/16081625.2014.995769
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Handle: RePEc:taf:raaexx:v:22:y:2015:i:4:p:384-405
Template-Type: ReDIF-Article 1.0
Author-Name: Pei Hui Hsu
Author-X-Name-First: Pei Hui
Author-X-Name-Last: Hsu
Title: Do financial expert directors affect the incidence of accruals management to meet or beat analyst forecasts?
Abstract:
Evidence that firms adjust accruals to meet or beat analyst forecasts is
pervasive. However, the implications for earnings quality are not clear.
Managers can use this practice to mislead investors or to signal future
earnings growth. Assuming boards are concerned about providing higher
quality financial information, they should discourage managers from
adjusting earnings to beat the target if adjustment diminishes earnings
quality. Consistent with this prediction, I find a significantly negative
relation between the probability that a firm beats the target by adjusting
accruals and the presence of independent audit committee financial expert
for firms with poor future performance.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 406-427
Issue: 4
Volume: 22
Year: 2015
Month: 12
X-DOI: 10.1080/16081625.2014.998244
File-URL: http://hdl.handle.net/10.1080/16081625.2014.998244
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Handle: RePEc:taf:raaexx:v:22:y:2015:i:4:p:406-427
Template-Type: ReDIF-Article 1.0
Author-Name: Cheng-Te Lee
Author-X-Name-First: Cheng-Te
Author-X-Name-Last: Lee
Author-Name: Deng-Shing Huang
Author-X-Name-First: Deng-Shing
Author-X-Name-Last: Huang
Title: Trade and market integration with heterogeneous labor
Abstract:
This paper explores the impact of labor market integration between an
advanced country (North) and backward country (South) on income
distribution and pattern of trade (POT) by making use of a two-sector,
competitive trade model with heterogeneous labor. We prove that, for the
North, the labor market integration increases income inequality. And, for
the South, the integration decreases income inequality. In addition, we
find that the POT for the integrated economy might reverse.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 428-448
Issue: 4
Volume: 22
Year: 2015
Month: 12
X-DOI: 10.1080/16081625.2015.1012088
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1012088
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Handle: RePEc:taf:raaexx:v:22:y:2015:i:4:p:428-448
Template-Type: ReDIF-Article 1.0
Author-Name: Sanyun Zeng
Author-X-Name-First: Sanyun
Author-X-Name-Last: Zeng
Author-Name: Lihong Wang
Author-X-Name-First: Lihong
Author-X-Name-Last: Wang
Title: CEO gender and corporate cash holdings. Are female CEOs more conservative?
Abstract:
In this paper, we empirically investigate how CEO gender affects corporate
cash holdings and the over-investment of free cash flow among Chinese
listed firms. Thereby, we utilize a sample of 468 listed firms with female
CEOs and a matched sample of firms with male CEOs during 2007-2011. We
then make a distinction between listed SOEs and non-SOEs in China. The
empirical results show that female CEOs are associated with a higher level
of corporate cash holdings, especially in Chinese listed non-SOEs.
Compared with their male counterparts, female CEOs are more concerned with
the precautionary motive of cash, while they care less about the
opportunity cost of cash. Besides, we find that female CEOs moderate the
over-investment problem of free cash flow, again indicating that they are
more conservative than their male counterparts. The latter finding is more
pronounced in the subsample of Chinese listed SOEs.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 449-474
Issue: 4
Volume: 22
Year: 2015
Month: 12
X-DOI: 10.1080/16081625.2014.1003568
File-URL: http://hdl.handle.net/10.1080/16081625.2014.1003568
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Handle: RePEc:taf:raaexx:v:22:y:2015:i:4:p:449-474
Template-Type: ReDIF-Article 1.0
Author-Name: Min Zhang
Author-X-Name-First: Min
Author-X-Name-Last: Zhang
Author-Name: Wen Zhang
Author-X-Name-First: Wen
Author-X-Name-Last: Zhang
Author-Name: Sheng Zhang
Author-X-Name-First: Sheng
Author-X-Name-Last: Zhang
Title: National culture and firm investment efficiency: international evidence
Abstract:
This paper examines the impact of national culture on firm investment
efficiency using data of listed companies from 18 countries. We measure
culture using Hofstede’s four cultural dimensions: power distance,
uncertainty avoidance, individualism, and masculinity. We follow extant
literature to measure firm investment efficiency. Our results indicate
that individualism is positively correlated with firm investment bias and
that uncertainty avoidance and masculinity are negatively correlated with
firm investment bias. In addition, the influence of national culture on
firm investment efficiency was more pronounced during the global financial
crisis of 2008. Our results show that national cultures have significant
influence on firm investment efficiency. This paper enriches the
literature on the relationship between national culture and firm
investment and has important implications for the investment decisions of
firms.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1-21
Issue: 1
Volume: 23
Year: 2016
Month: 3
X-DOI: 10.1080/16081625.2015.1027714
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1027714
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:1:p:1-21
Template-Type: ReDIF-Article 1.0
Author-Name: Min-ho Jang
Author-X-Name-First: Min-ho
Author-X-Name-Last: Jang
Author-Name: Joon-hwa Rho
Author-X-Name-First: Joon-hwa
Author-X-Name-Last: Rho
Title: IFRS adoption and financial statement readability: Korean evidence
Abstract:
Accounting is often called a language of business and the grammar of the
language is now under transition to a new one -- the IFRS. Does the IFRS
regime help make accounting a better business language than do other
accounting regimes? That is our research question, and to answer the
question we examine the effect of IFRS adoption on readability of
firms’ financial disclosures. As a global accounting regime, the
IFRS puts greater emphasis on understandability in financial reporting
than do any other existing accounting standards. In many countries,
however, adopting the IFRS involves the process of translating the
original IFRS into local non-English languages, and apparently, the
IFRS Foundation sticks to word-for-word or
literal-translation policy to ensure an adopter country’s complying
with the original IFRS. Understandability and literal translation,
however, might be less than a good match. It is, therefore, timely and
relevant to examine whether financial statement understandability has
improved under the IFRS regime in non-English speaking settings. Korea
serves as a real-world setting for research on readability of accounting
information because Korea has two concurrent accounting regimes for two
years before her complete IFRS adoption. We compare the 57 IFRS adopter
firms and 943 non-such firms for readability of their disclosed financial
statement footnotes. The univariate and multivariate results indicate that
the IFRS-based financial statements have significantly lower, not
higher, readability than those based on the local accounting
standards. Results also show that minority shareholder population and firm
age have significantly positive influence on the association between IFRS
adoption and financial statement readability. The findings of this study
have both academic and policy implications.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 22-42
Issue: 1
Volume: 23
Year: 2016
Month: 3
X-DOI: 10.1080/16081625.2014.977306
File-URL: http://hdl.handle.net/10.1080/16081625.2014.977306
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:1:p:22-42
Template-Type: ReDIF-Article 1.0
Author-Name: Ju-Chun Yen
Author-X-Name-First: Ju-Chun
Author-X-Name-Last: Yen
Author-Name: Shu-Hsing Li
Author-X-Name-First: Shu-Hsing
Author-X-Name-Last: Li
Author-Name: Kuo-Tay Chen
Author-X-Name-First: Kuo-Tay
Author-X-Name-Last: Chen
Title: Product market competition and firms’ narrative disclosures: evidence from risk factor disclosures
Abstract:
This study examines how product market competition affects firms’
narrative disclosures of Item 1A Risk Factors in 10-K filings. We find
that firms in more concentrated industries tend to disclose a greater
quantity of narrative risk information. Besides, such firms provide risk
disclosures more similar to those of their competitors, hence reducing the
quality of the disclosure. We also document similar findings for
idiosyncratic risk disclosure, which is inherently more firm-specific. The
results imply that firms in more concentrated industries avoid divulging
risk information in their narrative disclosures by disclosing more similar
information rather than by reducing the amount of risk disclosure.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 43-74
Issue: 1
Volume: 23
Year: 2016
Month: 3
X-DOI: 10.1080/16081625.2014.1003569
File-URL: http://hdl.handle.net/10.1080/16081625.2014.1003569
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:1:p:43-74
Template-Type: ReDIF-Article 1.0
Author-Name: Jaimin Goh
Author-X-Name-First: Jaimin
Author-X-Name-Last: Goh
Author-Name: Wonwook Choi
Author-X-Name-First: Wonwook
Author-X-Name-Last: Choi
Author-Name: Jungeun Cho
Author-X-Name-First: Jungeun
Author-X-Name-Last: Cho
Title: Changes in chaebol firms’ overinvestment after the Asian financial crisis: a long-term perspective
Abstract:
This paper examines chaebol firms’ overinvestment practices before
and after a financial crisis in Korea. In comparison to non-chaebol firms,
chaebol firms significantly reduced overinvestment after the Asian
financial crisis. Also, chaebol firms were less inclined to engage in
earnings management for overinvestment after the financial crisis. The
results suggest that governance and financial reforms focusing on chaebol
firms and emphasizing long-term firm value after the crisis discouraged
chaebol firms’ overinvestment practices, bringing about a sharp
rebound in their business performance.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 75-111
Issue: 1
Volume: 23
Year: 2016
Month: 3
X-DOI: 10.1080/16081625.2014.983632
File-URL: http://hdl.handle.net/10.1080/16081625.2014.983632
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:1:p:75-111
Template-Type: ReDIF-Article 1.0
Author-Name: Burçak Polat
Author-X-Name-First: Burçak
Author-X-Name-Last: Polat
Author-Name: Cem Payaslıoğlu
Author-X-Name-First: Cem
Author-X-Name-Last: Payaslıoğlu
Title: Exchange rate uncertainty and FDI inflows: the case of Turkey
Abstract:
In this paper, using monthly data for the period of 2004--2014, we employ
a Markov switching model to examine the impact of the level and volatility
of real exchange rate (RER) on foreign direct investment (FDI) inflows to
Turkey along with a set of control factors. Our estimation results do not
support any effect of volatility or the RER. On the other hand, internal
factors such as agglomeration effect, inflation, new incentive measures of
2009, and external factors such as Euro area policy interest rate and risk
appetite turn out to be effective in driving FDI into the host country.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 112-129
Issue: 1
Volume: 23
Year: 2016
Month: 3
X-DOI: 10.1080/16081625.2015.1032312
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1032312
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:1:p:112-129
Template-Type: ReDIF-Article 1.0
Author-Name: Jeong-Bon Kim
Author-X-Name-First: Jeong-Bon
Author-X-Name-Last: Kim
Author-Name: Li Li
Author-X-Name-First: Li
Author-X-Name-Last: Li
Author-Name: Mary L. Z. Ma
Author-X-Name-First: Mary L. Z.
Author-X-Name-Last: Ma
Author-Name: Frank M. Song
Author-X-Name-First: Frank M.
Author-X-Name-Last: Song
Title: CEO option compensation and systemic risk in the banking industry
Abstract:
We document that CEO risk-taking incentives induced by stock option
compensation increase a bank’s contribution to systemic distress
risk and systemic crash risk through reacting to common risk exposure of
the banking industry. We also find that this relation operates through
channels of engagement in non-interest income-generating activities and
maturity mismatch associated with short-term debt financing. Further
analysis reveals that CEO option-based risk-taking incentives increase
investments in innovative financial products that form naturally
interconnected networks, which increase systemic risk. Finally, we show
that market illiquidity and financial crisis accentuate the relation
between CEO risk-taking incentives and systemic risk.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 131-160
Issue: 2
Volume: 23
Year: 2016
Month: 6
X-DOI: 10.1080/16081625.2016.1155250
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1155250
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:2:p:131-160
Template-Type: ReDIF-Article 1.0
Author-Name: Shigeo Takami
Author-X-Name-First: Shigeo
Author-X-Name-Last: Takami
Title: Factors inhibiting Japanese firms from zero leverage: financial constraints and bank relationships
Abstract:
The objective of our paper is to clarify the factors that inhibit Japanese
firms from being unlevered, focusing on the interactions between financial
constraints and bank relationships. Through analysis of variance, logistic
regressions, and sensitivity analyses, we conclude that financial
constraints and bank shareholdings, which inhibit firms from being
unlevered, are more powerful than the presence of foreign investors that
encourage unleverage. Based on our panel data on 822 Japanese public
firms, we find that among developed countries, Japan has the fewest
unlevered firms, with less than 5%. Additionally, we observe reciprocal
cross stock holdings between unlevered firms and their banks.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 161-176
Issue: 2
Volume: 23
Year: 2016
Month: 6
X-DOI: 10.1080/16081625.2015.1012089
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1012089
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:2:p:161-176
Template-Type: ReDIF-Article 1.0
Author-Name: Der-Fen Huang
Author-X-Name-First: Der-Fen
Author-X-Name-Last: Huang
Author-Name: Ming-Lei Chang
Author-X-Name-First: Ming-Lei
Author-X-Name-Last: Chang
Title: Do auditor-provided tax services improve the relation between tax-related internal control and book-tax differences?
Abstract:
This study investigates whether companies purchasing tax services from
auditors can improve the relation between tax-related internal controls
and book-tax differences. We employ permanent book-tax differences as a
proxy of tax avoidance and temporary book-tax differences as a proxy of
earnings management via pre-tax accruals. Our findings show that companies
with a higher probability of reporting a material weakness regarding
tax-related internal controls have larger permanent and temporary
differences (i.e. a higher degree of tax avoidance and earnings management
activities); however, companies purchasing auditor-provided tax services
can mitigate the positive relation between tax-related internal control
weaknesses and permanent differences in the post-SOX period, but no effect
on temporary differences.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 177-199
Issue: 2
Volume: 23
Year: 2016
Month: 6
X-DOI: 10.1080/16081625.2014.1003570
File-URL: http://hdl.handle.net/10.1080/16081625.2014.1003570
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:2:p:177-199
Template-Type: ReDIF-Article 1.0
Author-Name: Ilanit Gavious
Author-X-Name-First: Ilanit
Author-X-Name-Last: Gavious
Author-Name: Yaron Lahav
Author-X-Name-First: Yaron
Author-X-Name-Last: Lahav
Author-Name: Meir Russ
Author-X-Name-First: Meir
Author-X-Name-Last: Russ
Title: Changes in the value implications of compensation costs throughout the economic cycle: an examination of high-tech versus low-tech industries
Abstract:
This study explores whether and how the value implications of compensation
costs change throughout the economic cycle. Given that we are dealing with
the human aspect of the intangibles that drive the value created by a
company, it is not obvious what impact the ‘boom’ and
‘bust’ phases of the economic cycle will have on investor
valuations of this primary component of a company’s investment in
human capital (HC). Our results reveal that economic cycles have a
substantial immediate impact on the value implications of compensation
costs. Specifically, these value implications increase significantly
during upticks in the economy and decline in the downturns, in high-tech
as well as low-tech firms. Notwithstanding, the value implications of
compensation costs are consistently higher for high-tech firms.
Furthermore, the changes in value implications for high-tech firms
throughout the economic trends are more volatile than those observed for
low-tech firms. When differentiating between investors on and outside the
exchange, we find consistently stronger value implications of compensation
costs for the latter. It seems that throughout the economic cycle more
informed and sophisticated investors have a higher assessment of the role
of a firm’s investment in HC in value creation. Another important
implication of our results is that, in response to economic changes,
investors modify their valuations of HC quickly rather than gradually,
which is unexpected given the strategic value and complexity of the human
aspect of the firm’s intangibles.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 200-223
Issue: 2
Volume: 23
Year: 2016
Month: 6
X-DOI: 10.1080/16081625.2015.1057189
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1057189
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:2:p:200-223
Template-Type: ReDIF-Article 1.0
Author-Name: Myung-Gun Lee
Author-X-Name-First: Myung-Gun
Author-X-Name-Last: Lee
Author-Name: Minjung Kang
Author-X-Name-First: Minjung
Author-X-Name-Last: Kang
Author-Name: Ho-Young Lee
Author-X-Name-First: Ho-Young
Author-X-Name-Last: Lee
Author-Name: Jong Chool Park
Author-X-Name-First: Jong Chool
Author-X-Name-Last: Park
Title: Related-party transactions and financial statement comparability: evidence from South Korea
Abstract:
This study examines the association between related-party transactions
(RPTs, hereafter) and comparability of accounting information. We posit
that comparability decreases with RPTs where much management discretion is
likely to be involved in determining volume and terms. In addition, firms
conducting RPTs are more likely to make accounting choices which make
their accounting information less comparable to their industry peers to
prevent government detection of illegal RPTs. Using a unique data-set on
RPTs among firms listed on the Korean stock market, we provide evidence
consistent with our prediction. Specifically, by defining three different
measures of annual RPTs; (1) size of RPTs, (2) volatility of RPTs, and (3)
size of non-cash RPTs, we find that financial statement comparability
decreases as RPTs increase for all three measures of RPTs. Additional
analyses show that the negative association is more pronounced in abnormal
RPTs than the predicted RPTs and less pronounced in operating RPTs than
non-operating RPTs.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 224-252
Issue: 2
Volume: 23
Year: 2016
Month: 6
X-DOI: 10.1080/16081625.2014.957706
File-URL: http://hdl.handle.net/10.1080/16081625.2014.957706
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:2:p:224-252
Template-Type: ReDIF-Article 1.0
Author-Name: Eric W. Bond
Author-X-Name-First: Eric W.
Author-X-Name-Last: Bond
Author-Name: Kazumichi Iwasa
Author-X-Name-First: Kazumichi
Author-X-Name-Last: Iwasa
Author-Name: Kazuo Nishimura
Author-X-Name-First: Kazuo
Author-X-Name-Last: Nishimura
Title: A Dynamic Heckscher-Ohlin Model and Inferior Goods
Abstract:
Under the assumption that a pure consumption good is labor intensive, we examined the properties of a two-country dynamic Heckscher-Ohlin model that allows for preferences to be non-homothetic (Bond et al. (2009)). In this paper, we assume that a pure consumption good is capital intensive and study the properties of the model. If both goods are normal, each country will have a unique autarkic steady state, and all steady state equilibria are saddle points. We also consider the case in which one good is inferior, and show that this can lead to multiple autarkic steady states and the possibility of inderminacy under free trade as in Bond et al. (2009).
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 217-236
Issue: 3
Volume: 18
Year: 2011
X-DOI: 10.1080/16081625.2011.9720882
File-URL: http://hdl.handle.net/10.1080/16081625.2011.9720882
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Handle: RePEc:taf:raaexx:v:18:y:2011:i:3:p:217-236
Template-Type: ReDIF-Article 1.0
Author-Name: Yukio Karasawa-Ohtashiro
Author-X-Name-First: Yukio
Author-X-Name-Last: Karasawa-Ohtashiro
Author-Name: Akihiko Yanase
Author-X-Name-First: Akihiko
Author-X-Name-Last: Yanase
Title: A Dynamic International Trade Model with Endogenous Fertility
Abstract:
This paper examines a two-country dynamic general equilibrium model with endogenous fertility. We show that the introduction of child-rearing behavior brings about new properties in long-run dynamics. After an analysis of the existence, uniqueness, and local stability of the long-run equilibrium, we examine the international trade pattern and comparative statics in order to identify the differences with the standard dynamic international trade model.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 237-261
Issue: 3
Volume: 18
Year: 2011
X-DOI: 10.1080/16081625.2011.9720883
File-URL: http://hdl.handle.net/10.1080/16081625.2011.9720883
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Handle: RePEc:taf:raaexx:v:18:y:2011:i:3:p:237-261
Template-Type: ReDIF-Article 1.0
Author-Name: Akihiko Yanase
Author-X-Name-First: Akihiko
Author-X-Name-Last: Yanase
Author-Name: Weijia Dong
Author-X-Name-First: Weijia
Author-X-Name-Last: Dong
Title: Open-Access Renewable Resources as Inputs and International Trade: A Small Open Economy
Abstract:
This paper develops a small-open-economy model in which two final goods are produced by using a primary factor and a resource good, which has an open-access property and is produced from the primary factor. Under the assumption that only the final goods are tradable, the economy's patterns of specialization both in the temporary equilibrium and in the steady state are derived. It is shown that in the steady state, the economy either completely specializes in one good or diversifies production, depending on the labor endowment and the growth rate of the resource. The long-run effects of trade on the resource stock and national welfare are also examined.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 263-285
Issue: 3
Volume: 18
Year: 2011
X-DOI: 10.1080/16081625.2011.9720884
File-URL: http://hdl.handle.net/10.1080/16081625.2011.9720884
File-Format: text/html
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Handle: RePEc:taf:raaexx:v:18:y:2011:i:3:p:263-285
Template-Type: ReDIF-Article 1.0
Author-Name: Raouf Boucekkine
Author-X-Name-First: Raouf
Author-X-Name-Last: Boucekkine
Author-Name: Giorgio Fabbri
Author-X-Name-First: Giorgio
Author-X-Name-Last: Fabbri
Author-Name: Fausto Gozzi
Author-X-Name-First: Fausto
Author-X-Name-Last: Gozzi
Title: Revisiting the Optimal Population Size Problem under Endogenous Growth: Minimal Utility Level and Finite Life
Abstract:
In this paper, we devise a social criterion in the spirit of the critical utility level of Blackorby-Donaldson (1984) to study an optimal population size problem in an endogenously growing economy populated by workers living a fixed amount of time and without capital accumulation. Population growth is endogenous. The problem is analytically solved, yielding closed-form solutions to optimal demographic and economic dynamics. It is shown that provided the economy is not driven to optimal finite time extinction, the optimal solution is egalitarian for appropriate choices of the critical utility levels: all individuals of any cohort are given the same consumption. The results obtained do not require any priori restriction of the values of the elasticity of intertemporal substitution unlike in several related papers.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 287-305
Issue: 3
Volume: 18
Year: 2011
X-DOI: 10.1080/16081625.2011.9720885
File-URL: http://hdl.handle.net/10.1080/16081625.2011.9720885
File-Format: text/html
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Handle: RePEc:taf:raaexx:v:18:y:2011:i:3:p:287-305
Template-Type: ReDIF-Article 1.0
Author-Name: Stefano Bosi
Author-X-Name-First: Stefano
Author-X-Name-Last: Bosi
Author-Name: Thierry Laurent
Author-X-Name-First: Thierry
Author-X-Name-Last: Laurent
Title: Health, Growth and Welfare: A Theoretical Appraisal of the Long-Run Impact of Medical R&D
Abstract:
This paper aims at providing a simple economic framework to address the question of the optimal share of investments in medical R&D in total public spending. In order to capture the long-run impact of tax-financed medical R&D on the growth rate, we develop an endogenous growth model in the spirit of Barro (1990). The model focuses on the optimal sharing of public resources between consumption and (non-health) investment, medical R&D and other health expenditures. It emphasizes the key role played by the public health-related R&D in enhancing economic growth and welfare in the long run.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 307-332
Issue: 3
Volume: 18
Year: 2011
X-DOI: 10.1080/16081625.2011.9720886
File-URL: http://hdl.handle.net/10.1080/16081625.2011.9720886
File-Format: text/html
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Handle: RePEc:taf:raaexx:v:18:y:2011:i:3:p:307-332
Template-Type: ReDIF-Article 1.0
Author-Name: Takuma Kunieda
Author-X-Name-First: Takuma
Author-X-Name-Last: Kunieda
Author-Name: Akihisa Shibata
Author-X-Name-First: Akihisa
Author-X-Name-Last: Shibata
Title: Endogenous Growth and Fluctuations in an Overlapping Generations Economy with Credit Market Imperfections
Abstract:
We study the dynamic properties of growth rates in an overlapping generations economy with credit market imperfections. The analysis demonstrates that in early stages of financial development where credit constraints are severe, growth rates evolve monotonically. At the intermediate level of financial development, as the degree of credit market imperfections diminishes, growth rates exhibit endogenous fluctuations for some parameter values. However, as the financial sector matures, fluctuations disappear and the growth rates evolve once again monotonically.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 333-357
Issue: 3
Volume: 18
Year: 2011
X-DOI: 10.1080/16081625.2011.9720887
File-URL: http://hdl.handle.net/10.1080/16081625.2011.9720887
File-Format: text/html
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Handle: RePEc:taf:raaexx:v:18:y:2011:i:3:p:333-357
Template-Type: ReDIF-Article 1.0
Author-Name: Carine Nourry
Author-X-Name-First: Carine
Author-X-Name-Last: Nourry
Author-Name: Alena Sergeeva
Author-X-Name-First: Alena
Author-X-Name-Last: Sergeeva
Author-Name: Alain Venditti
Author-X-Name-First: Alain
Author-X-Name-Last: Venditti
Title: A Two-sector Overlapping Generations Model with Endogenous Discounting
Abstract:
In this paper, we consider a two-sector two-periods overlapping generations model with inelastic labor, consumption in both periods of life, endogenous discounting and homothetic preferences. We prove that under the assumption of under-accumulation of capital, an economy with endogenous discounting depending on income is much more likely to experience macroeconomic fluctuations compared to an economy with constant discounting.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 359-385
Issue: 3
Volume: 18
Year: 2011
X-DOI: 10.1080/16081625.2011.9720888
File-URL: http://hdl.handle.net/10.1080/16081625.2011.9720888
File-Format: text/html
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Handle: RePEc:taf:raaexx:v:18:y:2011:i:3:p:359-385
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial Board
Abstract:
Journal:
Pages: ebi-ebi
Issue: 2
Volume: 18
Year: 2011
X-DOI: 10.1080/16081625.2011.9720876
File-URL: http://hdl.handle.net/10.1080/16081625.2011.9720876
File-Format: text/html
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Handle: RePEc:taf:raaexx:v:18:y:2011:i:2:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: Shirley J. Daniel
Author-X-Name-First: Shirley J.
Author-X-Name-Last: Daniel
Author-Name: Joshua K. Cieslewicz
Author-X-Name-First: Joshua K.
Author-X-Name-Last: Cieslewicz
Author-Name: Thomas C. Pearson
Author-X-Name-First: Thomas C.
Author-X-Name-Last: Pearson
Title: State Regulation's Significant Impact on Corporate Governance Practices, Earnings Management, and Disclosure
Abstract:
We provide a theoretical basis for the relationship between the institutional environment, corporate governance practices, disclosure, and earnings management at the nation level. We then provide empirical evidence of these relationships.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 105-124
Issue: 2
Volume: 18
Year: 2011
X-DOI: 10.1080/16081625.2011.9720877
File-URL: http://hdl.handle.net/10.1080/16081625.2011.9720877
File-Format: text/html
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Handle: RePEc:taf:raaexx:v:18:y:2011:i:2:p:105-124
Template-Type: ReDIF-Article 1.0
Author-Name: Ya-Chin Wang
Author-X-Name-First: Ya-Chin
Author-X-Name-Last: Wang
Author-Name: Leonard F.S. Wang
Author-X-Name-First: Leonard F.S.
Author-X-Name-Last: Wang
Title: Entry Mode, Technology Spillover and Host Country Welfare
Abstract:
This paper examines how technological spillover affects foreign entry, R&D level, and the host country's welfare. It finds that the strategic effect decreases as R&D spillover increases. The foreign firm tends to raise the likelihood of choosing direct entry when the technology spillover is larger. For the foreign firms as well as the host country, there is no difference between choosing direct entry or acquisition when the market is extremely competitive. On regulation of foreign ownership, technology spillover creates the possibility of choosing direct entry for the foreign firm, which is different from the results obtained in Mattoo et al. (2004).
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 125-143
Issue: 2
Volume: 18
Year: 2011
X-DOI: 10.1080/16081625.2011.9720878
File-URL: http://hdl.handle.net/10.1080/16081625.2011.9720878
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Handle: RePEc:taf:raaexx:v:18:y:2011:i:2:p:125-143
Template-Type: ReDIF-Article 1.0
Author-Name: Keiichi Kubota
Author-X-Name-First: Keiichi
Author-X-Name-Last: Kubota
Author-Name: Kazuyuki Suda
Author-X-Name-First: Kazuyuki
Author-X-Name-Last: Suda
Author-Name: Hitoshi Takehara
Author-X-Name-First: Hitoshi
Author-X-Name-Last: Takehara
Title: Information Content of Other Comprehensive Income and Net Income: Evidence for Japanese Firms
Abstract:
This paper investigates information content of net income, other comprehensive income items, and “pseudo” comprehensive income for Japanese firms. The relative information content test demonstrates we cannot distinguish between net income and other alternative comprehensive income numbers. The incremental information content test shows other comprehensive income items have significant information content. The signs are counterintuitive, but we find the stock market reactions to other comprehensive income items are related to the degree of firms' foreign dependency and on the magnitude of the ratio of available-for-sale securities to equities in a meaningful way. We conclude that comprehensive income and other comprehensive income are useful to disclose.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 145-168
Issue: 2
Volume: 18
Year: 2011
X-DOI: 10.1080/16081625.2011.9720879
File-URL: http://hdl.handle.net/10.1080/16081625.2011.9720879
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Handle: RePEc:taf:raaexx:v:18:y:2011:i:2:p:145-168
Template-Type: ReDIF-Article 1.0
Author-Name: Ken Y. Chen
Author-X-Name-First: Ken Y.
Author-X-Name-Last: Chen
Author-Name: Randal J. Elder
Author-X-Name-First: Randal J.
Author-X-Name-Last: Elder
Author-Name: Yung-Ming Hsieh
Author-X-Name-First: Yung-Ming
Author-X-Name-Last: Hsieh
Title: Corporate Governance, Growth Opportunities, and Earnings Restatements: Effects of a Corporate Governance Code
Abstract:
The study first examines whether firms that adopted the corporate governance mechanisms mandated by the newly enacted Corporate Governance Code in Taiwan are associated with lower incidence of earnings restatements. We find that firms with independent directors (supervisors) are associated with lower incidence of earnings restatements. We further examine this research question in a growth opportunity setting, a prevailing environmental feature in this emerging market, and find that high-growth firms having independent directors (supervisors) with financial expertise are associated with lower incidence of earnings restatements, suggesting that financial expertise of independent directors (supervisors) is important in the financial reporting function in high-growth firms.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 169-200
Issue: 2
Volume: 18
Year: 2011
X-DOI: 10.1080/16081625.2011.9720880
File-URL: http://hdl.handle.net/10.1080/16081625.2011.9720880
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Handle: RePEc:taf:raaexx:v:18:y:2011:i:2:p:169-200
Template-Type: ReDIF-Article 1.0
Author-Name: Kenneth Weiher
Author-X-Name-First: Kenneth
Author-X-Name-Last: Weiher
Author-Name: Hamid Beladi
Author-X-Name-First: Hamid
Author-X-Name-Last: Beladi
Title: Globalization and Wage Stagnation: Historical and Theoretical Perspectives
Abstract:
U.S. real-wages stagnation since 1973 in spite of rising labor productivity is an unprecedented phenomenon. This paper presents the history of the relationship between real wages and productivity and based upon long-run evidence rejects two possible explanations, measurement issues and skill-biased technical change. Instead it focuses on the coincidence of the development of productivity/wage wedge and the conversion of the U.S. economy to an open one in the 1970s. It suggests that in an open economy, technical improvements and foreign competition may collaborate to generate a fall in real earnings, where they would not in a closed economy.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 201-211
Issue: 2
Volume: 18
Year: 2011
X-DOI: 10.1080/16081625.2011.9720881
File-URL: http://hdl.handle.net/10.1080/16081625.2011.9720881
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Handle: RePEc:taf:raaexx:v:18:y:2011:i:2:p:201-211
Template-Type: ReDIF-Article 1.0
Author-Name: Joshua Ronen
Author-X-Name-First: Joshua
Author-X-Name-Last: Ronen
Title: The state of accounting research: objectives and implementation
Abstract:
This essay is a reflection on the state of accounting research. It asks whether accounting research to date has served its purpose of helping set accounting policies that improve resource allocation. The essay concludes that most studies to date have failed to offer normative prescriptions for policy making. Most articles are based on non-sustainable premises: either foolish managers not realizing that the market corrects for their manipulations, or foolish traders who are unaware that wise managers exploit their foolishness by successfully manipulating accounting numbers in order to fool them. Unless research focuses on managers and investors who rationally pursue their interests, being aware that they both do so, no sustainable research findings will usefully inform policy.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 3-11
Issue: 1
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.668051
File-URL: http://hdl.handle.net/10.1080/16081625.2012.668051
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:1:p:3-11
Template-Type: ReDIF-Article 1.0
Author-Name: Ashiq Ali
Author-X-Name-First: Ashiq
Author-X-Name-Last: Ali
Author-Name: Oktay Urcan
Author-X-Name-First: Oktay
Author-X-Name-Last: Urcan
Title: Dividend increases and future earnings
Abstract:
We examine the relation between dividend increases and unexpected changes in future earnings. This issue has been the subject of numerous empirical studies. However, the extant evidence on this issue is inconclusive. We allow for the fact that investor demand for dividend paying stocks is time-varying and the market pays a premium for such stocks when the demand is high. Moreover, when the dividend premium (DP) is high, dividend increases could be due to managers catering to high demand for dividends by investors. We find that when the DP is low, there is a significant positive relation between dividend increases and unexpected future earnings changes, consistent with the signaling theory of dividends. However, when the DP is high, the relation between dividend increases and unexpected future earnings changes is insignificant. This finding suggests that when the DP is high, managers increase dividends primarily to cater to investors’ demand for dividends rather than to signal an increase in the future profitability of the firm. Finally, as is the case with prior studies, we find an insignificant relation between dividend increases and unexpected changes in future earnings when we constraint the relation to be constant over time.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 12-25
Issue: 1
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.668052
File-URL: http://hdl.handle.net/10.1080/16081625.2012.668052
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:1:p:12-25
Template-Type: ReDIF-Article 1.0
Author-Name: Ramgopal Venkataraman
Author-X-Name-First: Ramgopal
Author-X-Name-Last: Venkataraman
Title: Discussion of dividend increases and future earnings
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 26-29
Issue: 1
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.668053
File-URL: http://hdl.handle.net/10.1080/16081625.2012.668053
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:1:p:26-29
Template-Type: ReDIF-Article 1.0
Author-Name: Umit Gurun
Author-X-Name-First: Umit
Author-X-Name-Last: Gurun
Author-Name: Alina Lerman
Author-X-Name-First: Alina
Author-X-Name-Last: Lerman
Author-Name: Joshua Ronen
Author-X-Name-First: Joshua
Author-X-Name-Last: Ronen
Title: Anticipatory and implementation effects of FIN 46 on the behavior of different market participants
Abstract:
We examine whether Financial Accounting Standards Board (FASB)-mandated modifications of the consolidation rules (FIN 46 and FIN 46R) resulted in perceptible changes in market participants’ decisions as manifested in a variety of financial indicia. We find that financial analysts’ idiosyncratic precision of information decreased and equity market participants acted as if they perceived higher information risk, as evidenced by reduced earnings response coefficients, in anticipation of guidance. We attribute these effects to a perceived increase in information risk and decrease in accounting information quality. We find that the actual implementation of the new rules reversed some, but not all, of these effects. On the other hand, we find that information users that likely had access to information regarding the off-balance-sheet debt structures prior to 2001 did not exhibit a similar reaction to the apparent change in information risk either in anticipation or upon implementation of the new guidance. Specifically, we find that banks did not increase the loan spreads for FIN 46 firms and credit rating agencies lowered the ratings of these firms only marginally more than those of other firms. This finding is consistent with our conjecture that these entities were aware of the fundamentals of FIN 46 firms even under the prior limited disclosure regime.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 30-55
Issue: 1
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.668054
File-URL: http://hdl.handle.net/10.1080/16081625.2012.668054
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:1:p:30-55
Template-Type: ReDIF-Article 1.0
Author-Name: Umit Gurun
Author-X-Name-First: Umit
Author-X-Name-Last: Gurun
Author-Name: Alina Lerman
Author-X-Name-First: Alina
Author-X-Name-Last: Lerman
Author-Name: Joshua Ronen
Author-X-Name-First: Joshua
Author-X-Name-Last: Ronen
Author-Name: Ram Ramakrishnan
Author-X-Name-First: Ram
Author-X-Name-Last: Ramakrishnan
Title: Anticipatory and implementation effects of FIN 46 on the behavior of different market participants
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 56-60
Issue: 1
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.668055
File-URL: http://hdl.handle.net/10.1080/16081625.2012.668055
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:1:p:56-60
Template-Type: ReDIF-Article 1.0
Author-Name: Suresh Govindaraj
Author-X-Name-First: Suresh
Author-X-Name-Last: Govindaraj
Author-Name: Mahesh Kumar
Author-X-Name-First: Mahesh
Author-X-Name-Last: Kumar
Author-Name: Bharat Sarath
Author-X-Name-First: Bharat
Author-X-Name-Last: Sarath
Title: The effects of correlated demand on pricing, inventory, and production
Abstract:
Existing explanations for price discrimination in products and services invoke reasons like customer segmentation, information rents, transactions costs, or inventory constraints. By contrast, we propose the sellers’ objective to smooth profits as a possible explanation. We show that when sellers carry multiple products, the spread in buying and selling prices of any product depends not only on its own profits and inventory position, but also on the correlations of these variables with the other products. Consequently, sellers may price the same product differently depending on the range of products that they carry.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 61-78
Issue: 1
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.668056
File-URL: http://hdl.handle.net/10.1080/16081625.2012.668056
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:1:p:61-78
Template-Type: ReDIF-Article 1.0
Author-Name: Masako Darrough
Author-X-Name-First: Masako
Author-X-Name-Last: Darrough
Title: A discussion on “The effects of correlated demand on pricing, inventory, and production” by Suresh Govindaraj, Mahesh Kumar, and Bharat Sarath
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 79-81
Issue: 1
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.668057
File-URL: http://hdl.handle.net/10.1080/16081625.2012.668057
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:1:p:79-81
Template-Type: ReDIF-Article 1.0
Author-Name: Shu-hsing Wu
Author-X-Name-First: Shu-hsing
Author-X-Name-Last: Wu
Author-Name: Stephen Lin
Author-X-Name-First: Stephen
Author-X-Name-Last: Lin
Author-Name: Shu-hsing Li
Author-X-Name-First: Shu-hsing
Author-X-Name-Last: Li
Author-Name: Meihua Koo
Author-X-Name-First: Meihua
Author-X-Name-Last: Koo
Title: Impact of market segmentation on value-relevance of accounting information: evidence from China
Abstract:
This study examines how the market segmentation policy in China affected value-relevance of accounting information. We find that the price difference between A- and B-shares significantly decreased after the market segmentation policy was diminished in 2001. We also find that the association between A-share price and accounting information increased after 2002. Although the association between share price and accounting information became much weaker for B-shares during the transition period of 2000–2002, this association also increased after 2002. This study provides evidence on how market condition and information environment affect the association between share price and accounting information in China.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 82-96
Issue: 1
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.668058
File-URL: http://hdl.handle.net/10.1080/16081625.2012.668058
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:1:p:82-96
Template-Type: ReDIF-Article 1.0
Author-Name: Albert Tsang
Author-X-Name-First: Albert
Author-X-Name-Last: Tsang
Title: Discussion: the impact of market segmentation on the value-relevance of accounting information: evidence from China
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 97-99
Issue: 1
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.668059
File-URL: http://hdl.handle.net/10.1080/16081625.2012.668059
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:1:p:97-99
Template-Type: ReDIF-Article 1.0
Author-Name: Michèle Pomberg
Author-X-Name-First: Michèle
Author-X-Name-Last: Pomberg
Author-Name: Hamid Pourjalali
Author-X-Name-First: Hamid
Author-X-Name-Last: Pourjalali
Author-Name: Shirley Daniel
Author-X-Name-First: Shirley
Author-X-Name-Last: Daniel
Author-Name: Marinilka Barros Kimbro
Author-X-Name-First: Marinilka Barros
Author-X-Name-Last: Kimbro
Title: Management accounting information systems: a case of a developing country: Vietnam
Abstract:
This study discusses the relationship between management accounting information systems and the relevance and usefulness of those systems in hospitals in Vietnam. In particular, it investigates how hospitals have improved/intend to improve their accounting activities and how they have tried to implement known managerial (accounting) systems to improve efficiencies. The study shows the influence of management accounting in hospitals in an environment that is rapidly changing from centrally governed to a more open capital market environment. Based on survey data from 53 hospitals in Hanoi and surrounding provinces, the study reports whether those environmental changes have resulted in actual or planned changes in management accounting activities. Our results show that in response to environmental and regulatory changes, Vietnamese hospitals have improved accounting functions and are planning to continue their development further. However, the improvement is not always in-line with what is expected in western countries.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 100-114
Issue: 1
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.668060
File-URL: http://hdl.handle.net/10.1080/16081625.2012.668060
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:1:p:100-114
Template-Type: ReDIF-Article 1.0
Author-Name: Simon Fung
Author-X-Name-First: Simon
Author-X-Name-Last: Fung
Title: Discussion of “Management accounting information systems in a developing country”
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 115-118
Issue: 1
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.668061
File-URL: http://hdl.handle.net/10.1080/16081625.2012.668061
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:1:p:115-118
Template-Type: ReDIF-Article 1.0
Author-Name: Laura Zoni
Author-X-Name-First: Laura
Author-X-Name-Last: Zoni
Author-Name: Andrea Dossi
Author-X-Name-First: Andrea
Author-X-Name-Last: Dossi
Author-Name: Marco Morelli
Author-X-Name-First: Marco
Author-X-Name-Last: Morelli
Title: Management accounting system (MAS) change: field evidence
Abstract:
This paper critically discusses one of the prescriptions of traditional control literature according to which the management accounting system (MAS) should be adaptive to changes in the organizational and strategic context. Drawing from contingency and institutional theories, the paper drafts a framework to pragmatically identify key phases and features of the management accounting change process to highlight its organizational nature. Using this framework, the paper documents four longitudinal case studies of the design and the implementation of management accounting changes. The field studies show how accounting systems are difficult to change despite the formally acknowledged need for change. Findings highlight that the need for change, the technical feasibility of change, the availability of traditional, and the contemporary methodologies are – alone – insufficient reasons to change. A number of other elements interplay in the process of change, namely, the intended MAS use, the stage of the organization life cycle, the potential impact of change on the organization, and the role of key individuals in linking the phases of the change process.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 119-138
Issue: 1
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.668062
File-URL: http://hdl.handle.net/10.1080/16081625.2012.668062
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:1:p:119-138
Template-Type: ReDIF-Article 1.0
Author-Name: Stewart Jones
Author-X-Name-First: Stewart
Author-X-Name-Last: Jones
Title: A review of “Management accounting system (MAS) change: field evidence” by Zoni, Dossi and Morelli
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 139-142
Issue: 1
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.668063
File-URL: http://hdl.handle.net/10.1080/16081625.2012.668063
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:1:p:139-142
Template-Type: ReDIF-Article 1.0
Author-Name: Suresh Radhakrishnan
Author-X-Name-First: Suresh
Author-X-Name-Last: Radhakrishnan
Title: Editorial
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1-2
Issue: 1
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.680299
File-URL: http://hdl.handle.net/10.1080/16081625.2012.680299
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:1:p:1-2
Template-Type: ReDIF-Article 1.0
Author-Name: Jong-Seo Choi
Author-X-Name-First: Jong-Seo
Author-X-Name-Last: Choi
Author-Name: Ji-Ahn Nam
Author-X-Name-First: Ji-Ahn
Author-X-Name-Last: Nam
Title: Does managerial discretion affect the value relevance of goodwill impairment information under IFRS? Korean evidence
Abstract:
This study examines managers’ use of discretion in determining goodwill impairment losses and the differential value relevance of impairment information depending on the type of management discretion under IFRS in Korea. We distinguish management discretions into accelerated, timely, and delayed recognition of goodwill impairment. We find that impairment decision is driven by managerial incentives, such as big bath behaviour, income smoothing, and avoidance of loss reporting. Moreover, the impairment loss is positively (negatively) associated with contemporaneous share price and future expected cash flows, when managers recognize impairments in an accelerated (timely) manner. The positive association of accelerated impairment coincides with the negative value relevance of pre-impairment goodwill balance. We also observe that the accelerated impairers exhibit superior market performance in the 2-years subsequent to the reporting of goodwill-related information. Overall, the evidence documented in this study is in line with the positive valuation implication of accelerated discretionary impairment, consistent with a signalling perspective.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1-23
Issue: 1
Volume: 27
Year: 2020
Month: 1
X-DOI: 10.1080/16081625.2020.1686813
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1686813
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:1:p:1-23
Template-Type: ReDIF-Article 1.0
Author-Name: Audrey Wen-Hsin Hsu
Author-X-Name-First: Audrey Wen-Hsin
Author-X-Name-Last: Hsu
Author-Name: Sophia Hsin-Tsai Liu
Author-X-Name-First: Sophia Hsin-Tsai
Author-X-Name-Last: Liu
Author-Name: Siva Nathan
Author-X-Name-First: Siva
Author-X-Name-Last: Nathan
Title: Corporate organizational structure, tax havens and analyst forecast properties
Abstract:
This study investigates how corporate organizational complexity affects analyst forecast behavior and the information environment of the firm. Using a unique sample of publicly traded Taiwan companies which are required to disclose information on all of their affiliates, we capture the feature of organizational complexity by measuring the number of investment layers connecting the parent firm and the lowest-tiered subsidiary. We argue that long chains of investment layers, which are associated with higher information asymmetry and agency costs, are likely to reduce the quality of financial reporting and complicate analysts’ forecast tasks. We find that, after controlling for other determinants of forecasting behavior, analysts experience greater difficulty in predicting the earnings of firms with more investment layers than in predicting the earnings of firms with fewer layers. In addition, we find that a long chain of investment layers influences analyst forecast accuracy and dispersion more if firms also have a larger number of investees in tax havens and if firms have a higher deviation between controlling rights and cash flow rights. Overall, we document that organizational complexity exacerbates the agency costs between investors and managers, which in turn complicates analyst forecast tasks.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 24-50
Issue: 1
Volume: 27
Year: 2020
Month: 1
X-DOI: 10.1080/16081625.2020.1686814
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1686814
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:1:p:24-50
Template-Type: ReDIF-Article 1.0
Author-Name: Yen-Chi Chen
Author-X-Name-First: Yen-Chi
Author-X-Name-Last: Chen
Author-Name: Hsuan-Lien Chu
Author-X-Name-First: Hsuan-Lien
Author-X-Name-Last: Chu
Title: Empirical research on the function of compensation committees: the influence of family control and professional managers
Abstract:
This study is intended to investigate the effect of compensation committees on executive compensation and ability. The results indicate that the quality of compensation committee strengthens the relationship between CEO compensation and ability. The results also indicate the alignment between CEO compensation and ability to be more pronounced following improvements in the quality of compensation committees in family firms, but this relationship does not existence in nonfamily firms. Furthermore, the relationship between CEO compensation and ability is found to be much stronger in the presence of better compensation committees in family firms who hire professional CEOs, but this relationship does not exist in family firms who appoint family members as the CEO. The results provide insights that may assist regulators and investors with understanding that compensation committees are not panaceas.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 51-70
Issue: 1
Volume: 27
Year: 2020
Month: 1
X-DOI: 10.1080/16081625.2020.1686815
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1686815
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:1:p:51-70
Template-Type: ReDIF-Article 1.0
Author-Name: Ruei-Shian Wu
Author-X-Name-First: Ruei-Shian
Author-X-Name-Last: Wu
Author-Name: Yi-Rong Wu
Author-X-Name-First: Yi-Rong
Author-X-Name-Last: Wu
Title: Payout policy decisions: the effect of compensation structures
Abstract:
This study examines the relation between CEO compensation structures and corporate payout policies from 2008 to 2015. The literature focuses on equity-based compensation, and few studies emphasize debt-based compensation. These two types of compensation structures have different features and thus induce managers to choose different payout policies. Using total payouts, dividends, and repurchases as three proxies for corporate payouts, we find that the relation between CEO equity-based compensation structures and total payouts is statistically trivial. However, when we break down corporate payout policies into dividend payouts and share repurchases, we find that CEOs with large options holdings decrease dividend payments and increase share repurchases. We also find that CEOs with large inside debt holdings pay more dividends to shareholders, but we find no significant effect on repurchase payouts. Our findings suggest that ignoring compensation types may veil their differing effects on corporate payout decisions.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 71-92
Issue: 1
Volume: 27
Year: 2020
Month: 1
X-DOI: 10.1080/16081625.2020.1686816
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1686816
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:1:p:71-92
Template-Type: ReDIF-Article 1.0
Author-Name: Audrey Wen-Hsin Hsu
Author-X-Name-First: Audrey Wen-Hsin
Author-X-Name-Last: Hsu
Title: Compensation consultants’ reputation, non-compensation consulting services and CEO pay
Abstract:
In this study, we draw on the reputation and product quality literature to examine whether compensation consultants with higher reputation have incentives to provide higher-quality services in terms of CEO pay level and pay performance sensitivity (PPS). Using 1,827 US firm-year observations for 2009 and 2010, we find that consulting firms with a higher reputation, proxied by consultant size, are associated with lower compensation and higher PPS. We also find that the PPS for consultants that also provide non-compensation-related services (NCS) is significantly positive for consultants with a higher reputation, consistent with the reputation protection explanation, and significantly negative for the other consultants with a lower reputation consistent with the conflict of interest argument.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 93-118
Issue: 1
Volume: 27
Year: 2020
Month: 1
X-DOI: 10.1080/16081625.2020.1686817
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1686817
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:1:p:93-118
Template-Type: ReDIF-Article 1.0
Author-Name: Xinpeng Xu
Author-X-Name-First: Xinpeng
Author-X-Name-Last: Xu
Title: China and the world economy: special section for the 10th biennial conference of Hong Kong economic association
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 119-119
Issue: 1
Volume: 27
Year: 2020
Month: 1
X-DOI: 10.1080/16081625.2020.1714898
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1714898
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:1:p:119-119
Template-Type: ReDIF-Article 1.0
Author-Name: Jan P. Voon
Author-X-Name-First: Jan P.
Author-X-Name-Last: Voon
Author-Name: Xinpeng Xu
Author-X-Name-First: Xinpeng
Author-X-Name-Last: Xu
Title: Impact of the Belt and Road Initiative on China’s soft power: preliminary evidence
Abstract:
Using latest available international survey data on soft power and China’s overseas direct investment (ODI) statistics, this paper examines if China’s Belt and Road Initiative (BRI), commonly perceived as an institution setup by China to build cross-border infrastructure to bolster trade and investment, had increased China’s international image or soft power. We find that the overall impact of ODI in BRI countries on China’s soft power is statistically insignificant over the period 2011 to 2016, yet further analysis reveals that the investments in the BRI countries along the land route bring significant improvement in China’s soft power.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 120-131
Issue: 1
Volume: 27
Year: 2020
Month: 1
X-DOI: 10.1080/16081625.2020.1686841
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1686841
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:1:p:120-131
Template-Type: ReDIF-Article 1.0
Author-Name: Xinhua Gu
Author-X-Name-First: Xinhua
Author-X-Name-Last: Gu
Author-Name: Guoqiang Li
Author-X-Name-First: Guoqiang
Author-X-Name-Last: Li
Author-Name: Chun Kwok Lei
Author-X-Name-First: Chun Kwok
Author-X-Name-Last: Lei
Author-Name: Li Sheng
Author-X-Name-First: Li
Author-X-Name-Last: Sheng
Author-Name: Qingbin Zhao
Author-X-Name-First: Qingbin
Author-X-Name-Last: Zhao
Title: The inequality-housing price nexus in tourist resorts: theory and evidence
Abstract:
Fast expansion in casino gaming is widely perceived as an underlying reason for housing bubbles in tourist resorts such as Macao. Yet it remains unclear whether such bubbles have any bearing on income inequality that comes with tourism expansion. This paper provides a formal explanation for the inequality-housing price nexus by using a vector autoregressive model with exogenous variables (VARX) and an autoregressive distributed lag model (ARDL). We find that casino tourism expansion plays a fundamental role for both income inequality heightening and housing price hiking, with rising inequality also contributing significantly to housing bubbles. Our empirical findings accord well with theoretical predictions made in this paper. Useful policy implications can then be derived from those findings.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 132-150
Issue: 1
Volume: 27
Year: 2020
Month: 1
X-DOI: 10.1080/16081625.2020.1686842
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1686842
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:1:p:132-150
Template-Type: ReDIF-Article 1.0
Author-Name: Kosuke Hirose
Author-X-Name-First: Kosuke
Author-X-Name-Last: Hirose
Author-Name: Toshihiro Matsumura
Author-X-Name-First: Toshihiro
Author-X-Name-Last: Matsumura
Title: Payoff interdependence and the multi-store paradox
Abstract:
We solve the multi-store paradox by introducing interdependent payoffs between the firms. We show that firms set up multiple stores unless the degree of payoff interdependence is low. We also show that multiple equilibria, namely intertwined and neighboring location equilibria, exist if the degree of payoff interdependence is intermediate.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 256-267
Issue: 3
Volume: 23
Year: 2016
Month: 7
X-DOI: 10.1080/16081625.2016.1188447
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1188447
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:3:p:256-267
Template-Type: ReDIF-Article 1.0
Author-Name: Chia-Chi Wang
Author-X-Name-First: Chia-Chi
Author-X-Name-Last: Wang
Author-Name: Jiunn-Rong Chiou
Author-X-Name-First: Jiunn-Rong
Author-X-Name-Last: Chiou
Title: Taxation on a mixed oligopoly in the presence of foreign ownership
Abstract:
This paper analyzes the optimal taxation policy in a mixed duopoly when the private firm is jointly owned by domestic and foreign investors. The optimal policy is tax if the foreign shareholding is high enough; otherwise, it should be subsidy. Besides, to obtain a higher welfare, the taxation policy is superior to the privatization policy only when the private firm is mainly domestically owned. However, when full foreign shareholding of the private firm is allowed, the taxation and privatization can obtain the same level of social welfare regardless of the public firm’s marginal cost.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 342-355
Issue: 3
Volume: 23
Year: 2016
Month: 7
X-DOI: 10.1080/16081625.2016.1188448
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1188448
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:3:p:342-355
Template-Type: ReDIF-Article 1.0
Author-Name: Chia-Hui Huang
Author-X-Name-First: Chia-Hui
Author-X-Name-Last: Huang
Author-Name: Chih-Hai Yang
Author-X-Name-First: Chih-Hai
Author-X-Name-Last: Yang
Title: Ownership, trade, and productivity in Vietnam’s manufacturing firms
Abstract:
This paper examines the interrelations among ownership, trade, and firm productivity in Vietnam, a developing transition economy. Based on a firm-level panel data for the period 2000–2008, the empirical results show that foreign-owned enterprises (FOEs) experience higher productivity than do their domestic counterparts, whereas private firms (POEs) are not expected to outperform state-owned enterprises (SOEs) in productivity. Trade executes a productivity-enhancing effect for Vietnamese firms, but this effect only applies for FOEs and POEs, and not for SOEs. Vietnam access to the WTO produces tough competition and improves SOEs’ productivity. Various robustness checks support our findings.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 356-371
Issue: 3
Volume: 23
Year: 2016
Month: 7
X-DOI: 10.1080/16081625.2016.1188449
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1188449
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:3:p:356-371
Template-Type: ReDIF-Article 1.0
Author-Name: Kuang-Cheng Andy Wang
Author-X-Name-First: Kuang-Cheng Andy
Author-X-Name-Last: Wang
Author-Name: Yi-Jie Wang
Author-X-Name-First: Yi-Jie
Author-X-Name-Last: Wang
Author-Name: Wen-Jung Liang
Author-X-Name-First: Wen-Jung
Author-X-Name-Last: Liang
Title: Intellectual property rights, international licensing and foreign direct investment
Abstract:
This paper develops a North-South trade model to examine the effect of the enforcement of intellectual property rights (IPR) in the South on inward foreign direct investment (FDI) by taking into account international licensing and the informational advantage of FDI. The focus of this paper is on the strategic influence of international licensing on the optimal entry mode of firm N. The main findings of this paper are as follows. First, the optimal entry mode for firm N in the absence of IPR protection is FDI when the innovation size is large but the variance of demand and the fixed setup cost are small, while selecting exporting otherwise. Second, the enforcement of IPR in the South can promote FDI when the innovation size is small, while discouraging FDI when the innovation size is moderate and large. Third, the enforcement of IPR protection will most likely decrease the total output and the welfare level in the South under international licensing, while the reverse may occur as a result of changing the firm N’s entry mode from FDI to exporting.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 291-305
Issue: 3
Volume: 23
Year: 2016
Month: 7
X-DOI: 10.1080/16081625.2016.1188450
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1188450
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:3:p:291-305
Template-Type: ReDIF-Article 1.0
Author-Name: Ray-Yun Chang
Author-X-Name-First: Ray-Yun
Author-X-Name-Last: Chang
Author-Name: Hong Hwang
Author-X-Name-First: Hong
Author-X-Name-Last: Hwang
Author-Name: Cheng-Hau Peng
Author-X-Name-First: Cheng-Hau
Author-X-Name-Last: Peng
Title: Discriminatory vs. uniform tariffs with international technology licensing
Abstract:
This paper introduces technology licensing between rival firms into a three-country model to examine how an international technology licensing may upset the welfare ranking between a discriminatory tariff policy and a uniform tariff policy. It is found that a discriminatory tariff policy is inferior to a uniform tariff policy in terms of the social welfare of the importing country or the welfare of the world as a whole if the cost disadvantage of the licensor firm is high. This result is robust even if the licensor firm can engage in R&D investment in the long-run.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 268-277
Issue: 3
Volume: 23
Year: 2016
Month: 7
X-DOI: 10.1080/16081625.2016.1188451
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1188451
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:3:p:268-277
Template-Type: ReDIF-Article 1.0
Author-Name: Chih-Wei Chang
Author-X-Name-First: Chih-Wei
Author-X-Name-Last: Chang
Author-Name: Yan-Shu Lin
Author-X-Name-First: Yan-Shu
Author-X-Name-Last: Lin
Author-Name: Ming-Fang Tsai
Author-X-Name-First: Ming-Fang
Author-X-Name-Last: Tsai
Title: Technology licensing with asymmetric absorptive capacity
Abstract:
This paper establishes a duopoly model to investigate the impacts of asymmetric absorptive capacity and asymmetric production cost on international technology licensing by an outside patent-holder. We find that, irrespective of fixed fee and royalty licensing, the patent-holder may adopt exclusively licensing if the difference in the absorptive capacity of two firms is large enough; otherwise, it will license to both firms. Surprisingly, such international licensing may be welfare-reducing if the difference in absorptive capacities between two licensees is large enough.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 278-290
Issue: 3
Volume: 23
Year: 2016
Month: 7
X-DOI: 10.1080/16081625.2016.1188452
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1188452
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:3:p:278-290
Template-Type: ReDIF-Article 1.0
Author-Name: Dan Sasaki
Author-X-Name-First: Dan
Author-X-Name-Last: Sasaki
Title: Infinite horizon oligopoly with asynchronous moves: Cournot-Bertrand reversal
Abstract:
In an infinite-horizon oligopoly game, if moves are not synchronised across firms, sustainability of tacitly collusive equilibria becomes substantially distinct from that in a classical simultaneous-move supergame. In linear duopoly, the critical discount factor becomes higher in Bertrand than in Cournot, yet for a low discount factor with which collusion is unsustainable the equilibrium discounted streams of non-collusive profits are higher in a Bertrand game than in a Cournot game. These features are contrary to the well-known observation in synchronous-move supergames, reflecting the tendency that once a deviation path is initiated, then an asynchronous-move Cournot game converges to a competitive outcome more quickly than an asynchronous-move Bertrand game.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 327-341
Issue: 3
Volume: 23
Year: 2016
Month: 7
X-DOI: 10.1080/16081625.2016.1188753
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1188753
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:3:p:327-341
Template-Type: ReDIF-Article 1.0
Author-Name: Takeshi Ebina
Author-X-Name-First: Takeshi
Author-X-Name-Last: Ebina
Author-Name: Daisuke Shimizu
Author-X-Name-First: Daisuke
Author-X-Name-Last: Shimizu
Title: Sequential mergers under general symmetric product differentiation with four firms
Abstract:
This paper studies the types of sequential mergers that emerge and how they emerge when goods produced by firms in an industry are differentiated. In particular, we employ the most general differentiation setting with four firms by introducing a new parameter describing the highest degree of differentiation. We analyze how the degree of product differentiation affects the emergence of sequential mergers and find that when the value of this new parameter decreases, sequential mergers are more likely to emerge. Furthermore, we also provide welfare and numerical analyses to discuss the product differentiation ranges that would or would not lead to sequential mergers or no mergers in equilibrium. Consequently, policymakers can use this new parameter as a rule-of-thumb parameter in predicting the future merger structure.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 306-326
Issue: 3
Volume: 23
Year: 2016
Month: 7
X-DOI: 10.1080/16081625.2016.1188754
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1188754
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:3:p:306-326
Template-Type: ReDIF-Article 1.0
Author-Name: Toshihiro Matsumura
Author-X-Name-First: Toshihiro
Author-X-Name-Last: Matsumura
Title: Introduction
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 253-255
Issue: 3
Volume: 23
Year: 2016
Month: 7
X-DOI: 10.1080/16081625.2016.1188755
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1188755
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:3:p:253-255
Template-Type: ReDIF-Article 1.0
Author-Name: Tae Choi
Author-X-Name-First: Tae
Author-X-Name-Last: Choi
Author-Name: Eunchul Lee
Author-X-Name-First: Eunchul
Author-X-Name-Last: Lee
Author-Name: Jinhan Pae
Author-X-Name-First: Jinhan
Author-X-Name-Last: Pae
Title: The equity premium puzzle: empirical evidence for the “Korea Discount”
Abstract:
This study examines the cost of equity capital (COC) and the factors that influence the COC of listed Korean companies, and compares the COC of Korean companies with that of companies from 31 selected countries. The major research question is whether companies that are listed in an emerging market have a disadvantage as they are underpriced through a higher COC (as compared with companies that are traded in developed markets). Consistent with the “Korea Discount,” we find that the COC is significantly higher for Korean companies than for companies in other countries after controlling for other relevant factors. However, the “Korea Discount” has significantly eased in recent years.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 143-166
Issue: 2
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.667378
File-URL: http://hdl.handle.net/10.1080/16081625.2012.667378
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:2:p:143-166
Template-Type: ReDIF-Article 1.0
Author-Name: Firat Demir
Author-X-Name-First: Firat
Author-X-Name-Last: Demir
Author-Name: Jiandong Ju
Author-X-Name-First: Jiandong
Author-X-Name-Last: Ju
Author-Name: Yin Zhou
Author-X-Name-First: Yin
Author-X-Name-Last: Zhou
Title: Income inequality and structures of international trade
Abstract:
The effects of trade openness on within-country income inequality in developing countries are found to be inconclusive in existing literature. This study proposes a “threshold effect” to address this issue. We argue that when exports benefit a large portion of population, it is more likely to decrease income inequality within a country; otherwise, increasing exports will likely increase the income inequality. Using a data-set of 55 developing countries from 1981 to 2005, we find that if the employment share of manufacturing industry is above (below) a threshold, the increase in the share of manufactures exports reduces (increases) the within-country income inequality.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 167-180
Issue: 2
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.667379
File-URL: http://hdl.handle.net/10.1080/16081625.2012.667379
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:2:p:167-180
Template-Type: ReDIF-Article 1.0
Author-Name: Jianhua Zhang
Author-X-Name-First: Jianhua
Author-X-Name-Last: Zhang
Author-Name: Baozhi Qu
Author-X-Name-First: Baozhi
Author-X-Name-Last: Qu
Author-Name: Zhong Xu
Author-X-Name-First: Zhong
Author-X-Name-Last: Xu
Author-Name: Peng Wang
Author-X-Name-First: Peng
Author-X-Name-Last: Wang
Title: Market development and bank profit efficiency in China: application of the generalized Malmquist productivity index
Abstract:
We study the total factor productivity of Chinese banks (the generalized Malmquist productivity index) and the impact of market development on bank profit efficiency using a unique sample of 150 Chinese commercial banks for the 1999–2008 period. Employing an output-oriented stochastic distance function approach, our analysis shows that the productivity growth of Chinese banks over time can be attributed mainly to improvements in technical efficiency and technical change. In addition, the efficiency of Chinese banks is heavily influenced by market development variables, including the proportion of non-state business, level of government intervention in the market, competition in the financial industry and competition in credit allocation. The effects of these factors on bank profit efficiency differ depending on the type of banks.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 181-197
Issue: 2
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.667380
File-URL: http://hdl.handle.net/10.1080/16081625.2012.667380
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:2:p:181-197
Template-Type: ReDIF-Article 1.0
Author-Name: Yi-Cheng Liu
Author-X-Name-First: Yi-Cheng
Author-X-Name-Last: Liu
Author-Name: Wen Yang
Author-X-Name-First: Wen
Author-X-Name-Last: Yang
Author-Name: Chao-Cheng Mai
Author-X-Name-First: Chao-Cheng
Author-X-Name-Last: Mai
Title: The competitive position of Shanghai in the Asia-Pacific region: a comparative study
Abstract:
This paper looked at 12 International Financial Centers (IFCs) in the Asia-Pacific region by employing hierarchical cluster analysis and principal component analysis and applying them to 10 financial variables. This study has demonstrated that as a result of increased foreign financial institutions’ participation and the expansion of markets’ size, Shanghai is fast closing up the gap with other major IFCs. Shanghai might pose a challenge not only to Hong Kong but also to Tokyo in the next few years if China’s Government further liberalizes its financial markets to foreigners and augments the range of financial instruments.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 198-209
Issue: 2
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.667381
File-URL: http://hdl.handle.net/10.1080/16081625.2012.667381
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:2:p:198-209
Template-Type: ReDIF-Article 1.0
Author-Name: Kuo-Feng Kao
Author-X-Name-First: Kuo-Feng
Author-X-Name-Last: Kao
Author-Name: Cheng-Hau Peng
Author-X-Name-First: Cheng-Hau
Author-X-Name-Last: Peng
Title: Production efficiency, input price discrimination, and social welfare
Abstract:
This paper re-examines the welfare implications of input price discrimination by considering the possibility of the structural change in the final goods market. When the marginal cost difference is moderate, price discrimination is more socially desirable as the upstream firm serves more downstream firms under price discrimination than uniform pricing. Surprisingly, when the marginal cost difference is sufficiently large, although the upstream monopolist serves more downstream firms and more outputs are produced under price discrimination than uniform pricing, the social welfare is lower under price discrimination. This result runs against those prevailing in the literature without market structural change.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 227-237
Issue: 2
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.667382
File-URL: http://hdl.handle.net/10.1080/16081625.2012.667382
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:2:p:227-237
Template-Type: ReDIF-Article 1.0
Author-Name: Xianhai Huang
Author-X-Name-First: Xianhai
Author-X-Name-Last: Huang
Author-Name: Qunyan Sun
Author-X-Name-First: Qunyan
Author-X-Name-Last: Sun
Author-Name: Jie Li
Author-X-Name-First: Jie
Author-X-Name-Last: Li
Title: Optimal policy choice and asymmetric information in a mixed market
Abstract:
In a public-firm monopoly market, we investigate a welfare-maximizing government’s attitude towards the entry of a private firm with private information in cost and the government’s choices over two policy options: a menu of policies and a uniform policy. Two different cases are considered: the case of a domestic private firm and the case of a foreign private firm. In both cases, allowing the entry of the private firm is socially optimal. However, in the first case, policy menu is preferred to uniform policy; in the second case, separation equilibrium does not exist and uniform policy is adopted.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 238-251
Issue: 2
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.667384
File-URL: http://hdl.handle.net/10.1080/16081625.2012.667384
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:2:p:238-251
Template-Type: ReDIF-Article 1.0
Author-Name: Hsihui Chang
Author-X-Name-First: Hsihui
Author-X-Name-Last: Chang
Author-Name: Sang-Hyun Suh
Author-X-Name-First: Sang-Hyun
Author-X-Name-Last: Suh
Author-Name: Edward Werner
Author-X-Name-First: Edward
Author-X-Name-Last: Werner
Author-Name: Jian Zhou
Author-X-Name-First: Jian
Author-X-Name-Last: Zhou
Title: The effect of SOX on the predictability of future cash flows in litigious and non-litigious industries
Abstract:
We investigate whether the role of discretionary accruals in predicting future operating cash flows changes after the passage of SOX. We also examine the information content of discretionary accruals in litigious industries. We find that discretionary accruals are positively associated with future operating cash flows and that discretionary accruals become even more important to predict future cash flows during the post-SOX period. Findings also indicate that litigious industry firms impart greater information content relative to those in nonlitigious industries prior to SOX being issued and that the SOX effect on discretionary accruals is weaker for such firms as a result.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 210-226
Issue: 2
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.667396
File-URL: http://hdl.handle.net/10.1080/16081625.2012.667396
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:2:p:210-226
Template-Type: ReDIF-Article 1.0
Author-Name: Suresh Govindaraj
Author-X-Name-First: Suresh
Author-X-Name-Last: Govindaraj
Author-Name: Mahesh Kumar
Author-X-Name-First: Mahesh
Author-X-Name-Last: Kumar
Author-Name: Bharat Sarath
Author-X-Name-First: Bharat
Author-X-Name-Last: Sarath
Title: The effects of correlated demand on pricing, inventory, and production
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 252-252
Issue: 2
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.703499
File-URL: http://hdl.handle.net/10.1080/16081625.2012.703499
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:2:p:252-252
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial Board
Abstract:
Journal:
Pages: ebi-ebi
Issue: 1
Volume: 18
Year: 2011
X-DOI: 10.1080/16081625.2011.9720869
File-URL: http://hdl.handle.net/10.1080/16081625.2011.9720869
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Handle: RePEc:taf:raaexx:v:18:y:2011:i:1:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: Martin J. Beckmann
Author-X-Name-First: Martin J.
Author-X-Name-Last: Beckmann
Title: The Size of the Market
Abstract:
The size of the market is the number of buyers that can be reached effectively in a spatial market. We exhibit as determining factor the intercept of the demand function with production cost and with transportation cost. For linear demand and cost function explicit form has to be given. Market structures considered are isolated monopoly, monopolistic competition and perfect competition. When transportation costs fall, markets expand under monopoly, but shrink under monopolistic or perfect competition.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1-9
Issue: 1
Volume: 18
Year: 2011
X-DOI: 10.1080/16081625.2011.9720870
File-URL: http://hdl.handle.net/10.1080/16081625.2011.9720870
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Handle: RePEc:taf:raaexx:v:18:y:2011:i:1:p:1-9
Template-Type: ReDIF-Article 1.0
Author-Name: Sung-Soo Yoon
Author-X-Name-First: Sung-Soo
Author-X-Name-Last: Yoon
Author-Name: Seung-Weon Yoo
Author-X-Name-First: Seung-Weon
Author-X-Name-Last: Yoo
Author-Name: Jinbae Kim
Author-X-Name-First: Jinbae
Author-X-Name-Last: Kim
Title: Ambiguity, Audit Errors, and Tax Compliance
Abstract:
We examine the impact of tax law ambiguity and tax audit errors on tax compliance in a setting where litigation is allowed. A decrease in audit errors discourages aggressive reporting and leads to fewer audits and trials. A reduction in tax ambiguity, however, has indeterminate effects on aggressive reporting and litigation frequencies. A more effective tax audit benefits taxpayers with relatively strong cases but not those with weak ones. A tax cut encourages aggressive reporting and lowers net revenue. An increase in the penalty, however, leads to less aggressive reporting and higher net revenue without making anyone worse off.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 11-26
Issue: 1
Volume: 18
Year: 2011
X-DOI: 10.1080/16081625.2011.9720871
File-URL: http://hdl.handle.net/10.1080/16081625.2011.9720871
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Handle: RePEc:taf:raaexx:v:18:y:2011:i:1:p:11-26
Template-Type: ReDIF-Article 1.0
Author-Name: Jinhan Pae
Author-X-Name-First: Jinhan
Author-X-Name-Last: Pae
Title: A Synthesis of Accrual Quality and Abnormal Accrual Models: An Empirical Implementation
Abstract:
Dechow and Dichev's (2002) accrual quality model suggests that the Jones (1991) abnormal accrual model can be improved with the inclusion of past, current, and future operating cash flows. A problem with the empirical implementation of this synthesis is that the augmented accrual model requires future operating cash flow information. I propose an equivalent accrual model that is not subject to the “peek ahead” bias and further takes into account the reversal of past accruals. The proposed model improves the explanatory power of the Jones accrual model and makes a difference in inferences about abnormal accruals of firms with accounting restatements and the market mispricing of abnormal accruals.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 27-44
Issue: 1
Volume: 18
Year: 2011
X-DOI: 10.1080/16081625.2011.9720872
File-URL: http://hdl.handle.net/10.1080/16081625.2011.9720872
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Handle: RePEc:taf:raaexx:v:18:y:2011:i:1:p:27-44
Template-Type: ReDIF-Article 1.0
Author-Name: Francesca Sanna-Randaccio
Author-X-Name-First: Francesca
Author-X-Name-Last: Sanna-Randaccio
Author-Name: Roberta Sestini
Author-X-Name-First: Roberta
Author-X-Name-Last: Sestini
Title: Foreign Direct Investment and Environmental Policy: Have Location Factors Been Neglected?
Abstract:
This paper analyzes the effect of asymmetric environmental policies on firms' international location strategies in pollution-intensive sectors, when countries differ in terms of market size. The model shows that, when the tighter mitigation measures are introduced by the larger country and unit transport cost is high, the probability of firms not relocating abroad via foreign direct investment increases with market asymmetry. Furthermore, in some key scenarios, the total relocation outcome predicted by the pollution haven hypothesis is never an optimal strategy. The analysis suggests that international environmental rules should take account of differences in countries' market size and thus ability to attract production.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 45-60
Issue: 1
Volume: 18
Year: 2011
X-DOI: 10.1080/16081625.2011.9720873
File-URL: http://hdl.handle.net/10.1080/16081625.2011.9720873
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Handle: RePEc:taf:raaexx:v:18:y:2011:i:1:p:45-60
Template-Type: ReDIF-Article 1.0
Author-Name: Yi-Hong Deng
Author-X-Name-First: Yi-Hong
Author-X-Name-Last: Deng
Author-Name: Ting Luo
Author-X-Name-First: Ting
Author-X-Name-Last: Luo
Title: Tax Revenue Manipulation by Local Taxation Administrations in China
Abstract:
This paper investigates the tax revenue manipulation in China by local taxation administrations to achieve a sustainable performance. We document a higher volatility in the effective corporate income tax rates for those companies registering in provinces with more tax sources caused by the manipulation. We also find that companies' ability to pay tax is negatively correlated with the probability of being selected by local taxation administrations for the purpose of tax revenue manipulation. Second, local taxation administrations' relationships with companies and the subsidy allocated to companies have no significant effect on this selection.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 61-75
Issue: 1
Volume: 18
Year: 2011
X-DOI: 10.1080/16081625.2011.9720874
File-URL: http://hdl.handle.net/10.1080/16081625.2011.9720874
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Handle: RePEc:taf:raaexx:v:18:y:2011:i:1:p:61-75
Template-Type: ReDIF-Article 1.0
Author-Name: Joanna L. Ho
Author-X-Name-First: Joanna L.
Author-X-Name-Last: Ho
Author-Name: Cheng-Jen Huang
Author-X-Name-First: Cheng-Jen
Author-X-Name-Last: Huang
Author-Name: Anne Wu
Author-X-Name-First: Anne
Author-X-Name-Last: Wu
Title: The Impact of Management Control Systems on Efficiency and Quality Performance —An Empirical Study of Taiwanese Correctional Institutions
Abstract:
Management control systems (MCS) have been widely suggested as a key framework with which organizations can increase the probability that people make decisions and take actions congruent with the entire goals of the organizations. Most of the previous studies have mainly focused on efficiency performance, and we have little knowledge of the impact of MCS on both quality and productivity performance. In this study, we use both non-parametric data envelopment analysis (DEA) and parametric stochastic frontier analysis (SFA) to examine how MCS affects efficiency and quality performance in correctional institutions. Our results show that correctional institutions in Taiwan have considerable technical inefficiency, which is attributable to their unfavorable resource usage. We also find that correctional institutions with tight MCS have higher efficiency and quality performance. Our overall results support the argument that tight control systems can be used to achieve efficiency and quality performance.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 77-94
Issue: 1
Volume: 18
Year: 2011
X-DOI: 10.1080/16081625.2011.9720875
File-URL: http://hdl.handle.net/10.1080/16081625.2011.9720875
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Handle: RePEc:taf:raaexx:v:18:y:2011:i:1:p:77-94
Template-Type: ReDIF-Article 1.0
Author-Name: Catherine Heyjung Sonu
Author-X-Name-First: Catherine Heyjung
Author-X-Name-Last: Sonu
Author-Name: Ahrum Choi
Author-X-Name-First: Ahrum
Author-X-Name-Last: Choi
Author-Name: Joonil Lee
Author-X-Name-First: Joonil
Author-X-Name-Last: Lee
Author-Name: Wonsuk Ha
Author-X-Name-First: Wonsuk
Author-X-Name-Last: Ha
Title: Audit partner’s length of audit experience and audit quality: evidence from Korea
Abstract:
This paper investigates the relation between the length of an audit partner’s experience as a certified public accountant and audit quality. Audit quality is measured by the magnitude of discretionary accruals and tendency to meet or miss earnings benchmarks of the client firms. This paper documents that an audit partner’s experience is positively associated with audit quality and the association is more salient among non-Big 4 auditors. These findings suggest that auditors’ knowledge and expertise develop with actual involvement with the clients over an extended period of time. For Big 4 audit firms, intense training, structured audit programs, and knowledge sharing opportunities are provided to individual accountants, which may weaken the dependence of audit quality on the individual partner’s experience.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 261-280
Issue: 3
Volume: 26
Year: 2019
Month: 5
X-DOI: 10.1080/16081625.2016.1242428
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1242428
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:3:p:261-280
Template-Type: ReDIF-Article 1.0
Author-Name: Yaying Mary Chou Yeh
Author-X-Name-First: Yaying Mary Chou
Author-X-Name-Last: Yeh
Author-Name: Wei-Ren Yao
Author-X-Name-First: Wei-Ren
Author-X-Name-Last: Yao
Author-Name: Chen Lung Chin
Author-X-Name-First: Chen Lung
Author-X-Name-Last: Chin
Title: Do local leads deliver contracting benefits? Evidence from emerging market syndicated loans
Abstract:
This study examines whether local leads benefit bank loan contracting. Based on 2019 loans from emerging markets in 2000–2010, we find significant differences in the lending behaviors between foreign and local lead banks. Foreign lead loans contain significantly higher spread and more financial covenants than those led by all local banks. The inclusion of local banks to colead loans deliver contracting benefits as we find mixed lead loans offer lower spread and prescribe substantially more financial covenants than all foreign lead banks. Local bank involvement reduces information asymmetry between foreign lenders and local borrowers, resulting in less rigorous contracting terms.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 301-319
Issue: 3
Volume: 26
Year: 2019
Month: 5
X-DOI: 10.1080/16081625.2017.1296779
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1296779
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:3:p:301-319
Template-Type: ReDIF-Article 1.0
Author-Name: Yong Bum Choi
Author-X-Name-First: Yong Bum
Author-X-Name-Last: Choi
Author-Name: Janghyuk Lee
Author-X-Name-First: Janghyuk
Author-X-Name-Last: Lee
Author-Name: Shijin Yoo
Author-X-Name-First: Shijin
Author-X-Name-Last: Yoo
Author-Name: Yong Keun Yoo
Author-X-Name-First: Yong Keun
Author-X-Name-Last: Yoo
Title: Value relevance of customer equity beyond financial statements: evidence from mobile telecom industry
Abstract:
We investigate the extent of usefulness of customer equity (CE) estimate in explaining market value of equity (MVE) and the determinants of the discrepancy between CE estimate and MVE. Using the data of 17 companies in the mobile telecom companies in 7 countries from 2004 to 2008, we find (1) CE estimate provides incremental value relevant information to explain contemporaneous MVE beyond financial statements, and (2) CE estimate can predict future stock returns by indicating a part of temporal divergence between MVE and a firm’s intrinsic value of equity.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 281-300
Issue: 3
Volume: 26
Year: 2019
Month: 5
X-DOI: 10.1080/16081625.2017.1386575
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1386575
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:3:p:281-300
Template-Type: ReDIF-Article 1.0
Author-Name: Masako Darrough
Author-X-Name-First: Masako
Author-X-Name-Last: Darrough
Author-Name: Yong Gyu Lee
Author-X-Name-First: Yong Gyu
Author-X-Name-Last: Lee
Author-Name: Hyung Il Oh
Author-X-Name-First: Hyung Il
Author-X-Name-Last: Oh
Title: Classification shifting within non-recurring items
Abstract:
This study examines whether managers shift income-decreasing special items to discontinued operations. We expect managers to engage in this form of classification shifting because discontinued operations are reported below income before extraordinary items and discontinued operations (IBXD) on the income statement. Consistent with this expectation, we find evidence suggesting that managers classification-shift asset write-downs to discontinued operations. Furthermore, we find that classification shifting from asset write-downs to discontinued operations is driven by firms with incentives to avoid reporting a negative IBXD and by firms with equity market benefits to classification shifting.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 185-206
Issue: 3
Volume: 26
Year: 2019
Month: 5
X-DOI: 10.1080/16081625.2017.1392877
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1392877
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:3:p:185-206
Template-Type: ReDIF-Article 1.0
Author-Name: Glenn P. Jenkins
Author-X-Name-First: Glenn P.
Author-X-Name-Last: Jenkins
Author-Name: Chun-Yan Kuo
Author-X-Name-First: Chun-Yan
Author-X-Name-Last: Kuo
Title: Taxing mobile capital in free trade zones to the detriment of workers
Abstract:
Many countries have exempted the income of firms operating in their free trade or export processing zones from corporate income taxation. This paper examines the long-term economic effects of removing this exemption in the Dominican Republic. The results suggest that removal of the corporate income tax exemption could inflict a burden on relatively low-waged workers of about ten times the amount of additional tax revenue collected. The analysis also measures the consequential impacts on prices of goods and services in the economy. It indicates that wealthier groups in society will gain substantially in real income.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 207-222
Issue: 3
Volume: 26
Year: 2019
Month: 5
X-DOI: 10.1080/16081625.2017.1392878
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1392878
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:3:p:207-222
Template-Type: ReDIF-Article 1.0
Author-Name: May H. Lo
Author-X-Name-First: May H.
Author-X-Name-Last: Lo
Author-Name: Wenjuan Xie
Author-X-Name-First: Wenjuan
Author-X-Name-Last: Xie
Author-Name: Le (Emily) Xu
Author-X-Name-First: Le (Emily)
Author-X-Name-Last: Xu
Title: Assessing investors’ earnings expectations: the contextual usefulness of composite forecasts
Abstract:
This study constructs composite forecasts and evaluates their contextual usefulness as a proxy for investors’ expectations of annual earnings. Our empirical tests utilize composites of three forecast sources: financial analysts’, time-series and security-price based forecasts. Our full sample results support the incremental usefulness of composite forecasts, over and above that of any of the three forecast sources. Moreover, results from partitioned subsamples show that the usefulness of composite forecasts is contextual. Composite forecasts are a better proxy for investors’ earnings expectations when (1) the information environment is relatively poor; or (2) firms experience negative performance in the prior year.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 223-240
Issue: 3
Volume: 26
Year: 2019
Month: 5
X-DOI: 10.1080/16081625.2018.1491316
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1491316
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:3:p:223-240
Template-Type: ReDIF-Article 1.0
Author-Name: Mahfuja Malik
Author-X-Name-First: Mahfuja
Author-X-Name-Last: Malik
Author-Name: Md Al Mamun
Author-X-Name-First: Md
Author-X-Name-Last: Al Mamun
Author-Name: Abu Amin
Author-X-Name-First: Abu
Author-X-Name-Last: Amin
Title: Peer pressure, CSR spending, and long-term financial performance
Abstract:
We investigate the role of peer pressure on banks’ Corporate Social Responsibility (CSR) activities and the long-term impacts of their CSR spending on financial performance. We find that a bank’s CSR expenditure increases with that of its peer-banks. However, there is no association between a bank’s CSR expenditure and that of banks of its non-peer group. Our results are robust to addressing the sample selection and bank-specific omitted variable bias, alternative definition of peer pressure, and addressing the concern of alternative explanation that CSR expenditure is driven by tax incentive. Additional analysis suggests that a bank’s CSR spending increases not only the current profitability but also its future profitability. This study establishes the evidence of the peer pressure on CSR spending, and the value of CSR in terms of short – and long-term benefits.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 241-260
Issue: 3
Volume: 26
Year: 2019
Month: 5
X-DOI: 10.1080/16081625.2018.1493933
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1493933
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:3:p:241-260
Template-Type: ReDIF-Article 1.0
Author-Name: Philip Beaulieu
Author-X-Name-First: Philip
Author-X-Name-Last: Beaulieu
Author-Name: Shujun Ding
Author-X-Name-First: Shujun
Author-X-Name-Last: Ding
Author-Name: Baozhi Qu
Author-X-Name-First: Baozhi
Author-X-Name-Last: Qu
Title: Compensation disclosure in China
Abstract:
This study examines compensation disclosure and corporate governance in the Chinese stock market. China’s unfolding governance reform and the adoption of western-style disclosure present a quasi-experimental setting to examine the effect of governance mechanisms on levels of disclosure. We code annual reports of Chinese listed companies and use content analysis to obtain a disclosure index. The results are mixed: only two governance mechanisms, audit committees and the proportion of independent directors, affect compensation disclosure. Our results suggest that cultural and social-political factors play a role in compensation disclosure in China. We also find evidence that compensation disclosure is negatively associated with cost of capital of the firm.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 253-277
Issue: 3
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.667383
File-URL: http://hdl.handle.net/10.1080/16081625.2012.667383
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:3:p:253-277
Template-Type: ReDIF-Article 1.0
Author-Name: Keun-Yeob Oh
Author-X-Name-First: Keun-Yeob
Author-X-Name-Last: Oh
Author-Name: Taegi Kim
Author-X-Name-First: Taegi
Author-X-Name-Last: Kim
Title: Measuring the welfare effects of intellectual property rights changes on the Korean pharmaceutical industry: the case of Korea–US Free Trade Agreement
Abstract:
This paper shows how to measure the welfare effects of intellectual property rights (IPR) changes under the Korea–US Free Trade Agreement (FTA) on the Korean economy. After the FTA, patent lifetimes are expected to be extended. During such extension periods, Korean generic drug makers will not be able to sell their drugs, and consumers will have to pay more because of higher prices. The new concepts of effective patent term and price-change mechanism were employed, and patent data for the Korean pharmaceutical industry were used to estimate the parameters needed to measure the welfare effects. The empirical results indicate that the welfare effect will be much smaller than suggested by previous studies. These methods to evaluate the welfare effects can be applied to the cases of other recent FTAs and other kinds of IPR negotiations in international economics.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 278-291
Issue: 3
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.667385
File-URL: http://hdl.handle.net/10.1080/16081625.2012.667385
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:3:p:278-291
Template-Type: ReDIF-Article 1.0
Author-Name: Hye-Jeong Nam
Author-X-Name-First: Hye-Jeong
Author-X-Name-Last: Nam
Author-Name: Jong-Hag Choi
Author-X-Name-First: Jong-Hag
Author-X-Name-Last: Choi
Author-Name: Joseph Comprix
Author-X-Name-First: Joseph
Author-X-Name-Last: Comprix
Author-Name: Helen Hyejin Kwon
Author-X-Name-First: Helen Hyejin
Author-X-Name-Last: Kwon
Title: Firm location and earnings management: Korean evidence
Abstract:
Using 7245 firm-year observations from Korean listed companies over 2000–2004, we find that firms located in Seoul (the capital city of Korea) or its surrounding metropolitan area (i.e. urban areas) are more likely to manage earnings than firms located in other areas (i.e. rural areas). Discretionary accruals are larger for urban firms than rural firms after controlling for variables that affect the level of accruals. Our findings suggest that due to greater attention from large numbers of investors and other market participants, urban firms face greater pressure to manipulate earnings to satisfy market expectations. However, we fail to find evidence of an association between firm location and increased earnings management for firms audited by Big 4 auditors or firms followed by analysts, which are likely to be more closely monitored by investors and other market participants. These findings are robust in various sensitivity analyses.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 292-317
Issue: 3
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.667436
File-URL: http://hdl.handle.net/10.1080/16081625.2012.667436
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:3:p:292-317
Template-Type: ReDIF-Article 1.0
Author-Name: Shujie Yao
Author-X-Name-First: Shujie
Author-X-Name-Last: Yao
Author-Name: Xiuyun Yang
Author-X-Name-First: Xiuyun
Author-X-Name-Last: Yang
Title: Air transport and regional economic growth in China
Abstract:
Air transport increased exponentially in China over the last 30 years, but studies on this issue are few. This paper aims to fill in this literature gap. It identifies the key determinants of air transport in the Chinese regions for the period 1995–2006. The empirical results based on an augmented production function indicate that air transport is positively related with economic growth, industrial structure, population density, and openness, but negatively related with ground transportation. The development of air transport, however, varies significantly across regions in terms of growth and competition with ground transport. The competition has become particularly intense in recent years, as high-speed railways have become a formidable challenge to air transport between the short- and mid-range transportation routes.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 318-329
Issue: 3
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.667458
File-URL: http://hdl.handle.net/10.1080/16081625.2012.667458
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:3:p:318-329
Template-Type: ReDIF-Article 1.0
Author-Name: Ting Luo
Author-X-Name-First: Ting
Author-X-Name-Last: Luo
Author-Name: Wenjuan Xie
Author-X-Name-First: Wenjuan
Author-X-Name-Last: Xie
Title: Industry information uncertainty and stock return comovement
Abstract:
This study investigates the association between industry information uncertainty and stock return comovement within industries. We test two predictions on industry comovement given correlated overweight among investors on past industry returns when there is greater industry-level uncertainty: (1) we find that stocks in high-uncertainty industries are more likely to move with other stocks in the same industry; (2) we find the higher prevalence of industry price continuation in high-uncertainty industries. The results suggest that stock comovement in industries with high information uncertainty is more likely driven by correlated bias in trading activities and is not related to common fundamental shocks.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 330-351
Issue: 3
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.667477
File-URL: http://hdl.handle.net/10.1080/16081625.2012.667477
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:3:p:330-351
Template-Type: ReDIF-Article 1.0
Author-Name: Nan Hu
Author-X-Name-First: Nan
Author-X-Name-Last: Hu
Author-Name: Fangjun Wang
Author-X-Name-First: Fangjun
Author-X-Name-Last: Wang
Author-Name: Peng Wang
Author-X-Name-First: Peng
Author-X-Name-Last: Wang
Author-Name: Lee Yao
Author-X-Name-First: Lee
Author-X-Name-Last: Yao
Author-Name: Junrui Zhang
Author-X-Name-First: Junrui
Author-X-Name-Last: Zhang
Title: The impact of ultimate ownerships on audit fees: evidence from Chinese listed companies
Abstract:
This paper investigates the relationships between ultimate ownerships and audit fees (ADFEE). Using the data of 1428 Chinese listed companies in 2008, our empirical results show ADFEE are lowest for companies controlled by central government, followed by companies controlled by local government. In addition, we reveal that the longer the control chain from the listed company to its ultimate owner, the higher the ADFEE that company will pay. We also find that there is a negative relationship between the discrepancy and ADFEE when we pool our sample together. However, when we divide our samples into large firms and small firms, we find that such a negative relationship only holds for big-size firms while for small-size firms, ADFEE are positively correlated. This discrepancy being due to small firms’ lack of bargain power and the increase in auditing risk. In addition, we find that company size moderates the effect of such discrepancies on ADFEE in a nonlinear fashion.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 352-373
Issue: 3
Volume: 19
Year: 2012
X-DOI: 10.1080/16081625.2012.667510
File-URL: http://hdl.handle.net/10.1080/16081625.2012.667510
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Handle: RePEc:taf:raaexx:v:19:y:2012:i:3:p:352-373
Template-Type: ReDIF-Article 1.0
Author-Name: Matthias Nnadi
Author-X-Name-First: Matthias
Author-X-Name-Last: Nnadi
Author-Name: Sailesh Tanna
Author-X-Name-First: Sailesh
Author-X-Name-Last: Tanna
Title: Accounting analyses of momentum and contrarian strategies in emerging markets
Abstract:
We analyse the momentum and contrarian effects of stock markets in Brazil, Russia, India, China and South Africa (BRICS) using accounting data. The five markets show different characteristics with the Indian market having the strongest momentum effect. Stock markets in China and Brazil show significant short-term contrarian profit and intermediate to long-term momentum profit while South Africa shows short-term momentum effect and intermediate to long-term contrarian effect. The Russian stock market reveals largely insignificant momentum portfolio returns. We also find evidence that the contrarian profits in South Africa and China are caused by relatively high loser returns while positive momentum profit in India results from relatively high winner returns.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 457-477
Issue: 4
Volume: 26
Year: 2019
Month: 7
X-DOI: 10.1080/16081625.2017.1284596
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1284596
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:4:p:457-477
Template-Type: ReDIF-Article 1.0
Author-Name: Turgut Tursoy
Author-X-Name-First: Turgut
Author-X-Name-Last: Tursoy
Author-Name: Faisal Faisal
Author-X-Name-First: Faisal
Author-X-Name-Last: Faisal
Title: Validity of F-H hypothesis in small isolated island economy: an application of the combined cointegration approach
Abstract:
This study aims to investigate the Feldstein-Horioka hypothesis for North Cyprus using ARDL bounds test for cointegration for period 1983–2012. The robustness of the ARDL was done by the newly developed Bayer-Hanck (2013) combined cointegration test. The empirical results revealed that both savings and investments are cointegrated, while the findings from the long-run and short-run analysis validate the F-H hypothesis suggesting, that North Cyprus have closed-economy in which domestic investments are related to domestic savings. Furthermore, investment converges to its long-run equilibrium position by 43.95% speed of adjustments using channel of savings. Finally, the result of Granger causality under the framework of ECM suggests that savings cause investment in short-run, long-run and both joint short-run and long-run causality.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 478-488
Issue: 4
Volume: 26
Year: 2019
Month: 7
X-DOI: 10.1080/16081625.2017.1284597
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1284597
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:4:p:478-488
Template-Type: ReDIF-Article 1.0
Author-Name: Soo Young Kwon
Author-X-Name-First: Soo Young
Author-X-Name-Last: Kwon
Author-Name: Kyunga Na
Author-X-Name-First: Kyunga
Author-X-Name-Last: Na
Author-Name: Jongil Park
Author-X-Name-First: Jongil
Author-X-Name-Last: Park
Title: The economic effects of IFRS adoption in Korea
Abstract:
This paper examines whether Korea’s mandatory adoption of International Financial Reporting Standards (IFRS) is associated with higher earnings quality. Based on Korean listed companies, we compare earnings quality and market assessment in the pre-IFRS period (2007–2010) with those in the post-IFRS period (2011–2014). We find significant IFRS adoption effects by documenting smaller absolute values in discretionary accruals and real earnings management, higher accrual quality, stronger earnings persistence, and less frequent negative earnings. Thus, we provide evidence of improved earnings quality with Korea’s mandatory IFRS adoption. Additionally, we document an increase in the value relevance of earnings, more accurate analysts’ earnings forecasts, and higher audit fees and hours. These results show that investors and analysts view improvements in the information environment, and auditors’ respond to the complex environment by demanding higher audit fees and making additional efforts after mandatory IFRS adoption.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 321-361
Issue: 4
Volume: 26
Year: 2019
Month: 7
X-DOI: 10.1080/16081625.2017.1298454
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1298454
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:4:p:321-361
Template-Type: ReDIF-Article 1.0
Author-Name: Namryoung Lee
Author-X-Name-First: Namryoung
Author-X-Name-Last: Lee
Author-Name: Charles Swenson
Author-X-Name-First: Charles
Author-X-Name-Last: Swenson
Title: Solving the tax evasion problem by co-opting the public: the Korean cash receipts system
Abstract:
In 2005 the Korean government instituted a mandatory cash receipts system to curb tax evasion by cash-based companies in the retail sector. We estimate that the system significantly decreased business tax evasion, and was cost-effective. Because it was a significant intervention, the system also had unintended consequences, including increased prices in the retail industry, firms exiting the market, and asymmetric wealth transfers across classes of individual taxpayers. The results have important policy implications for countries and/or subnational governments which consider adopting similar systems.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 362-381
Issue: 4
Volume: 26
Year: 2019
Month: 7
X-DOI: 10.1080/16081625.2017.1302348
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1302348
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:4:p:362-381
Template-Type: ReDIF-Article 1.0
Author-Name: Chen Ma
Author-X-Name-First: Chen
Author-X-Name-Last: Ma
Author-Name: Bin Li
Author-X-Name-First: Bin
Author-X-Name-Last: Li
Author-Name: Nanyan Dong
Author-X-Name-First: Nanyan
Author-X-Name-Last: Dong
Title: Do Chinese listed firms actively alter the design of pay–performance sensitivity following financial restatement?
Abstract:
The high sensitivity of management compensation to accounting performance could be an important driver of financial restatement, due to strong management incentives to manipulate earnings. This paper examines whether restating firms rearrange management’s annual compensation following restatement announcements to decrease management’s incentives to misreport. Based on observations between 2003 and 2011 in the Chinese capital market, this paper finds that accounting-based pay–performance sensitivity decreases and market-based pay–performance sensitivity increases in restating firms following restatement announcements. These findings indicate that active corporate governance in Chinese listed firms can redesign compensation packages to constrain management’s incentives to misreport. Furthermore, we find that the effect of financial restatement on pay–performance sensitivity is weaker in state-owned enterprises than in non–state-owned enterprises, indicating that compensation design as a tool to alleviate agency costs could, to some extent, lose its effectiveness in reducing management’s opportunistic behavior in state-owned enterprises.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 382-408
Issue: 4
Volume: 26
Year: 2019
Month: 7
X-DOI: 10.1080/16081625.2017.1318077
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1318077
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:4:p:382-408
Template-Type: ReDIF-Article 1.0
Author-Name: Yufang Jin
Author-X-Name-First: Yufang
Author-X-Name-Last: Jin
Author-Name: Haina Shi
Author-X-Name-First: Haina
Author-X-Name-Last: Shi
Author-Name: Xin Zhang
Author-X-Name-First: Xin
Author-X-Name-Last: Zhang
Title: Religious social norms and CSR deficiency disclosure
Abstract:
This study investigates the relation between religious social norms and corporate social responsibility (CSR) deficiency disclosure. Building on the social-political theory of voluntary disclosure, we hypothesize that religious social norms generate legitimacy motivations that bind corporate insiders to disclose CSR deficiencies and that such effects are more pronounced where formal institutions are weaker. We test these hypotheses in a group of Chinese listed firms that voluntarily file standalone CSR reports. Our empirical results are consistent with these hypotheses and robust to the robustness checks. Our study contributes to various related literature and has important implications for policymakers and investors.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 409-433
Issue: 4
Volume: 26
Year: 2019
Month: 7
X-DOI: 10.1080/16081625.2017.1318078
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1318078
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:4:p:409-433
Template-Type: ReDIF-Article 1.0
Author-Name: Sang-Min Cho
Author-X-Name-First: Sang-Min
Author-X-Name-Last: Cho
Author-Name: Sun-A Kang
Author-X-Name-First: Sun-A
Author-X-Name-Last: Kang
Title: The effect of accounting information quality and competition on investment inefficiency: evidence from Korea
Abstract:
We examine whether either accounting quality or competition mitigates against firms’ investment inefficiency, and whether the association between accounting quality and investment inefficiency depends on the level of competition. In this paper, an analysis is undertaken of firms listed on the Korean Stock Exchange (KSE) from 2000 to 2010. The Korean economy is characterized by the ‘Chaebol’ and dominated by a creditor-oriented financing system, such that creditors have strong control over firms’ investment decisions. We believe that our own empirical results illustrate an interesting case study of the Chaebol-/bank-dominated economy, and provide additional data in this regard for academic research. Our results show that firstly, and as expected, accounting quality and competition mitigate against investment inefficiency. Managers of firms that have a higher level of accounting quality make capital investment decisions more efficiently, and their BODs monitor managers’ decision-making more effectively. For a higher level of competition in a given industry, high liquidation risks force managers to decide on capital investment more efficiently. Secondly, it is shown that accounting quality causes improvements in investment inefficiency where the level of competition in a given industry is low.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 489-510
Issue: 4
Volume: 26
Year: 2019
Month: 7
X-DOI: 10.1080/16081625.2017.1392879
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1392879
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:4:p:489-510
Template-Type: ReDIF-Article 1.0
Author-Name: Hyun-Ah Lee
Author-X-Name-First: Hyun-Ah
Author-X-Name-Last: Lee
Title: The impact of IFRS adoption on management of bad debt expense and real operational activities: evidence from South Korea
Abstract:
This study examines whether the adoption of International Financial Reporting Standards in Korea affects earnings management behavior by focusing on the allowance for doubtful accounts. Adopting IFRS implies a change in approach whereby firms are required to build up an allowance only for incurred losses. Using a sample of 3817 firm-year observations of Korean listed companies covering 2000–2014, I find evidence that the discretionary portion of the allowance is decreased and that the opportunistic management of bad debt expense to meet crucial earnings targets is mitigated after the adoption of IFRS. Further, I find partial evidence that a shift from accrual-based to real earnings management may occur when the management of a specific accrual account is constrained by the adoption of IFRS.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 434-456
Issue: 4
Volume: 26
Year: 2019
Month: 7
X-DOI: 10.1080/16081625.2017.1404921
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1404921
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:4:p:434-456
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial Board
Abstract:
Journal:
Pages: ebi-ebi
Issue: 2
Volume: 17
Year: 2010
X-DOI: 10.1080/16081625.2010.9720854
File-URL: http://hdl.handle.net/10.1080/16081625.2010.9720854
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Handle: RePEc:taf:raaexx:v:17:y:2010:i:2:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: Hong Hwang
Author-X-Name-First: Hong
Author-X-Name-Last: Hwang
Author-Name: Eden Yu
Author-X-Name-First: Eden
Author-X-Name-Last: Yu
Title: Editorial Note
Abstract:
Journal:
Pages: 1-1
Issue: 2
Volume: 17
Year: 2010
X-DOI: 10.1080/16081625.2010.9720855
File-URL: http://hdl.handle.net/10.1080/16081625.2010.9720855
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Handle: RePEc:taf:raaexx:v:17:y:2010:i:2:p:1-1
Template-Type: ReDIF-Article 1.0
Author-Name: Liming Guan
Author-X-Name-First: Liming
Author-X-Name-Last: Guan
Author-Name: Hamid Pourjalali
Author-X-Name-First: Hamid
Author-X-Name-Last: Pourjalali
Title: Effect of Cultural Environmental and Accounting Regulation on Earnings Management: A Multiple Year-Country Analysis
Abstract:
We analyze the effect of cultural values and disclosure and earnings management scores on earnings management in 27 countries. The results indicate that debt-to-equity ratio (total assets) affects the earnings management upwards (downwards). These results are consistent with prior studies. Uncertainty Avoidance also affects the direction of earnings management downwards. Other cultural values, such as Individualism, Power Distance, and Masculinity, have a significant effect on the magnitude of earnings management. The results indicate that the higher the values of these variables, the higher the magnitude of earnings management. Furthermore, Disclosure Index has a significant effect on the magnitude of earnings management.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 99-127
Issue: 2
Volume: 17
Year: 2010
X-DOI: 10.1080/16081625.2010.9720856
File-URL: http://hdl.handle.net/10.1080/16081625.2010.9720856
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Handle: RePEc:taf:raaexx:v:17:y:2010:i:2:p:99-127
Template-Type: ReDIF-Article 1.0
Author-Name: Seung-Woon Yoo
Author-X-Name-First: Seung-Woon
Author-X-Name-Last: Yoo
Author-Name: Sung-Soo Yoon
Author-X-Name-First: Sung-Soo
Author-X-Name-Last: Yoon
Title: Optimal Information System for Teams
Abstract:
This paper investigates an optimal information system for teams when externalities exist between team members' performance. Using a discrete model reflecting a sequential manufacturing process, we show that a team information system is better than an individual information system when the second agent utilizes information about the first agent's performance to decide her or his effort level. This decision-facilitating effect of the individual performance information increases the principal's expected costs of inducing the agent's desirable effort. In order to avoid this negative effect of the individual performance information, the principal may delay the inspection until all production processes are finished.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 129-149
Issue: 2
Volume: 17
Year: 2010
X-DOI: 10.1080/16081625.2010.9720857
File-URL: http://hdl.handle.net/10.1080/16081625.2010.9720857
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Handle: RePEc:taf:raaexx:v:17:y:2010:i:2:p:129-149
Template-Type: ReDIF-Article 1.0
Author-Name: Dan S. Dhaliwal
Author-X-Name-First: Dan S.
Author-X-Name-Last: Dhaliwal
Author-Name: Oliver Zhen Li
Author-X-Name-First: Oliver Zhen
Author-X-Name-Last: Li
Author-Name: Hong Xie
Author-X-Name-First: Hong
Author-X-Name-Last: Xie
Title: Institutional Investors, Financial Health, and Equity Valuation
Abstract:
We investigate the relation between institutional ownership, financial health, and the market valuation weights on earnings and the book value of equity. We find that the valuation weight on earnings (book value) increases (decreases) with the level of institutional ownership for profit firms, while that on book value increases with the level of institutional ownership for loss firms. This valuation effect is not subsumed by incorporating current measures of financial health and is mainly driven by institutions with long investment horizons and monitoring incentives. We conclude that the institutional valuation effect is consistent with institutions playing a positive governance role.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 151-173
Issue: 2
Volume: 17
Year: 2010
X-DOI: 10.1080/16081625.2010.9720858
File-URL: http://hdl.handle.net/10.1080/16081625.2010.9720858
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Handle: RePEc:taf:raaexx:v:17:y:2010:i:2:p:151-173
Template-Type: ReDIF-Article 1.0
Author-Name: Kenji Fujiwara
Author-X-Name-First: Kenji
Author-X-Name-Last: Fujiwara
Author-Name: Norimichi Matsueda
Author-X-Name-First: Norimichi
Author-X-Name-Last: Matsueda
Title: Effects of Transboundary Stock Pollution on the Mode of International Competition
Abstract:
This paper looks into potential determinants of the mode of international competition in a polluting good market by focusing on a strategic interaction between two environmentally concerned governments. From the analysis of our model based on a simple international duopoly model with transboundary stock pollution, we show how the resulting form of international competition depends on the magnitudes of the transboundary impacts of pollutant emissions and the decay rates of pollutant stocks in respective countries.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 175-191
Issue: 2
Volume: 17
Year: 2010
X-DOI: 10.1080/16081625.2010.9720859
File-URL: http://hdl.handle.net/10.1080/16081625.2010.9720859
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Handle: RePEc:taf:raaexx:v:17:y:2010:i:2:p:175-191
Template-Type: ReDIF-Article 1.0
Author-Name: Munirul H. Nabirin
Author-X-Name-First: Munirul H.
Author-X-Name-Last: Nabirin
Author-Name: Pasquale M. Sgro
Author-X-Name-First: Pasquale M.
Author-X-Name-Last: Sgro
Title: Clean Technology, Willingness to Pay and Market Size
Abstract:
This paper extends Salop's model of localized competition by introducing the consumers' willingness to pay (WTP) for clean products and allows an individual firm to choose between a clean or a dirty technology. We assume that a clean technology is relatively costly to adopt. The consumer is willing to pay more for a product produced with clean technology and the model can also be interpreted as a world economy model where each firm represents a country. There exists a critical value of m (proportion of firms adopting the clean technology), m*, such that if m < m* then no country adopts the clean technology, all countries adopt the clean technology only if m > m* while some countries will adopt the clean technology and some will not adopt the clean technology if m = m*. Our results also identify an example of coordination failure. Since symmetric technology adoption delivers the same level of profits as non-adoption, global coordination will be necessary to achieve the clean technology adoption outcome. Finally, we demonstrate that the private and public (social planner) incentives to adopt clean technology differ.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 193-210
Issue: 2
Volume: 17
Year: 2010
X-DOI: 10.1080/16081625.2010.9720860
File-URL: http://hdl.handle.net/10.1080/16081625.2010.9720860
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Handle: RePEc:taf:raaexx:v:17:y:2010:i:2:p:193-210
Template-Type: ReDIF-Article 1.0
Author-Name: Joonho Park
Author-X-Name-First: Joonho
Author-X-Name-Last: Park
Author-Name: Chang Youl Ko
Author-X-Name-First: Chang Youl
Author-X-Name-Last: Ko
Author-Name: Hoon Jung
Author-X-Name-First: Hoon
Author-X-Name-Last: Jung
Author-Name: Yong-Seok Lee
Author-X-Name-First: Yong-Seok
Author-X-Name-Last: Lee
Title: Managerial ability and tax avoidance: evidence from Korea
Abstract:
This study investigates the incremental effects of managerial ability on tax avoidance. Managerial ability is estimated through a data envelopment analysis (DEA) and tobit regressions. We find that there is a negative relationship between tax avoidance and firm value. In addition, we document a statistically meaningful negative relation between managerial ability and tax avoidance. The results also suggest that high managerial ability mitigates the negative relationship between tax avoidance and firm value. These findings suggest that managerial ability influences the tax avoidance behavior of the firm.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 449-477
Issue: 4
Volume: 23
Year: 2016
Month: 10
X-DOI: 10.1080/16081625.2015.1017590
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1017590
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:4:p:449-477
Template-Type: ReDIF-Article 1.0
Author-Name: Eunho Cho
Author-X-Name-First: Eunho
Author-X-Name-Last: Cho
Author-Name: Sungbin Chun
Author-X-Name-First: Sungbin
Author-X-Name-Last: Chun
Title: Corporate social responsibility, real activities earnings management, and corporate governance: evidence from Korea
Abstract:
We examine whether a firm’s corporate social responsibility (CSR) activities are associated with real activities earnings management (RAEM) based on stakeholder perspective. We also investigate whether corporate governance (CG) moderates the relationship between CSR and RAEM. Using a sample of 1432 firm-year observations of Korean-listed firms during 2005–2010, we find that socially responsible firms are significantly and negatively associated with RAEM. More importantly, we find that this relationship is moderated by CG as measured by a composite CG index. These results remain robust after we perform various sensitivity analyses. This study primarily contributes to the literature on CSR, CG, and RAEM by providing evidence for the moderating role of CG on the relationship between CSR and RAEM.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 400-431
Issue: 4
Volume: 23
Year: 2016
Month: 10
X-DOI: 10.1080/16081625.2015.1047005
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1047005
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:4:p:400-431
Template-Type: ReDIF-Article 1.0
Author-Name: Donghua Chen
Author-X-Name-First: Donghua
Author-X-Name-Last: Chen
Author-Name: Oliver Zhen Li
Author-X-Name-First: Oliver Zhen
Author-X-Name-Last: Li
Author-Name: Shangkun Liang
Author-X-Name-First: Shangkun
Author-X-Name-Last: Liang
Title: Perk consumption as a suboptimal outcome under pay regulations
Abstract:
We examine how perk consumption is determined and whether it impacts firm value in China where executive pay is regulated. We find that perks are provided when the relative pay between top executives and average employees is low, in firms with high free cash flows, economic rent, and growth. Perks are positively associated with firm value, but to a much lesser extent than monetary compensation. This suggests that if perks are converted to cash compensation, shareholder wealth can be further enhanced. However, under China’s regulated compensation structure, this conversion may not be easily achieved and perks likely represent a second-best suboptimal solution in motivating executives.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 373-399
Issue: 4
Volume: 23
Year: 2016
Month: 10
X-DOI: 10.1080/16081625.2015.1076755
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1076755
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:4:p:373-399
Template-Type: ReDIF-Article 1.0
Author-Name: Jamel Jouini
Author-X-Name-First: Jamel
Author-X-Name-Last: Jouini
Title: Economic growth and savings in Saudi Arabia: empirical evidence from cointegration and causality analysis
Abstract:
The similar evolution of GDP and savings, the high level of natural resources, and the high financial surplus of Saudi Arabia motivate us to examine the linkages between economic growth and savings from 1980 to 2012 in the ARDL framework. By incorporating relevant determinants, we find cointegration among the variables and positive two-way Granger-causality between economic growth and savings over the long- and short-run. Authorities should thus pursue policies that promote economic growth and savings, to achieve higher levels of both. The results are robust to using alternative specifications and econometric procedures, and show stable economic growth and savings functions.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 478-495
Issue: 4
Volume: 23
Year: 2016
Month: 10
X-DOI: 10.1080/16081625.2015.1129282
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1129282
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:4:p:478-495
Template-Type: ReDIF-Article 1.0
Author-Name: Renard Y. J. Siew
Author-X-Name-First: Renard Y. J.
Author-X-Name-Last: Siew
Author-Name: Maria C. A. Balatbat
Author-X-Name-First: Maria C. A.
Author-X-Name-Last: Balatbat
Author-Name: David G. Carmichael
Author-X-Name-First: David G.
Author-X-Name-Last: Carmichael
Title: The impact of ESG disclosures and institutional ownership on market information asymmetry
Abstract:
This paper investigates the impact of ESG disclosures and institutional ownership on market information asymmetry for 683 firms listed on the New York Stock Exchange for years 2007–2011. Overall, the results suggest that there is a statistically significant negative relationship between ESG disclosures and bid-ask spread and that the presence of institutional investors reduces market information asymmetry. However, it is further established in this paper that a relatively higher level of institutional ownership may attenuate this effect because there is a tendency for institutional owners to exploit private ESG information gained through their position.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 432-448
Issue: 4
Volume: 23
Year: 2016
Month: 10
X-DOI: 10.1080/16081625.2016.1170100
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1170100
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:4:p:432-448
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial Board
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: (ebi)-(ebi)
Issue: 4
Volume: 23
Year: 2016
Month: 10
X-DOI: 10.1080/16081625.2016.1229717
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1229717
File-Format: text/html
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Handle: RePEc:taf:raaexx:v:23:y:2016:i:4:p:(ebi)-(ebi)
Template-Type: ReDIF-Article 1.0
Author-Name: Panagiotis I. Chronopoulos
Author-X-Name-First: Panagiotis I.
Author-X-Name-Last: Chronopoulos
Author-Name: Georgia Siougle
Author-X-Name-First: Georgia
Author-X-Name-Last: Siougle
Title: The information content of management sales forecasts
Abstract:
We investigate the information content of management sales forecasts by developing an incremental accruals measure. We examine whether market efficiently prices this incremental accrual component. We further relate the incremental accrual measure with management earnings forecast errors testing its effect on manager’s forecast accuracy. Our findings indicate sales forecasts to contain valuable information. We find a significant association between our incremental accruals measure and future stock returns, implying that market participants can benefit by utilizing information released through sales forecasts. Finally, we find a significant negative association between the incremental accrual component and management forecast errors, above historical accruals.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 511-531
Issue: 5
Volume: 26
Year: 2019
Month: 9
X-DOI: 10.1080/16081625.2018.1456344
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1456344
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:5:p:511-531
Template-Type: ReDIF-Article 1.0
Author-Name: Huijie Cui
Author-X-Name-First: Huijie
Author-X-Name-Last: Cui
Author-Name: Chong Chen
Author-X-Name-First: Chong
Author-X-Name-Last: Chen
Author-Name: Yanan Zhang
Author-X-Name-First: Yanan
Author-X-Name-Last: Zhang
Author-Name: Xiji Zhu
Author-X-Name-First: Xiji
Author-X-Name-Last: Zhu
Title: Managerial ability and stock price crash risk
Abstract:
This study examines the impact of managerial ability on firms’ stock price crash risk. Using a large sample of U.S. firms, we find that high-ability managers are associated with a higher likelihood of future crashes. The positive relation is more pronounced when managers have larger career concerns, possess better knowledge of operational information and engage in more risk-taking activities. In addition, we show that bad news hoarding and overinvestment are two possible channels through which managerial ability increases crash risk. Overall, our findings indicate that managerial ability may be costly as more capable managers may lead to greater crash risk.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 532-554
Issue: 5
Volume: 26
Year: 2019
Month: 9
X-DOI: 10.1080/16081625.2019.1636662
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1636662
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:5:p:532-554
Template-Type: ReDIF-Article 1.0
Author-Name: Yi Si
Author-X-Name-First: Yi
Author-X-Name-Last: Si
Author-Name: M. M. Fonseka
Author-X-Name-First: M. M.
Author-X-Name-Last: Fonseka
Author-Name: Gao-liang Tian
Author-X-Name-First: Gao-liang
Author-X-Name-Last: Tian
Author-Name: Hua Feng
Author-X-Name-First: Hua
Author-X-Name-Last: Feng
Title: Audit risk and articulation errors from different cash flow disclosures: evidence from China
Abstract:
We investigate the effects of articulation errors on audit opinions and fees, and moderating effects of the auditor size and different litigation regimes on the relationships between articulation errors on audit opinions and fees in China. We find that auditors are more likely to issue modified audit opinions (MAOs) and charge higher audit fees from their clients with higher absolute articulation errors, especially for big auditors and in high litigation risk regime. We also find that auditors who do not issue MAOs to clients with abnormal articulation errors receive higher fees than auditors who do issue MAOs.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 555-576
Issue: 5
Volume: 26
Year: 2019
Month: 9
X-DOI: 10.1080/16081625.2017.1323651
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1323651
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:5:p:555-576
Template-Type: ReDIF-Article 1.0
Author-Name: Hamed Ahmad Almahadin
Author-X-Name-First: Hamed Ahmad
Author-X-Name-Last: Almahadin
Author-Name: Gulcay Tuna
Author-X-Name-First: Gulcay
Author-X-Name-Last: Tuna
Title: Dynamic impact of interest rate volatility and spillover effect of the U.S. interest rate on banking sector development of Turkey: empirical evidence from cointegration and causality analysis
Abstract:
This article investigates the dynamic impacts of interest rate volatility and the spillover effect of the US’ interest rate on the development of Turkey’s banking sector. It employs the bounds test within autoregressive distributed lag framework and the conditional Granger causality. The empirical results showed that the banking sector development was negatively affected by the interest rate volatility in both short- and long-terms. The study’s findings revealed that the US’ interest rate affected the development of the Turkish banking sector through real interest rate channel which confirm existence of such spillover impacts. The findings are consistent with the policy actions of the Central Bank of Turkey.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 577-588
Issue: 5
Volume: 26
Year: 2019
Month: 9
X-DOI: 10.1080/16081625.2017.1354709
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1354709
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:5:p:577-588
Template-Type: ReDIF-Article 1.0
Author-Name: Tai-Hsin Huang
Author-X-Name-First: Tai-Hsin
Author-X-Name-Last: Huang
Author-Name: Bao-Guang Chang
Author-X-Name-First: Bao-Guang
Author-X-Name-Last: Chang
Author-Name: Chun-Yi Kuo
Author-X-Name-First: Chun-Yi
Author-X-Name-Last: Kuo
Title: Comparing the metafrontier Malmquist productivity changes of public accounting firms across countries
Abstract:
This study compares the productivity changes of public accounting firms among the US, China, and Taiwan, under the framework of the stochastic metafrontier production function. Using the generalized metafrontier Malmquist productivity index (gMMPI), we find that even if Chinese accounting firms have the lowest average technical efficiencies, their average gMMPI surpasses the other two countries. This is associated with Chinese governmental policies that encourage fast expansion in the scale of accounting firms. Our model provides an alternative approach to comparing productivity change among firms across different groups and the findings are more suggestive to regulators and partners of accounting firms.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 589-608
Issue: 5
Volume: 26
Year: 2019
Month: 9
X-DOI: 10.1080/16081625.2017.1354712
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1354712
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:5:p:589-608
Template-Type: ReDIF-Article 1.0
Author-Name: Zheyu Dong
Author-X-Name-First: Zheyu
Author-X-Name-Last: Dong
Author-Name: Xiaochun Li
Author-X-Name-First: Xiaochun
Author-X-Name-Last: Li
Title: Rural dual economics, subsidy policy and the income inequality between skilled and unskilled workers
Abstract:
This paper builds a general-equilibrium model with three sectors to study the effects of several modern-agricultural factor price subsidy policies on the income inequality between skilled and unskilled labour. We find that all types of price subsidies, including on skilled labour, unskilled labour and capital, enlarge the income inequality if capital is sector-specific, while they decrease this gap if capital moves freely between sectors. Moreover, to what extent the income gap would be altered depends on the ratio of factor income to total output, and we also find that the urban unemployment decreases under certain conditions regardless of capital mobility.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 609-621
Issue: 5
Volume: 26
Year: 2019
Month: 9
X-DOI: 10.1080/16081625.2017.1363656
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1363656
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:5:p:609-621
Template-Type: ReDIF-Article 1.0
Author-Name: Ping Li
Author-X-Name-First: Ping
Author-X-Name-Last: Li
Author-Name: Wei Shu
Author-X-Name-First: Wei
Author-X-Name-Last: Shu
Author-Name: Qingquan Tang
Author-X-Name-First: Qingquan
Author-X-Name-Last: Tang
Author-Name: Ying Zheng
Author-X-Name-First: Ying
Author-X-Name-Last: Zheng
Title: Internal control and corporate innovation: evidence from China
Abstract:
This study investigates whether and how internal control quality affects firms’ innovation decisions on exploratory innovation and routine innovation using a sample of Chinese listed firms. Our empirical evidence shows that firms with high-quality internal controls are associated with less innovation activities with regard to exploratory innovation, routine innovation, and total innovation. We further find that the role of internal controls in innovation strategies is more pronounced for high-tech firms. Specifically, we show that firms with high-quality internal controls shift innovation investment from exploratory innovation to routine innovation. Our findings provide evidence that internal control quality can have side-effects on a firm’s innovation activities in emerging markets.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 622-642
Issue: 5
Volume: 26
Year: 2019
Month: 9
X-DOI: 10.1080/16081625.2017.1370380
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1370380
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:5:p:622-642
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial Board
Abstract:
Journal:
Pages: ebi-ebi
Issue: 3
Volume: 17
Year: 2010
X-DOI: 10.1080/16081625.2010.9720861
File-URL: http://hdl.handle.net/10.1080/16081625.2010.9720861
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Handle: RePEc:taf:raaexx:v:17:y:2010:i:3:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: Chris Milner
Author-X-Name-First: Chris
Author-X-Name-Last: Milner
Title: Introduction
Abstract:
Journal:
Pages: iii-iv
Issue: 3
Volume: 17
Year: 2010
X-DOI: 10.1080/16081625.2010.9720862
File-URL: http://hdl.handle.net/10.1080/16081625.2010.9720862
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Handle: RePEc:taf:raaexx:v:17:y:2010:i:3:p:iii-iv
Template-Type: ReDIF-Article 1.0
Author-Name: Chris Miller
Author-X-Name-First: Chris
Author-X-Name-Last: Miller
Author-Name: Meng Lu
Author-X-Name-First: Meng
Author-X-Name-Last: Lu
Author-Name: Zhihong Yu
Author-X-Name-First: Zhihong
Author-X-Name-Last: Yu
Title: On the Economic Content of Factor Content: with Application to China's Trade
Abstract:
Chinese processing trade has grown considerably as firms adopted a wide array of organizational forms to have their products assembled in China for export. To understand the organization of processing trade we modify Grossman and Helpman's (2004) model of managerial incentives to account for the economic costs associated with firms' input control decisions in China. We examine Chinese processing trade between 1992 and 2003 to test the model's predictions. As predicted by the model, we find that firm productivity is related to processing choices. In addition, the organization of processing trade is found to match tariff levels at the product level.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 217-233
Issue: 3
Volume: 17
Year: 2010
X-DOI: 10.1080/16081625.2010.9720863
File-URL: http://hdl.handle.net/10.1080/16081625.2010.9720863
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Handle: RePEc:taf:raaexx:v:17:y:2010:i:3:p:217-233
Template-Type: ReDIF-Article 1.0
Author-Name: Huiya Chen
Author-X-Name-First: Huiya
Author-X-Name-Last: Chen
Author-Name: Deborah L. Swenson
Author-X-Name-First: Deborah L.
Author-X-Name-Last: Swenson
Title: Managerial Incentives and the Organization of Chinese Processing Trade
Abstract:
Chinese processing trade has grown considerably as firms adopted a wide array of organizational forms to have their products assembled in China for export. To understand the organization of processing trade we modify Grossman and Helpman's (2004) model of managerial incentives to account for the economic costs associated with firms' input control decisions in China. We examine Chinese processing trade between 1992 and 2003 to test the model's predictions. As predicted by the model, we find that firm productivity is related to processing choices. In addition, the organization of processing trade is found to match tariff levels at the product level.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 235-252
Issue: 3
Volume: 17
Year: 2010
X-DOI: 10.1080/16081625.2010.9720864
File-URL: http://hdl.handle.net/10.1080/16081625.2010.9720864
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Handle: RePEc:taf:raaexx:v:17:y:2010:i:3:p:235-252
Template-Type: ReDIF-Article 1.0
Author-Name: Xiaohua Bao
Author-X-Name-First: Xiaohua
Author-X-Name-Last: Bao
Author-Name: Larry D. Qiu
Author-X-Name-First: Larry D.
Author-X-Name-Last: Qiu
Title: Do Technical Barriers to Trade Promote or Restrict Trade? Evidence from China
Abstract:
The use of technical barriers to trade (TBT) is widespread and has increasing impact on international trade. In contrast to most other trade measures, TBT have both trade promotion and trade restriction effects. Due to their theoretical complexity and data scarcity, TBT have been considered as one of the most difficult non-tariff barriers (NTBs) to quantify. In this paper, we construct a TBT database from 1998–2006 to examine the influence of TBT imposed by China on the country's imports. When using the frequency index, we find that TBT are trade restrictive: a one unit increase in TBT will decrease import value by about 0.8%. However, when the coverage ratio is used, we find that the negative effects of TBT are not statistically significant based on the entire period. However, if the focus is shifted to data from 1998–2001, we find that TBT have trade promotion effects. A one unit increase in TBT will increase import value by about 0.2%. Finally, China's TBT (measured by both frequency index and coverage ratio) are trade restricting for agriculture goods but trade promoting for manufacturing goods.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 253-278
Issue: 3
Volume: 17
Year: 2010
X-DOI: 10.1080/16081625.2010.9720865
File-URL: http://hdl.handle.net/10.1080/16081625.2010.9720865
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Handle: RePEc:taf:raaexx:v:17:y:2010:i:3:p:253-278
Template-Type: ReDIF-Article 1.0
Author-Name: Joachim Jarreau
Author-X-Name-First: Joachim
Author-X-Name-Last: Jarreau
Author-Name: Sandra Poncet
Author-X-Name-First: Sandra
Author-X-Name-Last: Poncet
Title: What Chinese Provinces Export Matter for Their Income and Export Performance
Abstract:
We estimate the relationship between export sophistication and economic and export performance in China. We confirm Hausmann, Hwang and Rodrik (2007)'s prediction that regions that develop more sophisticated goods grasp greater gains from globalization and grow faster. We find that these gains are limited to export activities undertaken by domestic entities. Direct gains do not appear to derive from foreign entities typically engaged in processing trade even though they are the main contributors to the global upgrading of China's exports.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 279-297
Issue: 3
Volume: 17
Year: 2010
X-DOI: 10.1080/16081625.2010.9720866
File-URL: http://hdl.handle.net/10.1080/16081625.2010.9720866
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Handle: RePEc:taf:raaexx:v:17:y:2010:i:3:p:279-297
Template-Type: ReDIF-Article 1.0
Author-Name: Yang Li
Author-X-Name-First: Yang
Author-X-Name-Last: Li
Author-Name: Shin-Yi Chen
Author-X-Name-First: Shin-Yi
Author-X-Name-Last: Chen
Title: The Impact of FDI on the Productivity of Chinese Economic Regions
Abstract:
This paper, based on the 51 prefecture-level cities of three economic regions (the Pearl River Delta, the Yangtze River Delta, and the BoHai Rim) for the period 2001–2007, found that a city's own FDI can only contribute positively to technology, but not inefficiency. In addition, its influence on frontier and inefficiency are insignificantly different among these economic regions. Furthermore, the contribution of other cities' lagged FDI within the same region on inefficiency in the Pearl River Delta is significantly larger than that in the BoHai Rim and the Yangtze River Delta, which cannot be derived from the data of provincial levels.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 299-312
Issue: 3
Volume: 17
Year: 2010
X-DOI: 10.1080/16081625.2010.9720867
File-URL: http://hdl.handle.net/10.1080/16081625.2010.9720867
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Handle: RePEc:taf:raaexx:v:17:y:2010:i:3:p:299-312
Template-Type: ReDIF-Article 1.0
Author-Name: Shujie Yao
Author-X-Name-First: Shujie
Author-X-Name-Last: Yao
Author-Name: Dylan Sutherland
Author-X-Name-First: Dylan
Author-X-Name-Last: Sutherland
Author-Name: Jian Chen
Author-X-Name-First: Jian
Author-X-Name-Last: Chen
Title: China's Outward FDI and Resource-Seeking Strategy: A Case Study on Chinalco and Rio Tinto
Abstract:
The scale and frequency of foreign direct investment (FDI) in foreign mining companies by China's large state-owned enterprises (SOEs) is still not well explained by existing investment or international business theories. This paper advances and verifies two important theoretical propositions. First, the efforts of China's big businesses to “go global” can be thought of as being part of a national power-building globalisation strategy. Second, facilitated by extended protection from the state, reaching beyond China's national boundaries, China's large SOEs raise investment capital and take risks that their foreign competitors do not. This paper uses Chinalco as a case study to illustrate these propositions.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 313-325
Issue: 3
Volume: 17
Year: 2010
X-DOI: 10.1080/16081625.2010.9720868
File-URL: http://hdl.handle.net/10.1080/16081625.2010.9720868
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Handle: RePEc:taf:raaexx:v:17:y:2010:i:3:p:313-325
Template-Type: ReDIF-Article 1.0
Author-Name: Hong Fan
Author-X-Name-First: Hong
Author-X-Name-Last: Fan
Author-Name: Xiaofei Song
Author-X-Name-First: Xiaofei
Author-X-Name-Last: Song
Title: Earnings management of Chinese central state-owned enterprises – the effects of state level incentives
Abstract:
This study builds upon the argument of alignment effect and posits that the close alignment of the interests between Chinese central state-owned enterprises (CSOEs) and those of the Chinese central government creates state-level incentives (e.g. GDP volatility mitigation) for CSOEs to manage earnings. Consistent with our proposition we find that Chinese CSOEs engage in earnings management to reduce GDP volatility. Furthermore, we find that Chinese CSOEs only use the real earnings management approaches that also reduce enterprise earnings volatility to mitigate GDP volatility.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 643-658
Issue: 6
Volume: 26
Year: 2019
Month: 11
X-DOI: 10.1080/16081625.2017.1386576
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1386576
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:6:p:643-658
Template-Type: ReDIF-Article 1.0
Author-Name: Hanwen Chen
Author-X-Name-First: Hanwen
Author-X-Name-Last: Chen
Author-Name: Qiliang Liu
Author-X-Name-First: Qiliang
Author-X-Name-Last: Liu
Author-Name: Le Luo
Author-X-Name-First: Le
Author-X-Name-Last: Luo
Author-Name: Tomo Suzuki
Author-X-Name-First: Tomo
Author-X-Name-Last: Suzuki
Title: The consequences of private relationship between audit partners and their clients
Abstract:
A private partner–client relation is revealed when sometimes signing audit partners and their clients switch to new audit firms but the audit partners continue to sign on audit reports for these clients in the new audit firms. In this study, we examine the economic consequences associated with such a private relation between audit partners and their clients. Using data from China, where the names of signing audit partners are identified in audit reports, we find that clients with private partner–client relationship tend to have higher costs of equity capital, lower firm values, and poorer future stock and accounting performances than their counterparts with no private partner–client relationship. Additional analyses show that the unfavorable consequences are not mitigated after the enforcement of mandatory audit partner rotation requirement in China. The findings imply that impaired independence at the audit partner level adversely affects clients and that more actions need to be taken to sever the private bond between audit partners and their clients.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 659-683
Issue: 6
Volume: 26
Year: 2019
Month: 11
X-DOI: 10.1080/16081625.2017.1392876
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1392876
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:6:p:659-683
Template-Type: ReDIF-Article 1.0
Author-Name: Noel W. Leung
Author-X-Name-First: Noel W.
Author-X-Name-Last: Leung
Author-Name: Julia Junxia Liu
Author-X-Name-First: Julia Junxia
Author-X-Name-Last: Liu
Author-Name: Brossa Wong
Author-X-Name-First: Brossa
Author-X-Name-Last: Wong
Title: The emergence of second-tier auditors in China: analysis of audit fee premium and audit quality
Abstract:
Strong government support for the growth of domestic audit firms has contributed to the emergence of second-tier auditors as an alternative to the Big 4 for Chinese listed companies in the post-2007 period. This paper examines audit fee and audit quality differences across the Big 4, second-tier auditors, and other small auditors. Controlling for auditor choice bias, we find the Big 4 earn a fee premium relative to second-tier auditors, although the audit quality between them is indistinguishable. Relative to other small auditors, however, second-tier auditors earn a fee premium that is accompanied by superior audit quality.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 684-708
Issue: 6
Volume: 26
Year: 2019
Month: 11
X-DOI: 10.1080/16081625.2017.1404920
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1404920
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:6:p:684-708
Template-Type: ReDIF-Article 1.0
Author-Name: Nir Yehuda
Author-X-Name-First: Nir
Author-X-Name-Last: Yehuda
Author-Name: Linda Vincent
Author-X-Name-First: Linda
Author-X-Name-Last: Vincent
Author-Name: Thomas Lys
Author-X-Name-First: Thomas
Author-X-Name-Last: Lys
Title: The nature and implications of acquisition goodwill
Abstract:
We investigate the conditions under which the accounting-based acquisition goodwill represents an economic asset. Analysis of the stock market reaction to 2123 acquisitions suggests that although investors perceive 41% of the acquisitions to have a negative net present value consistent with overpayment for the target, the acquirer records positive accounting goodwill. Adjusting the goodwill to eliminate any overpayment results in a better prediction of future operating performance. As a thought experiment, we also increase the recognized accounting goodwill for the remaining 59% of the sample. Again, we show that this goodwill construct is a better predictor of future operating performance.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 709-730
Issue: 6
Volume: 26
Year: 2019
Month: 11
X-DOI: 10.1080/16081625.2017.1414615
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1414615
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:6:p:709-730
Template-Type: ReDIF-Article 1.0
Author-Name: Wenlong Bian
Author-X-Name-First: Wenlong
Author-X-Name-Last: Bian
Author-Name: Xiangnan Wang
Author-X-Name-First: Xiangnan
Author-X-Name-Last: Wang
Title: The openness of China’s insurance industry and the efficiency of domestic vs. foreign life insurers
Abstract:
We study the cost and profit efficiencies of life insurers in China from 2009 to 2013, a period when China fully opened its insurance market to foreign insurers. Further, we compare efficiency disparities between domestic and foreign life insurers and study the influences of firm characteristics on them. We find that foreign life insurers are more cost efficient than domestic life insurers, whereas mean profit efficiency of the former is slightly lower. In addition, domestic life insurers are advised to decrease the rate of scale expansion and to recruit more highly educated employees in order to narrow down the cost-efficiency disparity. Meanwhile, foreign life insurer advantages in terms of product diversification, employee quality, and equity adequacy do not help them achieve higher profit efficiency. We recommend that foreign life insurers expand their scale through merges and acquisitions and Internet platform in order to reap the benefits of the revenue scale economy.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 731-746
Issue: 6
Volume: 26
Year: 2019
Month: 11
X-DOI: 10.1080/16081625.2017.1404919
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1404919
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:6:p:731-746
Template-Type: ReDIF-Article 1.0
Author-Name: Shaner Chu
Author-X-Name-First: Shaner
Author-X-Name-Last: Chu
Author-Name: Changchun Gao
Author-X-Name-First: Changchun
Author-X-Name-Last: Gao
Title: Intellectual property protection and creative enterprises’ investment efficiency: alleviating financing constraints or inhibiting agency problem?
Abstract:
This study investigates the influence of regional intellectual property protection (IPP) on creative enterprises’ investment efficiency in China, and its influencing mechanism is also explored. For this purpose, we employ provincial level data of IPP along with micro financial data from 214 Chinese listed creative enterprises between 2007 and 2015. Consistent with our assumptions, we find strong and robust evidence that IPP has a significant and negative correlation with the investment inefficiency of creative enterprises especially those with private ownership. We also employ investment-cash flow sensitivity by using modified Tobin-Q model to examine the concrete mechanism of IPP, and the results show that IPP impacts creative enterprises’ investment efficiency advantageously by relaxing financing constraints rather than inhibiting agency issue. Taken together, this paper contributes that IPP can help alleviate private creative enterprises’ financing problem, which in turn improves the firms’ investment efficiency.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 747-766
Issue: 6
Volume: 26
Year: 2019
Month: 11
X-DOI: 10.1080/16081625.2019.1566010
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1566010
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:6:p:747-766
Template-Type: ReDIF-Article 1.0
Author-Name: Chao Chen
Author-X-Name-First: Chao
Author-X-Name-Last: Chen
Author-Name: Yang Zhao
Author-X-Name-First: Yang
Author-X-Name-Last: Zhao
Author-Name: Yu Zhao
Author-X-Name-First: Yu
Author-X-Name-Last: Zhao
Title: Corporate bond ratings, underwriters’ reputation and cost of bonds
Abstract:
This paper studies the impact of underwriters’ reputation on corporate bond ratings and issuers’ cost of bonds measured by their yield spread in China. By analyzing all corporate bond issues from the first issue in August 2007 to October 2014, this study finds that after controlling for the endogenous issue and other factors, rating agencies are likely to take the reputation of underwriters into consideration when assigning credit ratings. Furthermore, the reputation of underwriters can decrease bond financing costs through the channel of credit ratings. Specifically, the higher the reputation of underwriters is, the higher the credit ratings and the lower the yield spread of bonds will be. This study provides new evidence for the effect of underwriters’ reputation in the process of bond initial issuing in China.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1-16
Issue: 1-2
Volume: 26
Year: 2019
Month: 1
X-DOI: 10.1080/16081625.2019.1522570
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1522570
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:1-2:p:1-16
Template-Type: ReDIF-Article 1.0
Author-Name: Chien-Ju Lu
Author-X-Name-First: Chien-Ju
Author-X-Name-Last: Lu
Author-Name: Chao-Jung Chen
Author-X-Name-First: Chao-Jung
Author-X-Name-Last: Chen
Title: Debt covenants and analysts’ information environment
Abstract:
This study investigates whether private information from financial covenants in syndicated loans affects analysts’ information environment. Specifically, we examine the relationship between the number of financial covenants and common information in analysts’ forecasts, defined as the common-to-total information ratio. We demonstrate that the common information in analysts’ forecasts increases significantly after loan initiation when loans impose more financial covenants. We also find that the effect is more pronounced for balance sheet-based covenants relative to income statement-based covenants. Our evidence suggests that analysts use financial covenant information in loan contracts to shape their forecast behavior.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 17-37
Issue: 1-2
Volume: 26
Year: 2019
Month: 1
X-DOI: 10.1080/16081625.2019.1545894
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1545894
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:1-2:p:17-37
Template-Type: ReDIF-Article 1.0
Author-Name: Audrey Wen-hsin Hsu
Author-X-Name-First: Audrey Wen-hsin
Author-X-Name-Last: Hsu
Author-Name: Grace Shu-Hsing Wu
Author-X-Name-First: Grace Shu-Hsing
Author-X-Name-Last: Wu
Title: The fair value of investment property and stock price crash risk
Abstract:
This study examines whether recognizing fair value of investment property is more associated with stock price crash risk than recognizing historical cost of investment property. Using a sample of publicly traded firms that held investment property from 2007 through 2011 in China, we find that firms that recognize investment property at fair value in China experience an increase in crash risk. The findings suggest that fair value reporting for investment property in China does not convey private managerial information regarding firm value and could be a channel for concealing information. In additional analysis, we also find evidence that the association between fair value reporting and increased crash risk is mitigated in firms with strong corporate governance.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 38-63
Issue: 1-2
Volume: 26
Year: 2019
Month: 1
X-DOI: 10.1080/16081625.2019.1545895
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1545895
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:1-2:p:38-63
Template-Type: ReDIF-Article 1.0
Author-Name: Audrey Wen-hsin Hsu
Author-X-Name-First: Audrey
Author-X-Name-Last: Wen-hsin Hsu
Author-Name: Sophia Liu
Author-X-Name-First: Sophia
Author-X-Name-Last: Liu
Author-Name: Heibatollah Sami
Author-X-Name-First: Heibatollah
Author-X-Name-Last: Sami
Author-Name: TingHong Wan
Author-X-Name-First: TingHong
Author-X-Name-Last: Wan
Title: IAS 41 and stock price informativeness
Abstract:
We investigate whether the adoption of International Accounting Standard 41: Agriculture influences firm-specific information flows capitalized into stock prices and thus affects stock price informativeness. Using a sample of IAS 41 adopters from countries that mandates IFRS in 2005 and the control samples of non-IAS 41 adopters, we find that price informativeness for IAS 41 adopters increases following IAS 41 adoption. We also find that the effect of IAS 41 adoption is similar between firms that transforms bearer plants, which derive value in use of assets and other biological assets. Overall, our results are consistent with the notion that the increased transparency from IAS 41 adoption broadly facilitates firm-specific information flows entering into stock market and thereby reduces synchronicity, making stock price more informative.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 64-89
Issue: 1-2
Volume: 26
Year: 2019
Month: 1
X-DOI: 10.1080/16081625.2019.1545928
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1545928
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:1-2:p:64-89
Template-Type: ReDIF-Article 1.0
Author-Name: Chih-Wen Mao
Author-X-Name-First: Chih-Wen
Author-X-Name-Last: Mao
Author-Name: Wen-Chieh Wu
Author-X-Name-First: Wen-Chieh
Author-X-Name-Last: Wu
Title: Moderated mediation effects of corporate social responsibility performance on tax avoidance: evidence from China
Abstract:
Using data of publicly listed Chinese companies practicing corporate social responsibility (CSR) activities between 2009 and 2016, this study empirically examines whether CSR performance has a conditional indirect effect (or moderated mediation effect) on the level of corporate tax avoidance. We find that corporate profitability serves as a full mediator in the association between CSR performance and corporate tax avoidance. CSR performance reduces corporate profitability, and corporate profitability in turn increases the level of corporate tax avoidance. In other words, CSR performance first reduces corporate profitability, and therefore results in lower corporate tax avoidance. Moreover, CSR performance does not significantly moderate the effect of corporate profitability on corporate tax avoidance. Therefore, our results suggest that CSR performance has an indirect, but not a conditional, effect on the level of corporate tax avoidance.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 90-107
Issue: 1-2
Volume: 26
Year: 2019
Month: 1
X-DOI: 10.1080/16081625.2019.1546157
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1546157
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:1-2:p:90-107
Template-Type: ReDIF-Article 1.0
Author-Name: Hsuan-Lien Chu
Author-X-Name-First: Hsuan-Lien
Author-X-Name-Last: Chu
Author-Name: Yu-Lin Chen
Author-X-Name-First: Yu-Lin
Author-X-Name-Last: Chen
Author-Name: Yan-Yi Chiou
Author-X-Name-First: Yan-Yi
Author-X-Name-Last: Chiou
Title: A field study of the impact of changes to a net sales-based incentive plan and centralized inventory management
Abstract:
Although empirical studies have shown an increase in store sales following the implementation of performance-based incentive plans for the salesforce, they rarely consider inventory decisions and do not clarify the consequences of organizational design choices. Using data from 78 retail stores in a case study of a firm’s accounting records from January 2013 to December 2014, this study examines how store managers reacted to changes in (i) performance measurement choices in contracting and (ii) authority over inventory decisions after the mandatory adoption of the International Accounting Standards 2 (IAS 2), which increased the visibility of high inventory costs, and whether the underlying changes improved the gross profit percentage. The case firm switched from a sales-based incentive plan for store managers with a decentralized inventory structure to a net sales-based incentive plan combined with centralized inventory systems. Under the net sales-based incentive plan, store managers can receive bonuses only if losses on inventory valuation were deducted from sales revenue. The empirical evidence shows that performance measurement choices related to salesforce compensation in conjunction with inventory management systems result in increases in a retail store’s gross profits and decreases in losses on inventory valuation.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 108-123
Issue: 1-2
Volume: 26
Year: 2019
Month: 1
X-DOI: 10.1080/16081625.2019.1546559
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1546559
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:1-2:p:108-123
Template-Type: ReDIF-Article 1.0
Author-Name: Alfiyatul Qomariyah
Author-X-Name-First: Alfiyatul
Author-X-Name-Last: Qomariyah
Title: The influences of internal and external factors in auditor choice: a literature study
Abstract:
Nowadays, companies are more selective in auditor choice due to the quality of auditing and financial reporting. Previous studies have examined various factors of auditor choice; however, only few of them combined the internal and external determinants of it. Therefore, this study aims to fill the gap using literature review approach and analyzes the determinants of auditor choice based on the findings of previous studies, then classifies it into internal and external factors. This study also discusses the auditor choice in Indonesia in order to gain more knowledge about it. The results of this study are expected to contribute to academicians and managers in terms of new insights about auditor choice.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 124-130
Issue: 1-2
Volume: 26
Year: 2019
Month: 1
X-DOI: 10.1080/16081625.2019.1546562
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1546562
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:1-2:p:124-130
Template-Type: ReDIF-Article 1.0
Author-Name: Niluh Putu Dian Rosalina Handayani Narsa
Author-X-Name-First: Niluh Putu Dian Rosalina Handayani
Author-X-Name-Last: Narsa
Author-Name: Supriyadi
Author-X-Name-First:
Author-X-Name-Last: Supriyadi
Title: The role of companies’ codes of ethics in mitigating managers’ escalation behavior in the frame of agency theory
Abstract:
This study examines the role of codes of ethics used to reduce the tendency for managers to irrationally escalate their investment decision commitments, and compares the effectiveness of such codes of ethics in mitigating the escalation of these commitments. Based on 2 (adverse selection and no adverse selection) x 3 (self-certification of code of ethics with signatures, code reading, and no code of ethics) factorial experimental data, the participants in the adverse selection condition tend to escalate more than those who do not. The code of ethics (self-certification of code of ethics with signatures and code reading) is significantly able to mitigate the manager’s escalation behavior. Furthermore, the code certification with signatures is the most effective method to mitigate the escalation of commitment. This study contributes to the literature on the escalation of commitment by providing empirical evidence of effective de-escalation strategies through the organizational ethics aspect.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 131-149
Issue: 1-2
Volume: 26
Year: 2019
Month: 1
X-DOI: 10.1080/16081625.2019.1546563
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1546563
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:1-2:p:131-149
Template-Type: ReDIF-Article 1.0
Author-Name: Yani Permatasari
Author-X-Name-First: Yani
Author-X-Name-Last: Permatasari
Author-Name: Zumala Anis Surayya
Author-X-Name-First: Zumala
Author-X-Name-Last: Anis Surayya
Title: S1 accounting extension students: love of money, gender, ethical perception, and religiosity
Abstract:
Public scandals involving accountants are an ethical dilemma in the accounting profession. This study aims to determine the perception and awareness of accounting students associated with the ethical crisis. Furthermore, this study examines the moderating effect of religiosity on love of money, gender and ethical perceptions. Using 118 accounting extension students as the sample, the data analysis techniques used is PLS. This study reveals that love of money has no significant influence on ethical perception while gender has. Religiosity is also proven to have a moderating effect on the relationship between gender and ethical perception, while it is not on love of money.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 150-159
Issue: 1-2
Volume: 26
Year: 2019
Month: 1
X-DOI: 10.1080/16081625.2019.1546972
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1546972
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:1-2:p:150-159
Template-Type: ReDIF-Article 1.0
Author-Name: Hyo Jin Kim
Author-X-Name-First: Hyo Jin
Author-X-Name-Last: Kim
Author-Name: Soon Suk Yoon
Author-X-Name-First: Soon Suk
Author-X-Name-Last: Yoon
Title: Value-relevance of the regulatory non-GAAP adjustments in the Korean banking industry
Abstract:
IAS 39 requires firms to use the incurred-loss model for bad debt expenses. However, the Korean Financial Supervisory Commission requires banks to record additional loan-losses based on the expected-loss model. These non-GAAP adjustments include adjustments to book values as well as net income. We examine the incremental value-relevance of these non-GAAP adjustments and fail to find incremental value-relevance over unadjusted IFRS net income. However, the non-GAAP book value adjustment does have a partial, incremental value-relevance over unadjusted book values of equity. In addition, the non-GAAP loan-loss adjustments required by regulators may be disclosed either on the face of the financial statements or in the notes, but the disclosure location also appears to lack value-relevance.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 160-171
Issue: 1-2
Volume: 26
Year: 2019
Month: 1
X-DOI: 10.1080/16081625.2019.1546974
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1546974
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:1-2:p:160-171
Template-Type: ReDIF-Article 1.0
Author-Name: Hye-Jeong Nam
Author-X-Name-First: Hye-Jeong
Author-X-Name-Last: Nam
Title: The dividend payout policy and R&D for loss firms: evidence from South Korea
Abstract:
This paper examines the effect of research and development (R&D) on dividend payments for loss firms. Even though a firm’s positive earnings is the main factor of dividend payout policy, earnings is not the main factor for loss firms’ dividend policy. An increase in dividends affects a firm’s liquidity and may cause a loss of profitable investment opportunities, thus paying dividends when a firm has negative earnings can be quite costly. Given the increase of loss firms with dividend payouts in Korea, this paper explores whether R&D is crucial for paying dividends among loss firms. We expect that loss firms with high R&D intensity are more likely to pay dividends to signal their future prospects. Using the sample from South Korean firms over 2002–2013, we find evidence that is consistent with our prediction. It suggests that loss firms with good prospects have incentives to signal their future performance using dividend payouts, and R&D is an important factor in determining dividend payout for loss firms.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 172-183
Issue: 1-2
Volume: 26
Year: 2019
Month: 1
X-DOI: 10.1080/16081625.2019.1546564
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1546564
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Handle: RePEc:taf:raaexx:v:26:y:2019:i:1-2:p:172-183
Template-Type: ReDIF-Article 1.0
Author-Name: Shu-Miao Lai
Author-X-Name-First: Shu-Miao
Author-X-Name-Last: Lai
Author-Name: Chih-Liang Liu
Author-X-Name-First: Chih-Liang
Author-X-Name-Last: Liu
Title: Management characteristics and corporate investment efficiency
Abstract:
This paper investigates the relation between characteristics of top management teams (TMTs) and corporate investment efficiency. After controlling for corporate governance and several firms characteristics, we find that firms with better and more reputable TMTs (measured by larger team size, higher percentage of members with an MBA, higher percentage of members with prior executive experience, and higher number of members serving on boards of other companies) are negatively related to investment inefficiency caused by over- and underinvestment. Furthermore, we find that TMT characteristics complement the positive effect of financial reporting quality on investment efficiency. Our findings suggest that better TMT characteristics can mitigate investment distortions caused by over- and underinvestment.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 295-312
Issue: 3-4
Volume: 25
Year: 2018
Month: 5
X-DOI: 10.1080/16081625.2016.1266270
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1266270
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:3-4:p:295-312
Template-Type: ReDIF-Article 1.0
Author-Name: Ming-Jen Chang
Author-X-Name-First: Ming-Jen
Author-X-Name-Last: Chang
Author-Name: Chih-Chung Chien
Author-X-Name-First: Chih-Chung
Author-X-Name-Last: Chien
Title: Exchange rate prediction using monetary policy rules in Taiwan
Abstract:
This study examines exchange rate predictability based on different types of monetary policy rules in Taiwan. The out-of-sample exchange rate predictive accuracy is compared based on the Taylor rule fundamentals to a naïve random walk model. We find that both short-horizon and long-horizon out-of-sample exchange rate predictive power outperform the random walk process in many cases. The stronger evidence relates to the Taylor rule models with interest rate smoothing. The strongest evidence comes from the specifications which involve higher-order interest rate smoothing in the trade-weighted Taiwan Dollar rate. The findings are confirmed by the contemporaneous Taylor rules, the homogeneous coefficients, and the examinations of the nonlinear least squares approaches.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 388-403
Issue: 3-4
Volume: 25
Year: 2018
Month: 5
X-DOI: 10.1080/16081625.2016.1272422
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1272422
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:3-4:p:388-403
Template-Type: ReDIF-Article 1.0
Author-Name: Byungjin Kwak
Author-X-Name-First: Byungjin
Author-X-Name-Last: Kwak
Author-Name: Kyoungwon Mo
Author-X-Name-First: Kyoungwon
Author-X-Name-Last: Mo
Title: Executive pension, default risk, and earnings management
Abstract:
The value of executive pension plans depends significantly on the incidence of bankruptcy because executive pension plans have characteristics similar to unsecured debt. These unique characteristics lead us to investigate whether managers change their firms’ accounting policy to protect their pension plans when their firms face imminent default risk. Identifying a firm’s default risk with various proxies, we find that managers with executive pension plans are more likely to engage in income-increasing earnings management during a year of high default risk as compared to managers without such pension plans. The result remains robust with the use of propensity score matching and two-stage least squares regression analysis to alleviate the endogeneity issues in our hypothesized relationships. In addition, we find that the results are more pronounced for ex-post bankrupt firms.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 463-480
Issue: 3-4
Volume: 25
Year: 2018
Month: 5
X-DOI: 10.1080/16081625.2016.1277951
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1277951
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:3-4:p:463-480
Template-Type: ReDIF-Article 1.0
Author-Name: Zhongzhao Wang
Author-X-Name-First: Zhongzhao
Author-X-Name-Last: Wang
Author-Name: Quanxi Liang
Author-X-Name-First: Quanxi
Author-X-Name-Last: Liang
Author-Name: Wen Yang
Author-X-Name-First: Wen
Author-X-Name-Last: Yang
Title: Capital market internationalization and equity financing costs: firm-level evidence from China
Abstract:
In recent years, the Chinese capital market has been increasingly integrated into the international capital market, although the level of integration remains low. We exploit the unique variations in China’s capital market integration to study the effect of capital market internationalization on the cost of equity financing. Using firm-level panel data from China, we measure capital market integration at the corporate level using the degree of co-movement between a company’s share price and the international capital market. After controlling for year effects and industry effects, we find that the growing integration of the capital market is significantly increasing Chinese companies’ equity financing costs. This surprising result still holds after controlling for the endogeneity problem. One possible explanation is the asymmetric approach of China’s capital market internationalization, i.e. while the Chinese capital market is increasingly open to international investors, it remains difficult for Chinese investors to invest abroad. Consequently, while international investors bring more risk into the Chinese market, domestic investors in China lack effective ways to diversify the risk in the global market. This additional source of non-diversifiable risk demands a higher return to capital, which raises the equity financing costs in China.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 330-351
Issue: 3-4
Volume: 25
Year: 2018
Month: 5
X-DOI: 10.1080/16081625.2016.1278175
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1278175
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:3-4:p:330-351
Template-Type: ReDIF-Article 1.0
Author-Name: Diana B. Adelan
Author-X-Name-First: Diana B.
Author-X-Name-Last: Adelan
Author-Name: Makoto Kakinaka
Author-X-Name-First: Makoto
Author-X-Name-Last: Kakinaka
Title: Extensive and intensive margins of exports: the case of the Philippines
Abstract:
This study investigates the Philippines’ merchandise export patterns by empirically examining its performance of extensive and intensive margins at the product level over the sample period from 1975 to 2012. The main results suggest that the Philippines’ weak exports may be traced primarily from its poor performance at intensive margin, i.e. survival and deepening. In addition, our analysis indicates significant differences on the country’s export performance between its established markets (major trading partners, including Japan, the US, China, Hong Kong, and Korea, and ASEAN-5 members) and its relatively new export destinations (new ASEAN members).
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 404-418
Issue: 3-4
Volume: 25
Year: 2018
Month: 5
X-DOI: 10.1080/16081625.2017.1293551
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1293551
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:3-4:p:404-418
Template-Type: ReDIF-Article 1.0
Author-Name: Tae Wook Kim
Author-X-Name-First: Tae Wook
Author-X-Name-Last: Kim
Author-Name: Dainn Wie
Author-X-Name-First: Dainn
Author-X-Name-Last: Wie
Title: The five-day workweek system and investor inattention
Abstract:
In this paper, we show that work schedule is a key factor driving investor inattention to Friday earnings announcements using the introduction of the five-day workweek system in the financial sector of Korea in 2002 as a natural experiment. Our analyses show a stronger immediate response and a weaker delayed response to Friday news under the six-day workweek system. The trend was, however, reversed under the five-day workweek system. We also find out consistent evidence from the movement of trading volume. These findings demonstrate that the trade-off between weekend distraction and additional working hours during the weekend determines investors’ attention to Friday earnings announcements.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 419-432
Issue: 3-4
Volume: 25
Year: 2018
Month: 5
X-DOI: 10.1080/16081625.2017.1298455
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1298455
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:3-4:p:419-432
Template-Type: ReDIF-Article 1.0
Author-Name: Zhaohui Zhu
Author-X-Name-First: Zhaohui
Author-X-Name-Last: Zhu
Author-Name: Xiaoyan Song
Author-X-Name-First: Xiaoyan
Author-X-Name-Last: Song
Author-Name: WenSheng Huang
Author-X-Name-First: WenSheng
Author-X-Name-Last: Huang
Title: Top management team demography, investor sentiment, and the investment levels of listed companies
Abstract:
The perceptions and decisions of securities investors in capital markets are not fully rational. Therefore, ‘smart’ managers of listed companies may cater to the irrational sentiments of investors by making catering investments to raise short-term stock prices. In this research, the top management team (TMT) demography that affects managers’ cognitive base and values is studied to analyze its moderating effects on the impacts of investor sentiment on corporate investment levels. The results show that the level of corporate investment to cater for investor sentiment decreases as the TMT’s age increases, and high TMT education levels can reduce the impacts of investor sentiment on corporate investment decision-making. However, the tenure of the TMT has no effect on companies’ catering investments.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 481-495
Issue: 3-4
Volume: 25
Year: 2018
Month: 5
X-DOI: 10.1080/16081625.2017.1311797
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1311797
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:3-4:p:481-495
Template-Type: ReDIF-Article 1.0
Author-Name: Shengmin Hung
Author-X-Name-First: Shengmin
Author-X-Name-Last: Hung
Author-Name: Zheng Qiao
Author-X-Name-First: Zheng
Author-X-Name-Last: Qiao
Title: Profitability news or valuation news? A diagnostic analysis on the different news components in conditional conservatism
Abstract:
The sign of stock return has been widely used to proxy for news in the conditional conservatism model. Under discount cash flow model, firm value changes are caused by either cash flow news or discount rate news. Simply using the sign of stock returns to define good (bad) news can be problematic. Following the classic return decomposition method, this paper decomposes return news into cash flow news and discount rate news. We find that cash flow news component demonstrates consistent results with previous findings. However, with respect to discount rate news, positive return news turns out to be recognized more quickly in earnings. The conventional timeliness asymmetry even disappears in the highest quintile of discount rate news shock magnitude. In additional tests, we also document weakened timeliness asymmetry conditional on a battery of proxy variables for discount rate news. Our findings suggest that we should use stock return sign with caution in conditional conservatism tests, especially when discount rate news shock is large.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 496-513
Issue: 3-4
Volume: 25
Year: 2018
Month: 5
X-DOI: 10.1080/16081625.2017.1314189
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1314189
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:3-4:p:496-513
Template-Type: ReDIF-Article 1.0
Author-Name: Su Jeong Lee
Author-X-Name-First: Su Jeong
Author-X-Name-Last: Lee
Author-Name: Sung Ook Park
Author-X-Name-First: Sung Ook
Author-X-Name-Last: Park
Author-Name: Woon-Oh Jung
Author-X-Name-First: Woon-Oh
Author-X-Name-Last: Jung
Title: Earnings management by controlling shareholders who plan for stock gifts: Korean evidence
Abstract:
We examine whether controlling shareholders who plan for stock gifts would manage earnings in an attempt to depress stock prices prior to gifting stocks to related parties. Gift taxes are levied based on the average market value of the stock transferred for a certain period known as the valuation period. This process enables controlling shareholders to be incentivized to depress stock prices during this period and thereby alleviate tax burden. We discover that the firms that have stock gift transactions in the sample significantly decrease their discretionary accruals in the quarters that precede and/or overlap with the valuation period. Earnings management that decreases income is statistically significant when stock gifts are made for individuals who are the related parties and family members of controlling shareholders. By contrast, we do not observe a similar earnings-management behavior in cases where stock gifts are donated to institutional donees who are not subject to gift taxes.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 313-329
Issue: 3-4
Volume: 25
Year: 2018
Month: 5
X-DOI: 10.1080/16081625.2017.1322909
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1322909
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:3-4:p:313-329
Template-Type: ReDIF-Article 1.0
Author-Name: Seung-Leul Kim
Author-X-Name-First: Seung-Leul
Author-X-Name-Last: Kim
Author-Name: Sang-Ho Lee
Author-X-Name-First: Sang-Ho
Author-X-Name-Last: Lee
Author-Name: Toshihiro Matsumura
Author-X-Name-First: Toshihiro
Author-X-Name-Last: Matsumura
Title: Eco-technology licensing by a foreign innovator and privatization policy in a polluting mixed duopoly
Abstract:
This article investigates the fixed-fee licensing contract in a mixed duopoly where public and private firms may purchase eco-technology from a foreign innovator. We show that the foreign innovator chooses either an exclusive or a non-exclusive licensing contract, depending on (i) the cost gap between the two firms, (ii) the environmental damage caused by pollutants, and (iii) whether a public firm is privatized or not. We further examine the welfare consequences of non-exclusive licensing, exclusive licensing and discriminatory fixed-fee licensing contracts, respectively, and show that privatization improves social welfare when both cost gap and environmental damage are large.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 433-448
Issue: 3-4
Volume: 25
Year: 2018
Month: 5
X-DOI: 10.1080/16081625.2017.1339617
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1339617
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:3-4:p:433-448
Template-Type: ReDIF-Article 1.0
Author-Name: Rong-Ruey Duh
Author-X-Name-First: Rong-Ruey
Author-X-Name-Last: Duh
Author-Name: Li-Chun Kuo
Author-X-Name-First: Li-Chun
Author-X-Name-Last: Kuo
Author-Name: Jia-Ciou Yan
Author-X-Name-First: Jia-Ciou
Author-X-Name-Last: Yan
Title: The effects of review form and task complexity on auditor performance
Abstract:
This study examines the effects of review form and task complexity levels on auditor performance. Adopting a 2 × 2 (face-to-face vs. e-mail review and low vs. high task complexity) between-subjects design, we recruit auditors with limited experience to perform going-concern evaluations in an experimental setting. Our results reveal that auditors in the face-to-face review group perform better than those in the e-mail review group, and that auditor performance is lower for more complex tasks. More importantly, consistent with our hypotheses, auditors in the face-to-face review group perform better than those in the e-mail review group when task complexity is low, but not when task complexity is high.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 449-462
Issue: 3-4
Volume: 25
Year: 2018
Month: 5
X-DOI: 10.1080/16081625.2017.1346479
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1346479
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:3-4:p:449-462
Template-Type: ReDIF-Article 1.0
Author-Name: Shenggang Yang
Author-X-Name-First: Shenggang
Author-X-Name-Last: Yang
Author-Name: Feiying He
Author-X-Name-First: Feiying
Author-X-Name-Last: He
Author-Name: Qi Zhu
Author-X-Name-First: Qi
Author-X-Name-Last: Zhu
Author-Name: Shihao Li
Author-X-Name-First: Shihao
Author-X-Name-Last: Li
Title: How does corporate social responsibility change capital structure?
Abstract:
How do creditors view the existence of corporate social responsibility (CSR) strategies? Our study investigates the effect of CSR on information asymmetry between firms and creditors. Using Chinese listed firms as samples, our paper adopts propensity score matching to reconstruct the new samples to randomly assign CSR reportage to firms. We then use a differences-in-differences approach to construct our hypotheses as follows. First, firms that employ CSR strategies possess higher leverage than firms that do not. Second, the presence of CSR reports reduces the speed of capital structure adjustment, and the adjustment speeds of above-target leverage firms tend to be slower than those of below-target leverage firms. Third, CSR reports provide long-term predictions to creditors, enabling firms that issue them to maintain higher long-term leverage compared with firms that do not incorporate CSR into their operations. In summary, on the basis of causal inference, we conclude that CSR can considerably reduce information asymmetry between firms and creditors.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 352-387
Issue: 3-4
Volume: 25
Year: 2018
Month: 5
X-DOI: 10.1080/16081625.2017.1354710
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1354710
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:3-4:p:352-387
Template-Type: ReDIF-Article 1.0
Author-Name: Li Bai
Author-X-Name-First: Li
Author-X-Name-Last: Bai
Author-Name: Peter Koveos
Author-X-Name-First: Peter
Author-X-Name-Last: Koveos
Author-Name: Min Liu
Author-X-Name-First: Min
Author-X-Name-Last: Liu
Title: Applying an ontology-augmenting XBRL model to accounting information system for business integration
Abstract:
The field of accounting information analysis and computing is a conceptually rich domain. The eXtensible Business Reporting Language is an XML vocabulary designed to simplify the automation of exchanging financial information, there exist some important limitations in the current version, more insightful semantics and a sharper level of representation are required to describe and exploit complex information. We design an ontology-augmenting XBRL extension model and a financial service matching framework for accounting information integration by adopting Semantic Web technologies, and compute a fuzzy-based semantic similarity to integrate two financial concepts. The model can provide more insightful semantics for financial analysis.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 75-97
Issue: 1-2
Volume: 25
Year: 2018
Month: 1
X-DOI: 10.1080/16081625.2016.1170616
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1170616
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:1-2:p:75-97
Template-Type: ReDIF-Article 1.0
Author-Name: Jun Chen
Author-X-Name-First: Jun
Author-X-Name-Last: Chen
Author-Name: Wang Dong
Author-X-Name-First: Wang
Author-X-Name-Last: Dong
Author-Name: Shuo Li
Author-X-Name-First: Shuo
Author-X-Name-Last: Li
Author-Name: Yu (Tony) Zhang
Author-X-Name-First: Yu (Tony)
Author-X-Name-Last: Zhang
Title: Perceived audit quality, state ownership, and stock price delay: evidence from China
Abstract:
We examine the effect of audit quality on stock price delay and whether the effect differs between two groups of Chinese firms: state-owned enterprises (SOEs) and non-state-owned enterprises (NSOEs). Using a sample of 15,019 firm-year observations for Chinese listed firms over the period 2001–2011, we find that firms with Big 4 auditors are associated with less stock price delay and this negative association is weaker for SOEs than for NSOEs. Our findings suggest that high-quality auditors play an important role in the price formation process, in that there is less stock price delay, and this role varies across firms with different ownership structures. Additional analyses show that the audit quality of international Big 4 auditors is perceived to be different from that of domestic Big 4 auditors. The effect of the perceived audit quality on price delay is different for SOEs controlled by the central government compared to those controlled by the local governments. Our study contributes to extant research by focusing on the economic consequences of auditor choices and by emphasizing the importance of recognizing ownership type when conducting audit research.Data availability Data used are from public sources identified in this paper.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 253-275
Issue: 1-2
Volume: 25
Year: 2018
Month: 1
X-DOI: 10.1080/16081625.2016.1208573
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1208573
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:1-2:p:253-275
Template-Type: ReDIF-Article 1.0
Author-Name: Fangzhao Zhou
Author-X-Name-First: Fangzhao
Author-X-Name-Last: Zhou
Author-Name: Lei Wang
Author-X-Name-First: Lei
Author-X-Name-Last: Wang
Author-Name: Zenan Zhang
Author-X-Name-First: Zenan
Author-X-Name-Last: Zhang
Author-Name: Yunbi An
Author-X-Name-First: Yunbi
Author-X-Name-Last: An
Title: The impacts of accrual-based and real earnings management on executive compensation: evidence from Chinese public firms in the private sector
Abstract:
This paper investigates whether high CFO or CEO compensation follows earnings management practices in Chinese public firms in the private sector. We find that while accrual-based earnings management does not impact executive compensation, real earnings management leads to high executive compensation. In addition, the effect of real earnings management is particularly strong for CEO pay, consistent with the notion that CEO pressure is the key driver of earnings management. Moreover, we find that this association is more pronounced for firms with a powerful CEO as well as for firms with a large wedge between control and cash flow rights.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 128-144
Issue: 1-2
Volume: 25
Year: 2018
Month: 1
X-DOI: 10.1080/16081625.2016.1222296
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1222296
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:1-2:p:128-144
Template-Type: ReDIF-Article 1.0
Author-Name: Karim Jamal
Author-X-Name-First: Karim
Author-X-Name-Last: Jamal
Author-Name: Qiliang Liu
Author-X-Name-First: Qiliang
Author-X-Name-Last: Liu
Author-Name: Le Luo
Author-X-Name-First: Le
Author-X-Name-Last: Luo
Title: Do Big 4 firms benefit or suffer losses when another Big 4 firm fails to detect fraud?
Abstract:
This paper examines how investors and companies in China benefit or penalize other audit firms (and their clients) when one Big 4 audit firm fails to detect a fraud. Using a detailed archival study of a fraud by a manufacturing firm (Kelon), we propose that an audit failure by one Big 4 firm hurts not only itself and shareholders of its clients, but also competing Big 4 firms and their clients. Unlike results in developed countries, clients of both the failing auditor (Deloitte) and other foreign (Big 4) auditors experience more negative stock market reactions than local non-Big 4 auditors’ clients at the disclosure event pertaining to Kelon. Negative effects are more pronounced for companies in Kelon’s industry. Shareholder losses are moderated by government ownership. Furthermore, companies are less likely to switch to other Big 4 auditors after disclosure of the fraud case. Our results are robust to additional analyses, including controls for self-selection of Big 4 auditors.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1-20
Issue: 1-2
Volume: 25
Year: 2018
Month: 1
X-DOI: 10.1080/16081625.2016.1230506
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1230506
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:1-2:p:1-20
Template-Type: ReDIF-Article 1.0
Author-Name: Ahrum Choi
Author-X-Name-First: Ahrum
Author-X-Name-Last: Choi
Author-Name: Byungcherl Charlie Sohn
Author-X-Name-First: Byungcherl Charlie
Author-X-Name-Last: Sohn
Author-Name: Desmond Yuen
Author-X-Name-First: Desmond
Author-X-Name-Last: Yuen
Title: Do auditors care about real earnings management in their audit fee decisions?
Abstract:
This study investigates whether auditors incorporate the implications of potential litigation risk arising from their client firms’ using real earnings management (REM) to manage earnings. Using a large sample of US firms, we find that REM is positively related to audit fees and that this relation is incremental over and beyond the effects of accrual-based earnings management and other control variables. We also find that the positive relation between REM and audit fees is stronger for firms with sophisticated investors or higher stock price sensitivity to accounting earnings. Finally, we find that this positive relation is more pronounced for firms with financial constraints where REM is more likely to stem from managerial opportunism and is perceived as riskier by auditors. These findings are robust to endogeneity controls and various sensitivity tests.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 21-41
Issue: 1-2
Volume: 25
Year: 2018
Month: 1
X-DOI: 10.1080/16081625.2016.1231580
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1231580
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:1-2:p:21-41
Template-Type: ReDIF-Article 1.0
Author-Name: Chin-Ho Lin
Author-X-Name-First: Chin-Ho
Author-X-Name-Last: Lin
Title: Did international production/distribution networks mitigate the effect of the global financial crisis? Evidence from Taiwan machinery industry
Abstract:
This study employs survival analysis to investigate how the trade relationships of international production/distribution networks mitigated the negative effects on exports during the global financial crisis of 2008–2009. Using monthly trade data at the most disaggregated level, this study employs January 2009 as the base, which was the worst month of the crisis, to identify whether there were active or inactive trade relationships. We reveal that even in the worst month of the crisis, the country-product pairs had high survival rates for active trade relationships, implying they were major drivers of the recovery of trade values after the crisis.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 98-112
Issue: 1-2
Volume: 25
Year: 2018
Month: 1
X-DOI: 10.1080/16081625.2016.1234937
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1234937
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:1-2:p:98-112
Template-Type: ReDIF-Article 1.0
Author-Name: Manuel A. Zambrano-Monserrate
Author-X-Name-First: Manuel A.
Author-X-Name-Last: Zambrano-Monserrate
Author-Name: Christopher Carvajal-Lara
Author-X-Name-First: Christopher
Author-X-Name-Last: Carvajal-Lara
Author-Name: Roberto Urgiles-Sanchez
Author-X-Name-First: Roberto
Author-X-Name-Last: Urgiles-Sanchez
Title: Is there an inverted U-shaped curve? Empirical analysis of the Environmental Kuznets Curve in Singapore
Abstract:
This paper provides empirical information based on the existence of the Environmental Kuznets Curve (EKC) hypothesis for Singapore by applying the autoregressive distributed lag bounds testing approach for the period of 1971–2011. Singapore is a country that has experienced an incredible economic development in the last decades and its contamination has been low in recent years. This hypothesis was tested, obtaining positive results that support it, along with this the Granger causality test showed that the causal variables of CO2 emissions are the GDP per capita, energy consumption, population density, financial development and trade openness. Empirical results confirm the evidence of EKC hypothesis in both the short-run and long-run. The results suggest that the financial development and trade openness help to reduce the CO2 emissions. This study hopes to sustain that the existing environmental regulations in the country should continue applying to keep reducing environmental degradation.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 145-162
Issue: 1-2
Volume: 25
Year: 2018
Month: 1
X-DOI: 10.1080/16081625.2016.1245625
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1245625
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:1-2:p:145-162
Template-Type: ReDIF-Article 1.0
Author-Name: Xiaochun Li
Author-X-Name-First: Xiaochun
Author-X-Name-Last: Li
Author-Name: Yunyun Wu
Author-X-Name-First: Yunyun
Author-X-Name-Last: Wu
Title: Environment and economy in the modern agricultural development
Abstract:
This paper establishes a three-sector general equilibrium model to investigate the environmental and economic effects of policies intended to promote modern agriculture. In the model, two situations are considered: In the first situation, the perfect mobility of capital between the capital-consuming sectors is assumed, and in the second situation, there is perfect mobility of land between the land-using sectors, keeping perfect mobility of capital assumption unchanged. The main conclusion is that the environmental effect of interest subsidization for modern agricultural sector is superior to other subsiding policies of factor prices.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 163-176
Issue: 1-2
Volume: 25
Year: 2018
Month: 1
X-DOI: 10.1080/16081625.2016.1246191
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1246191
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:1-2:p:163-176
Template-Type: ReDIF-Article 1.0
Author-Name: Nida Türegün
Author-X-Name-First: Nida
Author-X-Name-Last: Türegün
Title: Effects of borrowing costs, firm size, and characteristics of board of directors on earnings management types: a study at Borsa Istanbul
Abstract:
Using data for firms at Borsa Istanbul in Turkey, this study determines how borrowing costs, firm size, and board size and independency affect choice of earnings management (EM) type (efficient or opportunistic), in an attempt to expand the somewhat limited EM literature. The results of the ordinary least squares hypothesis testing show that the firms practice efficient EM, and that highly leveraged firms and those with a high proportion of independent non-executive board members use EM less than those with a low proportion, while large firms and those with large boards use EM more than those with small boards do.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 42-56
Issue: 1-2
Volume: 25
Year: 2018
Month: 1
X-DOI: 10.1080/16081625.2016.1246192
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1246192
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:1-2:p:42-56
Template-Type: ReDIF-Article 1.0
Author-Name: Shijun Cheng
Author-X-Name-First: Shijun
Author-X-Name-Last: Cheng
Author-Name: Wei Jiang
Author-X-Name-First: Wei
Author-X-Name-Last: Jiang
Author-Name: Yeqin Zeng
Author-X-Name-First: Yeqin
Author-X-Name-Last: Zeng
Title: Does access to capital affect cost stickiness? Evidence from China
Abstract:
We study the effect of limited access to capital on firm cost stickiness, using data from a large sample of Chinese private firms over 1998–2007. Our results show that on average SG&A costs are anti-sticky. For firms in regions with lower levels of financial development, SG&A costs have lower sensitivity to sales increases and exhibit lower stickiness. Overall our findings suggest access to capital as an important determinant of cost stickiness.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 177-198
Issue: 1-2
Volume: 25
Year: 2018
Month: 1
X-DOI: 10.1080/16081625.2016.1253483
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1253483
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:1-2:p:177-198
Template-Type: ReDIF-Article 1.0
Author-Name: Che-Chia Chang
Author-X-Name-First: Che-Chia
Author-X-Name-Last: Chang
Author-Name: Chia-Wei Chen
Author-X-Name-First: Chia-Wei
Author-X-Name-Last: Chen
Title: Directors’ and officers’ liability insurance and the trade-off between real and accrual-based earnings management
Abstract:
In this study, we examine whether directors’ and officers’ legal liabilities affect their choices of different means of earnings management. We focus on listed firms in Taiwan, where information on directors’ and officers’ liability insurance is publicly available. Consistent with prior studies, we find that insured firms are more likely to use accrual-based earnings management. However, we demonstrate that the level of overall earnings management is marginally lower for insured firms because they rely less on costly real earnings management. Our findings suggest that carrying directors’ and officers’ liability insurance may, to some extent, mitigate costs resulting from earnings management.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 199-217
Issue: 1-2
Volume: 25
Year: 2018
Month: 1
X-DOI: 10.1080/16081625.2016.1253484
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1253484
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:1-2:p:199-217
Template-Type: ReDIF-Article 1.0
Author-Name: Fang-Chi Lin
Author-X-Name-First: Fang-Chi
Author-X-Name-Last: Lin
Author-Name: Yu-Cheng Lin
Author-X-Name-First: Yu-Cheng
Author-X-Name-Last: Lin
Author-Name: Chieh-Shuo Chen
Author-X-Name-First: Chieh-Shuo
Author-X-Name-Last: Chen
Title: Accrual reversals and audit fees: the role of abnormal audit fees
Abstract:
This study examines whether abnormal audit fees impair auditor independence or reflect auditors’ efforts by using accruals reversal. All accruals must ultimately reverse, but those reversals have different effects on earnings persistence. Management may communicate the private information by different kinds of accruals. Therefore, auditors that have inside information should be able to identify managers who use their reporting discretion accruals to signal private information to investors. Our results suggest that normal audit fees reflect audit effort to identify different kinds of accruals reversal, but positive abnormal audit fees impair audit quality.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 276-294
Issue: 1-2
Volume: 25
Year: 2018
Month: 1
X-DOI: 10.1080/16081625.2016.1256784
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1256784
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:1-2:p:276-294
Template-Type: ReDIF-Article 1.0
Author-Name: Mitchell Oler
Author-X-Name-First: Mitchell
Author-X-Name-Last: Oler
Author-Name: Terence J. Pitre
Author-X-Name-First: Terence J.
Author-X-Name-Last: Pitre
Author-Name: Chang Joon Song
Author-X-Name-First: Chang Joon
Author-X-Name-Last: Song
Title: Perverse market rewards for meeting or beating earnings expectations
Abstract:
Approximately 47 (43) percent of the observations in our sample receive negative (positive) market rewards when they meet (miss) earnings expectations. We define these phenomena as perverse market rewards (PMR). We find that the likelihood of PMR is increased when (i) firms use earnings and/or expectations management; (ii) earnings growth is negative (positive) when earnings expectations are met (missed); and (iii) ownership by transient (dedicated) institutional investors is high when earnings expectations are met (missed). In addition, we find that, when earnings expectations are met (missed), PMR appears to be an indicator of bad (good) future stock performance. Our study demonstrates that gratuitous participation in the ‘numbers game’ does not always result in the desired market rewards.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 57-74
Issue: 1-2
Volume: 25
Year: 2018
Month: 1
X-DOI: 10.1080/16081625.2016.1263158
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1263158
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:1-2:p:57-74
Template-Type: ReDIF-Article 1.0
Author-Name: Yao Guo
Author-X-Name-First: Yao
Author-X-Name-Last: Guo
Author-Name: Jianan Zhou
Author-X-Name-First: Jianan
Author-X-Name-Last: Zhou
Title: Experimental tests of the salience theory: disaggregated income statements under two economic states
Abstract:
We present experimental evidence that unsophisticated investors are better able to make judgments when operating expenses are disaggregated by nature. Disaggregated expenses on the face of income statements increase the salience of information about cost structures and operating leverages that usually disclosed in several parts of the financial statements and notes. The judgments are also affected by economic states. We infer that disaggregation contributes more on making judgments in economic expansion rather than in economic recession. Our results bring empirical evidence to joint FASB/IASB financial statement presentation project and standard setters to encourage consistent principles for the presentation format in financial statements between Chinese GAAP and IFRS.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 113-127
Issue: 1-2
Volume: 25
Year: 2018
Month: 1
X-DOI: 10.1080/16081625.2016.1266269
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1266269
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:1-2:p:113-127
Template-Type: ReDIF-Article 1.0
Author-Name: Joonhei Cheung
Author-X-Name-First: Joonhei
Author-X-Name-Last: Cheung
Author-Name: Hyunpyo Kim
Author-X-Name-First: Hyunpyo
Author-X-Name-Last: Kim
Author-Name: Seungjun Kim
Author-X-Name-First: Seungjun
Author-X-Name-Last: Kim
Author-Name: Rong Huang
Author-X-Name-First: Rong
Author-X-Name-Last: Huang
Title: Is the asymmetric cost behavior affected by competition factors?
Abstract:
Prior studies on the asymmetric cost behavior mainly focus on internal factors. However, managers consider both internal and external factors when making strategic cost decisions. In this paper, we investigate the relation between the asymmetric cost behavior and external competition factors. We find that Selling, General, and Administrative costs are more sticky for firms in different competition environments, proxied by higher product differentiation, higher entry costs, and larger market size. Overall, these findings suggest that the asymmetric cost behavior is affected by external factors as well as internal factors.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 218-234
Issue: 1-2
Volume: 25
Year: 2018
Month: 1
X-DOI: 10.1080/16081625.2016.1266271
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1266271
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:1-2:p:218-234
Template-Type: ReDIF-Article 1.0
Author-Name: Hyoung-joo Lim
Author-X-Name-First: Hyoung-joo
Author-X-Name-Last: Lim
Author-Name: Dafydd Mali
Author-X-Name-First: Dafydd
Author-X-Name-Last: Mali
Title: Does market risk predict credit risk? An analysis of firm risk sensitivity, evidence from South Korea
Abstract:
We empirically test the relation between stock volatility (market risk) and credit ratings (credit risk) using KRX listed firms. We find a negative relation between stock volatility and credit ratings. The results suggest that as stock price volatility increases, a firm is more likely to experience a credit rating decrease. After dividing our sample into investment and non-investment grade groups, we find the relation between volatility and a credit rating decrease diminishes in the investment grade sample compared to the non-investment grade sample. Overall, we find investment grade firms are more likely to absorb shocks associated with speculative investment/divestment compared to price sensitive non-investment grade firms.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 235-252
Issue: 1-2
Volume: 25
Year: 2018
Month: 1
X-DOI: 10.1080/16081625.2016.1268060
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1268060
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Handle: RePEc:taf:raaexx:v:25:y:2018:i:1-2:p:235-252
Template-Type: ReDIF-Article 1.0
Author-Name: Robert James Parker
Author-X-Name-First: Robert James
Author-X-Name-Last: Parker
Author-Name: Mai Dao
Author-X-Name-First: Mai
Author-X-Name-Last: Dao
Author-Name: Hua-Wei Huang
Author-X-Name-First: Hua-Wei
Author-X-Name-Last: Huang
Author-Name: Yun-Chia Yan
Author-X-Name-First: Yun-Chia
Author-X-Name-Last: Yan
Title: Disclosing material weakness in internal controls: Does the gender of audit committee members matter?
Abstract:
As mandated by Sarbanes-Oxley Act, firms must disclose material weaknesses in internal controls. This study extends the body of accounting research that seeks to identify the factors associated with such disclosure. Drawing upon gender research in the behavioral sciences, we argue that female audit committee members examine internal controls more critically and thoroughly than their male counterparts; hence, firms with females in these positions are more likely to report problems. A logistic regression model of material weakness disclosure is developed that includes, as a predictor variable, proportion of females on the audit committee. Results support the proposed relationship.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 407-420
Issue: 3-4
Volume: 24
Year: 2017
Month: 10
X-DOI: 10.1080/16081625.2015.1057190
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1057190
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:3-4:p:407-420
Template-Type: ReDIF-Article 1.0
Author-Name: Hyungtae Kim
Author-X-Name-First: Hyungtae
Author-X-Name-Last: Kim
Author-Name: Byungjin Kwak
Author-X-Name-First: Byungjin
Author-X-Name-Last: Kwak
Author-Name: Youngdeok Lim
Author-X-Name-First: Youngdeok
Author-X-Name-Last: Lim
Author-Name: Jaeyoon Yu
Author-X-Name-First: Jaeyoon
Author-X-Name-Last: Yu
Title: Audit committee accounting expertise, CEO power, and audit pricing
Abstract:
The Sarbanes–Oxley Act of 2002 (SOX) mandates that all listed firms disclose whether they have a financial expert on the audit committee, highlighting the committee’s expertise. However, some argue that non-accounting financial experts, compared to accounting financial experts, are not sufficient to ensure audit committee effectiveness because the former lack accounting knowledge. Accounting experts on audit committees may require higher audit efforts, while auditors may assess audit committees with accounting financial experts as effective, decreasing audit efforts. This paper first inspects the effect of audit committee accounting expertise on audit fees as a proxy for audit efforts, and then investigates whether the effect is moderated by powerful CEOs. Using post-SOX period data, our results show that, on average, firms with accounting experts on audit committees are more likely to pay higher audit fees, and the effect is less pronounced when a powerful CEO manages a firm.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 421-439
Issue: 3-4
Volume: 24
Year: 2017
Month: 10
X-DOI: 10.1080/16081625.2015.1105753
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1105753
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:3-4:p:421-439
Template-Type: ReDIF-Article 1.0
Author-Name: Baolei Qi
Author-X-Name-First: Baolei
Author-X-Name-Last: Qi
Author-Name: Rong Yang
Author-X-Name-First: Rong
Author-X-Name-Last: Yang
Author-Name: Gaoliang Tian
Author-X-Name-First: Gaoliang
Author-X-Name-Last: Tian
Title: Do social ties between individual auditors and client CEOs/CFOs matter to audit quality?
Abstract:
The objective of this paper is to investigate whether and how the social ties between individual auditors and client chief executive officers (CEOs)/chief financial officers (CFOs) affect audit quality using a large sample of publicly traded firms in China. We define social ties between individual auditors and client CEOs/CFOs as ‘working or educational alumni.’ We find that clients with social ties are significantly and positively associated with abnormal accruals and the presence of reporting small profits, and are more likely to receive clean audit opinions compared to clients without social ties. Moreover, we find that the working-tie effect on audit quality is stronger than the school-tie effect. Furthermore, we find that socially connected clients are more likely to downward restate their audited earnings in subsequent years. In addition, we find that the social-tie effect on audit quality can be mitigated by several personal characteristics of individual auditors, such as partner, female, accounting major, auditing experience, etc. Overall, our study sheds new light on the impact of social ties between individual auditors and client executives on audit quality.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 440-463
Issue: 3-4
Volume: 24
Year: 2017
Month: 10
X-DOI: 10.1080/16081625.2015.1135067
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1135067
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:3-4:p:440-463
Template-Type: ReDIF-Article 1.0
Author-Name: Yi-Ping Liao
Author-X-Name-First: Yi-Ping
Author-X-Name-Last: Liao
Author-Name: Kuei-Fu Li
Author-X-Name-First: Kuei-Fu
Author-X-Name-Last: Li
Author-Name: Shengmin Hung
Author-X-Name-First: Shengmin
Author-X-Name-Last: Hung
Title: Does the conflict of interest matter for credit ratings? The impact of the client’s economic importance and the CRA tenure
Abstract:
We investigate whether the potential conflict of interest affects credit ratings. Based on US data, we find that: (1) the client’s economic importance is positively related to credit ratings, and impairs the rating accuracy, and (2) at first, the credit rating (rating accuracy) increases (decreases) in the early years of the CRA-client relationship, but when the length of the engagement relationship gets longer enough, the CRA tenure is negatively (positively) related to the credit rating (rating accuracy). Overall, it suggests that the CRAs’ contention that the conflict of interest has been well-managed does not appear to be convincing.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 302-322
Issue: 3-4
Volume: 24
Year: 2017
Month: 10
X-DOI: 10.1080/16081625.2016.1157024
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1157024
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:3-4:p:302-322
Template-Type: ReDIF-Article 1.0
Author-Name: Dongchul Cho
Author-X-Name-First: Dongchul
Author-X-Name-Last: Cho
Author-Name: Kyuesook Han
Author-X-Name-First: Kyuesook
Author-X-Name-Last: Han
Title: Decomposing exchange rates of Asia into financial and real factors
Abstract:
This paper imagines a foreign exchange market in which a net financial flow curve and a current account curve interact to simultaneously determine equilibrium levels of exchange rate and current account. To identify the two curves, we selected four Asian countries (Indonesia, Korea, Philippines, and Thailand) that drastically liberalized financial accounts and exchange rate systems after the 1997 crisis, and assumed that the institutional changes altered the slopes of net financial outflow curves while maintaining those of current account. The results indicate that currency depreciation greatly contributes to stabilizing foreign exchange markets by suppressing financial outflows (or attracting inflows), although the effects are not uniform across the countries in the short-run.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 377-386
Issue: 3-4
Volume: 24
Year: 2017
Month: 10
X-DOI: 10.1080/16081625.2016.1166970
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1166970
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:3-4:p:377-386
Template-Type: ReDIF-Article 1.0
Author-Name: Maoyong Cheng
Author-X-Name-First: Maoyong
Author-X-Name-Last: Cheng
Author-Name: Hong Zhao
Author-X-Name-First: Hong
Author-X-Name-Last: Zhao
Author-Name: Jerry W. Lin
Author-X-Name-First: Jerry W.
Author-X-Name-Last: Lin
Title: The effects of bank privatization on performance and prudential behavior in China: does state ownership matter?
Abstract:
Using China’s data from 2000 to 2013, we examine the effects of bank privatization on performance and prudential behavior, and find the following results. First, bank operating efficiency, credit risk, and prudential behavior have improved after introducing foreign strategic investors (FSIs). However, these effects are diminished as time passes. Second, going public increases bank profitability, operating efficiency, and prudential behavior, and reduces credit risk, which are also reversed as time passes. Finally, the effects of introducing FSIs on credit risk and prudential behavior are weaker for state-owned banks than for other banks, while the opposite is true for going public.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 387-406
Issue: 3-4
Volume: 24
Year: 2017
Month: 10
X-DOI: 10.1080/16081625.2016.1187071
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1187071
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:3-4:p:387-406
Template-Type: ReDIF-Article 1.0
Author-Name: Noriaki Matsushima
Author-X-Name-First: Noriaki
Author-X-Name-Last: Matsushima
Title: Expanding distribution channels
Abstract:
I provide a model in which upstream producers, whose production cost is quadratic in quantity, sell their products through two distribution channels, a traditional channel and an external retailer. Some producers (called ‘large’ producers) supply to both channels, whereas other producers (called ‘small’ producers) are only able to supply to the traditional channel. All producers compete in quantity in the traditional channel. The external retailer offers a nondiscriminatory per unit payment to upstream producers. I show that distribution channel expansion executed by a small producer can decrease the producer’s profit and the sum of the upstream producers’ profits.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 464-484
Issue: 3-4
Volume: 24
Year: 2017
Month: 10
X-DOI: 10.1080/16081625.2016.1188453
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1188453
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:3-4:p:464-484
Template-Type: ReDIF-Article 1.0
Author-Name: Shuangyan Li
Author-X-Name-First: Shuangyan
Author-X-Name-Last: Li
Author-Name: Genfu Feng
Author-X-Name-First: Genfu
Author-X-Name-Last: Feng
Author-Name: Guangjun Cao
Author-X-Name-First: Guangjun
Author-X-Name-Last: Cao
Title: The role of regional institutional environment in the relationship between political participation and effective tax rates: evidence from Chinese listed private firms before the financial crisis
Abstract:
Using a sample of Chinese listed private firms selected from the period of 1999–2007 before the financial crisis, we investigate that the role of regional institutional environment (RIE) in the relationship between political participation (POLP) and effective tax rates (ETR). We find that the correlation between POLP and ETR depends on RIE, which can be characterized in two ways: marketization and corruption levels; and in particular, a statistically significant positive relation is shown to exist between POLP and ETR among firms located in regions with low corruption levels, and so does a statistically significant negative correlation among firms located in regions with high corruption levels. Correlations of opposite nature exist if the marketization level is concerned, but the relations are not as strong as in the case of corruption level.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 323-338
Issue: 3-4
Volume: 24
Year: 2017
Month: 10
X-DOI: 10.1080/16081625.2016.1208575
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1208575
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:3-4:p:323-338
Template-Type: ReDIF-Article 1.0
Author-Name: Wei Yu
Author-X-Name-First: Wei
Author-X-Name-Last: Yu
Author-Name: Leonard F. S. Wang
Author-X-Name-First: Leonard F. S.
Author-X-Name-Last: Wang
Title: Network externalities and tariff structure
Abstract:
In this paper, we show that with cost asymmetry, stronger network externalities and less differentiated goods, the uniform tariff rate set by the government of the importing country increases and the optimal discriminatory-tariff gap widens. In addition, under network externalities and good differentiation, we demonstrate that: (a) the optimal tariff policy is superior to free trade in maximizing the domestic social welfare; (b) the maximum-revenue tariff rate is always higher than the optimal tariff rate; (c) the consumer surplus and social welfare are always higher under the optimal tariff policy than under the maximum-revenue tariff policy.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 485-496
Issue: 3-4
Volume: 24
Year: 2017
Month: 10
X-DOI: 10.1080/16081625.2016.1210014
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1210014
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:3-4:p:485-496
Template-Type: ReDIF-Article 1.0
Author-Name: Yen-Jung Lee
Author-X-Name-First: Yen-Jung
Author-X-Name-Last: Lee
Title: Market reactions to unexpected relative earnings performance
Abstract:
This paper documents that investors value unexpected changes in a firm’s relative earnings performance (REP) in addition to its absolute earnings surprise on the firm’s earnings announcement date. Consistent with REP filtering out industry-wide common shocks and conveying information about the firm’s competitive advantage over its industry peers, investors react more strongly to unexpected relative earnings for firms with a stronger peer-firm earnings correlation and for firms with fewer growth options in their operations relative to their industry peers. Moreover, current unexpected REP is positively associated future growths in sales, market share, and earnings performance, suggesting that firms with stronger REP are better able to capture future industry opportunities.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 339-357
Issue: 3-4
Volume: 24
Year: 2017
Month: 10
X-DOI: 10.1080/16081625.2016.1213645
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1213645
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:3-4:p:339-357
Template-Type: ReDIF-Article 1.0
Author-Name: Minjung Kang
Author-X-Name-First: Minjung
Author-X-Name-Last: Kang
Author-Name: Ho-Young Lee
Author-X-Name-First: Ho-Young
Author-X-Name-Last: Lee
Author-Name: Myungsoo Son
Author-X-Name-First: Myungsoo
Author-X-Name-Last: Son
Author-Name: Michael Stein
Author-X-Name-First: Michael
Author-X-Name-Last: Stein
Title: The association between human resource investment by audit firms and their audit quality
Abstract:
Utilizing unique data available only in Korea, we examine the association between investment in human resources and audit quality provided by audit firms. While human resources investment is important in improving audit quality, few studies have examined this association mainly because public data about human resources investment and financial statements of audit firms are unavailable. Using two proxies for audit quality (i.e. discretionary accruals and accounting conservatism), we provide evidence that higher compensation in audit firms improves audit quality. In addition, we find higher audit quality in audit firms with higher education expenses, when audit quality is measured by the level of conservatism of clients’ financial statements. These results support regulators’ stance that quality control through human resources investment in audit firms can effectively improve audit quality and therefore the quality of clients’ financial reporting. However, we find no association between education expenses and the average absolute value of discretionary accruals of audit clients. These results generally suggest that direct investment in human capital (i.e. compensation) is more effective in improving audit quality than indirect investment in human capital (i.e. education expenses).
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 249-271
Issue: 3-4
Volume: 24
Year: 2017
Month: 10
X-DOI: 10.1080/16081625.2016.1214605
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1214605
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:3-4:p:249-271
Template-Type: ReDIF-Article 1.0
Author-Name: Youngsoon S. Cheon
Author-X-Name-First: Youngsoon S.
Author-X-Name-Last: Cheon
Author-Name: Dan Dhaliwal
Author-X-Name-First: Dan
Author-X-Name-Last: Dhaliwal
Author-Name: Munho Hwang
Author-X-Name-First: Munho
Author-X-Name-Last: Hwang
Author-Name: Moonchul Kim
Author-X-Name-First: Moonchul
Author-X-Name-Last: Kim
Title: Do regulator inspections of audit firms discern audit quality? Evidence from Korean regulator inspections
Abstract:
During the past decade, many countries have adopted a regulatory inspection program to oversee the auditing profession. In general, the inspection programs consist of two components: evaluation of accounting firms’ quality control systems and review of selected audit engagements. This study examines whether quality control system deficiencies and audit engagement deficiencies identified in the inspections reflect the audit quality of accounting firms using the data from Korean regulator inspections. We find that both quality control system deficiencies and audit engagement deficiencies reflect the audit quality of the accounting firms under inspection. Our findings also suggest that quality control system deficiencies discern the audit quality of accounting firms better than audit engagement deficiencies. Our results are robust across audit quality measures and auditor size. This study expands the literature by providing evidence about quality control system deficiencies and providing evidence for more comprehensive measures of audit quality.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 272-301
Issue: 3-4
Volume: 24
Year: 2017
Month: 10
X-DOI: 10.1080/16081625.2016.1226143
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1226143
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:3-4:p:272-301
Template-Type: ReDIF-Article 1.0
Author-Name: Yumi Inamura
Author-X-Name-First: Yumi
Author-X-Name-Last: Inamura
Author-Name: Shin’ya Okuda
Author-X-Name-First: Shin’ya
Author-X-Name-Last: Okuda
Title: Deferred taxes and cost of debt: evidence from Japan
Abstract:
This paper investigates the information content of deferred taxes in the Japanese debt market by analyzing the relationship between deferred taxes and cost of debt. We find that while deferred tax liabilities are positively associated with cost of debt, deferred tax assets are not. This evidence may reflect the greater probability of tax obligations being realized compared to tax benefits. Further, we analyze the relationship between cost of debt and the various components of deferred taxes. We find that net deferred taxes caused by temporary differences are negatively related to cost of debt. On the other hand, net deferred taxes from net operating losses are positively related to cost of debt. Additionally, we find that valuation allowances are less positively related to cost of debt when firms are suspected of seeking to avoid losses or decreases in earnings. These results suggest that debt investors in the Japanese debt market evaluate the various components of deferred taxes differently.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 358-376
Issue: 3-4
Volume: 24
Year: 2017
Month: 10
X-DOI: 10.1080/16081625.2016.1227714
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1227714
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:3-4:p:358-376
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Corrigendum
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: (i)-(i)
Issue: 3-4
Volume: 24
Year: 2017
Month: 10
X-DOI: 10.1080/16081625.2017.1309001
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1309001
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:3-4:p:(i)-(i)
Template-Type: ReDIF-Article 1.0
Author-Name: Katsufumi Fukuda
Author-X-Name-First: Katsufumi
Author-X-Name-Last: Fukuda
Title: The effects of globalization on regional inequality in a model of semi-endogenous growth and footloose capital
Abstract:
We show that manufacturing firms tend to locate only in northern regions when transportation costs are not high, and in both northern and southern regions when transportation costs are high. We made this determination through the use of a semi-endogenous research and development growth model that reflects international trade, footloose capital, and local knowledge spillover. Regional income inequality—defined here as differences in per-capita expenditure relative to the price index—decreases in the former scenario following globalization, as the northern share of expenditure does not change. This lack of change stems from there being a constant and exogenous growth rate. Additionally, the northern price index does not change, even as the southern price index decreases.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 95-105
Issue: 1-2
Volume: 24
Year: 2017
Month: 4
X-DOI: 10.1080/16081625.2015.1062243
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1062243
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:1-2:p:95-105
Template-Type: ReDIF-Article 1.0
Author-Name: Chia-Hui Lu
Author-X-Name-First: Chia-Hui
Author-X-Name-Last: Lu
Author-Name: Yu Pang
Author-X-Name-First: Yu
Author-X-Name-Last: Pang
Title: An anatomy of China’s eco-efficiency gains: the role of FDI
Abstract:
This paper quantifies the role of FDI in the remarkable fivefold gains in eco-efficiency in China’s manufacturing during the period 1995–2006. We refine the conventional index decomposition method and apply it to China’s SO2$ \mathrm{SO}_2 $ emission. We find that (i) foreign-invested enterprises (FIEs) have shifted production toward cleaner industries; (ii) the better abatement technique of FIEs explains 23% of the eco-efficiency gains; and (iii) another 69% of the eco-efficiency gains come from by progress in domestic firms’ abatement technique, which is associated with forward environmental spillovers from FIEs. Findings (ii) and (iii) lend support to the so-called Pollution Halo Hypothesis.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 106-126
Issue: 1-2
Volume: 24
Year: 2017
Month: 4
X-DOI: 10.1080/16081625.2015.1062244
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1062244
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:1-2:p:106-126
Template-Type: ReDIF-Article 1.0
Author-Name: Koki Arai
Author-X-Name-First: Koki
Author-X-Name-Last: Arai
Title: Ex-post examination of mergers: effects on retail prices
Abstract:
Merger control can be assessed simply by observing price movements of the product in question. In this study, three ex-post merger evaluations show statistically significant increase in price. Thus, in each case, the change in market power is analyzed in terms of changes in market sales and market share. The analyses indicate that market sales values increased, but market share decreased significantly. Although several studies showed the market price situation before and after a merger, this study is the first to analyze the appropriateness of merger control in terms of market sales and market share. In addition, one of the merging parties was likely to reposition its production lines, indicating that mergers and acquisitions may be used as a tool for strategic product differentiation. That is, under such merger regulations, leading examples of a merging party developing a marketing strategy are indicated.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 145-162
Issue: 1-2
Volume: 24
Year: 2017
Month: 4
X-DOI: 10.1080/16081625.2015.1067148
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1067148
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:1-2:p:145-162
Template-Type: ReDIF-Article 1.0
Author-Name: Seon Mi Kim
Author-X-Name-First: Seon Mi
Author-X-Name-Last: Kim
Author-Name: Yura Kim
Author-X-Name-First: Yura
Author-X-Name-Last: Kim
Title: Product market competition on the effectiveness of internal control
Abstract:
This paper investigates the impact of product market competition on a firm’s internal control system, which is an important corporate control mechanism. We measure the effectiveness of a firm’s internal control system based on the material weakness disclosure under Section 404 of the Sarbanes-Oxley Act (SOX). Using several measures to capture different dimensions of product market competition, we find that firms operating in competitive markets are more likely to have material weakness under Section 404 of the SOX; further, they are more inclined to disclose multiple internal control weaknesses. These results are robust after controlling for both internal and external governance mechanisms. The results indicate that market competition reduces the effectiveness of internal controls over financial reporting and hampers the quality of a firm’s information environment.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 163-182
Issue: 1-2
Volume: 24
Year: 2017
Month: 4
X-DOI: 10.1080/16081625.2015.1090323
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1090323
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:1-2:p:163-182
Template-Type: ReDIF-Article 1.0
Author-Name: Shengbao Zhai
Author-X-Name-First: Shengbao
Author-X-Name-Last: Zhai
Author-Name: Lu Xie
Author-X-Name-First: Lu
Author-X-Name-Last: Xie
Author-Name: Sheng Zhang
Author-X-Name-First: Sheng
Author-X-Name-Last: Zhang
Title: Bank connections and corporate risk-taking: evidence from China
Abstract:
This paper examines the impact of bank connections on corporate risk-taking. The results show that firms with bank connections exhibit a higher degree of corporate risk-taking than firms without bank connections, and that the difference is more prominent in provinces with a poor financial environment. Specific types of bank connections – executive and cross-shareholding connections – are further examined and we find that the effect only exists in firms with executive and bank-holding connections, not in firms connected to banks as shareholders. This demonstrates that having bank connections prompts firms to undertake more risk-taking projects and increases the magnitude of corporate risk-taking.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 183-194
Issue: 1-2
Volume: 24
Year: 2017
Month: 4
X-DOI: 10.1080/16081625.2015.1105831
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1105831
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:1-2:p:183-194
Template-Type: ReDIF-Article 1.0
Author-Name: Chan Lyu
Author-X-Name-First: Chan
Author-X-Name-Last: Lyu
Author-Name: Desmond Chun Yip Yuen
Author-X-Name-First: Desmond Chun Yip
Author-X-Name-Last: Yuen
Author-Name: Xu Zhang
Author-X-Name-First: Xu
Author-X-Name-Last: Zhang
Title: Individualist-collectivist culture, ownership concentration and earnings quality
Abstract:
In this study we explore the effects of individualist-collectivist culture, an important dimension of national cultures, on the entrenchment incentives of large shareholders. Specifically, we investigate how individualist-collectivist culture affects the relationship between ownership concentration and earnings quality. We predict that the social connections among corporate insiders are stronger in collectivist societies, thus reducing corporate monitoring efficiency and exacerbating agency problems. Consistent with our prediction we find the poor earnings quality that normally goes hand-in-hand with concentrated ownership, is improved when the firm’s national culture is individualist. We further find that the poor earnings quality induced by ownership concentration is more pronounced in East Asia, where cultures are rooted in Chinese cultures and collectivism. This study sheds light on the role that individualist-collectivist culture plays in shaping corporate insiders’ ethical behavior.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 23-42
Issue: 1-2
Volume: 24
Year: 2017
Month: 4
X-DOI: 10.1080/16081625.2015.1129281
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1129281
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:1-2:p:23-42
Template-Type: ReDIF-Article 1.0
Author-Name: Il-Hang Shin
Author-X-Name-First: Il-Hang
Author-X-Name-Last: Shin
Author-Name: Ho-Young Lee
Author-X-Name-First: Ho-Young
Author-X-Name-Last: Lee
Author-Name: Hyun-Ah Lee
Author-X-Name-First: Hyun-Ah
Author-X-Name-Last: Lee
Author-Name: Myungsoo Son
Author-X-Name-First: Myungsoo
Author-X-Name-Last: Son
Title: How does human resource investment in internal control affect audit reporting lag?
Abstract:
The Korean government requires listed firms to disclose the total number of employees engaged in the implementation of internal controls (hereafter, IC personnel) and the number of IC personnel in accounting, finance, information technology and systems departments, and other related functional areas. Using data unique to Korea, this study examines the effect of human resource investment in internal control on audit reporting lag (ARL). We employ quantitative and qualitative measures for the IC personnel, and the ARL is measured by the time between the fiscal year-end and the audit report date. We find an insignificant association between the quantitative measure (the number of IC personnel) and ARL. On the other hand, we find that the qualitative measure (the average experience of the IC personnel) reduces the audit time, thereby decreasing the ARL. This result highlights the importance of qualitative aspect in investments in IC personnel, which could be useful for firms that desire to reap the best result from the investment. Further analysis shows that investments in IC personnel at other departments as well as accounting and finance department increase audit efficiency. We confirm the robustness of our results through a series of additional analyses.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 195-215
Issue: 1-2
Volume: 24
Year: 2017
Month: 4
X-DOI: 10.1080/16081625.2015.1135751
File-URL: http://hdl.handle.net/10.1080/16081625.2015.1135751
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:1-2:p:195-215
Template-Type: ReDIF-Article 1.0
Author-Name: Lihong Wang
Author-X-Name-First: Lihong
Author-X-Name-Last: Wang
Author-Name: Philip T. Lin
Author-X-Name-First: Philip T.
Author-X-Name-Last: Lin
Title: Who benefits from political connections? Minority investors or controlling shareholders
Abstract:
Using a sample of Chinese privately controlled firms listed on the Shanghai Stock Exchange during 2003–2012, this paper empirically examines the relation between politically connected independent directors and firm value creation and value expropriation. Our empirical results show that having politicians as independent directors helps listed privately controlled firms to increase subsidies received from the government as well as obtain an ease of access to long-term bank financing. In contrast, we discern that a large fraction of politically connected independent directors increases the magnitude of related-party transactions between the listed firms and their controlling parties, suggesting wealth expropriating from minority shareholders. Finally, when exploring the net effects of political connections, the presence of politically connected independent directors promotes firm profitability and adds residual value to Chinese listed privately controlled firms.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1-22
Issue: 1-2
Volume: 24
Year: 2017
Month: 4
X-DOI: 10.1080/16081625.2016.1151364
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1151364
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:1-2:p:1-22
Template-Type: ReDIF-Article 1.0
Author-Name: Wen-Bin Chuang
Author-X-Name-First: Wen-Bin
Author-X-Name-Last: Chuang
Author-Name: To-Han Chang
Author-X-Name-First: To-Han
Author-X-Name-Last: Chang
Author-Name: Hui-lin Lin
Author-X-Name-First: Hui-lin
Author-X-Name-Last: Lin
Title: Does stronger intellectual property rights protection matter in developing local R&D outsourcing strategy?
Abstract:
This study examines whether the intellectual property rights (IPR) protection in the host countries has a significant moderating effect on the relationship between local R&D outsourcing strategy and subsidiary productivity. Due to the subsidiary mandate in the host country being categorized as exploitation-orientation or exploration-orientation, we further examine whether there is a different moderating effect for different types of a subsidiary mandate. This analysis takes advantage of the data-set on Taiwan-based subsidiaries and the IPR indices by the World Economic Forum over the 2006–2009 period. The empirical results show that a stronger degree of IPR protection is, on average, found to play a significant moderating role in the influence of R&D outsourcing strategy based on local collaboration relationships. Interestingly, the moderating effects are found to differ between exploitation-orientation and exploration-orientation.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 68-82
Issue: 1-2
Volume: 24
Year: 2017
Month: 4
X-DOI: 10.1080/16081625.2016.1158658
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1158658
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:1-2:p:68-82
Template-Type: ReDIF-Article 1.0
Author-Name: Takafumi Sasaki
Author-X-Name-First: Takafumi
Author-X-Name-Last: Sasaki
Title: Pension accruals and share prices: evidence from the amortization costs of transition amounts
Abstract:
This article investigates whether the market rationally evaluates the economic value of pension plans by focusing on the impacts of amortization costs of transition amounts on share prices. Because the amortization costs of transition amounts are cost attributed to the old deficits that appeared in the adoption year, they do not contain new additional information unless managers deliver private information through accountings choices. The data-set is from Japanese firms after the adoption of the postretirement accounting standard wherein recognition costs of transition amounts had a huge impact on the bottom-line earnings of sponsoring firms. We find that investors evaluate the amortization costs of transition amounts as though they hold new, value-relevant information. On the other hand, we do not have clear evidence that managers deliver private information through accounting discretions on the amortization of transition amounts.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 216-231
Issue: 1-2
Volume: 24
Year: 2017
Month: 4
X-DOI: 10.1080/16081625.2016.1170617
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1170617
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:1-2:p:216-231
Template-Type: ReDIF-Article 1.0
Author-Name: Sung Hwan Jung
Author-X-Name-First: Sung Hwan
Author-X-Name-Last: Jung
Title: The contingent effect of analyst coverage: how does analyst coverage affect innovation and Tobin’s Q?
Abstract:
This study hypothesizes that the relationship between analyst coverage and innovation (Tobin’s Q) is U-shaped. My results support this hypothesis. Specifically, I find that as a firm’s analyst coverage increases, innovation (Tobin’s Q) declines at first, reaching a low point at moderate levels of analyst coverage, and increase thereafter. These findings suggest that firms can transform its investments in the relationship with the analyst community into firm performance only after they make substantial investments in the relationship.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 43-67
Issue: 1-2
Volume: 24
Year: 2017
Month: 4
X-DOI: 10.1080/16081625.2016.1174070
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1174070
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:1-2:p:43-67
Template-Type: ReDIF-Article 1.0
Author-Name: Shirley J. Ho
Author-X-Name-First: Shirley J.
Author-X-Name-Last: Ho
Title: Credibility of voluntary disclosure in financial firms
Abstract:
Financial firms are more vulnerable to the investors’ lacking in confidence, and a speculative run could happen when all investors lose their confidence and withdraw simultaneously. In addition to the existing discussions on endogenous misreporting cost such as reputation, propriety and social norm effects, this paper demonstrated that the threat of speculative run can serve as an endogenous misreporting cost which prevents the bank manager from lying in their voluntary disclosures. Hence, voluntary disclosures such as management earnings forecast can be informative, and the degree of information revelation will be positively related to depositors’ perspectives on the random investment shock.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 232-247
Issue: 1-2
Volume: 24
Year: 2017
Month: 4
X-DOI: 10.1080/16081625.2016.1184988
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1184988
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:1-2:p:232-247
Template-Type: ReDIF-Article 1.0
Author-Name: Susumu Cato
Author-X-Name-First: Susumu
Author-X-Name-Last: Cato
Title: The optimal tariff structure and foreign penetration
Abstract:
This study investigates tariff policies as a means of improving economic welfare. The government sets the tariff so as to maximize domestic welfare against foreign penetration. We examine the relationship between the optimal tariff structure and the degree of penetration. We find that the optimal tariff rate is non-monotonically related with the degree of penetration (inverse U-shape). We also show that intermediate degrees of foreign penetration are harmful for economic welfare.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 83-94
Issue: 1-2
Volume: 24
Year: 2017
Month: 4
X-DOI: 10.1080/16081625.2016.1188454
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1188454
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:1-2:p:83-94
Template-Type: ReDIF-Article 1.0
Author-Name: Catherine Heyjung Sonu
Author-X-Name-First: Catherine Heyjung
Author-X-Name-Last: Sonu
Author-Name: Hyejin Ahn
Author-X-Name-First: Hyejin
Author-X-Name-Last: Ahn
Author-Name: Ahrum Choi
Author-X-Name-First: Ahrum
Author-X-Name-Last: Choi
Title: Audit fee pressure and audit risk: evidence from the financial crisis of 2008
Abstract:
This paper investigates whether the downward pressure on audit fees during crisis affects the audit fee structure. The empirical results reveal the following: First, audit fees dropped significantly during the financial crisis period. Second, auditors respond differently to small clients and risky clients when facing downward pressure on audit fees. Finally, the above mentioned findings are more pronounced when the client is under high pressure to reduce expenses. Collectively, the above results provide useful insights into how auditors behave when they are under pressure to reduce audit fees.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 127-144
Issue: 1-2
Volume: 24
Year: 2017
Month: 4
X-DOI: 10.1080/16081625.2016.1208574
File-URL: http://hdl.handle.net/10.1080/16081625.2016.1208574
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Handle: RePEc:taf:raaexx:v:24:y:2017:i:1-2:p:127-144
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Editorial Board
Abstract:
Journal:
Pages: ebi-ebi
Issue: 1
Volume: 17
Year: 2010
X-DOI: 10.1080/16081625.2010.9720848
File-URL: http://hdl.handle.net/10.1080/16081625.2010.9720848
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Handle: RePEc:taf:raaexx:v:17:y:2010:i:1:p:ebi-ebi
Template-Type: ReDIF-Article 1.0
Author-Name: Kenji Kondoh
Author-X-Name-First: Kenji
Author-X-Name-Last: Kondoh
Title: Can an EPA Help a Country with a Decreasing Population?
Abstract:
To help a developed country with a decreasing population such as Japan, we analyzed the effectiveness of various economic policies for securing a sufficient amount of qualified labor by introducing foreign unskilled workers and training them in terms of skill. We found that under certain conditions, the government must announce only the required period of skill training, while the total number of skilled trainees must be considered to be endogenously given. Then, policies that would bring about change in the required period, encourage capital inflow or raise the penalty charge for illegal immigration may become effective.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1-16
Issue: 1
Volume: 17
Year: 2010
X-DOI: 10.1080/16081625.2010.9720849
File-URL: http://hdl.handle.net/10.1080/16081625.2010.9720849
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Handle: RePEc:taf:raaexx:v:17:y:2010:i:1:p:1-16
Template-Type: ReDIF-Article 1.0
Author-Name: Axel K-D. Schulz
Author-X-Name-First: Axel K-D.
Author-X-Name-Last: Schulz
Author-Name: Anne Wu
Author-X-Name-First: Anne
Author-X-Name-Last: Wu
Author-Name: Chee W. Chow
Author-X-Name-First: Chee W.
Author-X-Name-Last: Chow
Title: Environmental Uncertainty, Comprehensive Performance Measurement Systems, Performance-Based Compensation, and Organizational Performance
Abstract:
This study explores firms' use of comprehensive performance measures and performance-based compensation in response to the increasingly uncertain competitive environment. Data from a sample of 84 Taiwanese high-tech manufacturing firms revealed an increased use of such systems among firms facing higher perceived environmental uncertainty. We also found performance-based pay to fully mediate the relationship between comprehensive performance measures and employee effort. Finally, employee effort is significantly and positively associated with organizational performance and fully explains the effect of performance-based compensation in increasing organizational performance.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 17-39
Issue: 1
Volume: 17
Year: 2010
X-DOI: 10.1080/16081625.2010.9720850
File-URL: http://hdl.handle.net/10.1080/16081625.2010.9720850
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Handle: RePEc:taf:raaexx:v:17:y:2010:i:1:p:17-39
Template-Type: ReDIF-Article 1.0
Author-Name: Shin'ya Okuda
Author-X-Name-First: Shin'ya
Author-X-Name-Last: Okuda
Author-Name: Manabu Sakaue
Author-X-Name-First: Manabu
Author-X-Name-Last: Sakaue
Author-Name: Atsushi Shiiba
Author-X-Name-First: Atsushi
Author-X-Name-Last: Shiiba
Title: Value Relevance of Profit Available for Dividend
Abstract:
According to some research, the profit available for dividend is undervalued. This paper examines the determinants of undervaluation based on the tax and agency hypotheses. First, the influence of taxation on dividend income on the valuation of companies in Japan is examined. However, evidence supporting the tax hypothesis cannot be provided. Next, this paper examines the agency hypothesis, employing the ratio dividend divided by the profit available for dividend as the proxy variable of agency cost. The result is consistent with the hypothesis: the profit available for dividend in a company with insufficient dividend payout is undervalued.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 41-56
Issue: 1
Volume: 17
Year: 2010
X-DOI: 10.1080/16081625.2010.9720851
File-URL: http://hdl.handle.net/10.1080/16081625.2010.9720851
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Handle: RePEc:taf:raaexx:v:17:y:2010:i:1:p:41-56
Template-Type: ReDIF-Article 1.0
Author-Name: Kazuhiro Takauchi
Author-X-Name-First: Kazuhiro
Author-X-Name-Last: Takauchi
Title: The Effects of Strategic Subsidies under FTA with ROO
Abstract:
This paper presents a model of a free trade area (FTA) with rules of origin (ROO) under an oligopolistic final goods market. Following the existing literature, we also consider ROO to serve as a protectionist device and mainly focus on the interaction between ROO and the subsidy policy. A paradoxical result is considered: if the government of the final goods exporter within the FTA is the first mover, it chooses export tax. Furthermore, we show that the profit of a firm located in the FTA increases due to a reduction in the external tariff.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 57-72
Issue: 1
Volume: 17
Year: 2010
X-DOI: 10.1080/16081625.2010.9720852
File-URL: http://hdl.handle.net/10.1080/16081625.2010.9720852
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Handle: RePEc:taf:raaexx:v:17:y:2010:i:1:p:57-72
Template-Type: ReDIF-Article 1.0
Author-Name: Jai-Young Choi
Author-X-Name-First: Jai-Young
Author-X-Name-Last: Choi
Title: Anatomy of the Post Global-Quota Trade Disputes on China's Textile Exports
Abstract:
This paper explores the trade disputes about China's textile exports that escalated after the expiration of the global quotas on January 1, 2005 and settled down after months of intensive negotiations. Particular attention is paid to China's export taxes which were revoked following the U.S. and E.U. decision to impose import quotas. Noting that the real issue was bigger than just textiles since the backbone of the disputes was the mounting trade deficits and flight of jobs from the U.S. and E.U., the paper studies the debates from a range of perspectives and concludes that the optimal solution is free trade.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 73-89
Issue: 1
Volume: 17
Year: 2010
X-DOI: 10.1080/16081625.2010.9720853
File-URL: http://hdl.handle.net/10.1080/16081625.2010.9720853
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Handle: RePEc:taf:raaexx:v:17:y:2010:i:1:p:73-89
Template-Type: ReDIF-Article 1.0
Author-Name: Ji Hye Kim
Author-X-Name-First: Ji Hye
Author-X-Name-Last: Kim
Author-Name: Sang Ho Lee
Author-X-Name-First: Sang Ho
Author-X-Name-Last: Lee
Author-Name: Yong Keun Yoo
Author-X-Name-First: Yong
Author-X-Name-Last: Keun Yoo
Title: Real earnings management and the cost of debt capital: international evidence
Abstract:
This study examines the association between the extent of real earnings management and the cost of debt capital in an international setting. Using a sample of 14,654 observations across 18 countries from 1987 to 2013, we find that on average, the extent of real earnings management is positively associated with the cost of debt capital. Moreover, we find that debt investors impose more premiums on the cost of debt capital for the firms in countries with more developed debt markets. This study contributes to the literature in the following ways: To begin with, this is the first international study to examine the effect of firms’ real earnings management on the cost of debt capital. Next, this study suggests that the association between the extent of real earnings management and the cost of debt capital varies depending on the institutional environment of the country a firm is based in. Finally, this study implies that financial policy makers need to extend bond market development in order to encourage debt investors to price the negative effects of real earnings management on the firm’s future performance.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 151-172
Issue: 2
Volume: 27
Year: 2020
Month: 3
X-DOI: 10.1080/16081625.2018.1518148
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1518148
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:2:p:151-172
Template-Type: ReDIF-Article 1.0
Author-Name: Abdulaziz Alzeban
Author-X-Name-First: Abdulaziz
Author-X-Name-Last: Alzeban
Title: The relationship between internal audit and foreign direct investment
Abstract:
This paper explores the influence of certain internal audit (IA) characteristics on the likelihood that FDI will be attracted. In making its investigation, the study uses data from the IIA CBOK database, and the World Bank database for 152 countries for the period 2012–2016. Ordinary least square methodology is used for analysis purposes, and the finding is that increases in FDI inflows result from effective IA. In particular, the most influential characteristic of IA in this respect is IA independence and competence, a finding which is valuable to academics and policy-makers who are keen to identify the drivers of FDI.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 173-194
Issue: 2
Volume: 27
Year: 2020
Month: 3
X-DOI: 10.1080/16081625.2018.1517602
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1517602
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:2:p:173-194
Template-Type: ReDIF-Article 1.0
Author-Name: Xiaorong Li
Author-X-Name-First: Xiaorong
Author-X-Name-Last: Li
Author-Name: Kam C. Chan
Author-X-Name-First: Kam C.
Author-X-Name-Last: Chan
Author-Name: Haitao Ma
Author-X-Name-First: Haitao
Author-X-Name-Last: Ma
Title: Communist party direct control and corporate investment efficiency: evidence from China
Abstract:
Many communist countries, such as China, place emphasis on fixed-asset investments in their process of economic development. Governments push the policy using state-owned enterprises (SOEs) via a communist party committee (CPC). Political and agency costs make SOE investment sub-optimal. We examine the impact of firm-level CPC control on the investment efficiency among a sample of Chinese SOEs. We test agency problem overhaul and political entrenchment hypotheses. The results suggest that CPC control, in terms of having a CPC member as a director, supervisor, or senior executive, can improve investment efficiency, especially for overinvestment in SOEs. Our findings are robust to different measures of overinvestment and are more pronounced among locally controlled SOEs and SOEs with CEO/board chairman duality. Overall, our findings support the agency problem overhaul hypothesis. The involvement of a CPC member in the control of an SOE, on average, mitigates the agency cost and more than offsets the additional political cost incurred.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 195-217
Issue: 2
Volume: 27
Year: 2020
Month: 3
X-DOI: 10.1080/16081625.2018.1470541
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1470541
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:2:p:195-217
Template-Type: ReDIF-Article 1.0
Author-Name: Hui Liu
Author-X-Name-First: Hui
Author-X-Name-Last: Liu
Author-Name: Charles P. Cullinan
Author-X-Name-First: Charles P.
Author-X-Name-Last: Cullinan
Author-Name: Junrui Zhang
Author-X-Name-First: Junrui
Author-X-Name-Last: Zhang
Title: Modified audit opinions and debt contracting: evidence from China
Abstract:
We examine whether the type of audit opinion a company receives is associated with the debt characteristics of Chinese companies. Our analyses indicate that companies receiving modified audit opinions pay higher interest rates and have more short-term debt. When the auditor mentions going concern in the audit opinion, companies pay higher interest rates and have a lower percentage of long-term debt, but this result is weaker for state-owned enterprises. We also find that companies receiving qualified or adverse opinion pay higher interest rates and have a lower level of long-term debt as a percentage of total debt.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 218-241
Issue: 2
Volume: 27
Year: 2020
Month: 3
X-DOI: 10.1080/16081625.2018.1517048
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1517048
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:2:p:218-241
Template-Type: ReDIF-Article 1.0
Author-Name: Qi Shi
Author-X-Name-First: Qi
Author-X-Name-Last: Shi
Author-Name: Adrian (Wai Kong) Cheung
Author-X-Name-First: Adrian (Wai Kong)
Author-X-Name-Last: Cheung
Author-Name: Bin Li
Author-X-Name-First: Bin
Author-X-Name-Last: Li
Title: Investigating linear multi-factor models in asset pricing: considerable supplemental evidence
Abstract:
The literature has offered an interesting debate about whether the performance of Fama-French’s three-factor benchmark model is inadequate because it fails to pass some model specification tests and its R2 is not convincingly high in cross-sectional estimations. Previous studies have been quite limited, since they only focused on the time-series procedure with many models. We extend their work by providing a more robust investigation of the performance of several well-regarded pricing models in pooled portfolios and other portfolios sorted by new and important anomalies, using cross-sectional GMM tests for robustness. Finally, we find that, in addition to Fama and French’s five-factor model proposed in 1993, Fama-French’s three-factor model augmented by other factors usually outperforms Fama-French’s three-factor model across a significant proportion of different portfolios. In particular, Frazzini, Kabiller, and Pedersen’s model shows the best overall performance and consistency across different portfolios.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 242-260
Issue: 2
Volume: 27
Year: 2020
Month: 3
X-DOI: 10.1080/16081625.2017.1419878
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1419878
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:2:p:242-260
Template-Type: ReDIF-Article 1.0
Author-Name: Rong-Ruey Duh
Author-X-Name-First: Rong-Ruey
Author-X-Name-Last: Duh
Author-Name: Chunlai Ye
Author-X-Name-First: Chunlai
Author-X-Name-Last: Ye
Author-Name: Lin-Hui Yu
Author-X-Name-First: Lin-Hui
Author-X-Name-Last: Yu
Title: Corruption and audit market concentration: an international investigation
Abstract:
This paper examines the association between the corruption level of a country and audit market concentration. Using a sample from 78 countries over the 2003–2012 period, we document a positive association between corruption and Big 4 audit market concentration, suggesting that in more corrupt countries, the audit market at the industry level is dominated by one or two Big 4 audit firms rather than shared equally. To provide further understanding about how corruption is associated with Big 4 audit market concentration, we conduct a path analysis and find that corruption has an indirect effect on audit market concentration through collusion. These results are consistent with the notion that corrupt governments do not effectively control collusion and thus decrease market competition, leading to a decrease in the perceived severity of information leakage and a lower concern about sharing a common auditor. Finally, we conduct a battery of sensitivity tests. Our results are robust to change analysis, to controlling for other factors that are likely to influence auditor choices and the market structure, to an alternative measure of concentration, and to alternative samples. Overall, we provide evidence to suggest that country-level corruption plays a role in Big 4 audit market concentration.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 261-279
Issue: 3
Volume: 27
Year: 2020
Month: 5
X-DOI: 10.1080/16081625.2018.1540942
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1540942
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:3:p:261-279
Template-Type: ReDIF-Article 1.0
Author-Name: Hyoung-joo Lim
Author-X-Name-First: Hyoung-joo
Author-X-Name-Last: Lim
Author-Name: Dafydd Mali
Author-X-Name-First: Dafydd
Author-X-Name-Last: Mali
Title: Does the productivity of labor influence credit risk? new evidence from South Korea
Abstract:
Using a sample of 1,666 Korean KRX listed firm observations, we find a positive relation between the productivity of labor in period t and credit ratings in period t + 1, suggesting that firms that use the least amount of input (labor) to achieve output (sales) are considered to have decreasing levels of default risk. After we divide our sample into investment grade and non-investment grade firm samples, the relation changes. We find a consistent relation for the investment grade sample. However, the relation is negative for the non-investment grade suggesting that market participants capture NIG firm’s potential detrimental behavior.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 280-299
Issue: 3
Volume: 27
Year: 2020
Month: 5
X-DOI: 10.1080/16081625.2018.1540937
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1540937
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:3:p:280-299
Template-Type: ReDIF-Article 1.0
Author-Name: Shin-Haing Kim
Author-X-Name-First: Shin-Haing
Author-X-Name-Last: Kim
Author-Name: Taegi Kim
Author-X-Name-First: Taegi
Author-X-Name-Last: Kim
Title: Investment and adjustment costs of Korean firms in view of Tobin’s q
Abstract:
This paper investigates investment decisions of Korean firms in view of Tobin’s q, and examines whether the adjustment costs of investment in group firms are lower than those in independent firms. We use firm-level data for 1,106 Korean manufacturing firms over the period 1982 to 2015. The results are as follows. First, group firms are much larger than independent firms, and investment rates are higher in group firms than in independent firms. Second, Tobin’s q is a significant determinant of investment, and the adjustment costs of investment are smaller in group firms than in independent firms. Third, the adjustment-cost advantage of group firms is greater before the financial crisis of 1997. Fourth, a firm’s cash holdings and foreign ownership contribute to increasing investment. This study suggests that group firms invest more than independent firms due to lower adjustment costs, and consequently contribute to economic growth through investment expansion.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 300-311
Issue: 3
Volume: 27
Year: 2020
Month: 5
X-DOI: 10.1080/16081625.2018.1540940
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1540940
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:3:p:300-311
Template-Type: ReDIF-Article 1.0
Author-Name: Huichi Huang
Author-X-Name-First: Huichi
Author-X-Name-Last: Huang
Author-Name: Wei Zhang
Author-X-Name-First: Wei
Author-X-Name-Last: Zhang
Title: Financial expertise and corporate tax avoidance
Abstract:
This study examines financial expert CEOs as one of the determinants of corporate tax avoidance. We conjecture that financial sophistication motivates CEOs to approach tax avoidance as an investment. We investigate the relationship between financial expert CEOs and tax avoidance both at the conditional mean and across tax avoidance distribution. Consistent with our conjecture, we find that financial expert CEOs are associated with a more aggressive tax avoidance policy. Further, our results indicate that the impact of financial expert CEOs results from a careful analysis of cost and benefit.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 312-326
Issue: 3
Volume: 27
Year: 2020
Month: 5
X-DOI: 10.1080/16081625.2019.1566008
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1566008
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:3:p:312-326
Template-Type: ReDIF-Article 1.0
Author-Name: Yi Si
Author-X-Name-First: Yi
Author-X-Name-Last: Si
Author-Name: Chongwu Xia
Author-X-Name-First: Chongwu
Author-X-Name-Last: Xia
Author-Name: Endong Yang
Author-X-Name-First: Endong
Author-X-Name-Last: Yang
Title: The bright side of investor sentiment: evidence from real activities manipulation
Abstract:
This paper studies how investor sentiment affects managers’ real activities manipulation (RAM). Under the catering hypothesis, managers engage in high level of RAM to meet investors’ expectations of earnings when sentiment is high. Under the curbing hypothesis, managers are concerned about the negative impact of RAM and sentiment reversal in the future, and hence involve in less RAM when sentiment is high. We find consistent results with the curbing hypothesis. Our results are robust to alternative specifications and measures for investor sentiment and RAM.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 327-351
Issue: 3
Volume: 27
Year: 2020
Month: 5
X-DOI: 10.1080/16081625.2019.1673186
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1673186
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:3:p:327-351
Template-Type: ReDIF-Article 1.0
Author-Name: Heming Zhang
Author-X-Name-First: Heming
Author-X-Name-Last: Zhang
Author-Name: Guanying Wang
Author-X-Name-First: Guanying
Author-X-Name-Last: Wang
Title: Chinese IPO returns: effects of ten-minute call auction
Abstract:
We connect the IPO underpricing with secondary market trading mechanism by examining the data of Chinese A-share IPOs between 1993 and 2016. We find that ten-minute call auction procedure generates most of the IPO initial return. For the whole sample, the mean value of the ratios of call auction returns to initial returns is close to 1, and the call auction returns account for 95% of the variability in initial returns. Regression results further show that determinants of IPO underpricing in existing literature explain IPO call auction returns better than continuous auction returns.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 352-363
Issue: 3
Volume: 27
Year: 2020
Month: 5
X-DOI: 10.1080/16081625.2019.1566007
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1566007
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:3:p:352-363
Template-Type: ReDIF-Article 1.0
Author-Name: Jeehong Kim
Author-X-Name-First: Jeehong
Author-X-Name-Last: Kim
Author-Name: Sooin Kim
Author-X-Name-First: Sooin
Author-X-Name-Last: Kim
Author-Name: Eunjung Cho
Author-X-Name-First: Eunjung
Author-X-Name-Last: Cho
Title: Spillover effect of FSS accounting inspection on audit hours of peer companies
Abstract:
Financial misstatements detected by the Financial Supervisory Service (FSS)’s accounting inspection incorporate the possibility of erroneous accounting practice over the industry and the increasing scrutiny of supervisory institution. We investigate the spillover effect of financial misstatements detected by the FSS on audit efforts for peer companies. We find that auditors put longer hours in auditing peer companies and that audit hours for peers increase as auditors of misstating companies receive stronger sanctions. In addition, the increase of audit effort is more pronounced for the auditors who audited misstating company-years, Big4 auditors and for companies listed in more scrutinized market. Our results are robust after controlling for the firm-specific risk of having material accounting misstatements. As a result, this paper contributes to the related literature by confirming the increase of auditors’ scrutiny after misstatement detection by the FSS and effectiveness of supervisory accounting inspections on a sampling basis.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 364-387
Issue: 3
Volume: 27
Year: 2020
Month: 5
X-DOI: 10.1080/16081625.2019.1673193
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1673193
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:3:p:364-387
Template-Type: ReDIF-Article 1.0
Author-Name: Hsin-Yu Liang
Author-X-Name-First: Hsin-Yu
Author-X-Name-Last: Liang
Author-Name: Liang-wei Kuo
Author-X-Name-First: Liang-wei
Author-X-Name-Last: Kuo
Author-Name: Kam C. Chan
Author-X-Name-First: Kam C.
Author-X-Name-Last: Chan
Author-Name: Sheng-Hung Chen
Author-X-Name-First: Sheng-Hung
Author-X-Name-Last: Chen
Title: Bank diversification, performance, and corporate governance: evidence from China
Abstract:
This paper examines the merit of bank diversification using a sample of listed Chinese national banks during 2003–2012. We find that income source diversity positively affects profitability but negatively affects operating efficiency and market valuation. By exploiting an exogenous change in the regulatory attitude toward diversification in 2008, we find that the positive diversification-profitability relation before 2008 changes to negative afterwards; meanwhile, the diversification discount turns to premium. We conjecture that the source of discount captures changes in the diversification-induced agency costs. Finally, we find that governance matters as it enhances the positive diversification-profitability relation and mitigates diversification discount.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 389-405
Issue: 4
Volume: 27
Year: 2020
Month: 7
X-DOI: 10.1080/16081625.2018.1452618
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1452618
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:4:p:389-405
Template-Type: ReDIF-Article 1.0
Author-Name: Bin Li
Author-X-Name-First: Bin
Author-X-Name-Last: Li
Author-Name: Chen Ma
Author-X-Name-First: Chen
Author-X-Name-Last: Ma
Title: Can audit fees inhibit accounting misstatements? Moderating effects of auditor reputation from Chinese experience*
Abstract:
We examine the association between audit fees and accounting misstatements and test the moderating effect of auditor reputation on this association in China, where auditors’ legal liability is essentially weak. We find that current-year audit fees are negatively and significantly associated with the likelihood of the current-year financial statement being misstated. This result is consistent with prior work, which has indicated a negative relation between audit fees and future misstatements in a strong litigation environment such as in the United States. Our finding indicates that higher audit fees can reflect audit effort, even in a setting where litigation plays essentially no role. The prior literature suggests that audit firms have reputational incentives; thus, we use auditor irregularities and audit firm rank as proxies for auditor reputation and find that the negative relationship between misstatements and audit fees weakens as auditor reputation decreases.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 406-425
Issue: 4
Volume: 27
Year: 2020
Month: 7
X-DOI: 10.1080/16081625.2018.1475243
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1475243
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:4:p:406-425
Template-Type: ReDIF-Article 1.0
Author-Name: Seyed Alireza Athari
Author-X-Name-First: Seyed Alireza
Author-X-Name-Last: Athari
Author-Name: Komeil Shaeri
Author-X-Name-First: Komeil
Author-X-Name-Last: Shaeri
Author-Name: Dervis Kirikkaleli
Author-X-Name-First: Dervis
Author-X-Name-Last: Kirikkaleli
Author-Name: Hasan Murat Ertugrul
Author-X-Name-First: Hasan Murat
Author-X-Name-Last: Ertugrul
Author-Name: Alper Ozun
Author-X-Name-First: Alper
Author-X-Name-Last: Ozun
Title: Global competitiveness and capital flows: does stage of economic development and risk rating matter?*
Abstract:
This paper closes a gap in the relevant literature by investigating the role of a country’s competitiveness on international capital mobility using robust panel multiple regressions with fixed and random effects. In this study, we use the Global Competitiveness Index to measure a country’s competitiveness level. The research empirically investigates the effect of competitiveness on cross-border capital flows, and shows how stages of economic development and country-specific risk ratings influence inflows and outflows of capital under the effect of competitiveness. Overall, we found that competitiveness has a positive and statistically significant impact on aggregated and disaggregated capital flows. However, the magnitude of its impact varies over different stages of development and across country risk levels.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 426-450
Issue: 4
Volume: 27
Year: 2020
Month: 7
X-DOI: 10.1080/16081625.2018.1481754
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1481754
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:4:p:426-450
Template-Type: ReDIF-Article 1.0
Author-Name: Xu Feng
Author-X-Name-First: Xu
Author-X-Name-Last: Feng
Author-Name: Jiarui Fan
Author-X-Name-First: Jiarui
Author-X-Name-Last: Fan
Author-Name: Yahui An
Author-X-Name-First: Yahui
Author-X-Name-Last: An
Title: The asset growth anomaly in the Chinese stock market
Abstract:
We discuss the existence and derivation of the asset growth anomaly in China’s A-share market. Our findings suggest that there is a negative relationship between the asset growth rate and future returns during 2008 to 2016 in the Chinese stock market. Furthermore, we investigate whether the asset growth anomaly is derived from mispricing or risk premia. Our tests reveal that it is the asset growth rate characteristic that predicts returns, which indicate investors misprice the asset growth rate characteristic and raise doubts regarding the risk explanation.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 451-471
Issue: 4
Volume: 27
Year: 2020
Month: 7
X-DOI: 10.1080/16081625.2018.1517049
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1517049
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:4:p:451-471
Template-Type: ReDIF-Article 1.0
Author-Name: Yoshinori Shimada
Author-X-Name-First: Yoshinori
Author-X-Name-Last: Shimada
Title: Voluntary disclosure of investment forecasts and the cost of capital: evidence from the treatment effect estimates model
Abstract:
This study examines the economic consequences of voluntary disclosures for investment forecasts. Using Japanese data, I examine whether voluntary disclosure of management forecasts of capital investments and research and development investments is related to the cost of capital in the same and subsequent years. The results indicate that firms that disclose investment forecasts realize a greater reduction in the cost of capital in the same and subsequent accounting periods than firms that do not disclose. Another finding is that the initial investment forecast disclosures affect the reduction in the cost of capital in the year subsequent to the initial disclosure. This suggests that information effects of investment forecasts on the cost of capital appear over time.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 472-489
Issue: 4
Volume: 27
Year: 2020
Month: 7
X-DOI: 10.1080/16081625.2018.1517050
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1517050
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:4:p:472-489
Template-Type: ReDIF-Article 1.0
Author-Name: Yu-Shan Wei
Author-X-Name-First: Yu-Shan
Author-X-Name-Last: Wei
Author-Name: Shu-Ching Chou
Author-X-Name-First: Shu-Ching
Author-X-Name-Last: Chou
Title: Corporate entity representatives of business group and real earnings management: evidence from Taiwan
Abstract:
This study investigates how corporate entity directors and supervisors from business groups influence real earnings management (REM) by using a sample of firms listed on the Taiwan Stock Exchange. Our results show that firms with more corporate entity representatives are more likely to manipulate earnings upward through sales manipulation, overproduction, and reduction of discretionary expenditure. Prior studies focus on the effects of pyramid structures and cross-shareholdings. Our results contribute to provide new evidence that corporate entity representatives may increase agency costs and aggravate REM.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 490-509
Issue: 4
Volume: 27
Year: 2020
Month: 7
X-DOI: 10.1080/16081625.2018.1517603
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1517603
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:4:p:490-509
Template-Type: ReDIF-Article 1.0
Author-Name: Yaoqin Li
Author-X-Name-First: Yaoqin
Author-X-Name-Last: Li
Author-Name: Xixiong Xu
Author-X-Name-First: Xixiong
Author-X-Name-Last: Xu
Title: Does religious culture matter for corporate risk-taking? Evidence from China
Abstract:
This study investigates the impact of religious culture on corporate risk-taking. Motivated by several considerations including risk aversion trait, we predict a negative relation between religion and corporate risk-taking and support it with Chinese data. We also find that this negative relation is strengthened by female executives while weakened by higher managerial incentives. Further analysis shows that R&D expenditures and cash flow volatility are underlying channels for religion to influence corporate risk-taking. In addition, we find that religious culture improves firms’ investment quality. These findings add to literature by uncovering that risk aversion trait of religion is an important determinant of corporate risk-taking in China.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 511-530
Issue: 5
Volume: 27
Year: 2020
Month: 09
X-DOI: 10.1080/16081625.2019.1566869
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1566869
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:5:p:511-530
Template-Type: ReDIF-Article 1.0
Author-Name: Xue Li
Author-X-Name-First: Xue
Author-X-Name-Last: Li
Author-Name: Zhiru Lin
Author-X-Name-First: Zhiru
Author-X-Name-Last: Lin
Author-Name: Jin-hui Luo
Author-X-Name-First: Jin-hui
Author-X-Name-Last: Luo
Title: Does auditor-client distance matter to real earnings management? Evidence from China
Abstract:
Using a large sample of Chinese listed firms and accounting firms during 2004–2013, this study investigates whether and how auditor-client distance affects corporate real earnings management (REM). We find that REM is positively associated with auditor-client distance, and the positive association is more pronounced in client firms with lower information transparency and higher business complexity, suggesting that information advantage arising from geographical proximity may facilitate auditors’ supervision over their client firms’ REM. Moreover, both marketization environment and ownership concentration significantly attenuate the positive association, thereby reflecting a substitution effect between external audit and the other two governance mechanisms.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 531-557
Issue: 5
Volume: 27
Year: 2020
Month: 09
X-DOI: 10.1080/16081625.2019.1567353
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1567353
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:5:p:531-557
Template-Type: ReDIF-Article 1.0
Author-Name: Dongwoo Kim
Author-X-Name-First: Dongwoo
Author-X-Name-Last: Kim
Author-Name: Kyuho Maeng
Author-X-Name-First: Kyuho
Author-X-Name-Last: Maeng
Author-Name: Youngsang Cho
Author-X-Name-First: Youngsang
Author-X-Name-Last: Cho
Title: Study on the determinants of decision-making in peer-to-peer lending in South Korea
Abstract:
In order to investigate the influences of borrower information on the decision-making, we collected data for 35,485 individual loan requests from Moneyauction, the largest P2P lending platform in South Korea, and analyzed the determinants of borrower and lender decision-making, adopting a logistic regression model. Specifically, we included various linguistic variables, generated by Korean Linguistic Inquiry and Word Count software, in order to analyze the effect of language use. Our research findings show that while a borrower’s demographic traits and linguistic style do have influential effects on participants’ decision-making, their relative importance is much lower than that of financial and loan request profiles.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 558-576
Issue: 5
Volume: 27
Year: 2020
Month: 09
X-DOI: 10.1080/16081625.2018.1540939
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1540939
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:5:p:558-576
Template-Type: ReDIF-Article 1.0
Author-Name: Hyejeong Shin
Author-X-Name-First: Hyejeong
Author-X-Name-Last: Shin
Author-Name: Heejeong Shin
Author-X-Name-First: Heejeong
Author-X-Name-Last: Shin
Author-Name: Su-In Kim
Author-X-Name-First: Su-In
Author-X-Name-Last: Kim
Title: Do investors anticipate the future earnings of firms in a homogeneous industry?
Abstract:
This paper investigates whether industry homogeneity improves earnings informativeness about future earnings. Because homogeneity, defined as a similarity in accounting practices in generating earnings of firms in the same industry, facilitates information transfer and comparability among peer firms, we conjecture that homogeneity influences investors’ abilities to forecast future earnings.Using Korean data, we found that homogeneity has incremental effects on the future earnings response coefficient (FERC). After including control variables and utilizing re-measured homogeneity, the results remain unchanged.Our findings imply that the homogeneity of accounting practices within an industry benefits market participants.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 577-590
Issue: 5
Volume: 27
Year: 2020
Month: 09
X-DOI: 10.1080/16081625.2019.1566009
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1566009
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:5:p:577-590
Template-Type: ReDIF-Article 1.0
Author-Name: TsingZai C. Wu
Author-X-Name-First: TsingZai C.
Author-X-Name-Last: Wu
Author-Name: Hua-Wei Huang
Author-X-Name-First: Hua-Wei
Author-X-Name-Last: Huang
Author-Name: Chun-Chan Yu
Author-X-Name-First: Chun-Chan
Author-X-Name-Last: Yu
Author-Name: Ching-Hui Wu
Author-X-Name-First: Ching-Hui
Author-X-Name-Last: Wu
Title: Engagement partners participating in auditing standard setting and audit quality
Abstract:
In this study, we investigate whether engagement partners who participate in the national auditing standard setting can provide better audit quality, and explore the underlying cause in the context of Taiwan, where the name of engagement partners can be identified in audit reports. The empirical results indicate that firms audited by incumbent Auditing Standards Committee (ASC) member auditors are associated with lower discretionary accruals and a lower probability of having small profits. The results support the view that concerns about the impairments of increased reputational capital may be the most likely cause that explains the ASC member auditors’ better audit quality. This study also provides the benefits that can arise from the identification of engagement partners.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 591-611
Issue: 5
Volume: 27
Year: 2020
Month: 09
X-DOI: 10.1080/16081625.2017.1404922
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1404922
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:5:p:591-611
Template-Type: ReDIF-Article 1.0
Author-Name: Hyungjin Cho
Author-X-Name-First: Hyungjin
Author-X-Name-Last: Cho
Author-Name: Seung-Youb Han
Author-X-Name-First: Seung-Youb
Author-X-Name-Last: Han
Author-Name: Seungbin Oh
Author-X-Name-First: Seungbin
Author-X-Name-Last: Oh
Author-Name: Hee-Yeon Sunwoo
Author-X-Name-First: Hee-Yeon
Author-X-Name-Last: Sunwoo
Title: Optimistic credit rating and its influence on corporate decisions: evidence from Korea
Abstract:
Credit rating agencies have often been a target for criticism due to their inaccuracy and untimeliness. This paper sheds light on this issue by examining how an optimistic credit rating influences corporate decisions. We use Korean corporate credit ratings and construct the measure of credit rating optimism as the deviation of the actual ratings from benchmark ratings based on US corporate ratings. We find that rating optimism has a negative association with cost of debt and a positive relation with debt financing and investment. We also find that a positive relation between investment and future performance is weaker for firms with optimistic ratings. This finding suggests that inaccurate credit ratings would damage efficient capital allocation in the capital market.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 612-629
Issue: 5
Volume: 27
Year: 2020
Month: 09
X-DOI: 10.1080/16081625.2017.1419879
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1419879
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:5:p:612-629
Template-Type: ReDIF-Article 1.0
Author-Name: Yueh-Hsiang Lin
Author-X-Name-First: Yueh-Hsiang
Author-X-Name-Last: Lin
Author-Name: Ruei-Shian Wu
Author-X-Name-First: Ruei-Shian
Author-X-Name-Last: Wu
Title: Managerial optimism or managerial opportunism: From a seasoned equity offerings perspective
Abstract:
This study explores whether high-growth firms use accruals as a signal, rather than as a misleading device, in seasoned equity offerings (SEOs). For high-growth companies only, we find a positive relation between pre-SEO discretionary accruals and SEO announcement returns. We fail to find a negative relation between pre-SEO accruals and post-SEO long-run returns. Finally, we observe a positive relation between pre-SEO accruals and the long-run operating performance. Our findings suggest that high-growth firms are more likely to use high abnormal accruals during SEOs to signal managerial optimistic perspectives, while managerial opportunism is more likely to appear in non-high-growth firms.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 630-647
Issue: 5
Volume: 27
Year: 2020
Month: 09
X-DOI: 10.1080/16081625.2018.1424000
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1424000
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:5:p:630-647
Template-Type: ReDIF-Article 1.0
Author-Name: Kyongsun Heo
Author-X-Name-First: Kyongsun
Author-X-Name-Last: Heo
Author-Name: Jaeyon Chu
Author-X-Name-First: Jaeyon
Author-X-Name-Last: Chu
Author-Name: Jennifer Jae-Young Kim
Author-X-Name-First: Jennifer Jae-Young
Author-X-Name-Last: Kim
Author-Name: Jinhan Pae
Author-X-Name-First: Jinhan
Author-X-Name-Last: Pae
Title: Pension liabilities and conservative financial reporting*
Abstract:
We investigate the relationship between a firm’s conditional financial reporting policy and the tendency to understate pension liabilities in the statement of financial position. We focus on two primary actuarial assumptions for pension liabilities, the discount rate and the salary growth rate, because a small bias in these two actuarial assumptions has a big effect on the estimate of pension liabilities and firms have some latitude in choosing these rates. We predict and find that firms are less likely to choose an upwardly biased discount rate and/or a downwardly biased salary growth rate when their earnings reflect bad news on a timelier basis than good news. Even though the salary growth result is somewhat weak, overall results suggest that firms are less likely to understate their pension liabilities by choosing pension obligation increasing actuarial assumptions when their financial reporting is conditionally more conservative.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 649-666
Issue: 6
Volume: 27
Year: 2020
Month: 11
X-DOI: 10.1080/16081625.2019.1584757
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1584757
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:6:p:649-666
Template-Type: ReDIF-Article 1.0
Author-Name: Abu S Amin
Author-X-Name-First: Abu S
Author-X-Name-Last: Amin
Author-Name: Pawan Jain
Author-X-Name-First: Pawan
Author-X-Name-Last: Jain
Author-Name: Mahfuja Malik
Author-X-Name-First: Mahfuja
Author-X-Name-Last: Malik
Title: Stock market reaction to credit rating changes: new evidence*
Abstract:
This study shows how stock market reacts to rating change announcements where confounding effects of information spillover from related markets are absent. Contrary to existing literature, we find that the stock market reacts positively to a rating upgrade and no response to downgrade. Our analysis shows that pre-announcement cumulative abnormal returns can significantly predict announcement period abnormal return. Finally, we document a significant reduction in information asymmetry due to rating upgrade announcements affirming the recent policy initiatives.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 667-684
Issue: 6
Volume: 27
Year: 2020
Month: 11
X-DOI: 10.1080/16081625.2018.1481756
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1481756
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:6:p:667-684
Template-Type: ReDIF-Article 1.0
Author-Name: Ke Chen
Author-X-Name-First: Ke
Author-X-Name-Last: Chen
Author-Name: Yi Pan
Author-X-Name-First: Yi
Author-X-Name-Last: Pan
Title: Sustainability of China’s listed commercial banks under background of the ‘new normal’*
Abstract:
Under the background of the ‘new normal’, this paper conducts a dynamic analysis of the sustainability of 13 Chinese-listed commercial banks. We found that the sustainability of 13 commercial banks followed a decreasing trend over the period of 2012–2016, the sustainability of State-Owned Commercial Banks (SOCBs) is the highest, except for the Bank of Communications (BCM). Notably, the sustainability of China Industrial Bank (CIB) stands out, this may be partly attributed to this company’s efficiency in coordinating society and environment as well as its early development of green credit business.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 685-702
Issue: 6
Volume: 27
Year: 2020
Month: 11
X-DOI: 10.1080/16081625.2018.1481755
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1481755
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:6:p:685-702
Template-Type: ReDIF-Article 1.0
Author-Name: Li-Ju Chen
Author-X-Name-First: Li-Ju
Author-X-Name-Last: Chen
Title: Weather conditions and electoral outcomes in Taiwan
Abstract:
This paper examines the electoral outcomes in legislative elections in Taiwan, using the weather characteristics on election day as the independent variable. The results show that weather matters for voter turnout. Moreover, rainfall on election day yields no marginal effects on the vote share of the two main parties, but benefits other small parties inclined to the right. This result responds to the argument that conservative parties benefit from lower turnout, and supplements the literature by showing that lower turnout caused by weather also yields different impacts on each political party.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 703-716
Issue: 6
Volume: 27
Year: 2020
Month: 11
X-DOI: 10.1080/16081625.2018.1470542
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1470542
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:6:p:703-716
Template-Type: ReDIF-Article 1.0
Author-Name: Chao-Shin Chiao
Author-X-Name-First: Chao-Shin
Author-X-Name-Last: Chiao
Author-Name: Yu-Jen Hsiao
Author-X-Name-First: Yu-Jen
Author-X-Name-Last: Hsiao
Author-Name: Jou-Chun Chen
Author-X-Name-First: Jou-Chun
Author-X-Name-Last: Chen
Author-Name: Nguyen Minh An
Author-X-Name-First: Nguyen Minh
Author-X-Name-Last: An
Title: Residual momentum versus price momentum: evidence from four Asian markets‡
Abstract:
This paper investigates the profitability of momentum investment strategies – residual momentum versus price momentum – for common stocks listed in Hong Kong, Singapore, Taiwan, and Thailand. This study shows that the residual-momentum winner and loser on the previous residual returns derived under the CAPM have lower time-varying exposures to the market risk. The residual momentum strategy generates not only higher but also more consistent returns over time than the price momentum strategy. Moreover, the residual momentum effect exists in the four aforementioned stock markets, whereas there is no evidence for the price momentum.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 717-726
Issue: 6
Volume: 27
Year: 2020
Month: 11
X-DOI: 10.1080/16081625.2018.1474772
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1474772
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:6:p:717-726
Template-Type: ReDIF-Article 1.0
Author-Name: Ahmad Abu Alrub
Author-X-Name-First: Ahmad
Author-X-Name-Last: Abu Alrub
Author-Name: Mehmet Ağa
Author-X-Name-First: Mehmet
Author-X-Name-Last: Ağa
Author-Name: Husam Rjoub
Author-X-Name-First: Husam
Author-X-Name-Last: Rjoub
Title: Does the improvement in accounting standard IAS/IFRS cure the financial crisis and bank profitability? Evidence from banking sector in Lebanon
Abstract:
This study is to examine the improvement in accounting standards IAS/IRS on the 24 Lebanese banks profitability, concerning the financial crisis. Over the period 2000Q1–2015Q4, the period is divided as pre-IAS/IFRS adoption, post-IAS/IFRS adoption, Post-IAS/IFRS adoption-pre-world crisis, and Post-IAS/IFRS adoption-post-world crisis. Via applying GMM the main results show that assets quality have a positive influence under GAAP on bank profitability, and negatively under the IAS/IFRS with minting their trend after the financial crisis. Also, liquidity and capital adequacy have a negative effect on bank profitability which increased Post-IAS/IFRS adoption-post-world crisis comparing with GAAP, which gives a signal prior the crisis under IAS/IFRS, in turn, it led to increasing the leverage. Moreover, there is a negative relationship between economic activities (Co-Index) under GAAP on bank profitability, whereas the value reduced under the adoption of IFRS which reflect the mark-to-market value of financial assets. Therefore, improvement in standards of transparency and reduction of complexity both increase financial stability and thereby restore participants’ confidence in the financial market.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 727-744
Issue: 6
Volume: 27
Year: 2020
Month: 11
X-DOI: 10.1080/16081625.2018.1435288
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1435288
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:6:p:727-744
Template-Type: ReDIF-Article 1.0
Author-Name: Soo Hyun (Catherine) Oh
Author-X-Name-First: Soo Hyun (Catherine)
Author-X-Name-Last: Oh
Author-Name: Dongwoo Yoo
Author-X-Name-First: Dongwoo
Author-X-Name-Last: Yoo
Title: Unemployment after trade liberalization
Abstract:
This paper develops a dynamic general equilibrium model of international trade by incorporating labor market friction into the traditional Heckscher–Ohlin framework. Mutual trade reform encourages the production of firms in the comparative advantage sectors (de-regulation effect) but discourages that in the comparative disadvantage sectors (de-protection effect). When search friction and intersectoral labor barrier are present, the de-protection effect is not canceled out by the de-regulation effect, and we have a U-shaped long-run equilibrium employment curve along the tariff rates. Our empirical analysis also indicates a humped U-shaped relationship between tariff and unemployment.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 745-768
Issue: 6
Volume: 27
Year: 2020
Month: 11
X-DOI: 10.1080/16081625.2018.1460209
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1460209
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Handle: RePEc:taf:raaexx:v:27:y:2020:i:6:p:745-768
Template-Type: ReDIF-Article 1.0
Author-Name: Yu-Lin Chen
Author-X-Name-First: Yu-Lin
Author-X-Name-Last: Chen
Author-Name: Mei-Chu Huang
Author-X-Name-First: Mei-Chu
Author-X-Name-Last: Huang
Title: Bottom-up (top-down) rolling budgeting and job autonomy: consequences for the role of role overload and managerial performance
Abstract:
Drawing on job demands-control theory, this study examined how bottom-up (BU) versus top-down (TD) approaches for implementing a rolling budget can impact lower-level managers’ performance. The analysis of survey data of 98 solar firms in Taiwan demonstrated that BU relative to TD rolling-budget approaches in three phases of the budgeting process (namely, the issuance of guidelines, development of the budget proposals, and negotiation of final budgets) increased self-perceived role overload among lower and middle-level managers. Further, the difference between BU and TD rolling-budget approaches in their effect on perceptions of role overload will be smaller when job autonomy is higher in the two phases of the budgeting process (namely, development of the budget proposals and negotiation of final budgets). Lastly, role overload was found to play a full mediating role in the relationship between rolling-budget approaches, and self-perceived performance in all three phases of the budget process. Overall, these insights suggest that in order to fully understand the consequences of rolling budgets, we should consider both job autonomy and role overload.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1-21
Issue: 1
Volume: 28
Year: 2021
Month: 01
X-DOI: 10.1080/16081625.2020.1844997
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1844997
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:1:p:1-21
Template-Type: ReDIF-Article 1.0
Author-Name: Jae B. Kim
Author-X-Name-First: Jae B.
Author-X-Name-Last: Kim
Author-Name: Jonathan (Sangwook) Nam
Author-X-Name-First: Jonathan (Sangwook)
Author-X-Name-Last: Nam
Title: The effect of SFAS 158 on the mispricing of pension plan funding
Abstract:
In this study, we examine whether the stock market pricing of the funding status of pension plans has improved after the adoption of SFAS 158. We find that the overvaluation of firms with severely underfunded pension plans, as documented in the prior literature, is no longer observed in the years after the adoption of SFAS 158. In addition, we find that the positive effect of SFAS 158 adoption in mitigating the mispricing of the funding status of pension plans is more pronounced for firms with a larger amount of off-balance-sheet disclosed pension liabilities. Overall, our results suggest that SFAS 158 has enhanced investors’ valuation of the funding status of pension plans, particularly due to the requirement for previously disclosed pension liabilities to be recognized on the balance sheet.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 22-43
Issue: 1
Volume: 28
Year: 2021
Month: 01
X-DOI: 10.1080/16081625.2020.1844998
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1844998
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:1:p:22-43
Template-Type: ReDIF-Article 1.0
Author-Name: Hyejin Ahn
Author-X-Name-First: Hyejin
Author-X-Name-Last: Ahn
Author-Name: Catherine Heyjung Sonu
Author-X-Name-First: Catherine Heyjung
Author-X-Name-Last: Sonu
Title: The effect of audit partner style on financial statement comparability
Abstract:
Several studies provide evidence that auditors play an important role in the implementation of accounting comparability. We extend this line of research by examining whether comparability in accounting earnings between two firms is affected by auditor industry expertise measured at the partner level. Using 45,741 pairs of firms over the period 2003–2016, we find that the accounting comparability between two firms in a pair is higher when they are audited by the same expert partner than when they are audited by the same non-expert partner. The findings suggest that the degree of accounting comparability within a partner’s clientele is influenced by the industry expertise of the individual audit partner. Specifically, expert partners are more likely to provide consistent implementation of auditing standards and enforcement of accounting standards across their client base. These findings are robust to various sensitivity tests including using alternative measures of comparability, industry expertise and pair-matching methods.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 44-70
Issue: 1
Volume: 28
Year: 2021
Month: 01
X-DOI: 10.1080/16081625.2020.1844999
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1844999
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:1:p:44-70
Template-Type: ReDIF-Article 1.0
Author-Name: Heesun Chung
Author-X-Name-First: Heesun
Author-X-Name-Last: Chung
Author-Name: Yewon Kim
Author-X-Name-First: Yewon
Author-X-Name-Last: Kim
Author-Name: Hee-Yeon Sunwoo
Author-X-Name-First: Hee-Yeon
Author-X-Name-Last: Sunwoo
Title: Korean evidence on auditor switching for opinion shopping and capital market perceptions of audit quality
Abstract:
This study examines whether auditor switching for opinion shopping (OS) influences investors’ perceptions of audit quality (proxied by earnings response coefficients; ERCs). To the extent that audit quality deteriorates after firms switch auditors for OS, investors are less likely to rely on these firms’ audited earnings. This may result in a negative association between auditor switching for OS and ERCs. However, when the intention for auditor switching is undetected by investors, ERCs would do not differ depending on whether firms switch auditors for OS or not. We find that firms switching auditors for OS have lower ERCs than non-switching firms or those that switch for other reasons, suggesting that investors perceive auditor switching for OS as evidence of impaired auditor independence.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 71-93
Issue: 1
Volume: 28
Year: 2021
Month: 01
X-DOI: 10.1080/16081625.2020.1845000
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1845000
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:1:p:71-93
Template-Type: ReDIF-Article 1.0
Author-Name: Shohei Nagasawa
Author-X-Name-First: Shohei
Author-X-Name-Last: Nagasawa
Author-Name: Mizue Nagasawa
Author-X-Name-First: Mizue
Author-X-Name-Last: Nagasawa
Title: Free riding, empire building, and cost management prior to and post municipal enterprise mergers in Japan
Abstract:
Opportunistic overspending tendencies induce inflexible cost adjustments and encourage bad cost stickiness. To examine whether this perspective applies to public sector organizations (PSOs) and mergers, we test the asymmetric cost behaviors, (1) free riding and (2) empire building, associated with managerial incentives in merged Japanese municipal enterprises. Consequently, we find evidence that prior to mergers, administrators’ opportunistic spending originating from free-riding behavior affects cost stickiness; conversely, an analysis of the post-merger sample shows that the empire-building incentive might partly mitigate sticky costs. Our results corroborate the contradictory role of managerial discretion in resource adjustment decisions between pre- and post-mergers.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 94-116
Issue: 1
Volume: 28
Year: 2021
Month: 01
X-DOI: 10.1080/16081625.2020.1845001
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1845001
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:1:p:94-116
Template-Type: ReDIF-Article 1.0
Author-Name: Shengzhong Huang
Author-X-Name-First: Shengzhong
Author-X-Name-Last: Huang
Author-Name: Brian M. Lam
Author-X-Name-First: Brian M.
Author-X-Name-Last: Lam
Author-Name: Ming Liu
Author-X-Name-First: Ming
Author-X-Name-Last: Liu
Author-Name: Byungcherl Charlie Sohn
Author-X-Name-First: Byungcherl Charlie
Author-X-Name-Last: Sohn
Author-Name: Desmond C. Y. Yuen
Author-X-Name-First: Desmond C. Y.
Author-X-Name-Last: Yuen
Title: Labor power, investor protection, and price synchronicity
Abstract:
In this study, we examine the impact of labor union power on stock price synchronicity. We proxy labor union power by the collective relation law index and measure stock price synchronicity by the level of co-movement between a firm’s stock price and market index. Using a sample of 37 countries between 1995 and 2016, we find that labor union power is positively associated with stock price synchronicity, indicating that firms in countries where labor union power is relatively stronger tend to disclose less firm-specific information. Our evidence also shows that this phenomenon is more pronounced in countries where investors are better protected, and is less pronounced or even reversed in countries where investors are less protected.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 117-132
Issue: 1
Volume: 28
Year: 2021
Month: 01
X-DOI: 10.1080/16081625.2020.1845002
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1845002
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:1:p:117-132
Template-Type: ReDIF-Article 1.0
Author-Name: Xiaobai Zhang
Author-X-Name-First: Xiaobai
Author-X-Name-Last: Zhang
Author-Name: Hu Dan Semba
Author-X-Name-First: Hu Dan
Author-X-Name-Last: Semba
Author-Name: Hong Xu
Author-X-Name-First: Hong
Author-X-Name-Last: Xu
Title: Mandatory vs. voluntary disclosure of management forecast in China
Abstract:
This study examines the difference in management forecast quality under mandatory vs. voluntary disclosure in China’s stock markets in terms of management forecasting error (MFE) and value relevance. The results of MFE tests reveal that the disclosure approach is significantly associated with forecast accuracy, and voluntarily disclosed forecasts are more accurate than mandatorily disclosed forecasts. In terms of value relevance, the results are also consistent with the belief that in China’s stock markets, management forecast quality under voluntary disclosure is higher than that under mandatory disclosure.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 133-152
Issue: 1
Volume: 28
Year: 2021
Month: 01
X-DOI: 10.1080/16081625.2020.1845003
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1845003
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:1:p:133-152
Template-Type: ReDIF-Article 1.0
Author-Name: Gerald J. Lobo
Author-X-Name-First: Gerald J.
Author-X-Name-Last: Lobo
Author-Name: Chong Wang
Author-X-Name-First: Chong
Author-X-Name-Last: Wang
Author-Name: Yanchao Wang
Author-X-Name-First: Yanchao
Author-X-Name-Last: Wang
Author-Name: Feng (Harry) Wu
Author-X-Name-First: Feng (Harry)
Author-X-Name-Last: Wu
Title: Debt enforcement and bank loans: evidence from insolvency practices worldwide
Abstract:
Using a novel debt enforcement index reflecting legal and economic characteristics directly relating to resolving insolvency across the world, we document that bank loan terms are more stringent (larger interest rate spread, higher collateral requirement, more covenants) in countries with weaker debt enforcement. The effect is more prominent when creditor rights are better protected and debtors are exposed to higher fundamental and informational risks. Improved enforcement has real effects of reducing borrowers’ covenant violation and enhancing their preference for bank funding. Lenders’ syndicates become more concentrated as loan contract enforceability deteriorates. A difference-in-differences analysis of insolvency resolution reforms worldwide confirms the cross-country evidence.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 153-182
Issue: 1
Volume: 28
Year: 2021
Month: 01
X-DOI: 10.1080/16081625.2020.1845004
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1845004
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:1:p:153-182
Template-Type: ReDIF-Article 1.0
Author-Name: Dong-Jin Pyo
Author-X-Name-First: Dong-Jin
Author-X-Name-Last: Pyo
Author-Name: Jungho Kim
Author-X-Name-First: Jungho
Author-X-Name-Last: Kim
Title: News media sentiment and asset prices in Korea: text-mining approach
Abstract:
This paper builds a new sentiment index from news articles using text-mining techniques to empirically investigate the relationships between investor sentiment and asset prices in the Korean financial markets. Results show that an increase in the sentiment index predicts a positive stock return and reduction in its volatility. Evidence also demonstrates that a higher sentiment index leads to an appreciation in the KRW against the USD and the lower exchange rate volatility.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 183-205
Issue: 2
Volume: 28
Year: 2021
Month: 03
X-DOI: 10.1080/16081625.2019.1642115
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1642115
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:2:p:183-205
Template-Type: ReDIF-Article 1.0
Author-Name: Xia Wang
Author-X-Name-First: Xia
Author-X-Name-Last: Wang
Author-Name: Cencen Gao
Author-X-Name-First: Cencen
Author-X-Name-Last: Gao
Author-Name: Mingming Feng
Author-X-Name-First: Mingming
Author-X-Name-Last: Feng
Title: CEOs raising daughters and female executives
Abstract:
We explore the relation between CEOs raising daughters and the proportion of female executives in the firm. We find that compared to CEOs without daughters, CEOs with daughters tend to hire more female executives, suggesting that there is a ‘daughter effect’ in human resource decisions and that raising daughters can improve CEOs’ perceptions of gender equality. The improvement in their perceptions is more significant for CEOs who were born in patriarchal regions where the social system is controlled or governed by men. This study suggests an effective way to increase the proportion of female executives based on CEOs’ individual characteristics.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 206-224
Issue: 2
Volume: 28
Year: 2021
Month: 03
X-DOI: 10.1080/16081625.2019.1601023
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1601023
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:2:p:206-224
Template-Type: ReDIF-Article 1.0
Author-Name: Chen Fei
Author-X-Name-First: Chen
Author-X-Name-Last: Fei
Author-Name: Weiyin Fei
Author-X-Name-First: Weiyin
Author-X-Name-Last: Fei
Author-Name: Yayun Rui
Author-X-Name-First: Yayun
Author-X-Name-Last: Rui
Author-Name: Litan Yan
Author-X-Name-First: Litan
Author-X-Name-Last: Yan
Title: International investment with exchange rate risk
Abstract:
This paper developed an optimal intertemporal asset allocation strategy of a multinational corporation, which invests in foreign market under exchange rate risk. First, through Itô formula, the international investor’s wealth dynamics denominated in domestic currency is obtained. Then, to maximize the expected utility of the intertemporal consumption and the terminal wealth, the optimal consumption and investment strategies are obtained through the Hamilton-Jacobi-Bellman (HJB) equation. Finally, based on the numerical simulations, we provide an analysis of the impact of varying the relative risk aversion, the investment horizon and the exchange rate volatility on the optimal investment strategies of the investor.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 225-241
Issue: 2
Volume: 28
Year: 2021
Month: 03
X-DOI: 10.1080/16081625.2019.1569539
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1569539
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:2:p:225-241
Template-Type: ReDIF-Article 1.0
Author-Name: Bin Li
Author-X-Name-First: Bin
Author-X-Name-Last: Li
Author-Name: Wen Zheng
Author-X-Name-First: Wen
Author-X-Name-Last: Zheng
Author-Name: Li Li
Author-X-Name-First: Li
Author-X-Name-Last: Li
Title: Parent–subsidiary geographic dispersion and earnings management
Abstract:
This study investigates the relationship between parent–subsidiary geographic dispersion and earnings management in China. We find that the parent–subsidiary geographic dispersion is positively associated with earnings management. This positive association is attributable to legal and cultural differences as well as firms with more agency conflict as proxied by: state-owned firms and non-cross-listed firms. Our findings are robust across various sensitivity analyses.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 242-262
Issue: 2
Volume: 28
Year: 2021
Month: 03
X-DOI: 10.1080/16081625.2019.1600417
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1600417
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:2:p:242-262
Template-Type: ReDIF-Article 1.0
Author-Name: Il Hang Shin
Author-X-Name-First: Il Hang
Author-X-Name-Last: Shin
Author-Name: Sung Kyu Sohn
Author-X-Name-First: Sung Kyu
Author-X-Name-Last: Sohn
Author-Name: Sorah Park
Author-X-Name-First: Sorah
Author-X-Name-Last: Park
Title: Related party transactions and income smoothing: new evidence from Korea
Abstract:
We examine the relationship between related party transactions (hereafter, RPTs) and income smoothing using a sample of Korean firms from 2001 to 2013. We hypothesize that RPTs can be an efficient tool for income smoothing activity because both controlling shareholders and managers related to the execution of RPTs have incentives for income smoothing. Consistent with our conjecture, we find that RPTs are significantly associated with income smoothing. In particular, operating RPTs are shown to be an efficient tool to achieve smooth earnings path. We further document that income smoothing based on RPTs improves the informativeness of firms’ reported earnings about their future earnings, which is measured by future earnings response coefficients (FERC).
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 263-280
Issue: 2
Volume: 28
Year: 2021
Month: 03
X-DOI: 10.1080/16081625.2019.1566011
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1566011
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:2:p:263-280
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Erratum
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 281-281
Issue: 2
Volume: 28
Year: 2021
Month: 03
X-DOI: 10.1080/16081625.2017.1293915
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1293915
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:2:p:281-281
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Erratum
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 282-282
Issue: 2
Volume: 28
Year: 2021
Month: 03
X-DOI: 10.1080/16081625.2017.1415117
File-URL: http://hdl.handle.net/10.1080/16081625.2017.1415117
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:2:p:282-282
Template-Type: ReDIF-Article 1.0
Author-Name: The Editors
Title: Corrigendum
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 283-283
Issue: 2
Volume: 28
Year: 2021
Month: 03
X-DOI: 10.1080/16081625.2018.1432467
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1432467
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:2:p:283-283
Template-Type: ReDIF-Article 1.0
Author-Name: Hyungjin Cho
Author-X-Name-First: Hyungjin
Author-X-Name-Last: Cho
Author-Name: Sera Choi
Author-X-Name-First: Sera
Author-X-Name-Last: Choi
Author-Name: Dae-Hyun Kwon
Author-X-Name-First: Dae-Hyun
Author-X-Name-Last: Kwon
Title: Employee tenure and earnings management through real activities manipulation
Abstract:
We extend prior studies on the role of employee on financial reporting by investigating the relation between employee tenure and earnings management through real activities manipulation. On the one hand, employees with longer tenure would be better in detecting real activities manipulation with better knowledge and experience on daily operations, yielding a negative relation between employee tenure and real earnings management. On the other hand, employee tenure would be positively associated with earnings management through real activities manipulation if rent-seeking managers persuade long-tenured employees who have a better ability to control daily operation, or if employees with longer tenure believe that real activities manipulation benefits the long-term survival of the firm. Our empirical analysis presents the positive relation between employee tenure and upward earnings management via reduction in discretionary expenses and overproduction. Further, we find that the positive association between employee tenure and REM could be attributable to employees’ collaboration in response to managerial efforts to provide the benefit to the firm by building creditability with the capital market and by signaling future better performance.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 387-410
Issue: 3
Volume: 28
Year: 2021
Month: 05
X-DOI: 10.1080/16081625.2019.1694953
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1694953
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:3:p:387-410
Template-Type: ReDIF-Article 1.0
Author-Name: Huilong Liu
Author-X-Name-First: Huilong
Author-X-Name-Last: Liu
Author-Name: Yunfei Qi
Author-X-Name-First: Yunfei
Author-X-Name-Last: Qi
Author-Name: Hong Wang
Author-X-Name-First: Hong
Author-X-Name-Last: Wang
Title: Do large shareholders separate the roles of CEO and board chairman for expropriations? Evidence from pyramidal business groups in China
Abstract:
This paper proposes that the separation of the roles of CEO and board chairman is a result of, rather than a solution to large shareholder agency problem. We support this view by examining the probabilities of CEO duality in pyramidal groups. We find that the probability of CEO duality is negatively associated with the number of pyramid layers and large shareholder expropriation, the number of pyramid layers and the level of large shareholder expropriation are positively related. Further analysis reveals that CEO duality improves (dampens) firm performance in cases of more (fewer) pyramid layers.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 334-356
Issue: 3
Volume: 28
Year: 2021
Month: 05
X-DOI: 10.1080/16081625.2019.1636664
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1636664
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:3:p:334-356
Template-Type: ReDIF-Article 1.0
Author-Name: Yuxiang Zhong
Author-X-Name-First: Yuxiang
Author-X-Name-Last: Zhong
Author-Name: Wanli Li
Author-X-Name-First: Wanli
Author-X-Name-Last: Li
Author-Name: Yue Li
Author-X-Name-First: Yue
Author-X-Name-Last: Li
Title: Discretionary income smoothing and crash risk: evidence from China
Abstract:
Using a sample of Chinese listed firms from 2003 to 2017, our paper investigates how discretionary income smoothing affects crash risk. We find that discretionary income smoothing is positively correlated with crash risk the positive effect is robust to alternative empirical designs. In addition, discretionary income smoothing also predicts (reduces) the likelihood of future positive price jump, indicating that discretionary income smoothing generally forecasts fat-tailed stock price distributions. Our cross-sectional analysis suggests that the positive effect of discretionary income smoothing on crash risk is stronger in firms without institutional ownership, with poorer information environment and with higher agency conflicts.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 311-333
Issue: 3
Volume: 28
Year: 2021
Month: 05
X-DOI: 10.1080/16081625.2019.1600413
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1600413
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:3:p:311-333
Template-Type: ReDIF-Article 1.0
Author-Name: Junyan Li
Author-X-Name-First: Junyan
Author-X-Name-Last: Li
Author-Name: Gaoliang Tian
Author-X-Name-First: Gaoliang
Author-X-Name-Last: Tian
Author-Name: Mohan Fonseka
Author-X-Name-First: Mohan
Author-X-Name-Last: Fonseka
Author-Name: Yi Si
Author-X-Name-First: Yi
Author-X-Name-Last: Si
Title: The reverse corporate governance effect of online media management
Abstract:
Market participants face a relatively serious information dilemma due to ‘limited attention’ and ‘reporting bias.’ This directly affects the choice and behavior of economic parties and ultimately leads to loss of interests. To tackle such problems, this study makes use of a questionnaire to investigate the current situation of online media management, in listed companies, such as Shen Zhen Securities Exchange and other companies operating in China. The focus is to discuss the economic consequences of reverse corporate governance behavior of listed companies, which actively undertake online media management. The findings of this paper are as follows: (1) Effective online media management can increase the transparency of information and improve the welfare of stakeholder groups. (2) The economic consequences is more obvious in the sample of listed companies with an environment facilitating better information and high visibility. (3) The government penalization is unable to replace the effect of online media management, which provides additional evidence for the empirical results of this paper to be robust.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 285-310
Issue: 3
Volume: 28
Year: 2021
Month: 05
X-DOI: 10.1080/16081625.2019.1618719
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1618719
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:3:p:285-310
Template-Type: ReDIF-Article 1.0
Author-Name: Bin Li
Author-X-Name-First: Bin
Author-X-Name-Last: Li
Author-Name: Chen Ma
Author-X-Name-First: Chen
Author-X-Name-Last: Ma
Title: Can tax enforcement affect misstatements? From the perspective of tax account and non-tax account misstatements
Abstract:
This study examines the relationship between tax enforcement and accounting misstatements in China and investigates whether the effect of tax enforcement on tax account misstatement (TAM) and non-tax account misstatement (NTAM) differs. We find evidence that stricter tax enforcement by tax authorities reduces the incidence of accounting misstatements and, more importantly, this effect is the same for TAM and NTAM. However, we find that as tax enforcement increases, firms are less (more) likely to misstate tax accounts for income-increasing (income-decreasing) misstatements than non-tax accounts. Overall, our evidence is consistent with tax authorities disciplining earnings management, and more importantly, the disciplining occurs in both the tax and non-tax related accounts.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 357-374
Issue: 3
Volume: 28
Year: 2021
Month: 05
X-DOI: 10.1080/16081625.2019.1618718
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1618718
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:3:p:357-374
Template-Type: ReDIF-Article 1.0
Author-Name: Gihwan Yi
Author-X-Name-First: Gihwan
Author-X-Name-Last: Yi
Author-Name: Seung-Gyu Sim
Author-X-Name-First: Seung-Gyu
Author-X-Name-Last: Sim
Title: Resale price maintenance and informative advertisement
Abstract:
This paper studies a monopolistic producer’s resale price maintenance scheme when downstream retailers simultaneously put (informative) advertisement efforts and sell final products. It posits that each retailer’s advertisement effort increases not only its own sales, but also the entire market size, because consumers, after observing an advertisement from one retailer, may purchase from another. Unless the advertisement cost is too elastic, the minimum resale price maintenance scheme is binding and welfare-enhancing. Unlike the existing literature, it supports the legal doctrine of ‘rule of reason’ rather than ‘illegal per se’ even under consumer surplus standard for competition policy.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 375-386
Issue: 3
Volume: 28
Year: 2021
Month: 05
X-DOI: 10.1080/16081625.2019.1567354
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1567354
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:3:p:375-386
Template-Type: ReDIF-Article 1.0
Author-Name: Lu Zhang
Author-X-Name-First: Lu
Author-X-Name-Last: Zhang
Author-Name: Jincai Li
Author-X-Name-First: Jincai
Author-X-Name-Last: Li
Author-Name: Huijuan Wang
Author-X-Name-First: Huijuan
Author-X-Name-Last: Wang
Title: IPO over-funding and cost stickiness
Abstract:
The paper explores the influence of IPO over-funding on the cost stickiness. We first document that the liquidity from IPO over-funding has positive association with the cost stickiness in China which indicates that the liquidity supplement from IPO over-funding increases manager’s empire building incentives and reduces company’s operating efficiency. Besides, we find that this positive association is more significant in companies with weak governance in terms of less power balance, lower debt constraints and less institutional investor’s supervision. It is because company’s governance mechanism plays an important role on the efficiency of IPO proceeds. These conclusions provide enlightenment for the current regulation of listed companies.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 411-426
Issue: 4
Volume: 28
Year: 2021
Month: 07
X-DOI: 10.1080/16081625.2019.1601024
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1601024
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:4:p:411-426
Template-Type: ReDIF-Article 1.0
Author-Name: Kenneth A. Tah
Author-X-Name-First: Kenneth A.
Author-X-Name-Last: Tah
Author-Name: Courtney Czerniak
Author-X-Name-First: Courtney
Author-X-Name-Last: Czerniak
Author-Name: Alexa Levine
Author-X-Name-First: Alexa
Author-X-Name-Last: Levine
Author-Name: Kylie Wiggin
Author-X-Name-First: Kylie
Author-X-Name-Last: Wiggin
Author-Name: Iheanyi N. Osondu
Author-X-Name-First: Iheanyi N.
Author-X-Name-Last: Osondu
Title: Foreign trade and economic growth in South Africa
Abstract:
This study investigates the effects of foreign trade (economic openness) on South African economic growth. We control for the role of human capital accumulation, physical capital and foreign direct investment. We employ the cointegration test, Gonzalo-Granger common long-memory test, and the error-correction model. The empirical evidence indicates that foreign trade is a significant catalyst of growth in both the short- and long-run period. The evidence also indicates that human and physical capital are significant catalyst of growth in the long-run. Accordingly, South Africa should have policies that encourage foreign trade in order to boost both short and long-run economic growth. Policies to invigorate the education system and physical capital in South Africa should persist over a long period of time to realize their expected economic benefits.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 472-481
Issue: 4
Volume: 28
Year: 2021
Month: 07
X-DOI: 10.1080/16081625.2019.1567352
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1567352
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:4:p:472-481
Template-Type: ReDIF-Article 1.0
Author-Name: Mohammad Jahangir Alam
Author-X-Name-First: Mohammad Jahangir
Author-X-Name-Last: Alam
Author-Name: Thomas Kloepfer
Author-X-Name-First: Thomas
Author-X-Name-Last: Kloepfer
Author-Name: Shinji Kaneko
Author-X-Name-First: Shinji
Author-X-Name-Last: Kaneko
Title: Wage inequality in Bangladesh, 2000–2010: an unconditional quantile regression decomposition
Abstract:
This paper reports on an investigation into changes in wage inequality in Bangladesh between 2000 and 2010, based on gender, marital status, education, job industry, job sector, location, etc. The 2000 and 2010 Labour Force Surveys conducted by the Bangladesh Bureau of Statistics (BBS) provided the data used. Oaxaca–Blinder’s (1973) decomposition and regression of the (recentered) influence function (RIF) model of Firpo–Fortin–Lemieux (FFL)’s (2007) decomposition were used to identify the important factors that caused wage inequality in Bangladesh. Both methods showed that the coefficient effect is the main contributor to the overall increase in wage inequality.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 507-524
Issue: 4
Volume: 28
Year: 2021
Month: 07
X-DOI: 10.1080/16081625.2019.1600420
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1600420
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:4:p:507-524
Template-Type: ReDIF-Article 1.0
Author-Name: Tung Lam Dang
Author-X-Name-First: Tung Lam
Author-X-Name-Last: Dang
Author-Name: Man Dang
Author-X-Name-First: Man
Author-X-Name-Last: Dang
Author-Name: Phuong Dung Le
Author-X-Name-First: Phuong Dung
Author-X-Name-Last: Le
Author-Name: Hoa Nhan Nguyen
Author-X-Name-First: Hoa Nhan
Author-X-Name-Last: Nguyen
Author-Name: Quang Minh Nhi Nguyen
Author-X-Name-First: Quang Minh Nhi
Author-X-Name-Last: Nguyen
Author-Name: Darren Henry
Author-X-Name-First: Darren
Author-X-Name-Last: Henry
Title: Does earnings management matter for firm leverage? An international analysis
Abstract:
This paper examines the relation between corporate information environment and capital structure decisions, and whether this association changes with cross-country institutional environments. Using earnings management as a measure of the corporate information environment, we find that firms with higher earnings management activities have greater firm leverage ratios. We further document that the effect of earnings management on leverage is more pronounced in countries with weaker institutional environments. Overall, our study adds to the strand of research on imperfect factor markets and verifies the influence of information asymmetry on debt financing choices in a cross-country setting.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 482-506
Issue: 4
Volume: 28
Year: 2021
Month: 07
X-DOI: 10.1080/16081625.2018.1540938
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1540938
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:4:p:482-506
Template-Type: ReDIF-Article 1.0
Author-Name: Yong-Shik Kim
Author-X-Name-First: Yong-Shik
Author-X-Name-Last: Kim
Author-Name: Sun A Kang
Author-X-Name-First: Sun A
Author-X-Name-Last: Kang
Author-Name: Sang-Hun Park
Author-X-Name-First: Sang-Hun
Author-X-Name-Last: Park
Title: The effect of management style on financial statement comparability: evidence from Korean business groups
Abstract:
In this study, we investigate whether firm-pairs in the same business group have more comparable earnings than firm-pairs in different business groups. We find evidence consistent with our hypothesis that accounting earnings comparability is greater when two firms are members of the same business group. Additionally, we find that accounting earnings comparability for firm-pairs in the same business group is greater where insider ownership of business groups is higher and the exchange of board personnel is more frequent. In sum, we confirm that ‘management style’ in each business group contributes to an improvement in accounting earnings comparability across member firms in the same business group.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 454-471
Issue: 4
Volume: 28
Year: 2021
Month: 07
X-DOI: 10.1080/16081625.2019.1566870
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1566870
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:4:p:454-471
Template-Type: ReDIF-Article 1.0
Author-Name: Hua Feng
Author-X-Name-First: Hua
Author-X-Name-Last: Feng
Author-Name: Ahsan Habib
Author-X-Name-First: Ahsan
Author-X-Name-Last: Habib
Author-Name: H. J. Huang
Author-X-Name-First: H. J.
Author-X-Name-Last: Huang
Author-Name: Bao-Lei Qi
Author-X-Name-First: Bao-Lei
Author-X-Name-Last: Qi
Title: Auditor industry specialization and stock price crash risk: individual-level evidence
Abstract:
We investigate the effect of individual auditor industry specialization on stock price crash risk. Although research on individual auditors has been growing, we are not aware of any prior studies that investigate industry specialization at the individual auditor-level and crash risk. Using a large sample of Chinese stocks spanning the period 2003–2015, we find a statistically significant and negative association between individual auditor industry specialization and stock price crash risk after controlling the firm-level effect. Our mediation tests suggest that individual auditor industry specialization decreases the risk of price crash by mitigating earnings manipulation. We further document that the negative association is more pronounced for firms that switch from non-specialist to specialist auditors. We also find some evidence that an auditor’s personal characteristics moderate the association between auditor industry specialization and crash risk. Our results remain robust to alternative measures of individual auditor industry specialization and sensitivity checks.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 427-453
Issue: 4
Volume: 28
Year: 2021
Month: 07
X-DOI: 10.1080/16081625.2019.1584859
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1584859
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:4:p:427-453
Template-Type: ReDIF-Article 1.0
Author-Name: Burcak Polat
Author-X-Name-First: Burcak
Author-X-Name-Last: Polat
Title: The impact of renewable and nonrenewable energy consumption on economic growth: a dynamic panel data approach
Abstract:
The role of energy consumption in production processes has received considerable attention from academic scholars in recent years because of the new assumptions in endogamous growth theory. Yet, the real effect of energy consumption on economic growth is still a controversial and inconclusive issue in the literature. Using a dynamic panel data technique, this study aimed to provide new insights into these issues by examining the effect of renewable and non-renewable energy consumption on economic growth in developing and developed countries for the period 2002 to 2014. The results suggest that the effect of energy consumption on economic growth varies according to the income levels of the economies concerned. While non-renewable energy consumption was positively correlated with growth in developing countries, non-renewable or renewable energy consumption was not found to have an effect on the economic performance of developed countries.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 592-603
Issue: 5
Volume: 28
Year: 2021
Month: 09
X-DOI: 10.1080/16081625.2018.1540936
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1540936
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:5:p:592-603
Template-Type: ReDIF-Article 1.0
Author-Name: Min Liu
Author-X-Name-First: Min
Author-X-Name-Last: Liu
Author-Name: Weijie Lu
Author-X-Name-First: Weijie
Author-X-Name-Last: Lu
Title: Corporate social responsibility, firm performance, and firm risk: the role of firm reputation
Abstract:
This paper examines the impacts of firms’ corporate social responsibility (CSR) engagements on firm performance and firm risk, and explores the underlying mechanisms. We empirically demonstrate the active effect of CSR activities on firm performance improvement and risk mitigation. We further examine the role of firm reputation with published data from Fortune’s Most Admired Companies list. We document a significant positive association between CSR and firm reputation, and find that firm reputation is positively related to firm performance while negatively related to firm risk. Based on our analyses, firm reputation mediates the effects of CSR on firm performance and firm risk. This study contributes to the CSR literature through exploring CSR-outcomes relationships with published reputation data.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 525-545
Issue: 5
Volume: 28
Year: 2021
Month: 09
X-DOI: 10.1080/16081625.2019.1601022
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1601022
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:5:p:525-545
Template-Type: ReDIF-Article 1.0
Author-Name: Tony Kang
Author-X-Name-First: Tony
Author-X-Name-Last: Kang
Author-Name: Yong Gyu Lee
Author-X-Name-First: Yong Gyu
Author-X-Name-Last: Lee
Author-Name: Ji Yeon Ryu
Author-X-Name-First: Ji Yeon
Author-X-Name-Last: Ryu
Author-Name: Yong Keun Yoo
Author-X-Name-First: Yong
Author-X-Name-Last: Keun Yoo
Title: A comparison of investors’ and analysts’ efficiency in incorporating accounting information
Abstract:
In this study, we compare the relative efficiency of investors and sell-side analysts in using various accounting information to predict future earnings. Our results indicate that the equity- value estimates inferred from the analysts’ earnings forecasts are more biased than the stock prices in interpreting stock price momentum, accruals, and the growth in long-term net operating assets. Therefore, we conclude that sell-side analysts are generally less efficient than investors in incorporating certain accounting information. Thus, investors may not be able to mitigate their mispricing of certain accounting information by fixating on analysts’ earnings forecasts as a benchmark for their earnings expectation.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 562-576
Issue: 5
Volume: 28
Year: 2021
Month: 09
X-DOI: 10.1080/16081625.2019.1584758
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1584758
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:5:p:562-576
Template-Type: ReDIF-Article 1.0
Author-Name: Ernesto Rodriguez-Crespo
Author-X-Name-First: Ernesto
Author-X-Name-Last: Rodriguez-Crespo
Author-Name: Rocio Marco
Author-X-Name-First: Rocio
Author-X-Name-Last: Marco
Author-Name: Margarita Billon
Author-X-Name-First: Margarita
Author-X-Name-Last: Billon
Title: ICTs impacts on trade: a comparative dynamic analysis for internet, mobile phones and broadband
Abstract:
We investigate the impact of internet use, mobile phones, and broadband on bilateral trade flows using a dynamic gravity model and panel data for 2004‒2013. We find a significant and positive relationship between each type of ICT and bilateral exports, although the impacts vary depending on the type of technology. Our findings suggest that the effect of ICT use is larger for mobile phones and smaller for broadband. The impact on trade is greater for the exporter than for the importer. Mobile phones register the greatest effect for import countries in trade flows from high-income to low- and middle-income countries.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 577-591
Issue: 5
Volume: 28
Year: 2021
Month: 09
X-DOI: 10.1080/16081625.2018.1519636
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1519636
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:5:p:577-591
Template-Type: ReDIF-Article 1.0
Author-Name: Sang-Ho Lee
Author-X-Name-First: Sang-Ho
Author-X-Name-Last: Lee
Author-Name: Chul-Hi Park
Author-X-Name-First: Chul-Hi
Author-X-Name-Last: Park
Title: Corporate environmentalism in a managerial delegation and abatement subsidy policy
Abstract:
This study examines strategic corporate environmentalism in a managerial delegation contract within a product differentiated duopolistic framework in which polluting firms can purchase abatement goods from an eco-industry. We emphasize a cost pass-through effect under price competition, which can restrict the outputs of polluting firms but increase their profits. We then construct an abatement subsidy policy and show that the government can induce the firm’s profitable environmental concern to be socially desirable by substituting the output-restriction behavior with the adoption of abatement goods. Our analysis supports the Porter hypothesis that given a well-designed government regulation on the voluntary initiative of self-regulation, Pareto-improving alignment between private and social incentives is feasible and attainable.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 546-561
Issue: 5
Volume: 28
Year: 2021
Month: 09
X-DOI: 10.1080/16081625.2019.1587302
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1587302
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:5:p:546-561
Template-Type: ReDIF-Article 1.0
Author-Name: Yujing Gong
Author-X-Name-First: Yujing
Author-X-Name-Last: Gong
Author-Name: Kung-Cheng Ho
Author-X-Name-First: Kung-Cheng
Author-X-Name-Last: Ho
Title: Corporate social responsibility and managerial short-termism
Abstract:
This study examines whether corporate social responsibility (CSR) mitigates or exacerbates managerial short-termism. Using earnings management (EM) as a proxy for managerial short-termism, we find that socially responsible firms engage in less accrual-based and real EM activities. This finding supports the argument that socially responsible firms not only focus on current profits but also maintain long-term sustainable development. Further analyses reveal that the moderate effect of CSR on managerial short-termism is evident only for mandatory CSR disclosure firms. This suggests that regulatory non-financial reporting potentially mitigates information asymmetry and effectively constrains managerial short-termism.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 604-630
Issue: 5
Volume: 28
Year: 2021
Month: 09
X-DOI: 10.1080/16081625.2018.1540941
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1540941
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:5:p:604-630
Template-Type: ReDIF-Article 1.0
Author-Name: Eun Joo Cho
Author-X-Name-First: Eun Joo
Author-X-Name-Last: Cho
Author-Name: Jae Hong Lee
Author-X-Name-First: Jae Hong
Author-X-Name-Last: Lee
Author-Name: Jong Sung Park
Author-X-Name-First: Jong Sung
Author-X-Name-Last: Park
Title: The impact of leverage and overinvestment on project financing: evidence from South Korea
Abstract:
This study analyzes relationship between leverage and project financing payment guarantee using 337 firm-year observations of the listed firms on the Korean stock market from 2008 to 2017. We find that the higher the debt ratio, the greater the tendency to make risky investments as project financing payment guarantee. In addition, the relationship between the debt ratio and the project financing payment guarantee is more significant when the manager’s overinvestment tendency is greater. Despite the controversy surrounding the accounting methods of the construction companies since the introduction of K-IFRS, we report that project financing guarantees are not yet properly recognized.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 723-745
Issue: 6
Volume: 28
Year: 2021
Month: 11
X-DOI: 10.1080/16081625.2019.1584761
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1584761
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:6:p:723-745
Template-Type: ReDIF-Article 1.0
Author-Name: Quang Thi Thieu Nguyen
Author-X-Name-First: Quang Thi Thieu
Author-X-Name-Last: Nguyen
Author-Name: Christopher Gan
Author-X-Name-First: Christopher
Author-X-Name-Last: Gan
Author-Name: Zhaohua Li
Author-X-Name-First: Zhaohua
Author-X-Name-Last: Li
Title: Capital regulation and bank capital ratio – introduction of a new measurement
Abstract:
This study examines how capital regulation affects bank capital ratio in Asia during the period 2001–2015. Employing a new capital regulation measurement and System Generalized Method of Moments estimation, our study shows that: (i) Capital regulation has been effective in inducing banks to raise capital ratios; (ii) Bank capital ratios are affected by bank characteristics and macro-economic factors, similar to non-financial firms; (iii) The effects of bank characteristics and macro-economic factors vary across banks in developed, emerging and frontier countries, as well as countries with and without Basel Committee membership.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 696-722
Issue: 6
Volume: 28
Year: 2021
Month: 11
X-DOI: 10.1080/16081625.2019.1600419
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1600419
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:6:p:696-722
Template-Type: ReDIF-Article 1.0
Author-Name: Bingjie Wang
Author-X-Name-First: Bingjie
Author-X-Name-Last: Wang
Author-Name: Siming Yan
Author-X-Name-First: Siming
Author-X-Name-Last: Yan
Author-Name: Lihong Wang
Author-X-Name-First: Lihong
Author-X-Name-Last: Wang
Title: Resource dependence or monitoring: a governance perspective on political connections
Abstract:
This paper empirically investigates the resource versus monitoring roles of independent directors with political connections using a sample of privately controlled firms listed on the Chinese stock markets during the 2003–2013 period. We examine how political connections affect firms’ financing decisions and discount rate. Our results show that having politically connected independent directors facilitates firms’ access to external debt financing, indicating a broader resource base. However, having politically connected independent directors does not help connected firms reduce the cost of capital, probably because these directors are unable to perform their monitoring role effectively. The above results are robust to various model specifications and are more pronounced when we consider the appointment of politicians as independent directors instead of non-independent directors.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 631-656
Issue: 6
Volume: 28
Year: 2021
Month: 11
X-DOI: 10.1080/16081625.2019.1584759
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1584759
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:6:p:631-656
Template-Type: ReDIF-Article 1.0
Author-Name: Jiancai Pi
Author-X-Name-First: Jiancai
Author-X-Name-Last: Pi
Author-Name: Yanwei Fan
Author-X-Name-First: Yanwei
Author-X-Name-Last: Fan
Title: Sector heterogeneity and wage inequality
Abstract:
This paper takes heterogeneity between different skilled sectors into account and analyzes how sector heterogeneity affects wage inequality through the general equilibrium approach. We find that under both the wage efficiency hypothesis and the fair wage hypothesis, an increase in the degree of sector heterogeneity will conditionally expand wage inequality between skilled workers in the high-productivity skilled sector and the low-productivity skilled sector and that between skilled and unskilled labor.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 657-673
Issue: 6
Volume: 28
Year: 2021
Month: 11
X-DOI: 10.1080/16081625.2019.1673187
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1673187
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:6:p:657-673
Template-Type: ReDIF-Article 1.0
Author-Name: Joonhyun Kim
Author-X-Name-First: Joonhyun
Author-X-Name-Last: Kim
Author-Name: Sukyoon Jung
Author-X-Name-First: Sukyoon
Author-X-Name-Last: Jung
Author-Name: Mihye Ha
Author-X-Name-First: Mihye
Author-X-Name-Last: Ha
Title: Consolidated financial reporting and the effect of mandatory IFRS adoption on the information content of earnings announcements: evidence from Korea
Abstract:
We examine the effect of mandatory IFRS adoption on the information content of earnings announcement in Korea, and its main driving factors. We find an increase in earnings information content with IFRS adoption; however, this increase is only weakly associated with the IFRS reconciliation adjustment, as a proxy for accounting rule differences. In contrast, we observe a strong association between the availability of consolidated financial statements and the increase in information content. Collectively, our analysis contributes to understanding the source of the IFRS effect, by providing new evidence of the crucial role of disclosure policy changes in consolidated reporting.Abbreviation: International Financial Accounting Standards (IFRS).
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 674-695
Issue: 6
Volume: 28
Year: 2021
Month: 11
X-DOI: 10.1080/16081625.2018.1517601
File-URL: http://hdl.handle.net/10.1080/16081625.2018.1517601
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:6:p:674-695
Template-Type: ReDIF-Article 1.0
Author-Name: Surya Bhushan Kumar
Author-X-Name-First: Surya Bhushan
Author-X-Name-Last: Kumar
Author-Name: Vinay Goyal
Author-X-Name-First: Vinay
Author-X-Name-Last: Goyal
Author-Name: S. K. Mitra
Author-X-Name-First: S. K.
Author-X-Name-Last: Mitra
Title: The relationship between earnings round up/down and global financial crisis: evidence from BRICS markets
Abstract:
This study examines the rounding up/down behavior of selected key accounting figures in BRICS countries. It also examines the role of global financial crisis (GFC) on this rounding up or down of such key numbers. Five key financial figures (Revenue, Operating Income, Net Income, and Earnings per share (EPS), Dividend per share (DPS)) are studied during year 2000 to 2015. Results show rounding up/down is more prevalent in two markets, China and India, for positive as well as for negative profit firms during both periods. Brazilian, Russian, and South African markets are showing less rounding up/down of earnings figures during pre-GFC and also for post-GFC period.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 746-769
Issue: 6
Volume: 28
Year: 2021
Month: 11
X-DOI: 10.1080/16081625.2019.1584756
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1584756
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Handle: RePEc:taf:raaexx:v:28:y:2021:i:6:p:746-769
Template-Type: ReDIF-Article 1.0
Author-Name: Dongbo Liu
Author-X-Name-First: Dongbo
Author-X-Name-Last: Liu
Author-Name: Yu Wang
Author-X-Name-First: Yu
Author-X-Name-Last: Wang
Author-Name: Changling Sun
Author-X-Name-First: Changling
Author-X-Name-Last: Sun
Title: Industrial policy, corporate strategic differences, and debt financing cost
Abstract:
Taking the non-financial companies listed on the Chinese capital market in China from 2007 to 2015 as samples combined with the macroeconomic environment faced by enterprises, this paper explores the impacts and functional mechanism of strategic differences on debt financing cost under different levels of industrial policy support. The results show that (1) strategic differences increase the debt financing cost of enterprises, and further research finds that the quality of accounting information, internal controls, and financing constraints play a mediating role in it and (2) the support of industrial policy weakens the impact of strategic differences on the debt financing cost of enterprises, with this phenomenon more apparent in the state-owned, large-scale, and lower-growth enterprises. This paper complements and improves on the related research on the factors that affect debt financing cost and the economic consequences of strategic differences. At the same time, it also provides enlightenment for enterprises to make strategic choices and optimize the allocation of credit resources under the support of different macroeconomic policies.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 36-52
Issue: 1
Volume: 29
Year: 2022
Month: 01
X-DOI: 10.1080/16081625.2019.1673195
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1673195
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:1:p:36-52
Template-Type: ReDIF-Article 1.0
Author-Name: Toshiaki Wakabayashi
Author-X-Name-First: Toshiaki
Author-X-Name-Last: Wakabayashi
Title: Fixed salary or incentive contract? The effect of stickiness of compensation contracts
Abstract:
This study adopts behavioural contract theory through a mathematical model and clarifies the situation in which a fixed–salary contract is preferable to an incentives–based one for the principal. Theoretically, the expected utility for the principal is higher under an incentives–based contract but, in reality, there are companies that employ people via fixed–salary contracts.This study fined that, in the multitasking case, a case exists in which the principal should offer a fixed–salary contract, and due to behavioural elements, compensation contracts will become inefficient; however, inefficiency may be reduced by using appropriate performance measures.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 179-190
Issue: 1
Volume: 29
Year: 2022
Month: 01
X-DOI: 10.1080/16081625.2019.1673191
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1673191
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:1:p:179-190
Template-Type: ReDIF-Article 1.0
Author-Name: Wensheng Kang
Author-X-Name-First: Wensheng
Author-X-Name-Last: Kang
Title: The asymmetric responses of aggregate earnings and stock returns to oil shocks and policy uncertainty
Abstract:
This paper utilizes a structural VAR model to investigate the asymmetric responses of aggregate earnings and stock market returns to oil price shocks and economic policy uncertainty. It finds that aggregate earnings contain information about oil price fluctuations. The effects of oil shocks on the earnings and returns are amplified by endogenous policy uncertainty responses. Oil shocks and policy uncertainty explain 29.7% and 11.2% of the variation in the aggregate earnings in the long run. The covariance of aggregate earnings and stock market returns is negative and driven by the demand-side oil shock and news coverage/CPI forecast uncertainty.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 97-109
Issue: 1
Volume: 29
Year: 2022
Month: 01
X-DOI: 10.1080/16081625.2019.1654395
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1654395
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:1:p:97-109
Template-Type: ReDIF-Article 1.0
Author-Name: Hyun Ah Kim
Author-X-Name-First: Hyun Ah
Author-X-Name-Last: Kim
Author-Name: Seung Uk Choi
Author-X-Name-First: Seung Uk
Author-X-Name-Last: Choi
Author-Name: Wooseok Choi
Author-X-Name-First: Wooseok
Author-X-Name-Last: Choi
Title: Managerial overconfidence and firm profitability
Abstract:
This study examines how Chief Executive Officer (CEO) overconfidence affects profitability. Using United States data from 1992 to 2010, we find that firms with overconfident CEOs have a greater return on net operating assets (RNOA). To identify the sources of this higher performance, RNOA is partitioned into profit margin and asset turnover. This Dupont analysis reveals that higher RNOA of firms with overconfident CEOs comes from profit margin and is not associated with asset turnover. Our results also show that the earnings components of firms having overconfident CEOs better predict future earnings change. The results are robust to the different definitions of CEO overconfidence and profitability. Additional analyses show that CEO overconfidence is positively related with stock performances proxied by abnormal stock returns. Overall, our results suggest that CEO overconfidence is an important factor that contributes to higher and predictable performance of firms.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 129-153
Issue: 1
Volume: 29
Year: 2022
Month: 01
X-DOI: 10.1080/16081625.2019.1673190
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1673190
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:1:p:129-153
Template-Type: ReDIF-Article 1.0
Author-Name: Xia Chen
Author-X-Name-First: Xia
Author-X-Name-Last: Chen
Title: Managerial sentiment and non-GAAP earnings disclosure: evidence from terrorist attacks
Abstract:
We examine how managerial sentiment affects non-generally accepted accounting principles (non-GAAP) earnings disclosure. Following recent studies, we use terrorist attacks in the US to measure the exogenous shocks to managerial sentiment. We find that (1) firms located in the attacked metropolitan areas are less likely to report non-GAAP earnings; (2) there is a significant decline in non-GAAP exclusions for affected firms, indicating more conservative non-GAAP earnings disclosure; (3) the effect of pessimistic sentiment on non-GAAP earnings disclosure is more pronounced when terrorist-attack events are perceived as more salient, and when managers are less experienced. Our main findings are robust to a battery of robustness tests. Overall, results of this study suggest that shocks induced by exogenous negative events affect managerial sentiment and corporate disclosure practice.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 110-128
Issue: 1
Volume: 29
Year: 2022
Month: 01
X-DOI: 10.1080/16081625.2019.1673189
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1673189
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:1:p:110-128
Template-Type: ReDIF-Article 1.0
Author-Name: Akio Kawasaki
Author-X-Name-First: Akio
Author-X-Name-Last: Kawasaki
Author-Name: Shunichi Matsuzaki
Author-X-Name-First: Shunichi
Author-X-Name-Last: Matsuzaki
Title: Privatization of a multi-product public firm
Abstract:
This study considers a public firm that provides a profitable service and an unprofitable service. In our model, only the public firm supplies the unprofitable service, while both the public firm and multiple private firms supply the profitable service. The two services may be substitutes, complements, or independent in demand, and the public firm has inferior technology. We examine whether the public firm should privatize either the profitable service or the service that faces competition from private firms. We obtain the following results. When the two services are complementary, the critical cost of the public firm such that privatizing the profitable service is socially preferable increases with the degree of complementarity. When the two services are substitutes, the critical cost decreases (increases) with the degree of substitution for a low (high) degree of substitution. For a sufficiently high degree of substitution, the critical cost becomes small.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 275-285
Issue: 1
Volume: 29
Year: 2022
Month: 01
X-DOI: 10.1080/16081625.2020.1726776
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1726776
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:1:p:275-285
Template-Type: ReDIF-Article 1.0
Author-Name: Yaxian Gong
Author-X-Name-First: Yaxian
Author-X-Name-Last: Gong
Title: Which is better, selective disclosure or fair disclosure? The effects of information asymmetry and incentive misalignment
Abstract:
This paper analyzes the selective disclosure and fair disclosure in a persuation game in which there are incentive misalignment and information asymmetry between the manager and investors. The selective dislcosure regime gives the manager the flexibility to choose the fraction of the investors who can receive the information but the fair disclosure regime regulates the manager in the way that she is only allowed to reveal the information or withhold the information to all the investors. I conclude that when the incentive misalignment and information asymmetry are both sufficiently small (great), the manager and investor both prefer the fair disclosure (selective dislcosure) regime. On the other hand, if the information asymmetry and incentive misalignment are intermediate, the manager prefers the selective disclosure regime and the investor prefers the fair disclosure regime, showing the necessity of taking the heterogeneity of firms into consideration when implementing Reg FD. Furthermore, I show that the small investors prefer the fair disclosure regime when the market size of large investors is sufficiently large, showing that the rgulator should pay attention to the conditions under which the small investors will be worse off after the implementation of Reg FD.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 154-178
Issue: 1
Volume: 29
Year: 2022
Month: 01
X-DOI: 10.1080/16081625.2019.1674163
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1674163
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:1:p:154-178
Template-Type: ReDIF-Article 1.0
Author-Name: Rita Wing Yue Yip
Author-X-Name-First: Rita Wing Yue
Author-X-Name-Last: Yip
Author-Name: Beibei Liu
Author-X-Name-First: Beibei
Author-X-Name-Last: Liu
Author-Name: Danqing Young
Author-X-Name-First: Danqing
Author-X-Name-Last: Young
Title: Mandatory IFRS adoption: friend or foe of M&As? International evidence
Abstract:
Using a sample of M&As from 19 countries, we identify the effects of mandatory IFRS adoption on M&As by analyzing changes in frequency and in market-perceived benefits for mandatory IFRS adopters (from treatment countries) against non-IFRS adopters (from control countries). Using difference-in-differences analyses, we find (1) frequency with which a treatment firm acquires a foreign (local) firm increases (decreases) in the post-IFRS adoption period; (2) acquirers’ M&A synergies increase for cross-border M&As in treatment countries between public acquirers and public targets; and (3) acquirers’ synergies decrease for within-country M&As in treatment countries between public acquirers and private targets.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 233-254
Issue: 1
Volume: 29
Year: 2022
Month: 01
X-DOI: 10.1080/16081625.2019.1673184
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1673184
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:1:p:233-254
Template-Type: ReDIF-Article 1.0
Author-Name: Chong Chen
Author-X-Name-First: Chong
Author-X-Name-Last: Chen
Author-Name: Weijie Lu
Author-X-Name-First: Weijie
Author-X-Name-Last: Lu
Author-Name: Min Liu
Author-X-Name-First: Min
Author-X-Name-Last: Liu
Title: Corporate social responsibility learning in mergers and acquisitions
Abstract:
Using a large sample of mergers and acquisitions (M&As) in the U.S., we examine whether and how corporate social responsibility (CSR) spread between the target and acquirer affects firm value. We find that the stronger the target’s CSR performance relative to the acquirer’s, the higher the acquirer gains as well as synergy gains created by the acquisition. We also document acquirer’s improvements in CSR performance and market performance following the acquisition of a target with higher CSR. Moreover, the positive effect of CSR spread on the acquirer is more pronounced when the target has stronger operating performance. Overall, we attribute the source of the value creation to acquirer’s learning from the target’s CSR practices and experiences.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 53-76
Issue: 1
Volume: 29
Year: 2022
Month: 01
X-DOI: 10.1080/16081625.2019.1680297
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1680297
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:1:p:53-76
Template-Type: ReDIF-Article 1.0
Author-Name: Chong Ning
Author-X-Name-First: Chong
Author-X-Name-Last: Ning
Author-Name: Ying Hao
Author-X-Name-First: Ying
Author-X-Name-Last: Hao
Author-Name: Zhibo Liu
Author-X-Name-First: Zhibo
Author-X-Name-Last: Liu
Author-Name: Yuting Liu
Author-X-Name-First: Yuting
Author-X-Name-Last: Liu
Title: Business social norms from overseas and corporate social responsibility performance: evidence from China
Abstract:
This study examines the link between foreign business norms and corporate social responsibility (CSR) in China. Using the information of directors’ foreign background, we find that firms which hire directors with social norms from overseas engage more in CSR, and specifically realize better performance of shareholder responsibility, employee caring, supplier-customer relation, and environment protection. The positive relation is especially significant when directors’ foreign social norms obtained from high ranking CSR countries. Furthermore, firms hiring directors with social norms from overseas are more likely to have larger increase in their firm value. In addition, firms without directors with foreign social norms do better in the responsibility of charity, which does not have a significantly positive improvement on their firm value. These findings suggest that standard social norms from overseas are associated with positive CSR performance, and not at the expense of firm value.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 191-221
Issue: 1
Volume: 29
Year: 2022
Month: 01
X-DOI: 10.1080/16081625.2019.1600416
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1600416
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:1:p:191-221
Template-Type: ReDIF-Article 1.0
Author-Name: Qian Li
Author-X-Name-First: Qian
Author-X-Name-Last: Li
Author-Name: Jiamin Wang
Author-X-Name-First: Jiamin
Author-X-Name-Last: Wang
Author-Name: Liang Bao
Author-X-Name-First: Liang
Author-X-Name-Last: Bao
Title: Media tone, bias, and stock price crash risk: evidence from China
Abstract:
This paper studies the effect of media tone on firm-specific price crash risk. Media tone measures the imbalance between positive and negative coverage. Using data from China, we find firms with more favorable media tone have higher crash risk. The transmission channel is through weakened media governance and the subsequent motivated managerial opportunism. Moreover, the effect is more prominent for firms having more advertising expenditures, institutional holdings, and analyst coverage. We also find only the tone of state-controlled media significantly affects crash risk. Our study suggests the existence of media bias and its economic consequence.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1-35
Issue: 1
Volume: 29
Year: 2022
Month: 01
X-DOI: 10.1080/16081625.2019.1654396
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1654396
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:1:p:1-35
Template-Type: ReDIF-Article 1.0
Author-Name: Min Zhang
Author-X-Name-First: Min
Author-X-Name-Last: Zhang
Author-Name: Yaqian Wu
Author-X-Name-First: Yaqian
Author-X-Name-Last: Wu
Author-Name: Lijing Tong
Author-X-Name-First: Lijing
Author-X-Name-Last: Tong
Author-Name: Yingwen Deng
Author-X-Name-First: Yingwen
Author-X-Name-Last: Deng
Title: Does IFRS convergence promote corporate innovation? Preliminary evidence from China
Abstract:
Using a sample of Chinese A-share and H-share firms, this study examines the influence of International Financial Reporting Standards (IFRS) convergence on corporate innovation. Empirical results show that compared with H-share firms not affected by IFRS convergence, A-share firms engage more in innovative activities during the post-convergence period. Further analyses show the positive effect of IFRS convergence on corporate innovation only exists in firms with high information asymmetry before IFRS convergence; improving information environment is the mechanism through which IFRS convergence affects corporate innovation. This study contributes to the literature on disclosure regulations in emerging markets and enriches academic understanding of the real effects of IFRS convergence.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 255-274
Issue: 1
Volume: 29
Year: 2022
Month: 01
X-DOI: 10.1080/16081625.2019.1673185
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1673185
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:1:p:255-274
Template-Type: ReDIF-Article 1.0
Author-Name: Jengfang Chen
Author-X-Name-First: Jengfang
Author-X-Name-Last: Chen
Author-Name: Ying-Chin Ho
Author-X-Name-First: Ying-Chin
Author-X-Name-Last: Ho
Author-Name: Chi-Chang Hung
Author-X-Name-First: Chi-Chang
Author-X-Name-Last: Hung
Author-Name: Yan-Jie Yang
Author-X-Name-First: Yan-Jie
Author-X-Name-Last: Yang
Title: Measuring technical and allocative efficiencies of public accounting firms in Taiwan
Abstract:
This study examines whether public accounting firms are efficient in transforming human resources into service revenues and in allocating these resources to an optimal mix of services. Using Data Envelopment Analysis to analyze data from 51 Taiwan accounting firms for the period 2015–2016, we find that there are significant allocative inefficiencies in accounting firms and these inefficiencies are negatively associated with the proportion of management advisory services (MAS). Further, we find a significant improvement in technical efficiencies from 2015 to 2016 although not in allocative efficiencies. Collectively, our results suggest that accounting firms should expand MAS to improve allocative and aggregate efficiencies.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 222-232
Issue: 1
Volume: 29
Year: 2022
Month: 01
X-DOI: 10.1080/16081625.2019.1636666
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1636666
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:1:p:222-232
Template-Type: ReDIF-Article 1.0
Author-Name: Jun Yang
Author-X-Name-First: Jun
Author-X-Name-Last: Yang
Author-Name: Jinghua Wang
Author-X-Name-First: Jinghua
Author-X-Name-Last: Wang
Author-Name: Zhigao Yi
Author-X-Name-First: Zhigao
Author-X-Name-Last: Yi
Author-Name: Ning Mao
Author-X-Name-First: Ning
Author-X-Name-Last: Mao
Title: Managing the media coverage: evidence from managers’ stock selling
Abstract:
This paper investigates whether the insiders strategically manage the disclosure and timing of media coverage to maximize their trading profits. Using a sample of Chinese A-listed firms during the period of 2008–2017, we find that when top managers intend to sell their shares, they would increase the media coverage in the early stage to pull up the stock price based on the self-interest motivation. That’s to say, the media attention on the focused firms represents a significant increase during the selling period and decreases largely after the selling is completed. In addition, the association is mitigated in SOEs and firms belonging to more competitive industries. We also find that there are significant positive cumulative abnormal returns during the selling period while negative ones after the event. Our findings suggest that managers could intentionally manage the media during important corporate events for their own benefits at the cost of minority shareholders.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 77-96
Issue: 1
Volume: 29
Year: 2022
Month: 01
X-DOI: 10.1080/16081625.2019.1693278
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1693278
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:1:p:77-96
Template-Type: ReDIF-Article 1.0
Author-Name: Jiameng Ma
Author-X-Name-First: Jiameng
Author-X-Name-Last: Ma
Author-Name: Fenglong Xiao
Author-X-Name-First: Fenglong
Author-X-Name-Last: Xiao
Author-Name: Yue Qiu
Author-X-Name-First: Yue
Author-X-Name-Last: Qiu
Author-Name: Zongyu Xu
Author-X-Name-First: Zongyu
Author-X-Name-Last: Xu
Title: How R&D investment affects bondholder wealth?
Abstract:
Purpose: This paper focuses on creditors as a key group of stakeholders in corporate finance and governance, and develops a contingency perspective to understand how corporate investment in R&D activities affects creditor value through influencing a firm’s creditworthiness among investors.Design: This study is based on a sample of publicly traded firms in the US. during 1994–2017. Various regression models are applied to analyze the archival data.Findings: This paper shows that a firm’s creditworthiness increases with R&D intensity initially but falls when R&D intensity keeps increasing and surpasses a certain threshold. Moreover, such curvilinear relationship is less pronounced when the firm is of low disclosure quality and is less concerned with financial distress.Originality: Although prior research has intensively studied how corporate R&D activities affect shareholders, less attention has been paid to the impact of corporate R&D on other stakeholders. This study fills this void by examining how R&D activities affect creditors.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 304-328
Issue: 2
Volume: 29
Year: 2022
Month: 03
X-DOI: 10.1080/16081625.2020.1726187
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1726187
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:2:p:304-328
Template-Type: ReDIF-Article 1.0
Author-Name: Tomoyasu Yamaguchi
Author-X-Name-First: Tomoyasu
Author-X-Name-Last: Yamaguchi
Title: Earnings management to achieve industry-average profitability in Japan
Abstract:
This study examines earnings management activities to achieve industry-average profitability in Japanese firms. I focus on Japanese firms because they tend to be preoccupied with the activities and profitability of industry competitors. I find that firms just meeting or slightly beating industry-average profitability (JUSTMEET_PEER firms) are positively related to real and accrual-based earnings management. I also find that the positive relationship between JUSTMEET_PEER firms and real earnings management is stronger when the JUSTMEET_PEER firms operate in more competitive industries. Finally, similar evidence is found for firms that just meet and slightly beat industry-average forecast profitability. These findings suggest that Japanese firms tend to regard industry-average profitability as an important benchmark and are likely to engage in earnings management to achieve the benchmark.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 402-431
Issue: 2
Volume: 29
Year: 2022
Month: 03
X-DOI: 10.1080/16081625.2020.1726188
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1726188
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:2:p:402-431
Template-Type: ReDIF-Article 1.0
Author-Name: Qiaoyu Jia
Author-X-Name-First: Qiaoyu
Author-X-Name-Last: Jia
Author-Name: Jia’Nan Zhou
Author-X-Name-First: Jia’Nan
Author-X-Name-Last: Zhou
Title: The impact of cross-listing on earnings management and its economic consequence: evidence from China
Abstract:
This study empirically examines the effect of cross-listing on earnings management and its economic consequences using A + H cross-listed company data from China. Considering both accrual-based earnings management (AEM) and real earnings management (REM) and modifying reported performance to obtain true performance, we use path analysis to find that cross-listing can reduce AEM, thereby damaging firm performance, and can reduce REM, thereby benefiting firm performance. We further examine the mechanism of benefit of earnings management. The results reveal that AEM can maintain debt contract efficiency and REM plays a role in signaling better performance.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 502-522
Issue: 2
Volume: 29
Year: 2022
Month: 03
X-DOI: 10.1080/16081625.2019.1600414
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1600414
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:2:p:502-522
Template-Type: ReDIF-Article 1.0
Author-Name: Soon Suk Yoon
Author-X-Name-First: Soon
Author-X-Name-Last: Suk Yoon
Author-Name: Hyo Jin Kim
Author-X-Name-First: Hyo Jin
Author-X-Name-Last: Kim
Author-Name: Gregg S. Woodruff
Author-X-Name-First: Gregg S.
Author-X-Name-Last: Woodruff
Title: A critical evaluation of the Jones models and the industry approach for the estimation of discretionary accruals
Abstract:
We critically examine two important methodological issues related to the estimation of discretionary accruals: the Jones models and the industry approach, both of which are considered the norms in the earnings management studies. We document that the original Jones models are the regression-through-the-origin (RTO) models. The RTO Jones models unduly overstate the significance of PPE and R2, produce inconsistent coefficients and non-zero mean discretionary accruals. If we include the intercept in the models, then they lack power. We show that the RTO Jones models are theoretically flawed while their non-RTO variations are empirically flawed. We also address the issue of using the industry approach as a sole approach for the estimation of discretionary accruals. We document that the CFO approach outperforms the industry approach. Lastly, we document that the prediction error method outperforms the estimation error method in detecting earnings management.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 432-450
Issue: 2
Volume: 29
Year: 2022
Month: 03
X-DOI: 10.1080/16081625.2020.1830559
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1830559
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:2:p:432-450
Template-Type: ReDIF-Article 1.0
Author-Name: Chong Chen
Author-X-Name-First: Chong
Author-X-Name-Last: Chen
Author-Name: Dequan Jiang
Author-X-Name-First: Dequan
Author-X-Name-Last: Jiang
Author-Name: Weiping Li
Author-X-Name-First: Weiping
Author-X-Name-Last: Li
Author-Name: Zilong Song
Author-X-Name-First: Zilong
Author-X-Name-Last: Song
Title: Does analyst coverage curb executives’ excess perks? Evidence from Chinese listed firms
Abstract:
In this study, we explore the causal relationship between analyst coverage and executives’ excess perquisites by using manually collected data from Chinese listed firms. Empirical results show that analyst following has a negative effect on excess perks. This result still holds when we use alternative measure of excess perquisites, utilize alternative regression methodology, and address endogenous problems. Furthermore, we find that the analysts’ monitoring effect is more pronounced when corruption is more severe. Finally, we find that the effect substitutes the monitoring function by large shareholders and Big 4 auditors.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 329-343
Issue: 2
Volume: 29
Year: 2022
Month: 03
X-DOI: 10.1080/16081625.2020.1770613
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1770613
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:2:p:329-343
Template-Type: ReDIF-Article 1.0
Author-Name: Myo Min Kyi Win
Author-X-Name-First: Myo Min Kyi
Author-X-Name-Last: Win
Author-Name: Makoto Kakinaka
Author-X-Name-First: Makoto
Author-X-Name-Last: Kakinaka
Title: Firm performance and backward and forward linkages: the case of the garment sector in Myanmar
Abstract:
This study examines how vertical spillovers through backward and forward linkages with multinationals relate to productivity and inputs allocation for garment firms in Myanmar. The results confirm that while these linkages promote spillover effects on productivity growth with capital accumulation, they fail to accelerate employment growth. The Myanmar government has emphasized employment growth by attracting foreign investment. Although linkages with multinationals lead to productivity improvement, such positive effects may be realized without clear evidence of increased job opportunities.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 523-546
Issue: 2
Volume: 29
Year: 2022
Month: 03
X-DOI: 10.1080/16081625.2019.1600415
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1600415
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:2:p:523-546
Template-Type: ReDIF-Article 1.0
Author-Name: Sanggeum Woo
Author-X-Name-First: Sanggeum
Author-X-Name-Last: Woo
Author-Name: Junyoup Lee
Author-X-Name-First: Junyoup
Author-X-Name-Last: Lee
Author-Name: Eunsuh Lee
Author-X-Name-First: Eunsuh
Author-X-Name-Last: Lee
Title: Private benefits of control: evidence from a new measure of the value of shareholder voting rights
Abstract:
Prior studies indicate that controlling shareholders’ private benefits are linked to the value of voting rights. We estimate this value in terms of two events known to increase the private benefits of control enjoyed by controlling shareholders: the period prior to annual shareholder meetings and after the announcements of share repurchase and disposal. We find a statistically significant increase in the value of voting rights of 1% prior to annual shareholder meetings and of approximately 0.4% after announcements of share repurchase and disposal. Our study provides insights into how the private benefits of control can be identified by examining specific corporate events.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 287-303
Issue: 2
Volume: 29
Year: 2022
Month: 03
X-DOI: 10.1080/16081625.2020.1726192
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1726192
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:2:p:287-303
Template-Type: ReDIF-Article 1.0
Author-Name: Manapol Ekkayokkaya
Author-X-Name-First: Manapol
Author-X-Name-Last: Ekkayokkaya
Author-Name: Suppasit Jirajaroenying
Author-X-Name-First: Suppasit
Author-X-Name-Last: Jirajaroenying
Author-Name: Christian C.P. Wolff
Author-X-Name-First: Christian C.P.
Author-X-Name-Last: Wolff
Title: Executing trades in style: retail investors vs. institutions
Abstract:
Employing an exhaustive sample of trades made by all investors in a fully automated order-driven stock market, we examine trade execution prices between retail and institutional investors. Retail investors execute both purchases and sales systematically at better prices than domestic institutions but receive better prices than foreign institutions only when executing sales. Importantly, we also find some evidence consistent with the hypothesis that retail investors have a comparative advantage in executing trades of small-cap stocks. Based on a population of retail trades, our findings are not consistent with the stereotype arising from earlier studies that retail investors are noise traders.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 344-362
Issue: 2
Volume: 29
Year: 2022
Month: 03
X-DOI: 10.1080/16081625.2020.1754256
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1754256
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:2:p:344-362
Template-Type: ReDIF-Article 1.0
Author-Name: Manju Tripathi
Author-X-Name-First: Manju
Author-X-Name-Last: Tripathi
Author-Name: Smita Kashiramka
Author-X-Name-First: Smita
Author-X-Name-Last: Kashiramka
Author-Name: P. K. Jain
Author-X-Name-First: P. K.
Author-X-Name-Last: Jain
Title: Has EVA evolved to outperform conventional earnings measures in determining firm’s value? A case of Indian consumer firms
Abstract:
The only five EVA disclosing firms (out of 500 Indian NIFTY500 index firms) belong to consumer goods industry; thus, the sector forms the test case as the paper examines the relative significance of EVA vis-à-vis conventional earnings measures. EVA computational methodology of these firms has been analysed. Moreover, the impact of financial crisis 2008 is studied through EVA and ROCE. Results observe that EVA ranks at par with conventional measures. Pre- and post-crisis analysis not only shows that consumer sector has successfully withstood its impact but also establishes EVA to be a superior indicator of firms’ performance.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 487-501
Issue: 2
Volume: 29
Year: 2022
Month: 03
X-DOI: 10.1080/16081625.2019.1584760
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1584760
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:2:p:487-501
Template-Type: ReDIF-Article 1.0
Author-Name: Chun-You Ko
Author-X-Name-First: Chun-You
Author-X-Name-Last: Ko
Author-Name: Hunghua Pan
Author-X-Name-First: Hunghua
Author-X-Name-Last: Pan
Author-Name: Li-Chun Kuo
Author-X-Name-First: Li-Chun
Author-X-Name-Last: Kuo
Author-Name: Yen-Chun Ko
Author-X-Name-First: Yen-Chun
Author-X-Name-Last: Ko
Title: The association between non-executive compensation and firm performance
Abstract:
This study uses Taiwanese data, where the disclosure of detailed information regarding employee compensation is mandatory, to calculate non-executive compensation and its components. We find a positive correlation between total non-executive compensation and firm performance. Besides, we find strong evidence that fixed (variable) pay is negatively (positively) correlated with firm performance. Moreover, we find significant positive (negative) incremental effects of fixed (variable) pay on firm performance among companies with high percentages of compensation classified as selling, general, and administrative expenses. Overall, our results suggest that non-executive compensation is highly correlated with firm performance, which has policy and managerial implications.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 386-401
Issue: 2
Volume: 29
Year: 2022
Month: 03
X-DOI: 10.1080/16081625.2020.1726777
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1726777
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:2:p:386-401
Template-Type: ReDIF-Article 1.0
Author-Name: Weijie Chen
Author-X-Name-First: Weijie
Author-X-Name-Last: Chen
Author-Name: Wei Zhang
Author-X-Name-First: Wei
Author-X-Name-Last: Zhang
Author-Name: Zhenwei Lv
Author-X-Name-First: Zhenwei
Author-X-Name-Last: Lv
Author-Name: Gaofeng Zou
Author-X-Name-First: Gaofeng
Author-X-Name-Last: Zou
Title: Liquidity around SEO announcements: evidence from China
Abstract:
Our paper identifies a unique type of corporate event: SEO announcement effects. By employing various liquidity measures, we consistently find a significant decrease in liquidity after the release of announcements. The magnitude of liquidity change is associated with various firm characteristics. More importantly, we find the reduction in liquidity increases SEO discount. Our findings suggest that a part of SEO discount is risk compensation for uncertainty produced by the SEO plan.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 472-486
Issue: 2
Volume: 29
Year: 2022
Month: 03
X-DOI: 10.1080/16081625.2020.1754253
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1754253
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:2:p:472-486
Template-Type: ReDIF-Article 1.0
Author-Name: Meeok Cho
Author-X-Name-First: Meeok
Author-X-Name-Last: Cho
Author-Name: Jiwon Hyeon
Author-X-Name-First: Jiwon
Author-X-Name-Last: Hyeon
Author-Name: Taejin Jung
Author-X-Name-First: Taejin
Author-X-Name-Last: Jung
Author-Name: Woo-Jong Lee
Author-X-Name-First: Woo-Jong
Author-X-Name-Last: Lee
Title: Audit pricing of hard-to-read annual reports
Abstract:
This paper investigates the auditors’ responses to the readability of annual reports, which are important sources of information for auditors in their audit planning and pricing decisions. Using unique audit fee and hour data for Korean listed companies, we find that hard-to-read annual reports are positively associated with audit fees and audit hours. However, no empirical association exists between annual report readability and hourly fee rates. These findings imply that while auditors exert additional effort to reduce the audit risk embedded in unclear annual reports, they do not charge a higher fee premium. We further show that the association between annual report readability and audit variables (i.e. audit fees and hours) is most salient at the initial engagement but becomes weaker as the auditor tenure increases. The findings of this paper contribute to the literature on the auditors’ reactions to the clarity of annual reports.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 547-572
Issue: 2
Volume: 29
Year: 2022
Month: 03
X-DOI: 10.1080/16081625.2019.1600418
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1600418
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:2:p:547-572
Template-Type: ReDIF-Article 1.0
Author-Name: Ming-Chin Chen
Author-X-Name-First: Ming-Chin
Author-X-Name-Last: Chen
Author-Name: Chia-Wen Chang
Author-X-Name-First: Chia-Wen
Author-X-Name-Last: Chang
Title: The effect of the accounting expertise of chief financial officers on corporate credit ratings
Abstract:
Corporate credit ratings (CRs) are closely related to companies’ cost of debt financing. Recent research has drawn wide attention to how nonfinancial as well as financial factors may affect ratings. By manually collecting information about the profiles of chief financial officers (CFOs) of US companies, we examine the effect of CFOs’ accounting expertise on corporate CRs. The results show that firms with accounting expert CFOs are more likely to receive higher CRs and that the effect of CFOs’ accounting expertise on the ratings is more pronounced for firms with higher default risk, suggesting that the accounting expertise of CFOs may be an important factor that affects CRs. Moreover, we find a dynamic relation between accounting expert CFOs and CRs such that a downgrade in a firm’s CR in a prior year affects the subsequent selection of an accounting expert CFO.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 451-471
Issue: 2
Volume: 29
Year: 2022
Month: 03
X-DOI: 10.1080/16081625.2020.1830560
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1830560
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:2:p:451-471
Template-Type: ReDIF-Article 1.0
Author-Name: Xunan Feng
Author-X-Name-First: Xunan
Author-X-Name-Last: Feng
Author-Name: Y. Ling Lo
Author-X-Name-First: Y. Ling
Author-X-Name-Last: Lo
Author-Name: Kam C. Chan
Author-X-Name-First: Kam C.
Author-X-Name-Last: Chan
Title: Impact of economic policy uncertainty on cash holdings: firm-level evidence from an emerging market
Abstract:
We examine how economic policy uncertainty (EPU) affects firms’ cash holdings and how such changes in cash holdings affect firm value and capital investment in China. Our findings suggest that firms that increase their cash holdings during high EPU have higher firm values and are less negatively impacted by the underinvestment problem. When a firm is non-state-owned, financially constrained, or is located in a province with low marketization, the impact of EPU on cash holdings is amplified. Furthermore, state-owned enterprises (SOEs) are less likely to increase cash holdings during elevated EPU, and consequently tend to have lower firm values.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 363-385
Issue: 2
Volume: 29
Year: 2022
Month: 03
X-DOI: 10.1080/16081625.2019.1694954
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1694954
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:2:p:363-385
Template-Type: ReDIF-Article 1.0
Author-Name: Gaoyan Xu
Author-X-Name-First: Gaoyan
Author-X-Name-Last: Xu
Author-Name: Wenhao Dong
Author-X-Name-First: Wenhao
Author-X-Name-Last: Dong
Author-Name: Shiliang Hu
Author-X-Name-First: Shiliang
Author-X-Name-Last: Hu
Title: Is political connection a panacea for corporate turnaround?—An analysis based on the resource-based view during the global financial crisis
Abstract:
This paper constructs a three-stage model of corporate turnaround, beginning with political connections’ affects declining companies’ implementation of turnaround strategies. The model also explores political connections’ role in corporate turnaround in the context of the most recent global financial crisis. This study discovered that political connections exhibited a weaker ability to allocate resources in the financial crisis. And the government would impede the implementations of turnaround strategies as an important stakeholder. Therefore, political connections significantly and negatively impact corporate turnaround. Through group testing, this paper further demonstrates that companies more dependent on political connections experience more significant, negative impacts.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 743-760
Issue: 3
Volume: 29
Year: 2022
Month: 05
X-DOI: 10.1080/16081625.2020.1789480
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1789480
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:3:p:743-760
Template-Type: ReDIF-Article 1.0
Author-Name: Ji Seon Yoo
Author-X-Name-First: Ji Seon
Author-X-Name-Last: Yoo
Title: The effects of transfer pricing regulations on multinational income shifting
Abstract:
This study examines the effectiveness of transfer pricing regulations on income shifting. The results indicate that domestic (foreign) transfer pricing regulations reduce the tax and non-tax motivations of affiliates to shift income out of (into) their home country. The study further identifies that regulations restrict the income-shifting behavior of small multinational affiliates to a greater extent than that of larger multinational affiliates. The results confirm that aggressive income-shifting activities are generally conducted by large multinational corporations, which are capable of exploiting sophisticated tax planning using legitimate tax loopholes.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 692-714
Issue: 3
Volume: 29
Year: 2022
Month: 05
X-DOI: 10.1080/16081625.2020.1741277
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1741277
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:3:p:692-714
Template-Type: ReDIF-Article 1.0
Author-Name: Leixi Wang
Author-X-Name-First: Leixi
Author-X-Name-Last: Wang
Author-Name: Huiwen Zou
Author-X-Name-First: Huiwen
Author-X-Name-Last: Zou
Author-Name: Xiaoyong Li
Author-X-Name-First: Xiaoyong
Author-X-Name-Last: Li
Title: Does short selling affect the investment of Chinese firms? An external financing perspective
Abstract:
The objective of this paper is to explore the effect of short selling on firm investment from the perspective of external financing. We find that short selling makes it more difficult for firms to finance investment projects with external funds, and firms react to this exogenous shock by reducing their investment. The effect is more obvious in firms with lower stock price synchronicity, more investment in innovation projects and more severe internal financing constraints. Moreover, we find that after removing short selling constraints, the value-added effect of firm investment on firm value is enhanced.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 649-672
Issue: 3
Volume: 29
Year: 2022
Month: 05
X-DOI: 10.1080/16081625.2020.1787852
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1787852
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:3:p:649-672
Template-Type: ReDIF-Article 1.0
Author-Name: Shaofang Li
Author-X-Name-First: Shaofang
Author-X-Name-Last: Li
Author-Name: Xiaolin Li
Author-X-Name-First: Xiaolin
Author-X-Name-Last: Li
Title: Bank competition, regulation, and efficiency: evidence from the Asia-Pacific region
Abstract:
This study investigates the impact of bank competition and regulation on bank efficiency in the Asia-Pacific region during 2001–2016. The result reveals that market power is positively related to bank efficiency. We also find that stringent activity restrictions, strong official supervisory power, and low capital requirements are associated with high bank efficiency. Furthermore, market power has a stronger efficiency-increasing effect in a banking system characterized by the activity restrictions, supervisory power, and capital requirements described above. Foreign banks operating under increased activity restrictions in a host country with strong official supervisory power have relatively high efficiency.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 715-742
Issue: 3
Volume: 29
Year: 2022
Month: 05
X-DOI: 10.1080/16081625.2020.1787854
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1787854
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:3:p:715-742
Template-Type: ReDIF-Article 1.0
Author-Name: Mohamed S. El-Deeb
Author-X-Name-First: Mohamed S.
Author-X-Name-Last: El-Deeb
Author-Name: Yasser T. Halim
Author-X-Name-First: Yasser T.
Author-X-Name-Last: Halim
Author-Name: Ahmed F. Elbayoumi
Author-X-Name-First: Ahmed F.
Author-X-Name-Last: Elbayoumi
Title: Disclosure tone, corporate governance and firm value: evidence from Egypt
Abstract:
This study examines the extent to which corporate governance (CG) affects disclosure tone (DT) and assesses the impact of DT on firm value (FV). It also tests the effect of CG on FV using DT as an intermediary variable. Content analysis is used to measure DT level. CEO duality, board size, gender diversity, and board independence are used as proxies for CG. Tobin’s Q is used to measure FV. The empirical analysis shows significant positive impact of CG on DT and FV. We also find a highly significant association between disclosure of good/bad news with leverage, audit quality, firm growth, and abnormal accruals. The results also indicate that DT along with the profitability of the firm (ROA) and Abnormal Accruals are significantly associated with FV. Finally, the results of the structure equation modeling show that gender diversity, ROA, leverage, revenue growth, and abnormal accruals are the most influential variables that run from CG and DT into FV. The novelty of this study stems from its empirical analysis that tests the association between CG, DT from one side and DT and FV from the other side, and then measures the impact of CG on FV using DT as an intermediary variable.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 793-814
Issue: 3
Volume: 29
Year: 2022
Month: 05
X-DOI: 10.1080/16081625.2021.1934708
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1934708
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:3:p:793-814
Template-Type: ReDIF-Article 1.0
Author-Name: Chih-Wei Wang
Author-X-Name-First: Chih-Wei
Author-X-Name-Last: Wang
Title: Debt maturity choice in CEOs’ incentive to signal abilities
Abstract:
This research examines the effect of CEOs’ ability concerning their debt maturity choice. Examining public firms over the period 1997–2016 in Taiwan, we find that high-ability managers choose short-term debt financing to signal their ability. We adopt the rollover risk channel to prove that managers signal their ability on the use of short-term debt are only from their intention. In addition, we consider the separation of ownership and control as well as information opacity, which could force managers to have a greater incentive to use short-term debt for signaling their ability to align the managers-shareholders conflict and maintain their reputation, compensation, and bonus from being affected by information opacity.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 632-648
Issue: 3
Volume: 29
Year: 2022
Month: 05
X-DOI: 10.1080/16081625.2020.1754258
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1754258
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:3:p:632-648
Template-Type: ReDIF-Article 1.0
Author-Name: Weijia Hu
Author-X-Name-First: Weijia
Author-X-Name-Last: Hu
Author-Name: Xiangfei Fu
Author-X-Name-First: Xiangfei
Author-X-Name-Last: Fu
Title: Does individual investors’ online search activities reduce information asymmetry? Evidence from stock exchanges’ comment letters in China
Abstract:
Commonly treated as ‘dumb noise traders’, individual investors are widely known as the group who are unaware, unsophisticated, and have low financial literacy. Their trading behavior in the capital markets is often assumed away by previous literature, let alone their information demand and the impacts on capturing the market pricing dynamics. In this study, we build a framework for understanding the information demand of individual investors and analyze their information role using the releases of comment letters in China as the setting. We find that: (a) individual investors’ information demand is high when there is an inferior information environment; (b) individual investors’ online search behavior dampens negative shocks to unexpected events. In an additional analysis, we find that the information searching of investors has abating effects on the cost of information remediation.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 582-602
Issue: 3
Volume: 29
Year: 2022
Month: 05
X-DOI: 10.1080/16081625.2020.1754248
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1754248
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:3:p:582-602
Template-Type: ReDIF-Article 1.0
Author-Name: Ahmed Hassanein
Author-X-Name-First: Ahmed
Author-X-Name-Last: Hassanein
Author-Name: Altan Kokel
Author-X-Name-First: Altan
Author-X-Name-Last: Kokel
Title: Corporate cash hoarding and corporate governance mechanisms: evidence from Borsa Istanbul
Abstract:
Hoarding cash can create conflicts of interest between managers and shareholders that lead to an agency conflict. Corporate governance is a mechanism to overcome agency conflicts. Thus, this study aims to examine the effect of corporate governance mechanisms on the corporate decision to hoard cash. The study focuses on the BIST100 nonfinancial firms listed on the Borsa Istanbul during the period from 2010 to 2014. It finds that firms with smaller boards of directors and larger audit committees are likely to hoard less cash. However, firms with a large percentage of independent directors are likely to hoard more cash. This study also finds that when the CEO of a firm acts as the chairman of the board, the firm tends to hoard more cash. Further, the study finds that firms audited by a big auditor are more likely to hoard less cash than firms audited by a non-big auditor. These results suggest that firms with good corporate governance mechanisms (except for the percentage of independent directors) are likely to hoard less cash to reduce agency conflicts.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 831-848
Issue: 3
Volume: 29
Year: 2022
Month: 05
X-DOI: 10.1080/16081625.2019.1617753
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1617753
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:3:p:831-848
Template-Type: ReDIF-Article 1.0
Author-Name: Xuqian Wen
Author-X-Name-First: Xuqian
Author-X-Name-Last: Wen
Author-Name: Jia Xia
Author-X-Name-First: Jia
Author-X-Name-Last: Xia
Author-Name: Yong Ye
Author-X-Name-First: Yong
Author-X-Name-Last: Ye
Title: Customer stability, managerial overconfidence, and enterprise investment in innovation: a perspective based on “Made in China 2025”
Abstract:
Based on ‘Made in China 2025’, this paper empirically explores how customer stability influences innovation investment and the mediating effect of managerial overconfidence. The results indicate that customer stability significantly and positively affects innovation investment and that managerial overconfidence partially mediates this relationship. The effect significantly differs before and after ‘Made in China 2025’. Furthermore, the customer concentration enhances the impact of innovation investment on market value. Overall, by exploring the transformation and upgrading of the manufacturing industry, this study enriches relevant theories of supply chain management and provides practical guidance for innovation activities.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 673-691
Issue: 3
Volume: 29
Year: 2022
Month: 05
X-DOI: 10.1080/16081625.2020.1754249
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1754249
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:3:p:673-691
Template-Type: ReDIF-Article 1.0
Author-Name: James Ohlson
Author-X-Name-First: James
Author-X-Name-Last: Ohlson
Title: Growth: rectifying two common mistakes
Abstract:
The paper discusses two issues related to ‘growth’. Both lack a proper recognition in the literature. The first concerns growth and accruals. Research practice combines two components of accruals, asset accruals and liability accruals into a ‘net’. This aggregation causes problems: income-increasing asset accruals correlate positively with growth whereas the opposite holds for income-increasing liability accruals and growth. In light of this property, the paper re-configures Jones’s model. The second issue addresses forward P/E-multiple dependence on future growth in expected eps. It is shown that the textbook Gordon-Williams 1/(r-g) approach makes no sense. An alternative modeling views growth as information – not a parameter like Gordon-Williams. Thus, the P/E-multiple is shown to depend on the growth in expected earnings, Y2 vs. Y1. A similar g-parameter dependency is noted in the residual income model and the so-called OJ earnings growth model; both include a 1/(r-g) type of multiplier. This is viewed as a model-deficiency, that is, a ‘mistake’.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 573-581
Issue: 3
Volume: 29
Year: 2022
Month: 05
X-DOI: 10.1080/16081625.2022.2042659
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2042659
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:3:p:573-581
Template-Type: ReDIF-Article 1.0
Author-Name: Bin Wu
Author-X-Name-First: Bin
Author-X-Name-Last: Wu
Author-Name: Lijing Tong
Author-X-Name-First: Lijing
Author-X-Name-Last: Tong
Author-Name: Min Zhang
Author-X-Name-First: Min
Author-X-Name-Last: Zhang
Author-Name: Xin Wang
Author-X-Name-First: Xin
Author-X-Name-Last: Wang
Title: Courtesy calls for reciprocity: the effect of purchasing financial products from banks on firm borrowing
Abstract:
Using data of Chinese listed firms, we find that firms that purchase financial products from banks are more likely to obtain loans from these banks than firms that do not buy. The probability is 52% and 58% higher for the three-year and one-year look-back window, respectively. This phenomenon is more pronounced for borrowers who are non-SOE or low-risk ones. Our findings reveal that by purchasing financial products from banks, firms can build relationship with them and consequently obtain loans more easily. Our paper contributes to the extant literature on the channels and mechanisms of relationship building between banks and firms.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 761-792
Issue: 3
Volume: 29
Year: 2022
Month: 05
X-DOI: 10.1080/16081625.2020.1828103
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1828103
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:3:p:761-792
Template-Type: ReDIF-Article 1.0
Author-Name: Sanghyuk Byun
Author-X-Name-First: Sanghyuk
Author-X-Name-Last: Byun
Author-Name: K. C. Roland
Author-X-Name-First: K. C.
Author-X-Name-Last: Roland
Title: Analyst reputation and limited attention: How does firm visibility impact measures of reputation?
Abstract:
We investigate the determinants of analyst reputation considering the impact of limited attention. We find support for the hypothesis that capital market participants have limited attention and assess analyst reputation based on their large-firm forecast performance, not their performance as a whole. We find no relation between an analyst’s overall forecast accuracy and initially obtaining a high reputation, but we find a significantly positive relation between analyst large-firm forecast accuracy and reputation. Our study reconciles conflicting studies and contributes to the literature investigating analyst incentives, suggesting that high reputation analysts allocate their limited resources to the largest firms in their portfolios.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 603-621
Issue: 3
Volume: 29
Year: 2022
Month: 05
X-DOI: 10.1080/16081625.2020.1770614
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1770614
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:3:p:603-621
Template-Type: ReDIF-Article 1.0
Author-Name: Quan Hong Nguyen
Author-X-Name-First: Quan Hong
Author-X-Name-Last: Nguyen
Author-Name: John Dalrymple
Author-X-Name-First: John
Author-X-Name-Last: Dalrymple
Author-Name: Mohammad I. Azim
Author-X-Name-First: Mohammad I.
Author-X-Name-Last: Azim
Title: Efficiency assessment of state-owned financial institutions using data envelopment analysis: the case of Vietnam
Abstract:
Measurement of public sector enterprises' performance, especially efficiency measurement by way of a DEA model, has gained prominence in recent years among academics and practitioners. However, the different sources of input and output chosen to be used in the DEA model would produce different results for the assessor. The current research uses a closed-ended questionnaire aiming to explore suitable sources of input and output for use in a data envelopment analysis (DEA) model to assess the efficiency of public sector commercial banks (PSCBs) in Vietnam. The data is subsequently analysed quantitatively using confirmatory factor analysis (CFA) with the AMOS program. The results show five sources of input and five sources of output suitable for inclusion in the DEA model. This paper provides a reliable basis for policy analysts and performance assessors to use DEA to analyse efficiency and effectiveness in PSCBs and might trigger future research on efficiency evaluation of PSCBs using DEA in the context of Vietnam.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 815-830
Issue: 3
Volume: 29
Year: 2022
Month: 05
X-DOI: 10.1080/16081625.2019.1617752
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1617752
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:3:p:815-830
Template-Type: ReDIF-Article 1.0
Author-Name: Cui Zhang
Author-X-Name-First: Cui
Author-X-Name-Last: Zhang
Author-Name: Ping Fu
Author-X-Name-First: Ping
Author-X-Name-Last: Fu
Title: Overseas-returned executives and their roles in firm performance: evidence from China
Abstract:
This paper examines the roles of overseas-returned executives in optimizing the business performance of Chinese companies. Using the data from listed companies in China’s manufacturing industry, we find that overseas-returned executives improve firm performance, especially in non-state-owned firms, large firms and firms located in eastern China. Further mechanism analysis reveals that overseas-returned executives influence firm performance mainly through the risk-taking mechanism. This paper contributes to the firm performance literature by stating the importance of overseas-returned executives.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 622-631
Issue: 3
Volume: 29
Year: 2022
Month: 05
X-DOI: 10.1080/16081625.2020.1754257
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1754257
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:3:p:622-631
Template-Type: ReDIF-Article 1.0
# input file: catalog-resolver1497000228415217271.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Mei Zhao
Author-X-Name-First: Mei
Author-X-Name-Last: Zhao
Author-Name: Yun Ke
Author-X-Name-First: Yun
Author-X-Name-Last: Ke
Author-Name: Yao Yi
Author-X-Name-First: Yao
Author-X-Name-Last: Yi
Title: The effects of risk factor disclosure on analysts’ earnings forecasts: evidence from Chinese IPOs
Abstract:
Using Chinese IPO firms, we examine the impact of risk information disclosure on the properties of financial analysts’ earnings forecasts. We construct a disclosure index by manually reading the disclosures of risk factors in IPO prospectuses. We find that high-quality risk factor disclosure is associated with lower earnings forecast bias, less dispersion, and more timely forecasts. Separating total risk factors into five different types, we show that analysts have better ability to process financial risk and operational risk disclosure compared to the other three types (technology-related risk, market risk, and macroeconomic risk). Cross-sectional tests reveal that the positive effect of risk disclosure is mainly concentrated in firms with greater information transparency (e.g., larger firms, firms with higher profitability, and firms with lower performance volatility). We further rule out other potential explanations (e.g., the effect of analyst sentiment) and conduct additional robustness tests. Our study has broad implications for firms in emerging economies.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 866-895
Issue: 4
Volume: 29
Year: 2022
Month: 07
X-DOI: 10.1080/16081625.2020.1772089
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1772089
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:4:p:866-895
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# input file: catalog-resolver2284593528215478415.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Haomin Shen
Author-X-Name-First: Haomin
Author-X-Name-Last: Shen
Author-Name: Xiaoke Cheng
Author-X-Name-First: Xiaoke
Author-X-Name-Last: Cheng
Author-Name: Lin Han
Author-X-Name-First: Lin
Author-X-Name-Last: Han
Author-Name: Kam C. Chan
Author-X-Name-First: Kam C.
Author-X-Name-Last: Chan
Title: Are institutional investors subject to gambling preference? Evidence from detailed investor bids of IPO auctions in China
Abstract:
Using a unique disclosure database of institutional investor bidding information in Chinese initial public offerings (IPOs), we examine the preference for lottery-like IPO shares of institutional investors. We document that IPOs with higher expected skewness have higher institutional bidding prices and higher offline oversubscription ratio. The effect is stronger for sub-samples with higher investor sentiment and IPOs with higher valuation uncertainty. Moreover, higher expected skewed IPOs experience higher issue prices and initial returns but lower long run returns. These results show that institutional investors have gambling preference for IPO investments and the expected skewness of returns explain institutional bidding prices.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 964-980
Issue: 4
Volume: 29
Year: 2022
Month: 07
X-DOI: 10.1080/16081625.2020.1815549
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1815549
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:4:p:964-980
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# input file: catalog-resolver-1949026872551233682.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Nguyen Thi Bich Ngoc
Author-X-Name-First: Nguyen
Author-X-Name-Last: Thi Bich Ngoc
Author-Name: Masaru Ichihashi
Author-X-Name-First: Masaru
Author-X-Name-Last: Ichihashi
Author-Name: Makoto Kakinaka
Author-X-Name-First: Makoto
Author-X-Name-Last: Kakinaka
Title: The link between financial leverage and investment decisions in Vietnam’s small and medium-sized enterprises
Abstract:
This study analyzes the correlation between financial leverage and investment decisions and the choice of financing sources in small and medium-sized enterprises (SMEs) in Vietnam. In contrast to financial theories and previous studies, our results reveal a positive relationship between financial leverage and investment decision, suggesting that SMEs with higher financial leverage tend to seek more investment opportunities than SMEs with lower financial leverage. We also find that firms with higher financial leverage are more likely to choose external financing sources than internal ones. Our results confirm that financial theories have varying levels of applicability in the context of an emerging market, such as Vietnam.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1090-1101
Issue: 4
Volume: 29
Year: 2022
Month: 07
X-DOI: 10.1080/16081625.2019.1673196
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1673196
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:4:p:1090-1101
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# input file: catalog-resolver-6301014364145810290.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Young Min Kim
Author-X-Name-First: Young Min
Author-X-Name-Last: Kim
Author-Name: Seojin Lee
Author-X-Name-First: Seojin
Author-X-Name-Last: Lee
Title: Korean exchange rate forecasts using Bayesian variable selection
Abstract:
Using Bayesian variable selection, we demonstrate that economic variables forecast Korea-US exchange rates better than random walk or random walk with drift model at a short horizon. It implies that the failure of out-of-sample exchange rate forecasts is due to the uncertainties associated with selecting proper predictors, rather than the lack of relationship between the exchange rate and its theoretical determinants. Our results also suggest that time-variant and asymmetric weights on predictors should be taken into account to understand exchange rates dynamics. (JEL classification: C11, C53, F31)
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1045-1062
Issue: 4
Volume: 29
Year: 2022
Month: 07
X-DOI: 10.1080/16081625.2019.1653777
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1653777
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:4:p:1045-1062
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# input file: catalog-resolver-5704494705893220271.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Ömer Tuğsal Doruk
Author-X-Name-First: Ömer Tuğsal
Author-X-Name-Last: Doruk
Author-Name: Bahadır Ergün
Author-X-Name-First: Bahadır
Author-X-Name-Last: Ergün
Title: The role of macroeconomic constraints on cash conversion cycle: evidence from the Turkish manufacturing sector
Abstract:
The cash conversion cycle is a crucial firm-level factor in liquidity in sustainable firm growth; therefore, the effects of macroeconomic factors on cash conversion cycle have high importance to economic development and growth in developing countries, such as Turkey. Unlike previous studies, we use a set of different macroeconomic variables (growth volatility, inflation, and real exchange rate) to check the effects of macroeconomic variables on firms’ cash conversion cycle for the Turkish manufacturing sector in the 2006–2017 period. The obtained findings show that the cash conversion cycle is affected by macroeconomic factors in the Turkish manufacturing sector.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1063-1074
Issue: 4
Volume: 29
Year: 2022
Month: 07
X-DOI: 10.1080/16081625.2019.1636665
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1636665
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:4:p:1063-1074
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# input file: catalog-resolver7958983287106412043.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Steffen Westermann
Author-X-Name-First: Steffen
Author-X-Name-Last: Westermann
Author-Name: Scott J. Niblock
Author-X-Name-First: Scott J.
Author-X-Name-Last: Niblock
Author-Name: Michael A. Kortt
Author-X-Name-First: Michael A.
Author-X-Name-Last: Kortt
Title: Does it pay to be responsible? Evidence on corporate social responsibility and the investment performance of Australian REITs
Abstract:
This paper creates portfolios to better understand the influence of corporate social responsibility (CSR) practices on the risk-adjusted returns of Australian Real Estate Investment Trusts (A-REITs) from 2007 to 2016. We find that A-REIT portfolios (except for the high CSR-rated portfolio) outperform the broader Asia-Pacific market. We also show that the low CSR-rated A-REIT portfolio delivers the best risk-adjusted return performance. Our findings indicate that while CSR practices might mitigate risk in A-REITs, they do not appear to improve risk-adjusted return performance. However, CSR practices may be effective in producing greater risk-adjusted returns for A-REITs during market downturns or economic crises.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1102-1119
Issue: 4
Volume: 29
Year: 2022
Month: 07
X-DOI: 10.1080/16081625.2019.1673188
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1673188
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:4:p:1102-1119
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# input file: catalog-resolver4197902085151546646.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Chao Yan
Author-X-Name-First: Chao
Author-X-Name-Last: Yan
Author-Name: Min Liu
Author-X-Name-First: Min
Author-X-Name-Last: Liu
Title: Constitutional amendment and stock prices: evidence from China
Abstract:
This paper examines the market response to China’s 2018 constitutional amendment, which removes presidential term limits and cements the leadership of the party. We document that stock prices rise as a result of the decrease in political uncertainty. We find that state-owned enterprises (SOEs) gain broadly, especially for centrally controlled SOEs. In particular, the results illustrate that SOEs with high R&D investment earn higher returns, whereas non-SOEs in industries with high growth potential earn relatively lower returns. We also find that stock prices increase more for firms belonging to the Belt and Road key industries and for firms located in provinces that used to be led by Xi Jinping. However, the conventional fixed investment and political connections play no role for either SOEs or non-SOEs. Moreover, the profitability (volatility) of SOEs increases (declines) after this event, when compared with the pre-amendment period. Overall, our study suggests that, as a response to global uncertainty, China’s constitutional amendment improves market certainty.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1025-1044
Issue: 4
Volume: 29
Year: 2022
Month: 07
X-DOI: 10.1080/16081625.2020.1828105
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1828105
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:4:p:1025-1044
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# input file: catalog-resolver-1205229850764260819.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Yueting Li
Author-X-Name-First: Yueting
Author-X-Name-Last: Li
Author-Name: Jianling Wang
Author-X-Name-First: Jianling
Author-X-Name-Last: Wang
Title: The negative corporate governance impact of distracted shareholders: evidence from value of cash holdings
Abstract:
This paper examines whether distracted shareholders reduce firms’ value of cash holdings. Following prior literature, we construct a firm-year level shareholder ‘distraction’ measure, by exploiting exogenous shocks to institutional shareholders’ portfolios. We find that firms with distracted shareholders experience a decrease in the marginal value of cash holdings, which indicates that firms with distracted shareholders are more likely to misallocate company resources due to lack of monitoring. We further find that this effect is more pronounced for firms with low information asymmetry, few product market competitive threats, and high analyst coverage. The results of this paper suggest that institutional investor attention distraction will reduce firms’ monitoring intensity, which exacerbates firms’ opportunistic behaviors.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 981-1003
Issue: 4
Volume: 29
Year: 2022
Month: 07
X-DOI: 10.1080/16081625.2020.1870509
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1870509
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:4:p:981-1003
Template-Type: ReDIF-Article 1.0
# input file: catalog-resolver-7693715985107764415.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Meng Wang
Author-X-Name-First: Meng
Author-X-Name-Last: Wang
Author-Name: Wanlong Zhao
Author-X-Name-First: Wanlong
Author-X-Name-Last: Zhao
Author-Name: Lei Yin
Author-X-Name-First: Lei
Author-X-Name-Last: Yin
Title: Economic policy uncertainty, investor sentiment, and voluntary disclosure on internet platform
Abstract:
Based on the quarterly data of listed companies on the ‘hudongyi’ Internet platform of the Shenzhen Stock Exchange from 2011 to 2018, this study uses the economic policy uncertainty (EPU) index to explore the impact of EPU on voluntary disclosure. We find that EPU is positively correlated with the timeliness and sufficiency of voluntary disclosure. Moreover, investor sentiment plays a mediation role between economic policy uncertainty and voluntary disclosure. Furthermore, for state-owned, high bankruptcy risk, and low growth firms, the positive effect of EPU on the timeliness and sufficiency of voluntary disclosure becomes larger.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 896-915
Issue: 4
Volume: 29
Year: 2022
Month: 07
X-DOI: 10.1080/16081625.2020.1808799
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1808799
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:4:p:896-915
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# input file: catalog-resolver6438846388128496326.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Salvador Marín-Hernández
Author-X-Name-First: Salvador
Author-X-Name-Last: Marín-Hernández
Author-Name: Esther Ortiz-Martínez
Author-X-Name-First: Esther
Author-X-Name-Last: Ortiz-Martínez
Title: Banking industry: profitability and social responsibility
Abstract:
This paper aims to go more deeply into the study of the relationship between ROA/ROE in the financial entities due to their specific features, different objectives, and compromise with CSR. We analyse 16 banks listed on benchmark stock exchanges indexes during the period 2005–2015. The main conclusion is that there is a significant negative relationship between profitability and the social responsibility index. We also find a significant relationship between listing and ROA and ROE, and between size and ROA in the sample of banks studied.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1120-1133
Issue: 4
Volume: 29
Year: 2022
Month: 07
X-DOI: 10.1080/16081625.2019.1673194
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1673194
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:4:p:1120-1133
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# input file: catalog-resolver-2521637335091609806.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Woraphon Wattanatorn
Author-X-Name-First: Woraphon
Author-X-Name-Last: Wattanatorn
Author-Name: Sarayut Nathaphan
Author-X-Name-First: Sarayut
Author-X-Name-Last: Nathaphan
Title: Do bank-affiliated funds perform better than the others: the higher moment approach
Abstract:
In this study, we examine the difference in mutual fund performance between the bank-related and the non-bank-related mutual funds in emerging markets. We further improve the empirical testing model to match the environment of the high-volatility and high-reward market – the emerging market. Specifically, we introduce co-skewness as an additional important risk factor in this study. Therefore, our model specification matches the non-normality of return distribution in the market. Furthermore, according to the information advantage hypothesis, we provide evidence of the superior market timing ability of the high-performance bank-related fund.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1075-1089
Issue: 4
Volume: 29
Year: 2022
Month: 07
X-DOI: 10.1080/16081625.2019.1658528
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1658528
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:4:p:1075-1089
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# input file: catalog-resolver-1166313348821147221.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Guohua Zhang
Author-X-Name-First: Guohua
Author-X-Name-Last: Zhang
Author-Name: Xiaohui Qu
Author-X-Name-First: Xiaohui
Author-X-Name-Last: Qu
Title: Fair value measurement, value relevance and economic development: adoption evidence of China’s listed firms
Abstract:
Empirical data reveal that fair value measurement (FVM) is mostly used for the measurement of financial assets and liabilities and slightly used for the measurement of investment property. Both the combined value relevance of book value of equity (BV) and earnings (NI) and the value relevance of BV and NI have increased in the post-FVM adoption period; however, FV adjustments do not have incremental explanatory power. The level of economic development and a firm’s characteristics and size significantly affect FVM adoption and its value relevance. The findings imply that the full adoption of FVM in countries with immature market mechanisms remains immature.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 849-865
Issue: 4
Volume: 29
Year: 2022
Month: 07
X-DOI: 10.1080/16081625.2020.1754252
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1754252
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# input file: catalog-resolver-5536197017462884151.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Wenhan Xu
Author-X-Name-First: Wenhan
Author-X-Name-Last: Xu
Author-Name: Di Qi
Author-X-Name-First: Di
Author-X-Name-Last: Qi
Title: Abnormal tone in management earnings forecast, media negative coverage, and insider trading
Abstract:
Based on previous studies, we define the term abnormal language tone, used in management earnings forecasts, as the extent to which the language tone in the forecast deviates from the regular language tone that is used to describe business performance. We posit that the use of abnormal language tone is associated with insider trading. We specifically analyze a sample of Chinese listed firms during the period of 2010–2017. Our results indicate that, when managers intend to sell their shares, they release information in an abnormally optimistic tone. When they intend to buy shares, they release information in an abnormally pessimistic tone in order to bring down the stock price. However, we found that the media can exert supervision and corporate governance control on listed firms. If the media reports negative news prior to the earnings forecast, the relationship between abnormal language tone and insider trading will be weaker. Our findings complement prior studies in two ways. First, we provide evidence that the managers manipulate the tone of the language in earnings forecasts to facilitate insider trading. Second, we show that the media not only exposes the immoral behaviors of listed firm but can also prevent future manipulation of the tone in management earnings forecasts
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 939-963
Issue: 4
Volume: 29
Year: 2022
Month: 07
X-DOI: 10.1080/16081625.2020.1808796
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1808796
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:4:p:939-963
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# input file: catalog-resolver4086655748066637655.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Danni Han
Author-X-Name-First: Danni
Author-X-Name-Last: Han
Author-Name: Qiang Liu
Author-X-Name-First: Qiang
Author-X-Name-Last: Liu
Author-Name: Zi Wei
Author-X-Name-First: Zi
Author-X-Name-Last: Wei
Author-Name: Ying Hao
Author-X-Name-First: Ying
Author-X-Name-Last: Hao
Title: Are female CFOs trailblazers or sustainers? Evidence from industry growth prospects in China
Abstract:
This paper examines the effect of female corporate financial officers (CFOs) on corporate financial policies in industries with different rates of growth. In general, we find that female CFOs in China show more risk aversion and conservatism across a broad set of financial decisions. Furthermore, we document that female CFOs emphasize different corporate financial policies in high-growth versus low-growth industries. We find that female CFOs emphasize restraint in expansion decisions in high-growth industries but attach more weight to efficiency management in low-growth industries. Finally, we find that the conservative characteristics of female CFOs are more beneficial for financial performance in low-growth industries. Our findings enhance understanding of female CFOs’ roles under different growth conditions in emerging markets.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1004-1024
Issue: 4
Volume: 29
Year: 2022
Month: 07
X-DOI: 10.1080/16081625.2020.1847150
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1847150
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:4:p:1004-1024
Template-Type: ReDIF-Article 1.0
# input file: catalog-resolver1643259394438375389.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220713T202513 git hash: 99d3863004
Author-Name: Sheng Yao
Author-X-Name-First: Sheng
Author-X-Name-Last: Yao
Title: Price pressure effects of short selling on environmental disclosure
Abstract:
Most studies argue that short selling is an external constraint mechanism that can restrict managers’ manipulation of financial information according to the disciplining hypothesis. Whether this conclusion is also suitable for environmental information, however, is still unclear. Therefore, we examine the effect of short selling on environmental disclosure by using empirical data from China. We find that pilot firms, after being added to the pilot short-selling list, disclose less environmental information than non-pilot firms do. Further examination shows that the pilot firms’ internal and external monitoring mechanisms can affect managers’ decision-making regarding environmental information. The results suggest that when a short-selling mechanism is implemented, it is important that the appropriate regulatory department mandatorily receives environmental information disclosure. Simultaneously, the pilot firms’ internal and external monitoring mechanisms should be strengthened to mitigate the negative disclosure behavior of managers.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 916-938
Issue: 4
Volume: 29
Year: 2022
Month: 07
X-DOI: 10.1080/16081625.2020.1754250
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1754250
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:4:p:916-938
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# input file: RAAE_A_9720804_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220823T191300 git hash: 39867e6e2f
Author-Name: The Editors
Title: Editorial Board
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: ebi-ebi
Issue: 1
Volume: 15
Year: 2008
Month: 4
X-DOI: 10.1080/16081625.2008.9720804
File-URL: http://hdl.handle.net/10.1080/16081625.2008.9720804
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Handle: RePEc:taf:raaexx:v:15:y:2008:i:1:p:ebi-ebi
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# input file: RAAE_A_9720805_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220823T191300 git hash: 39867e6e2f
Author-Name: Martin J. Beckmann
Author-X-Name-First: Martin J.
Author-X-Name-Last: Beckmann
Title: A Preview of the New Economics of Knowledge
Abstract:
Examples of knowledge as a subject for economic analysis are:1. author and document evaluation by citations2. joint authorship3. size of research groups4. knowledge as an input in production.The optimal choice of products requiring various items of knowledge is made through an assessment of products for knowledge costs that can meet the Lindahl criterion of accounting.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1-9
Issue: 1
Volume: 15
Year: 2008
Month: 4
X-DOI: 10.1080/16081625.2008.9720805
File-URL: http://hdl.handle.net/10.1080/16081625.2008.9720805
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Handle: RePEc:taf:raaexx:v:15:y:2008:i:1:p:1-9
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# input file: RAAE_A_9720806_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220823T191300 git hash: 39867e6e2f
Author-Name: Tae H. Choi
Author-X-Name-First: Tae H.
Author-X-Name-Last: Choi
Title: Asset Write-offs: An Empirical Investigation of Timeliness
Abstract:
Anecdotal evidence shows that managers have plenty of discretion to manage the timing of write-offs to take action related to earnings management. In this paper, I examine whether write-offs are recorded in a timely manner. In particular, I investigate the association between asset write-offs and the market return over a long window as a metric of testing the timeliness of write offs. The results suggest that write-offs are recorded in a less timely manner than other components of earnings.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 11-27
Issue: 1
Volume: 15
Year: 2008
Month: 4
X-DOI: 10.1080/16081625.2008.9720806
File-URL: http://hdl.handle.net/10.1080/16081625.2008.9720806
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Handle: RePEc:taf:raaexx:v:15:y:2008:i:1:p:11-27
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# input file: RAAE_A_9720807_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220823T191300 git hash: 39867e6e2f
Author-Name: Gene Hsin Chang
Author-X-Name-First: Gene Hsin
Author-X-Name-Last: Chang
Title: Estimation of the Undervaluation of the Chinese Currency by a Non-linear Model
Abstract:
Anecdotal evidence shows that managers have plenty of discretion to manage the timing of write-offs to take action related to earnings management. In this paper, I examine whether write-offs are recorded in a timely manner. In particular, I investigate the association between asset write-offs and the market return over a long window as a metric of testing the timeliness of write offs. The results suggest that write-offs are recorded in a less timely manner than other components of earnings.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 29-40
Issue: 1
Volume: 15
Year: 2008
Month: 4
X-DOI: 10.1080/16081625.2008.9720807
File-URL: http://hdl.handle.net/10.1080/16081625.2008.9720807
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Handle: RePEc:taf:raaexx:v:15:y:2008:i:1:p:29-40
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# input file: RAAE_A_9720808_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220823T191300 git hash: 39867e6e2f
Author-Name: Hiroshi Ohta
Author-X-Name-First: Hiroshi
Author-X-Name-Last: Ohta
Author-Name: Hironobu Nakagawa
Author-X-Name-First: Hironobu
Author-X-Name-Last: Nakagawa
Title: On the “Technology Transfer” Paradox and “Worsening Terms of Trade” Paradox
Abstract:
This paper revisits some seeming paradoxes or puzzles in trade theory. We explore the
socalled “technology transfer” paradox, which may be interpreted more
generally in terms of what we call the “worsening terms of trade” paradox.
We show both paradoxes are no more paradox than the Leontief paradox is. We also assert
that, judging from the implications that international technology transfers have for the
possible pattern of trade, the seeming paradoxes that require the pattern-of-trade
reversals are less likely to occur under conditions of the Hecksher-Ohlin variable input
proportions than under the Ricardian fixed proportions.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 41-53
Issue: 1
Volume: 15
Year: 2008
Month: 4
X-DOI: 10.1080/16081625.2008.9720808
File-URL: http://hdl.handle.net/10.1080/16081625.2008.9720808
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# input file: RAAE_A_9720809_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220823T191300 git hash: 39867e6e2f
Author-Name: Gregory C. Chow
Author-X-Name-First: Gregory C.
Author-X-Name-Last: Chow
Title: China's Energy and Environmental Problems and Policies
Abstract:
This paper describes China's energy and environmental degradation problems in terms of air pollution, water pollution, CO2 emission and shortage of energy. It discusses the laws, agencies established and policies introduced to solve the energy-environment problems as well as the practical difficulties in the implementation of government environmental policies. Finally it presents two proposals to improve the protection of China's environment.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 57-70
Issue: 1
Volume: 15
Year: 2008
Month: 4
X-DOI: 10.1080/16081625.2008.9720809
File-URL: http://hdl.handle.net/10.1080/16081625.2008.9720809
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Handle: RePEc:taf:raaexx:v:15:y:2008:i:1:p:57-70
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# input file: RAAE_A_1618717_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Liuchuang Li
Author-X-Name-First: Liuchuang
Author-X-Name-Last: Li
Author-Name: Bin Srinidhi
Author-X-Name-First: Bin
Author-X-Name-Last: Srinidhi
Author-Name: Zhongbo Yu
Author-X-Name-First: Zhongbo
Author-X-Name-Last: Yu
Author-Name: Hao Zhang
Author-X-Name-First: Hao
Author-X-Name-Last: Zhang
Title: The effects of newly emergent non–state-controlled Chinese firms adapting an established practice from state-owned organizations: evidence of symbolic compliance from a natural experiment
Abstract:
We examine the puzzling observation of newly emergent Chinese non–state-controlled enterprises (NSCEs) adapting the long-established practice from state-controlled organizations of inviting state officials for general nontechnical and nonregulatory visits and then publicizing these visits in the media even though such visits impose significant costs on these firms. This context is unique and allows for a natural experiment in which newly emergent organizations that lack inherent legitimacy and cannot undertake substantial identification resort to symbolic compliance to enhance legitimacy. We show that these visits result in better operating and market performance, and reduce the risk in the visited NSCEs. We interpret this result as providing evidence that symbolic compliance is effective to enhance legitimacy.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1376-1393
Issue: 5
Volume: 29
Year: 2022
Month: 09
X-DOI: 10.1080/16081625.2019.1618717
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1618717
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:5:p:1376-1393
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# input file: RAAE_A_1726190_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Jie Li
Author-X-Name-First: Jie
Author-X-Name-Last: Li
Author-Name: Xu Feng
Author-X-Name-First: Xu
Author-X-Name-Last: Feng
Author-Name: Yongjie Zhang
Author-X-Name-First: Yongjie
Author-X-Name-Last: Zhang
Title: Month-end effect on Chinese stock returns: explanation of the liquidity hypothesis
Abstract:
This study focuses on an anomaly in the intramonth pattern of stock returns and defines it as the ‘month-end effect’. The mean return for stocks is negative for the month-end days. Moreover, this study provides an economically plausible explanation for the month-end effect, namely, the liquidity hypothesis. It is suggested that the increase in the liquidity demand of commercial banks at the month-end days generally induces a fall in stock returns at the end of each month. Finally, additional evidence is provided that the window dressing hypothesis and macroeconomic news announcements hypothesis have limited explanation for the month-end effect.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1283-1298
Issue: 5
Volume: 29
Year: 2022
Month: 09
X-DOI: 10.1080/16081625.2020.1726190
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1726190
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# input file: RAAE_A_1673192_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Junjian Gu
Author-X-Name-First: Junjian
Author-X-Name-Last: Gu
Author-Name: Zheng Qiao
Author-X-Name-First: Zheng
Author-X-Name-Last: Qiao
Title: The synergistic effect of direct and indirect methods in fundamental analysis: Evidence from Japan
Abstract:
We employ two types of firm valuation models, direct and indirect methods, to predict future stock returns and future earnings changes using a battery of variables from financial statements. We construct three investment strategies based on the valuation models and find significant abnormal returns by identifying overvalued and undervalued stocks. Furthermore, by holding the overlapping stocks between the two valuations models, we manage to construct a modified portfolio strategy that delivers the highest abnormal return, which demonstrates a synergistic effect between the two valuation methods.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1299-1332
Issue: 5
Volume: 29
Year: 2022
Month: 09
X-DOI: 10.1080/16081625.2019.1673192
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1673192
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# input file: RAAE_A_1816186_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Dipankar Ghosh
Author-X-Name-First: Dipankar
Author-X-Name-Last: Ghosh
Author-Name: Jong-Yu Paula Hao
Author-X-Name-First: Jong-Yu Paula
Author-X-Name-Last: Hao
Author-Name: Joanna L.Y. Ho
Author-X-Name-First: Joanna L.Y.
Author-X-Name-Last: Ho
Author-Name: Hiroshi Miya
Author-X-Name-First: Hiroshi
Author-X-Name-Last: Miya
Title: Choice of performance measures for bonus plan: implications for firm performance and promotions
Abstract:
In this study, we examine the impact of a change in the bonus-based incentives on firm performance and promotions. We use both a proprietary dataset and a field-based survey of a leading bakery chain in Japan that changed its bonus determination from focusing on nonfinancial measures to financial measures. We find that firm performance declines under the new bonus plan due to a misalignment between the choice of performance measures and the bakery’s customer-focused strategy. Moreover, supervisors consider performance measures other than what is intended by the firm for promotions i.e., financial measures) when they perceive these measures to be underweighted from the perspective of temporal alignment of the incentive system. This study contributes to prior literature by documenting the impact of a change in bonus plan on firm performance and promotions decisions, where empirical evidence is limited.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1156-1174
Issue: 5
Volume: 29
Year: 2022
Month: 09
X-DOI: 10.1080/16081625.2020.1816186
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1816186
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# input file: RAAE_A_1871043_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Su Li
Author-X-Name-First: Su
Author-X-Name-Last: Li
Author-Name: Fangfei Ding
Author-X-Name-First: Fangfei
Author-X-Name-Last: Ding
Author-Name: Qianqian Liu
Author-X-Name-First: Qianqian
Author-X-Name-Last: Liu
Author-Name: Ziwei Qiao
Author-X-Name-First: Ziwei
Author-X-Name-Last: Qiao
Author-Name: Zhiyu Chen
Author-X-Name-First: Zhiyu
Author-X-Name-Last: Chen
Title: Can financial analysts constrain real earnings management in emerging markets? Evidence from China
Abstract:
We examine the effect of financial analysts on real earnings management in China. Our empirical results show a negative relationship between analyst coverage and real earnings management. This relationship exists within the full sample and sub-sample of firms meeting or beating earnings benchmarks. It survives tests to address endogeneity problems. We also find that real earnings management can impair companies’ profitability and analysts will revise their earnings forecasts downward for firms with aggressive real earnings management. Further research suggests that analysts can also curb accrual earnings management.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1208-1226
Issue: 5
Volume: 29
Year: 2022
Month: 09
X-DOI: 10.1080/16081625.2020.1871043
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1871043
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:5:p:1208-1226
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# input file: RAAE_A_1726189_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Liang Dong
Author-X-Name-First: Liang
Author-X-Name-Last: Dong
Author-Name: Hung Wan Kot
Author-X-Name-First: Hung Wan
Author-X-Name-Last: Kot
Author-Name: Keith S. K. Lam
Author-X-Name-First: Keith S. K.
Author-X-Name-Last: Lam
Author-Name: Bo Yu
Author-X-Name-First: Bo
Author-X-Name-Last: Yu
Title: China vs. U.S.: is co-skewness risk priced differently?
Abstract:
We investigate the role of co-skewness in pricing stock returns in the Chinese and U.S. markets. In both markets, co-skewness is priced with a negative premium. The annualized factor-adjusted co-skewness effect is −7.98% in China and −3.53% in the U.S. The negative co-skewness effect coexists with other higher-moment-related pricing effects. Through two natural experiments in the Chinese and U.S. markets, we find that an improvement in the information environment greatly enhances the co-skewness pricing effect in both markets. Furthermore, we find that the governance structure and the efficiency level are the main determinants of the co-skewness premium in the Chinese market.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1333-1353
Issue: 5
Volume: 29
Year: 2022
Month: 09
X-DOI: 10.1080/16081625.2020.1726189
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1726189
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# input file: RAAE_A_1636663_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Saud Asaad Al-Thaqeb
Author-X-Name-First: Saud
Author-X-Name-Last: Asaad Al-Thaqeb
Title: The effect of major customer type on corporate capital structure
Abstract:
This study examines the impact of governments as major customers on the firm’s capital structure. Our results show that major customer type significantly impacts capital structure. Firms with government (non-government) customers have higher (lower) leverage. The financial condition of firms with major customers offers some explanation: the results are stronger for financially constrained firms. Government (non-government) customers may give supplier firms more flexibility (pressure). The difference in the effect of customer type may be attributed to the differences in the risk associated with each type. Collectively, the findings support the view that dealing with governments as major customers can reduce risk.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1394-1416
Issue: 5
Volume: 29
Year: 2022
Month: 09
X-DOI: 10.1080/16081625.2019.1636663
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1636663
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# input file: RAAE_A_1808797_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Xiaochun Li
Author-X-Name-First: Xiaochun
Author-X-Name-Last: Li
Author-Name: Huanan Fu
Author-X-Name-First: Huanan
Author-X-Name-Last: Fu
Title: Migrant remittance, agricultural producer services, and environmental pollution
Abstract:
This paper established ageneral equilibrium model to study the effects of the changes of remittance rate in the migrant workers’ income on environmental pollution. We found that, in the capital specific case, the increase of urban-rural migrants’ remittance rate will increase the total remittance of the migrant workers, increase the demand of agricultural sector for agricultural producer services and decrease the environmental level, but it has no influence on the output level of the urban industrial sector; and in the mobile capital case, the increase of urban-rural migrants’remittance rate will increase the total remittance of the migrant workers, increase the demand of agricultural sector for agricultural producer services, decrease the output level of the urban industrial sector and improve the environmental level.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1267-1282
Issue: 5
Volume: 29
Year: 2022
Month: 09
X-DOI: 10.1080/16081625.2020.1808797
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1808797
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# input file: RAAE_A_1947861_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Hyejin Ahn
Author-X-Name-First: Hyejin
Author-X-Name-Last: Ahn
Title: Fair value complexity and financial statement comparability
Abstract:
This study examines whether fair value accounting and its complexity influence financial statement comparability. Using quarterly US bank holding company data from 2008 to 2014, I find that the proportion of assets and liabilities that are fair valued is negatively associated with financial statement comparability and that this negative relation appears to be driven by the less v
erifiable (lower-level) fair value estimates. Under the three-level hierarchy of SFAS 157, the financial statements of a bank become less comparable with those of other banks as the complexity of its fair value estimates increases. Overall, these results indicate that fair value complexity has a negative influence on comparability.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1247-1266
Issue: 5
Volume: 29
Year: 2022
Month: 09
X-DOI: 10.1080/16081625.2021.1947861
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1947861
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# input file: RAAE_A_1870510_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Yuan Huang
Author-X-Name-First: Yuan
Author-X-Name-Last: Huang
Author-Name: Xiao Li
Author-X-Name-First: Xiao
Author-X-Name-Last: Li
Author-Name: Zilong Song
Author-X-Name-First: Zilong
Author-X-Name-Last: Song
Title: Board reforms and audit fees: international evidence
Abstract:
With a difference-in-differences approach, we find that world-wide reforms result in higher audit fees for reform firms. And this is specially so for reforms involving components of director independence and/or audit committee and auditor independence, adopting the rule-based approach, and implemented in countries with weaker institutional quality. Further analysis reveals that the increase in audit fees is driven by the increase in auditors’ efforts and auditees’ litigation risk, while the improved financial reporting quality has a negative effect on audit fees. Overall, our study examines one compliance cost, as well as its variations, of the board reforms.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1227-1246
Issue: 5
Volume: 29
Year: 2022
Month: 09
X-DOI: 10.1080/16081625.2020.1870510
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1870510
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# input file: RAAE_A_1828104_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Bok Baik
Author-X-Name-First: Bok
Author-X-Name-Last: Baik
Author-Name: Seung-Youb Han
Author-X-Name-First: Seung-Youb
Author-X-Name-Last: Han
Author-Name: Bong Hwan Kim
Author-X-Name-First: Bong Hwan
Author-X-Name-Last: Kim
Author-Name: Seungbin Oh
Author-X-Name-First: Seungbin
Author-X-Name-Last: Oh
Title: Financial reporting quality of privately held firms: evidence from private corporations versus limited companies
Abstract:
In this paper, we examine whether requirements to disclose audited financial statements enhance financial reporting quality of privately held firms. Unlike U.S. private firms, private corporations in Korea are required to prepare and disclose audited financial statements. While limited companies, another type of Korean private firms, are almost identical to private corporations in economic substance, they are exempt from reporting requirements to disclose audited financial statements. Using this unique institutional environment in Korea for the period of 2007–2012, we investigate the effect of audit and disclosure requirements on financial reporting quality and find that such requirements enhance financial reporting quality of private companies. Our findings shed light on the economic consequences of mandatory disclosure of audited financial statements and should be of interest to academics and regulators as we evidence the effects of audit and disclosure requirements on financial reporting quality outside of public firms.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1184-1207
Issue: 5
Volume: 29
Year: 2022
Month: 09
X-DOI: 10.1080/16081625.2020.1828104
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1828104
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:5:p:1184-1207
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# input file: RAAE_A_1816185_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Nicholas Apergis
Author-X-Name-First: Nicholas
Author-X-Name-Last: Apergis
Author-Name: Emmanuel Apergis
Author-X-Name-First: Emmanuel
Author-X-Name-Last: Apergis
Title: The role of Covid-19 for Chinese stock returns: evidence from a GARCHX model
Abstract:
This paper examines the effect of Covid-19 pandemic on the Chinese stock market returns and their volatility using the generalized autoregressive conditionally heteroskedastic GARCHX model. The GARCHX model allows us to include Covid-19 information within the GARCH framework. The findings document that daily increases in total confirmed Covid-19 cases in China, measured as total daily deaths and cases, have a significant negative impact on stock returns, with the negative impact of the Covid-19 on stock returns being more pronounced when total deaths proxy the effect of this infectious disease. The results also document that Covid-19 has a positive and statistically significant effect on the volatility of these market returns. Overall, new evidence is offered that infectious diseases, such as Covid-19, can seriously impact market returns, as well as their volatility. The findings could be essential in understanding the implications of Covid-19 for the stock market in China.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1175-1183
Issue: 5
Volume: 29
Year: 2022
Month: 09
X-DOI: 10.1080/16081625.2020.1816185
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1816185
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# input file: RAAE_A_1617751_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Chao Bi
Author-X-Name-First: Chao
Author-X-Name-Last: Bi
Author-Name: Ying Li
Author-X-Name-First: Ying
Author-X-Name-Last: Li
Title: Unintended consequences of regulation FD: a natural experiment from China
Abstract:
The aim of Regulation Fair Disclosure (Reg FD) is to prohibit selected disclosure and improve the information environment of capital markets. Using a natural experiment from China and applying a difference-in-differences design, we find that Reg FD constrains private communication between firms and analysts but has the unintended consequence of increasing earnings management, which deteriorates accounting information quality. Furthermore, the effect of Reg FD on earnings management is concentrated in firms without public management earnings forecasts (MFs), firms with strong incentives to meet or beat analysts’ targets, and firms with poor corporate governance. Overall, this study sheds light on the effect of Reg FD on the methods that managers use to meet analysts’ expectations and on how this effect varies with underlying firm characteristics.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1354-1375
Issue: 5
Volume: 29
Year: 2022
Month: 09
X-DOI: 10.1080/16081625.2019.1617751
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1617751
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# input file: RAAE_A_1787853_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Xi Zhao
Author-X-Name-First: Xi
Author-X-Name-Last: Zhao
Author-Name: Xiaotong Niu
Author-X-Name-First: Xiaotong
Author-X-Name-Last: Niu
Author-Name: Jiaqi Chen
Author-X-Name-First: Jiaqi
Author-X-Name-Last: Chen
Title: CEO risk preference, enterprise characteristics, and goodwill value: evidence from China
Abstract:
This study investigates the relationship between CEO risk preferences in companies completed mergers and acquisitions (M&A) and the goodwill generated by M&A. The analysis period ranges from 2014 to 2018, which represents the recent ‘boom’ in China’s M&A market. We estimate CEO risk preference by using factor analysis and regress the goodwill on CEO risk preference while controlling for firms’ characteristics. The results show that CEOs with a high-level risk preference are willing to accept a higher value of goodwill. This positive correlation is more significant in non-state-owned or lower ownership concentration companies, and firms within a suitable debt capacity.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1135-1155
Issue: 5
Volume: 29
Year: 2022
Month: 09
X-DOI: 10.1080/16081625.2020.1787853
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1787853
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:5:p:1135-1155
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# input file: RAAE_A_1681282_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Shin Hyoung Kwon
Author-X-Name-First: Shin Hyoung
Author-X-Name-Last: Kwon
Author-Name: Ashutosh Deshmukh
Author-X-Name-First: Ashutosh
Author-X-Name-Last: Deshmukh
Title: Earnings management and instances of material weaknesses reported under Sections 302 and 404
Abstract:
Sections 302 and 404 of the 2002 Sarbanes-Oxley Act require firms to disclose material weaknesses (MWs) in internal controls. We investigate the association of single and multiple instances of MWs with earnings management. Multiple instances are positively associated with earnings management for Section 302 and 404 firms, whereas single instances have no such association for either firm type. Thus, MWs that are not remediated within one quarter or year tend to be positively associated with earnings management and, in particular, with income-decreasing earnings management. Multiple instances of MWs for such firms can therefore provide critical information for auditors and investors.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1540-1559
Issue: 6
Volume: 29
Year: 2022
Month: 11
X-DOI: 10.1080/16081625.2019.1681282
File-URL: http://hdl.handle.net/10.1080/16081625.2019.1681282
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# input file: RAAE_A_1886951_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Ahmad Abu-Dawleh
Author-X-Name-First: Ahmad
Author-X-Name-Last: Abu-Dawleh
Author-Name: Nadine Lybaert
Author-X-Name-First: Nadine
Author-X-Name-Last: Lybaert
Author-Name: Tensie Steijvers
Author-X-Name-First: Tensie
Author-X-Name-Last: Steijvers
Author-Name: Mieke Jans
Author-X-Name-First: Mieke
Author-X-Name-Last: Jans
Title: Board of directors and earnings management: conventional and Islamic banks
Abstract:
This study examines how the board of directors (BOD) of Islamic banks (IBs) might affect earnings management differently, compared to BOD of conventional banks (CBs). Our results indicate that banks in the MENA region that promote BOD independence incur less earnings management. Distinguishing between CBs and IBs, we document higher loan quality and credit policy at IBs. Moreover, smaller BOD size and board independence decrease earnings management at IBs. Findings suggest that agency theory might not accommodate the agency conflicts at IBs, since it neglects stakeholders’ behavioural patterns. Thus, these results suggest the need to shape directors’ financial acumen at IBs.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1640-1656
Issue: 6
Volume: 29
Year: 2022
Month: 11
X-DOI: 10.1080/16081625.2021.1886951
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1886951
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# input file: RAAE_A_1828951_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Shiyun Zeng
Author-X-Name-First: Shiyun
Author-X-Name-Last: Zeng
Author-Name: Wenfei Li
Author-X-Name-First: Wenfei
Author-X-Name-Last: Li
Author-Name: Qingquan Tang
Author-X-Name-First: Qingquan
Author-X-Name-Last: Tang
Title: Accounting conservatism and the fulfilment of the target’s performance commitment in valuation adjustment mechanism contracts
Abstract:
We find that acquiring firm’s accounting conservatism positively affects the likelihood of targets fulfilling their performance commitments in valuation adjustment mechanism (VAM) contracts in merger and acquisition (M&A) deals. The effect is more pronounced when the acquirer is in a high-competition industry and audited by non-Top eight accounting firms and the deal is cross-region. Further tests show that accounting conservatism increases the likelihood of fulfilment by lowering the targets’ promised standards and increasing managers’ incentive to motivate and monitor targets’ managers after M&A. Finally, the performance of conservative acquirers is better after VAM contract expires.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1497-1517
Issue: 6
Volume: 29
Year: 2022
Month: 11
X-DOI: 10.1080/16081625.2020.1828951
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1828951
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# input file: RAAE_A_1829976_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Qifa Xu
Author-X-Name-First: Qifa
Author-X-Name-Last: Xu
Author-Name: Qianqian Li
Author-X-Name-First: Qianqian
Author-X-Name-Last: Li
Author-Name: Cuixia Jiang
Author-X-Name-First: Cuixia
Author-X-Name-Last: Jiang
Author-Name: Jun Wu
Author-X-Name-First: Jun
Author-X-Name-Last: Wu
Author-Name: Xin Zhang
Author-X-Name-First: Xin
Author-X-Name-Last: Zhang
Title: Social media, interaction information and stock market efficiency: evidence from the Shenzhen stock exchange easy interaction platform in China
Abstract:
This paper studies the impact of interaction between investors and listed companies on market efficiency from two perspectives of earnings expectation and information asymmetry. We conduct an empirical analysis of the Shenzhen Stock Exchange Easy Interaction (SSEEI) platform. The interactive text is used to build interactivity indicators showing that the platform provides an important way to increase stock market efficiency. We further study how the interaction affects market efficiency using the emotion dictionary and the Latent Dirichlet Allocation (LDA) model. The results show that both good and bad news discussed on the platform are significant to market efficiency.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1469-1496
Issue: 6
Volume: 29
Year: 2022
Month: 11
X-DOI: 10.1080/16081625.2020.1829976
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1829976
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# input file: RAAE_A_1830558_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Yu Gao
Author-X-Name-First: Yu
Author-X-Name-Last: Gao
Author-Name: Kil-Seok Han
Author-X-Name-First: Kil-Seok
Author-X-Name-Last: Han
Title: Managerial overconfidence, CSR and firm value
Abstract:
The purpose of our study is to explore the relationship among managerial overconfidence, CSR and firm value. Nonlinear regression and OLS regression are used to test the hypotheses. Managerial overconfidence is measured by the integrated index. The financial data of Korean-listed companies are collected from the DataGuide5 database. The ESG rating of Koran Governance Service (KCGS) is selected as the proxy variable of CSR in Korea. Korean-listed non-financial companies from 2011 to 2016 are selected as the research sample. Empirical results show that managerial overconfidence has a significant and positive impact on firm value; Managerial overconfidence enhances firm value through CSR activities. Our study enriches the research of managerial overconfidence and provides a new perspective within the Eastern culture.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1600-1618
Issue: 6
Volume: 29
Year: 2022
Month: 11
X-DOI: 10.1080/16081625.2020.1830558
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1830558
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# input file: RAAE_A_1754251_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Xiaofei Wu
Author-X-Name-First: Xiaofei
Author-X-Name-Last: Wu
Author-Name: Hailong Miao
Author-X-Name-First: Hailong
Author-X-Name-Last: Miao
Author-Name: Shuzhen Zhu
Author-X-Name-First: Shuzhen
Author-X-Name-Last: Zhu
Author-Name: Xin Li
Author-X-Name-First: Xin
Author-X-Name-Last: Li
Title: Study on the optimal hedging ratio of Shanghai crude oil futures based on Copula models
Abstract:
This paper focuses on the risk management of the participants and takes an in-depth study into the hedging ratio based on the minimum variance method. Crude oil futures contract price series are taken from INE and SHENGLI crude oil markets. Copula methods are used instead of common methods to find the nonlinear correlation between the futures and spot markets. Especially, the hedging ratio and hedging effectiveness are calculated by the minimum variance method and three copula models. The study found that the hedging ratio derived from the Frank Copula model is more suitable for the Shanghai crude oil futures market.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1657-1670
Issue: 6
Volume: 29
Year: 2022
Month: 11
X-DOI: 10.1080/16081625.2020.1754251
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1754251
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# input file: RAAE_A_1754255_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Syed Riaz Mahmood Ali
Author-X-Name-First: Syed Riaz Mahmood
Author-X-Name-Last: Ali
Title: Do momentum and reversal matter in the Singapore stock market?
Abstract:
This paper shows the presence of positive momentum return in the short run but no subsequent price reversal in the Singapore Market. Rather, price momentum continues in the long run. It also demonstrates that momentum profit is higher for the small and highly volatile firms rather than the large stable firms. Both portfolio level and firm-level cross-sectional analyses are used to show the relationships.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1692-1708
Issue: 6
Volume: 29
Year: 2022
Month: 11
X-DOI: 10.1080/16081625.2020.1754255
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1754255
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# input file: RAAE_A_1878909_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Youliang Yan
Author-X-Name-First: Youliang
Author-X-Name-Last: Yan
Author-Name: Xixiong Xu
Author-X-Name-First: Xixiong
Author-X-Name-Last: Xu
Title: The role of communist party branch in employment protection: evidence from Chinese private firms
Abstract:
Using the survey data from Chinese private firms, this study investigates how the ruling Party affects firms’ treatment to their employees. We document a significant positive relationship between Party branch and employment protection. Specifically, firms with Party branch are more likely to sign labor contracts and provide stable jobs to their employees. Moreover, this effect is more prominent in regions with higher unemployment rate and in firms with labor union. Our findings highlight the Communist Party branch as an important communication bridge between the government and firms, which transfers public governance goals to firms, and then promotes employee-friendly practices.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1518-1539
Issue: 6
Volume: 29
Year: 2022
Month: 11
X-DOI: 10.1080/16081625.2021.1878909
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1878909
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# input file: RAAE_A_1828106_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Jihun Bae
Author-X-Name-First: Jihun
Author-X-Name-Last: Bae
Author-Name: Jeong Hwan Joo
Author-X-Name-First: Jeong Hwan
Author-X-Name-Last: Joo
Author-Name: Chul W. Park
Author-X-Name-First: Chul W.
Author-X-Name-Last: Park
Title: Differential performance impacts of outsider and insider interim CEO successions
Abstract:
This study finds differential performance impacts of outsider and insider interim CEO successions. Stock markets react incrementally positively to interim CEO successions when the interim CEOs are from outside rather than inside firms. Relative to insider interim CEOs, outsider interim CEOs produce worse earnings performance and greater restructuring charges during their services but lead more frequently to outsider permanent CEO appointments followed by better long-term earnings performance. Our findings suggest that market reactions to interim CEO successions rationally impound the investors’ expectation that outsider relative to insider interim CEO successions will generate greater short-term disruption but pave the way for greater long-term performance improvement.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1439-1468
Issue: 6
Volume: 29
Year: 2022
Month: 11
X-DOI: 10.1080/16081625.2020.1828106
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1828106
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:6:p:1439-1468
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# input file: RAAE_A_1730920_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Jun-Hyung Ko
Author-X-Name-First: Jun-Hyung
Author-X-Name-Last: Ko
Author-Name: Akeyoshi Matsuzaki
Author-X-Name-First: Akeyoshi
Author-X-Name-Last: Matsuzaki
Author-Name: Dongwoo Yoo
Author-X-Name-First: Dongwoo
Author-X-Name-Last: Yoo
Title: The geography of gravity
Abstract:
Although geography has been considered an important factor in international trade, spatial heterogeneity has not been fully investigated in standard gravity models. This paper contributes to the literature by investigating how gravity works geographically in trade. The geographically weighted regression (GWR) reveals spatial variations in estimated parameters. GWR regression results suggest even though physical distance is the same, economic distance can be different based on the location. Our regression results on the impact of Kyoto protocol show that while a loss of competitiveness is observed among non-European developed countries, no loss of competitiveness is clearly seen in the European Union.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1560-1578
Issue: 6
Volume: 29
Year: 2022
Month: 11
X-DOI: 10.1080/16081625.2020.1730920
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1730920
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:6:p:1560-1578
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# input file: RAAE_A_1847149_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Xiang Ma
Author-X-Name-First: Xiang
Author-X-Name-Last: Ma
Author-Name: Xiaohui Xu
Author-X-Name-First: Xiaohui
Author-X-Name-Last: Xu
Author-Name: Mobing Jiang
Author-X-Name-First: Mobing
Author-X-Name-Last: Jiang
Title: Does a firm have to be socially responsible to become a target in cross-border M&As: evidence from China
Abstract:
Based on data from Chinese-listed firms from 2008 to 2016, we explore the impact of corporate social responsibility (CSR) on the likelihood of becoming a target in cross-border mergers and acquisitions (M&As). We find that CSR performance is positively associated with the firm’s likelihood of becoming a target in cross-border M&As, but this effect is significant only in higher competitive markets and for non-state-owned enterprises. Moreover, only high-quality CSR disclosure can improve the likelihood of becoming a M&A target. Therefore, the governments in emerging markets should guide listed companies to disclose high-quality CSR reports and propel the process of marketization.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1417-1438
Issue: 6
Volume: 29
Year: 2022
Month: 11
X-DOI: 10.1080/16081625.2020.1847149
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1847149
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# input file: RAAE_A_1741285_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Ruey-Ching Lin
Author-X-Name-First: Ruey-Ching
Author-X-Name-Last: Lin
Author-Name: Chihua Li
Author-X-Name-First: Chihua
Author-X-Name-Last: Li
Author-Name: Hong-Da Wang
Author-X-Name-First: Hong-Da
Author-X-Name-Last: Wang
Author-Name: Yan-Jie Yang
Author-X-Name-First: Yan-Jie
Author-X-Name-Last: Yang
Title: The regulation change in consolidation rules and the incentives for earnings management activities via related party transactions
Abstract:
Boundaries of consolidated reporting entities vary between International Financial Reporting Standards (IFRS) and U.S. Generally Accepted Accounting Principles (GAAP). Based on the rules-oriented conceptual framework, U.S. GAAP adopts the ownership-based consolidation approach (ARB 51), while IFRS adopts the control-based approach that is more principle-oriented (IAS 27). Exploiting a unique setting which took place in Taiwan that switched from U.S. GAAP to IFRS in consolidation rules in 2005, this study investigates how the regulation change affects the feasibility to manage earnings via related party transactions (RPTs). Our findings support the predominant role of earnings management incentives for RPTs. Further evidence shows that parent firms conducting more RPTs with their subsidiaries are inclined to hide them from consolidation under ownership-based consolidation. This intention to avoid consolidation, however, is substantially restrained when switching to the control-based consolidation approach. In addition, firms employ real earnings management to substitute for earnings management via RPTs after control-based consolidation approach is adopted. In particular, our results weakly support that better corporate governance is able to mitigate the shift to other kinds of earnings management after the regulation change for those firms with a higher tendency to avoid consolidation. In short, our study complements prior studies that find relative costliness drives the earnings management decision.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1619-1639
Issue: 6
Volume: 29
Year: 2022
Month: 11
X-DOI: 10.1080/16081625.2020.1741285
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1741285
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# input file: RAAE_A_1754254_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Changyong Xue
Author-X-Name-First: Changyong
Author-X-Name-Last: Xue
Author-Name: Yeung Ying
Author-X-Name-First: Yeung
Author-X-Name-Last: Ying
Title: Financial quality, internal control and stock price crash risk
Abstract:
We investigate the effects of financial quality and internal control on stock price crash risk by using the listed companies in A-share market from 2007 to 2017. The result shows that financial quality reduces the risk of stock price crisis. Moreover, the relationship can be enhanced by improving the internal control. Further, considering the heterogeneity, financial quality has a stronger influence on new companies, while internal control has a stronger influence on mature companies. For companies with larger agency conflict between the management and shareholders, internal control can effectively reduce stock price crash risk.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1671-1691
Issue: 6
Volume: 29
Year: 2022
Month: 11
X-DOI: 10.1080/16081625.2020.1754254
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1754254
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# input file: RAAE_A_1726191_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Frendy
Author-X-Name-First:
Author-X-Name-Last: Frendy
Title: The relevance of keiretsu affiliation on disclosure quality in contemporary Japanese economy
Abstract:
Corporate governance reforms were introduced in Japan in the 2000s to improve investor protection and disclosure quality. Given the importance of keiretsu-affiliated firms in the Japanese economy, our study investigates the association between keiretsu affiliation and disclosure quality. We find no systematic difference in disclosure quality between listed Japanese keiretsu and non-keiretsu-affiliated firms. Instead, we find that disclosure quality is positively associated with firm size, profitability, directors’ share ownership, overseas sales, and access to international capital. Moreover, no gap in disclosure quality between old keiretsu firms with zaibatsu heritage and post-war emerging keiretsu firms is observed.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1579-1599
Issue: 6
Volume: 29
Year: 2022
Month: 11
X-DOI: 10.1080/16081625.2020.1726191
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1726191
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Handle: RePEc:taf:raaexx:v:29:y:2022:i:6:p:1579-1599
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# input file: RAAE_A_1886950_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Yaohua Qin
Author-X-Name-First: Yaohua
Author-X-Name-Last: Qin
Author-Name: He Xiao
Author-X-Name-First: He
Author-X-Name-Last: Xiao
Title: Market-based Financing Reforms and Shareholder Valuations: event Study Evidence from the Chinese Sci-Technology Innovation Board
Abstract:
In this study, the impact of the newly introduced sci-technology innovation board (STAR) on stock valuations in China is examined. Two key event dates are addressed, the STAR guideline announcement date and applicants’ prospectus release dates. The results suggest a positive market reaction of relevant listed firms. The difference-in-differences (DID) results for the first event show a reduction in the bid-ask spreads of high-tech firms, as the new policy attracts more analyst research, particularly in-depth research. The DID results for the second event indicate that the information asymmetry for ownership-related listed firms decreases compared to firms within the same industries.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 172-195
Issue: 1
Volume: 30
Year: 2023
Month: 01
X-DOI: 10.1080/16081625.2021.1886950
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1886950
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# input file: RAAE_A_1977662_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Zhiwen Zhang
Author-X-Name-First: Zhiwen
Author-X-Name-Last: Zhang
Author-Name: Zilong Wang
Author-X-Name-First: Zilong
Author-X-Name-Last: Wang
Author-Name: Shan Liang
Author-X-Name-First: Shan
Author-X-Name-Last: Liang
Title: The effect of government intervention on the resource misallocation in innovation: ownership differences
Abstract:
In the present study, the misallocation of resources in innovation in the China’s high-tech industry sector was analysed. A model was constructed to measure the misallocation of resources at the level of the department. Based on the model, there is an estimated misallocation of total resources, capital, and labour, respectively. The empirical findings show that there is a misallocation of innovation resources in the high-tech industry sector, with a general trend of fluctuation from 45.73% in 2009 to 7.85% in 2016. The misallocation of resources caused by labour is greater than capital. Government intervention has a significant negative impact on the misallocation of resources in innovation. An increase in the share of SOEs in an industry will deepen the misallocation.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 230-246
Issue: 1
Volume: 30
Year: 2023
Month: 01
X-DOI: 10.1080/16081625.2021.1977662
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1977662
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# input file: RAAE_A_1934707_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Xiaotao Zhang
Author-X-Name-First: Xiaotao
Author-X-Name-Last: Zhang
Author-Name: Yuelei Li
Author-X-Name-First: Yuelei
Author-X-Name-Last: Li
Author-Name: Wei Zhang
Author-X-Name-First: Wei
Author-X-Name-Last: Zhang
Author-Name: Jieli Xing
Author-X-Name-First: Jieli
Author-X-Name-Last: Xing
Title: The role of narrative style in a peer-to-peer lending market: an empirical investigation
Abstract:
Decision-making behavior can be capricious and may vary from individual to individual. This paper provides a straightforward method for the empirical identification of the narrative style affecting financial decisions under time pressure. Punctuation, Chinese characters and sentence length constitute different narrative styles. Using data from Renrendai, we find that as the number and type of punctuation marks in narratives increase, the loan funding and repayment performance increase. Also, as the number of characters and long sentences in narratives increases, loan funding increases, whereas loan performance suffers. These conclusions remain valid after robustness checks.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 156-171
Issue: 1
Volume: 30
Year: 2023
Month: 01
X-DOI: 10.1080/16081625.2021.1934707
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1934707
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# input file: RAAE_A_1871041_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Jingyu Yang
Author-X-Name-First: Jingyu
Author-X-Name-Last: Yang
Author-Name: John Z. Zhang
Author-X-Name-First: John Z.
Author-X-Name-Last: Zhang
Title: The inevitable disclosure doctrine and CEO risk-taking incentives
Abstract:
This study investigates the impact of the inevitable disclosure doctrine (IDD) on risk-taking incentives of chief executive officers (CEOs). Because the IDD restricts CEOs’ external employment opportunities, we expect CEOs to become more risk-averse and firms to increase CEO risk-taking incentives after IDD adoption. Consistent with expectations, we find that IDD adoption is associated with higher CEO risk-taking incentives, measured by the sensitivity of CEOs’ equity holdings to stock return volatility (Vega). The positive impact of IDD adoption on CEO risk-taking incentives is stronger for firms in more homogeneous industries and for CEOs in the later years of their tenure.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 120-138
Issue: 1
Volume: 30
Year: 2023
Month: 01
X-DOI: 10.1080/16081625.2020.1871041
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1871041
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# input file: RAAE_A_1952084_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Yuto Yoshinaga
Author-X-Name-First: Yuto
Author-X-Name-Last: Yoshinaga
Author-Name: Makoto Nakano
Author-X-Name-First: Makoto
Author-X-Name-Last: Nakano
Title: Aggregate earnings informativeness and economic shocks: international evidence
Abstract:
Our study proposes the usage of aggregate earnings to forecast future GDP growth. Using empirical analyses with global quarterly data, we investigate whether aggregate-level profitability drivers, which are components of aggregate earnings, are relevant for forecasting GDP growth. After confirming that aggregate-level profitability drivers are useful for forecasting future GDP growth worldwide, we show that considering the effects of crises improves the forecast model of GDP growth. In addition, we suggest that predicting GDP growth using aggregate-level profitability drivers is relevant for stock valuation in developed countries, but not in emerging countries.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 196-211
Issue: 1
Volume: 30
Year: 2023
Month: 01
X-DOI: 10.1080/16081625.2021.1952084
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1952084
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:1:p:196-211
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# input file: RAAE_A_1953389_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Sung-Jin Park
Author-X-Name-First: Sung-Jin
Author-X-Name-Last: Park
Author-Name: Emeka T. Nwaeze
Author-X-Name-First: Emeka T.
Author-X-Name-Last: Nwaeze
Title: Earnings and cash flow comparability in executive compensation
Abstract:
We examine whether cross-firm comparability of earnings and operating cash flows influence the usefulness of earnings and cash flows in CEO compensation. We find that earnings (cash flow) comparability is positively associated with the compensation weight of earnings (cash flow) and negatively associated with the weight of cash flow (earnings), suggesting a substitution effect between earnings and cash flow measures. We also find that peer firms ‘stock returns get less negatively associated with CEO compensation as a firm’s earnings comparability increases, suggesting that the filtering role of stock return-based relative performance evaluation decreases as earnings comparability increases.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 72-95
Issue: 1
Volume: 30
Year: 2023
Month: 01
X-DOI: 10.1080/16081625.2021.1953389
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1953389
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# input file: RAAE_A_1910049_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Hui-Ling Chung
Author-X-Name-First: Hui-Ling
Author-X-Name-Last: Chung
Author-Name: Hung-Yi Chen
Author-X-Name-First: Hung-Yi
Author-X-Name-Last: Chen
Author-Name: Yan-Shu Lin
Author-X-Name-First: Yan-Shu
Author-X-Name-Last: Lin
Title: Strategic decisions of a multi-product firm under Bertrand competition
Abstract:
This research examines three strategies that a multi-product firm can adopt when facing a single-product entrant under Bertrand competition: (i) staying in the duopoly market, (ii) abandoning the duopoly market, and (iii) bundling the two goods. When the competing good is homogenous, bundling is the most profitable strategy if the product differentiation of the two goods produced by the multi-product firm is not too high. When the competing good is heterogeneous, the preferred strategy of the multi-product firm and the welfare ranking depend on the substitutability of the competing good and the degree of product differentiation between the two goods.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1-13
Issue: 1
Volume: 30
Year: 2023
Month: 01
X-DOI: 10.1080/16081625.2021.1910049
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1910049
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# input file: RAAE_A_1908154_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Long Liu
Author-X-Name-First: Long
Author-X-Name-Last: Liu
Author-Name: Hongkang Xu
Author-X-Name-First: Hongkang
Author-X-Name-Last: Xu
Author-Name: Mai Dao
Author-X-Name-First: Mai
Author-X-Name-Last: Dao
Author-Name: Hua Sun
Author-X-Name-First: Hua
Author-X-Name-Last: Sun
Title: Pilot CEOs and tax avoidance: evidence from machine learning methods
Abstract:
Chief executive officers (CEOs) could use tax avoidance to reduce costs and hence increase firm profits. Nevertheless, the reputation of the firm could be harmed. Prior studies find that firms’ tax avoidance is associated with CEOs’ personality traits. We attempt to predict firms’ engagement in tax avoidance using CEOs’ flying hobby measured by the pilot certificate. Using various advanced machine learning methods, we find that CEOs’ hobby of flying airplanes is significantly associated with increased corporate tax avoidance. In particular, we find CEOs with a student, private, or airline transport pilot certificate are more likely to engage in corporate tax avoidance while CEOs with a commercial pilot certificate are less likely to engage in corporate tax avoidance. This study advances prior literature and helps investors, regulators, and policymakers to predict firms’ tax avoidance strategies using executives’ hobby.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 14-29
Issue: 1
Volume: 30
Year: 2023
Month: 01
X-DOI: 10.1080/16081625.2021.1908154
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1908154
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# input file: RAAE_A_1947860_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Hsihui Chang
Author-X-Name-First: Hsihui
Author-X-Name-Last: Chang
Author-Name: Junxiong Fang
Author-X-Name-First: Junxiong
Author-X-Name-Last: Fang
Author-Name: Phyllis Lai Lan Mo
Author-X-Name-First: Phyllis Lai Lan
Author-X-Name-Last: Mo
Title: Auditor career concerns, audit fees and audit quality
Abstract:
This study examines how engagement signing auditors’ career concerns affect audit fees and audit quality. Based on a sample of listed companies in China, we find that audit fees and audit quality are lower for firms audited by auditors in their early years of being signing auditors. Moreover, we find that the results are more pronounced for signing auditors in local Chinese audit firms than those in Big 4. These results may be attributed to differential quality control mechanism and incentive systems. Our results have implications for regulators and audit firms in formulating standards and guidelines on monitoring newly promoted signing auditors.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 30-55
Issue: 1
Volume: 30
Year: 2023
Month: 01
X-DOI: 10.1080/16081625.2021.1947860
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1947860
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# input file: RAAE_A_1915165_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Wenzhen Liu
Author-X-Name-First: Wenzhen
Author-X-Name-Last: Liu
Author-Name: Bin Wang
Author-X-Name-First: Bin
Author-X-Name-Last: Wang
Author-Name: Chuanyu Wang
Author-X-Name-First: Chuanyu
Author-X-Name-Last: Wang
Author-Name: Kefei Han
Author-X-Name-First: Kefei
Author-X-Name-Last: Han
Title: The effect of financial literacy on rural households insurance participation: evidence from farmers in southwest China
Abstract:
This paper analyses the insurance participation of farmers from the perspective of financial literacy. The results suggest that financial literacy can significantly accelerate the participation of farmers in insurance and the types of participation. In addition, when the farmer is female, highly educated, or younger, financial literacy has a greater effect on the participation of insurance than the male, the low educated, or the older. Meanwhile, when the subjective financial literacy of farmers is consistent with the objective’, it is also stronger for the influence of financial literacy on insurance participation and types of insurance participation.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 139-155
Issue: 1
Volume: 30
Year: 2023
Month: 01
X-DOI: 10.1080/16081625.2021.1915165
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1915165
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# input file: RAAE_A_2020665_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Ting Zhang
Author-X-Name-First: Ting
Author-X-Name-Last: Zhang
Author-Name: Gaoliang Tian
Author-X-Name-First: Gaoliang
Author-X-Name-Last: Tian
Author-Name: Hua Feng
Author-X-Name-First: Hua
Author-X-Name-Last: Feng
Title: Role of stock price informativeness in shaping non-GAAP earnings disclosures
Abstract:
Using 107,411 firm-quarter observations from 2004 to 2017, we find that managers are less likely to report non-GAAP earnings with the increase of stock price informativeness, suggesting that information from stock prices discourages non-GAAP reporting from firm managers. We further show that stock price informativeness influences managerial incentive of non-GAAP reporting through two channels: (a) direct monitoring and (b) the improvement in the information environment. Accordingly, we find that the constraining effect is more pronounced when a firm’s monitoring mechanisms are weak and when the pre-disclosure information environments are poor. In addition, we find that the quality of non-GAAP earnings improves with the increase of stock price informativeness. Collectively, our results are consistent with the notion that information from the secondary stock price plays an important role in guiding managerial non-GAAP earnings disclosures.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 266-283
Issue: 1
Volume: 30
Year: 2023
Month: 01
X-DOI: 10.1080/16081625.2021.2020665
File-URL: http://hdl.handle.net/10.1080/16081625.2021.2020665
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:1:p:266-283
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# input file: RAAE_A_1879658_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Xun Li
Author-X-Name-First: Xun
Author-X-Name-Last: Li
Author-Name: Xue Jiang
Author-X-Name-First: Xue
Author-X-Name-Last: Jiang
Author-Name: Yang Yang
Author-X-Name-First: Yang
Author-X-Name-Last: Yang
Title: Learning by P2P bidding
Abstract:
Most of peer-to-peer (P2P) online borrowers are small business managers. Learning behavior of them is under-analyzed in the literature of P2P online lending. Using a large sample from one of the China’s largest online P2P lending marketplaces- renrendai.com, we examine whether a borrower in the P2P lending market has a learning behavior when he/she bids interest rates for a loan. We validate the existence of learning behavior in the interest rate bidding, in which they learn from the previous experience and adjust the interest rates downward, so that they can obtain finance at a lower cost. Further analysis shows the heterogeneity across gender and education. We find that female borrowers and highly educated borrowers are more effective in the learning process. Robustness check further supports our hypothesis. Our findings point to the importance of providing financial education for groups of low education level. Managerial implications are discussed.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 96-119
Issue: 1
Volume: 30
Year: 2023
Month: 01
X-DOI: 10.1080/16081625.2021.1879658
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1879658
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# input file: RAAE_A_2020670_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Tzu-Ching Weng
Author-X-Name-First: Tzu-Ching
Author-X-Name-Last: Weng
Author-Name: Hsin-Yi Chi
Author-X-Name-First: Hsin-Yi
Author-X-Name-Last: Chi
Author-Name: Huan-Yi Li
Author-X-Name-First: Huan-Yi
Author-X-Name-Last: Li
Title: Auditors’ response to family succession: evidence from China
Abstract:
This study examines the association between family succession and audit pricing. Auditors are interested in the successor’s capability, and they are incentivized to include this information in their audit pricing. A unique manually gathered dataset from China shows higher audit fees paid by second-generation family firms. However, compared with top-tier auditors, non-top-tier auditors charge lower audit fees to retain their engagement with family successors. Furthermore, auditors are more sensitive to successors’ personality characteristics, such as overseas education, business-related bachelor’s degree, business career experience, political connections, and succession age.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 247-265
Issue: 1
Volume: 30
Year: 2023
Month: 01
X-DOI: 10.1080/16081625.2021.2020670
File-URL: http://hdl.handle.net/10.1080/16081625.2021.2020670
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:1:p:247-265
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# input file: RAAE_A_1976227_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Chong Guo
Author-X-Name-First: Chong
Author-X-Name-Last: Guo
Author-Name: Huisu Lai
Author-X-Name-First: Huisu
Author-X-Name-Last: Lai
Author-Name: Yalin Jiang
Author-X-Name-First: Yalin
Author-X-Name-Last: Jiang
Author-Name: Yingyu Wu
Author-X-Name-First: Yingyu
Author-X-Name-Last: Wu
Title: Debt finance and environmental performance of heavily polluting companies in China: the perspective of the green credit guideline policy
Abstract:
The improvement of environmental performance (EP) of heavily polluting (HP) firms is critical to green development in China. In this research, we examine the impact of debt finance on HP firms’ EP in the context of China’s Green Credit Guidelines (GCGs) policy. Debt finance was found to have a positive impact on HP firms’ EP, and this finding is robust to a battery of tests. Additional tests reveal that this impact is exerted through corporate environmental investment. Moreover, our results suggest that the positive impact strengthens as government support increases. The heterogeneity analysis shows that the positive association between debt finance and EP of HP companies is more prominent in state-owned enterprises and HP firms located in the central and western regions. The above conclusions provide policy implications for the authorities of emerging economies seeking sustainable development.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 212-229
Issue: 1
Volume: 30
Year: 2023
Month: 01
X-DOI: 10.1080/16081625.2021.1976227
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1976227
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# input file: RAAE_A_1947859_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949
Author-Name: Chih-Hsien Liao
Author-X-Name-First: Chih-Hsien
Author-X-Name-Last: Liao
Author-Name: Ziyao San
Author-X-Name-First: Ziyao
Author-X-Name-Last: San
Author-Name: Albert Tsang
Author-X-Name-First: Albert
Author-X-Name-Last: Tsang
Author-Name: Miao Yu
Author-X-Name-First: Miao
Author-X-Name-Last: Yu
Title: Executive extraversion and voluntary disclosure: evidence from management earnings forecasts
Abstract:
In this study we examine whether and how extravert key executives in firms affect the provision of management earnings forecasts and the associated stock market reactions. We provide evidence that firms with extraverted chief financial officers (CFOs) tend to issue more earnings forecasts, earnings forecasts with a higher level of disaggregation, and earnings forecasts accompanied by supplementary information. However, earnings forecasts issued by extraverted CFOs are also less timely, less accurate, and more optimistic. Further analyses show that investors tend to react more strongly to earnings forecasts issued by firms with extraverted CFOs. Our findings therefore suggest that although earnings forecasts issued by extraverted CFOs are not necessarily of better quality, the stock market reactions associated with such forecasts are generally positive.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 56-71
Issue: 1
Volume: 30
Year: 2023
Month: 01
X-DOI: 10.1080/16081625.2021.1947859
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1947859
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# input file: RAAE_A_1976229_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Lili Jiu
Author-X-Name-First: Lili
Author-X-Name-Last: Jiu
Author-Name: Shiyang Hu
Author-X-Name-First: Shiyang
Author-X-Name-Last: Hu
Author-Name: Yuanyuan Liu
Author-X-Name-First: Yuanyuan
Author-X-Name-Last: Liu
Title: Does financial statement comparability mitigate corporate frauds in an emerging market? Evidence from China
Abstract:
In this paper, we empirically examine whether financial statement comparability mitigates corporate fraud in China. Using the FSC measure proposed by De Franco, Kothari and Verdi (2011), we find that firms with greater comparability are less likely to commit frauds, either accounting – or non-accounting-related frauds. Further tests confirm that regulators can more quickly detect the fraudulent activities of accused firms if their financial statements are more comparable with those of their same-industry peers. Cross-sectional analyses show that the negative relationship between FSC and fraud incidence is more pronounced for firms with lower institutional ownership, and for those operating in regions with more developed markets. Overall, our study provides evidence for the benefits of peer comparisons in the fraud context, and has implications for investors, regulators, and standard setters.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 391-408
Issue: 2
Volume: 30
Year: 2023
Month: 03
X-DOI: 10.1080/16081625.2021.1976229
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1976229
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# input file: RAAE_A_1872033_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Dengjun Zhang
Author-X-Name-First: Dengjun
Author-X-Name-Last: Zhang
Title: Impacts of credit constraints on innovation propensity and innovation performance: evidence from China and India
Abstract:
In the literature, researchers generally focus on the impact of credit constraints on innovation activities as a whole. In this study, we investigated how a firm’s financial status affects its adoption of product, process, or organizational innovations and the contribution of the individual innovation activities to innovation performance. Our empirical results indicate that financial constraints restrain Chinese firms’ engagement in all types of innovation, reduce Indian firms’ motivation to engage in product innovation, and force Indian firms to undertake organizational innovation. Consistency between the impacts of financial status on innovation propensity and innovation performance is further discussed.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 304-326
Issue: 2
Volume: 30
Year: 2023
Month: 03
X-DOI: 10.1080/16081625.2021.1872033
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1872033
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:2:p:304-326
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# input file: RAAE_A_1848594_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Rui Xiang
Author-X-Name-First: Rui
Author-X-Name-Last: Xiang
Author-Name: Wenyan Zhu
Author-X-Name-First: Wenyan
Author-X-Name-Last: Zhu
Title: Academic independent directors and corporate fraud: evidence from China
Abstract:
This paper examined the effect of academic independent directors on the incidence of corporate fraud in a sample of listed Chinese companies from 2007 to 2017. A significant inhibitory effect on fraudulent activities was found when academic directors were on the board, which was stronger when the academic directors were highly reputable or from legal and accounting backgrounds. Negative relationships between academic directors and the likelihood of fraud commission and positive relationships for the likelihood of fraud detection were also proven. This study highlighted the corporate fraud prevention effect that academic independent directors can have on company operations.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 285-303
Issue: 2
Volume: 30
Year: 2023
Month: 03
X-DOI: 10.1080/16081625.2020.1848594
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1848594
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# input file: RAAE_A_1887747_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Qingquan Tang
Author-X-Name-First: Qingquan
Author-X-Name-Last: Tang
Author-Name: Jingjing Guo
Author-X-Name-First: Jingjing
Author-X-Name-Last: Guo
Author-Name: Shiyun Zeng
Author-X-Name-First: Shiyun
Author-X-Name-Last: Zeng
Title: Do insiders facing pledging risks make risky corporate investments? Evidence from Chinese M&As
Abstract:
Prior studies find that insiders facing pledging risks pass up risky projects to preserve their private benefits of control. However, we find that firms with controlling shareholders’ share pledges (CSSP) tend to initiate mergers and acquisitions (M&As), which signal good news and prevent the stock price from falling. This phenomenon is more pronounced in non-state-owned enterprises (non-SOEs) and firms with negative market responses on the announcement date of share pledges. Additionally, due to cost control considerations, a firm with CSSP will choose small-size targets and complete M&As in a short time. Nevertheless, the long-term performance of such M&As is worse.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 354-372
Issue: 2
Volume: 30
Year: 2023
Month: 03
X-DOI: 10.1080/16081625.2021.1887747
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1887747
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# input file: RAAE_A_1808798_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Nezir Köse
Author-X-Name-First: Nezir
Author-X-Name-Last: Köse
Author-Name: Çağlayan Aslan
Author-X-Name-First: Çağlayan
Author-X-Name-Last: Aslan
Title: The effect of real exchange rate uncertainty on Turkey’s foreign trade: new evidences from SVAR model
Abstract:
In this study, the relationship between exchange rate uncertainty and Turkey’s foreign trade performance is analyzed using monthly data from 2002:01 to 2017:12 via Structural VAR (SVAR) model. The empirical results indicate that domestic income and import have more impact on Turkey’s export. Moreover, domestic income, exchange rate and exchange rate uncertainty are effective on Turkey’s import. These results imply that Turkey’s export is dependent on imported inputs more than the exchange rate and exchange rate uncertainties.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 553-567
Issue: 2
Volume: 30
Year: 2023
Month: 03
X-DOI: 10.1080/16081625.2020.1808798
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1808798
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:2:p:553-567
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# input file: RAAE_A_1976226_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Yun Wang
Author-X-Name-First: Yun
Author-X-Name-Last: Wang
Author-Name: Xiaoguang Yang
Author-X-Name-First: Xiaoguang
Author-X-Name-Last: Yang
Title: The information advantage from existing bank-firm relationships -evidence from new clients’ screening
Abstract:
Using a unique dataset from 17 major banks in China, we investigate whether related firms serve as an alternative information channel. We find that compared with new clients with no related firms, new clients with related firms are less likely to default. And the difference in default rates becomes more pronounced when new clients have multiple related firms or the related firms have intense relationships with the bank. Moreover, this difference increases with new clients’ degree of information asymmetry. Our results suggest that the existing bank-firm relationships from related firms play an important role in the screening process.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 409-428
Issue: 2
Volume: 30
Year: 2023
Month: 03
X-DOI: 10.1080/16081625.2021.1976226
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1976226
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:2:p:409-428
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# input file: RAAE_A_1787851_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Qi Shi
Author-X-Name-First: Qi
Author-X-Name-Last: Shi
Author-Name: bin li
Author-X-Name-First: bin
Author-X-Name-Last: li
Title: The evaluation and comparison of three benchmark asset pricing models with daily data: supplementary evidence
Abstract:
Recent studies advocate two new benchmark models (the Fama-French five-factor model and the Hou, Xue and Zhang four-factor model) with monthly data. Our daily data approach provides considerable supplement to the monthly data approach presented in recent studies. We adopt the advanced bootstrap methodology by replicating the original data sample, and this approach should effectively alleviate the problem of too much noise in the data of daily return. A two-pass cross-sectional regression and GMM with several useful testing statistics are used to more thoroughly diagnose the specifications of the model. The following consistency is observed when using different frequencies of sample data: the evidence indicates that the two newer benchmark models (the Fama-French five-factor model and the Hou, Xue and Zhang four-factor model) outperform the Fama-French three-factor model in estimating a few well-known portfolios (formed on different anomalies). However, several specification tests do not robustly accept the correct specifications of the Fama-French five-factor model and the Hou, Xue and Zhang four-factor model.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 514-530
Issue: 2
Volume: 30
Year: 2023
Month: 03
X-DOI: 10.1080/16081625.2020.1787851
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1787851
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# input file: RAAE_A_1787850_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Young Zik Shin
Author-X-Name-First: Young Zik
Author-X-Name-Last: Shin
Author-Name: Yong Gyu Lee
Author-X-Name-First: Yong Gyu
Author-X-Name-Last: Lee
Author-Name: Myung Seok Park
Author-X-Name-First: Myung Seok
Author-X-Name-Last: Park
Title: The use of non-financial performance measures in CEO compensation contracts and stock price crash risk
Abstract:
This study examines whether the use of non-financial performance measures (NFPMs) in chief executive officer (CEO) compensation contracts is related to stock price crash risk. The literature on NFPMs suggests that incorporating NFPMs into executive compensation contracts motivates managers to engage less in short-term oriented behaviors such as earnings management, while the literature on crash risk focuses on short-term oriented behaviors, such as bad news hoarding, as the main cause for stock price crashes. Based largely on these literatures, we predict that the use of NFPMs in CEO compensation contracts reduces managers’ tendency to hide bad news primarily by over-estimating accruals, thereby leading to a decline in future crash risk. Consistent with this prediction, we find a negative association between the use of NFPMs and subsequent crash risk. Overall, this study enhances our understanding of stock price implications of incorporating NFPMs into CEO compensation contracts.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 531-552
Issue: 2
Volume: 30
Year: 2023
Month: 03
X-DOI: 10.1080/16081625.2020.1787850
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1787850
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# input file: RAAE_A_1930942_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Taichi Kimura
Author-X-Name-First: Taichi
Author-X-Name-Last: Kimura
Author-Name: Takahiro Morimitsu
Author-X-Name-First: Takahiro
Author-X-Name-Last: Morimitsu
Title: Cost-based pricing in government procurements with unobservable cost-reducing actions and productivity
Abstract:
The effective and efficient implementation of government procurement improves social welfare, however, governments and policymakers struggle to refine contract arrangements. To investigate the optimal contract scheme, we analyze a hybrid model of moral hazard and adverse selection. We show that the contract price is higher when the firm’s cost–reducing capacity is unobservable than when it is observable. Moreover, the effect of the unobservability of the firm’s cost–reducing capacity becomes more severe as the information asymmetry between the government and the firm increases. We contribute to the literature by clarifying how information asymmetry leads to higher contract prices.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 373-390
Issue: 2
Volume: 30
Year: 2023
Month: 03
X-DOI: 10.1080/16081625.2021.1930942
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1930942
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# input file: RAAE_A_1878910_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Yahui An
Author-X-Name-First: Yahui
Author-X-Name-Last: An
Author-Name: Fei Su
Author-X-Name-First: Fei
Author-X-Name-Last: Su
Title: Do internet stock message boards influence firm value? evidence from China
Abstract:
This study examines whether Internet stock message boards influence firm value in China. By analyzing data on online posts manually collected from a Chinese stock message board over the period from 2007 to 2018, we find that more online posts lead to greater firm value. Besides, the impact of stock message boards on firm value is more pronounced for firms with higher idiosyncratic risk. We further examine the mechanisms underlying the positive association between online posts and firm value. We find that more online posts contribute to a larger shareholder base and more retail investors’ trading, which potentially increases the degree of investor recognition and therefore enhances firm value. The results are robust to instrumental variable approaches and alternative model specifications. Overall, this study provides a new understanding of the effect of social media on financial market.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 327-353
Issue: 2
Volume: 30
Year: 2023
Month: 03
X-DOI: 10.1080/16081625.2021.1878910
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1878910
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# input file: RAAE_A_1995888_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Jiao Xue
Author-X-Name-First: Jiao
Author-X-Name-Last: Xue
Title: The effect of mandatory corporate social responsibility on firm’s cash holdings
Abstract:
This study investigates the effect of mandatory Corporate Social Responsibility (CSR) disclosure on corporate cash holdings in China. We use the enactment of a policy mandating a group of firms to disclose their CSR activities as a quasi-natural experiment and find that mandatory CSR disclosure can significantly reduce corporate cash holdings. We identify three channels and their corresponding mechanisms through which mandatory CSR disclosure may affect corporate cash holdings. Mandatory CSR disclosure decreases corporate cash holdings by alleviating financing constraints, improving corporate governance and increasing risk-taking capacity. Further analysis indicates that the reduction in cash holdings due to mandatory CSR disclosure improves firm value.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 470-489
Issue: 2
Volume: 30
Year: 2023
Month: 03
X-DOI: 10.1080/16081625.2021.1995888
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1995888
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# input file: RAAE_A_1995887_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Zhaohui Ke
Author-X-Name-First: Zhaohui
Author-X-Name-Last: Ke
Author-Name: Lihong Wang
Author-X-Name-First: Lihong
Author-X-Name-Last: Wang
Author-Name: Yujia Yin
Author-X-Name-First: Yujia
Author-X-Name-Last: Yin
Title: Corporate cash holdings under Sino-US trade conflict: evidence from China
Abstract:
This study examines the impact of Sino-US trade conflict on the corporate cash holdings of China’s listed foreign-trade companies with sanctioned US business. Employing a DID method, we utilize a sample of 207 foreign-trade companies with sanctioned US business and 832 foreign-trade companies without US business from 2016 to 2019. Our results show that Sino-US trade conflict has stimulated cash holdings in foreign-trade enterprises with sanctioned US business. A large amount of cash holdings exerts a positive effect on corporate performance, especially in poorly performing firms. This relationship is especially pronounced in enterprises with financing constraints and non-state-owned foreign-trade firms.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 448-469
Issue: 2
Volume: 30
Year: 2023
Month: 03
X-DOI: 10.1080/16081625.2021.1995887
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1995887
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# input file: RAAE_A_1993074_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Yi-Hui Tai
Author-X-Name-First: Yi-Hui
Author-X-Name-Last: Tai
Author-Name: Chih-Yang Tseng
Author-X-Name-First: Chih-Yang
Author-X-Name-Last: Tseng
Title: Information content of holding investor conferences: the case of Taiwan’s semiconductor supply chain
Abstract:
Investor conference has been adapted from conference call but allows substantial managerial controllability over its timing and disclosures during the meeting. The announcement of holding such a meeting is posited to have information content. We examine investors’ positive prospect utilizing the announcements during growth period of Taiwanese semiconductor supply chain (TSSC). TSSC’s disintegration into upstream, midstream, and downstream firms further allows tests for information transfer vertically among three subgroups. We find supportive evidence that all three subgroups show significantly positive cumulative abnormal returns surrounding the upstream firm’s announcement of an upcoming investor conference. Notably, the spillover effect is stronger for industry peers with shorter vertical distance to the announcing firm.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 429-447
Issue: 2
Volume: 30
Year: 2023
Month: 03
X-DOI: 10.1080/16081625.2021.1993074
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1993074
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# input file: RAAE_A_1828107_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Meeok Cho
Author-X-Name-First: Meeok
Author-X-Name-Last: Cho
Author-Name: Wonsuk Ha
Author-X-Name-First: Wonsuk
Author-X-Name-Last: Ha
Author-Name: Yewon Kim
Author-X-Name-First: Yewon
Author-X-Name-Last: Kim
Author-Name: Eugenia Lee
Author-X-Name-First: Eugenia
Author-X-Name-Last: Lee
Author-Name: Woo-Jong Lee
Author-X-Name-First: Woo-Jong
Author-X-Name-Last: Lee
Title: Do donors discount accounting information of nonprofits affiliated with for-profit firms?
Abstract:
Recent anecdotes suggest that shareholdings of for-profit firms by nonprofit organizations engender agency conflicts between donors and managers. Analyzing a unique dataset of nonprofits in Korea, we find evidence that donors of the share-affiliated nonprofits rely less on the program ratio, a primary accounting performance metric in nonprofits, in making subsequent donations than those in unaffiliated nonprofits. We also report that the affiliation effect is primarily driven by individual donors but effectively attenuated by government monitoring. Our results highlight a novel source of agency problems in nonprofits.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 490-513
Issue: 2
Volume: 30
Year: 2023
Month: 03
X-DOI: 10.1080/16081625.2020.1828107
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1828107
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# input file: RAAE_A_2003211_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Yalu Xie
Author-X-Name-First: Yalu
Author-X-Name-Last: Xie
Author-Name: Chong Wang
Author-X-Name-First: Chong
Author-X-Name-Last: Wang
Author-Name: Feng (Harry) Wu
Author-X-Name-First: Feng (Harry)
Author-X-Name-Last: Wu
Title: Is language priced? evidence from bank loan contracting
Abstract:
Previous studies document that firms in countries speaking languages with strong future time reference (FTR), which more sharply dissociates the future from the present, engage in less future-oriented corporate behaviors relating to their default and information risks. We find that strong FTR influences creditors’ pricing of bank loan contracts: banks design more unfavorable loan terms to strong-FTR borrowers, including larger loan spread, higher likelihood of collateral requirement, and more covenants. This effect can be mitigated by a country’s strong governance. We confirm that strong FTR is associated with higher default and information risks of borrowing firms. Overall, our findings suggest that language represents a distinctive risk to banks which is priced in the loan market.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 745-768
Issue: 3
Volume: 30
Year: 2023
Month: 05
X-DOI: 10.1080/16081625.2021.2003211
File-URL: http://hdl.handle.net/10.1080/16081625.2021.2003211
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:3:p:745-768
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# input file: RAAE_A_2020666_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Jian Cao
Author-X-Name-First: Jian
Author-X-Name-Last: Cao
Author-Name: Bin Lin
Author-X-Name-First: Bin
Author-X-Name-Last: Lin
Author-Name: Gennaro Bernile
Author-X-Name-First: Gennaro
Author-X-Name-Last: Bernile
Author-Name: Wei Shu
Author-X-Name-First: Wei
Author-X-Name-Last: Shu
Title: The economic effects of mandated ICFR disclosure in China: an insider perspective
Abstract:
Using a survey of corporate insiders from 1,148 Chinese listed firms, this paper examines the direct effects of compliance with mandated Internal Control over Financial Reporting (ICFR) disclosure. In contrast with their U.S. counterparts, vast majorities of respondents recognize compliance benefits and perceive these benefits to outweigh the costs. However, the degree to which the firm is susceptible to market forces is a major determinant of the effects of compliance. The paper shows the evidence which supports the idea that the effectiveness of mandated ICFR disclosure depends crucially on the broader market and institutional environment in which firms operate.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 707-725
Issue: 3
Volume: 30
Year: 2023
Month: 05
X-DOI: 10.1080/16081625.2021.2020666
File-URL: http://hdl.handle.net/10.1080/16081625.2021.2020666
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# input file: RAAE_A_2007407_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Yong Du
Author-X-Name-First: Yong
Author-X-Name-Last: Du
Author-Name: Xin Sui
Author-X-Name-First: Xin
Author-X-Name-Last: Sui
Author-Name: Wei Wei
Author-X-Name-First: Wei
Author-X-Name-Last: Wei
Author-Name: Jun Du
Author-X-Name-First: Jun
Author-X-Name-Last: Du
Title: Economic policy uncertainty and stock price crash risk
Abstract:
We use the China’s economic policy uncertainty (EPU) index constructed by Baker et al. (2016)to explore the relationship between EPU and stock price crash risk. We find that the increasing of EPU will significantly increase stock price crash risk. After analyzing the mechanism of the relationship between them, we find that economic policy affects stock price crash risk mainly by influencing information asymmetry. More specifically, small enterprises, non-state-owned enterprises, and enterprises in regions with developed economies and high levels of marketization are more sensitive to EPU and are more affected by EPU in terms of stock price crash risk. We also put forward policy implications from both the government and business perspectives.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 667-689
Issue: 3
Volume: 30
Year: 2023
Month: 05
X-DOI: 10.1080/16081625.2021.2007407
File-URL: http://hdl.handle.net/10.1080/16081625.2021.2007407
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:3:p:667-689
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# input file: RAAE_A_1993073_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Feng Cao
Author-X-Name-First: Feng
Author-X-Name-Last: Cao
Author-Name: Xueyan Zhang
Author-X-Name-First: Xueyan
Author-X-Name-Last: Zhang
Author-Name: Jin Liu
Author-X-Name-First: Jin
Author-X-Name-Last: Liu
Title: Comment letter regulation and stock price synchronicity: evidence from China
Abstract:
This paper investigates whether comment letter (CL) regulation affects stock price synchronicity. We find solid evidence that stock exchanges’ CL process can significantly reduce synchronicity, and this effect is attenuated by political connection and state ownership. Further study shows that the negative correlation is more pronounced when CLs address major accounting issues, target firms take longer time to prepare responses, and the responses are accompanied with verifications from related third parties. Our results confirm the positive role of the CL regulation in enhancing firm-specific information disclosure and have implications for the improvement of market efficiency in emerging nations.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 569-593
Issue: 3
Volume: 30
Year: 2023
Month: 05
X-DOI: 10.1080/16081625.2021.1993073
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1993073
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:3:p:569-593
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# input file: RAAE_A_2012703_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Hiroyuki Taguchi
Author-X-Name-First: Hiroyuki
Author-X-Name-Last: Taguchi
Author-Name: Abdukodirov Amirjon
Author-X-Name-First: Abdukodirov
Author-X-Name-Last: Amirjon
Title: Manufacturing exports and institutional qualities in Central Asian countries
Abstract:
This paper evaluates the export values of manufactured goods for the Central Asian countries using a gravity trade model and investigates the roles of institutional qualities in manufacturing exports based on the World Governance Indicators. The findings of this study are summarized as follows. With Kazakhstan being a benchmark country, the remaining four Central Asian countries have downward deviations in manufacturing exports and institutional qualities. Then, the institutional qualities such as control of corruption, government effectiveness and rule of law are identified to be the major factors to explain the differences in the manufacturing exports’ performances.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 769-779
Issue: 3
Volume: 30
Year: 2023
Month: 05
X-DOI: 10.1080/16081625.2021.2012703
File-URL: http://hdl.handle.net/10.1080/16081625.2021.2012703
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:3:p:769-779
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# input file: RAAE_A_2030772_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Meer Hassan Mari
Author-X-Name-First: Meer Hassan
Author-X-Name-Last: Mari
Author-Name: Arifa Bano Talpur
Author-X-Name-First: Arifa Bano
Author-X-Name-Last: Talpur
Author-Name: Muhammad Abbass
Author-X-Name-First: Muhammad
Author-X-Name-Last: Abbass
Author-Name: Muhammad Adil Keerio
Author-X-Name-First: Muhammad
Author-X-Name-Last: Adil Keerio
Title: The impact of economic indicators on an international financial diversification: a long term investment approach
Abstract:
Pakistan is one of the developing countries, whose investors invest out in diversifying long-term portfolio investments in unpredictable nature of the international market. The long-term viewpoint is lacking a systematic study from a perspective of economic indicators (inflation, interest and exchange rate). To address this gap the study attempt to develop a framework for investors of Pakistan by using inferential statistics and Sharp’s performance (SHP) techniques. The findings perceived influence of economic indicators on long-term portfolio investment (based on holdings: Stock and Bond), results indicated USA with (high-risk high return) and UAE (low-risk low return) and find both countries best investment option to invest for long term.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 804-819
Issue: 3
Volume: 30
Year: 2023
Month: 05
X-DOI: 10.1080/16081625.2022.2030772
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2030772
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:3:p:804-819
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# input file: RAAE_A_2003213_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Kambar Farooq
Author-X-Name-First: Kambar
Author-X-Name-Last: Farooq
Author-Name: Chin Man Chui
Author-X-Name-First: Chin Man
Author-X-Name-Last: Chui
Author-Name: Muhammad Azeem
Author-X-Name-First: Muhammad
Author-X-Name-Last: Azeem
Title: Board centrality and investment efficiency
Abstract:
We study whether firms with central network boards influence investment efficiency. The results demonstrate that board centrality enhances investment efficiency and mitigates overinvestment but show an insignificant impact on underinvestment. This asymmetric effect on over and underinvestment can be attributed to different roles played by executive (internal) directors and external directors on the board. Further analysis reveals that the board centrality and investment efficiency relationship is stronger for firms with higher managerial entrenchment and informational asymmetry problems. The findings support the notion that social capital, in the shape of board networks, improves monitoring and information environment, consequently enhancing investment efficiency.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 633-666
Issue: 3
Volume: 30
Year: 2023
Month: 05
X-DOI: 10.1080/16081625.2021.2003213
File-URL: http://hdl.handle.net/10.1080/16081625.2021.2003213
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:3:p:633-666
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# input file: RAAE_A_1770611_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: You Li
Author-X-Name-First: You
Author-X-Name-Last: Li
Author-Name: Zhang Jian
Author-X-Name-First: Zhang
Author-X-Name-Last: Jian
Title: Employee mobility, information transfer and stock price crash risk
Abstract:
This paper examines the asset pricing implications of labor market friction by exploiting the staggered recognition of the Inevitable Disclosure Doctrine (IDD) by U.S. state courts as an exogenous event that adversely impacts employee mobility. After the recognition of the doctrine in their state, firms exhibit a significant increase in stock price crash risk compared to comparable firms in non-affected states. Moreover, the positive impact on a firm’s crash risk only appears after the IDD recognition and is unlikely to be driven by unobservable economic conditions. The effect is more pronounced for firms with higher ex-ante employment mobility, facing more intense competition and higher degrees of entry threats and operated in a stable industry.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 833-848
Issue: 3
Volume: 30
Year: 2023
Month: 05
X-DOI: 10.1080/16081625.2020.1770611
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1770611
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:3:p:833-848
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# input file: RAAE_A_2012702_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Jie Wang
Author-X-Name-First: Jie
Author-X-Name-Last: Wang
Author-Name: Wanwan Wang
Author-X-Name-First: Wanwan
Author-X-Name-Last: Wang
Author-Name: Qinghe Yang
Author-X-Name-First: Qinghe
Author-X-Name-Last: Yang
Title: Regional cultural diversity and corporate philanthropy: evidence from Chinese dialects
Abstract:
This study investigates the impact of regional cultural diversity on corporate philanthropy. We find that regional cultural diversity is negatively associated with corporate philanthropy. The mechanism analyses show that relationship between regional cultural diversity and corporate philanthropy is more pronounced in firms with lower CEO empathy and media coverage, indicating that regional cultural diversity reduces corporate philanthropy by affecting altruistic motive and reputational motive of firms. In addition, the relationship between regional cultural diversity and corporate philanthropy is more pronounced in regions with lower social trust.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 690-706
Issue: 3
Volume: 30
Year: 2023
Month: 05
X-DOI: 10.1080/16081625.2021.2012702
File-URL: http://hdl.handle.net/10.1080/16081625.2021.2012702
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:3:p:690-706
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# input file: RAAE_A_2003713_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Xiaoqing Feng
Author-X-Name-First: Xiaoqing
Author-X-Name-Last: Feng
Author-Name: Wen Wen
Author-X-Name-First: Wen
Author-X-Name-Last: Wen
Author-Name: Yun Ke
Author-X-Name-First: Yun
Author-X-Name-Last: Ke
Author-Name: Ying He
Author-X-Name-First: Ying
Author-X-Name-Last: He
Title: Stock pledges by controlling shareholders and the disclosure of critical audit matters: evidence from China
Abstract:
This paper examines the impact of stock pledges by controlling shareholders on critical audit matters (CAMs) disclosure. We show that there is a positive association between stock pledges by controlling shareholders and the disclosure of CAMs. We also find that the positive effect is more pronounced when auditors are Big Four audit firms. Further analysis reveals that increases in accrual earnings management and controlling shareholders’ entrenchment are possible channels through which stock pledges by controlling shareholders affect the disclosure of CAMs. Auditors disclose more CAMs associated with asset impairment and related-party transactions for firms with controlling shareholders pledging their stocks.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 726-744
Issue: 3
Volume: 30
Year: 2023
Month: 05
X-DOI: 10.1080/16081625.2021.2003713
File-URL: http://hdl.handle.net/10.1080/16081625.2021.2003713
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:3:p:726-744
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# input file: RAAE_A_2020668_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Muhammad Hashim Shah
Author-X-Name-First: Muhammad Hashim
Author-X-Name-Last: Shah
Author-Name: Xiao Zuoping
Author-X-Name-First: Xiao
Author-X-Name-Last: Zuoping
Author-Name: Abdullah Abdullah
Author-X-Name-First: Abdullah
Author-X-Name-Last: Abdullah
Author-Name: Shakir Quresh
Author-X-Name-First: Shakir
Author-X-Name-Last: Quresh
Author-Name: Mushtaq Ahmad
Author-X-Name-First: Mushtaq
Author-X-Name-Last: Ahmad
Author-Name: Muqeet Ahmad
Author-X-Name-First: Muqeet
Author-X-Name-Last: Ahmad
Title: Complex ownership, contract enforcement, creditor rights, and leverage
Abstract:
This study examines the moderating effect of judicial efficiency and creditor rights on the relationship between internal pyramid structure and leverage. The results suggest that the effect of the vertical and horizontal pyramid structures on leverage is positive and significant. We find that the impact of the pyramid’s vertical structure on leverage is more substantial than that of the horizontal structure. The results also reveal that judicial efficiency and creditor rights weaken the association between a complex ownership structure and leverage.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 780-803
Issue: 3
Volume: 30
Year: 2023
Month: 05
X-DOI: 10.1080/16081625.2021.2020668
File-URL: http://hdl.handle.net/10.1080/16081625.2021.2020668
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:3:p:780-803
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# input file: RAAE_A_2003212_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Ziye He
Author-X-Name-First: Ziye
Author-X-Name-Last: He
Author-Name: Jianxin Tang
Author-X-Name-First: Jianxin
Author-X-Name-Last: Tang
Title: Deleveraging policy, leverage management, and firms’ aggressive tax planning
Abstract:
Using data on non-financial firms listed on China’s A-share market from 2011 to 2018, we study how the effect of the China’s deleveraging policies on firms’ tax planning changes with their engagement in leverage management. We find that the effect of the policies on tax planning of over-indebted firms is more negative when they engage in more leverage management. These results are stronger when (1) tax enforcement is less strict; (2) firms are more financially constrained; and (3) firms are non-state-owned enterprises (non-SOEs). These findings increase our understanding of the economic consequences of deleveraging policies and leverage management. They also contribute to the literature on capital structure and corporate tax planning.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 594-618
Issue: 3
Volume: 30
Year: 2023
Month: 05
X-DOI: 10.1080/16081625.2021.2003212
File-URL: http://hdl.handle.net/10.1080/16081625.2021.2003212
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# input file: RAAE_A_2007408_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Zeynep İltüzer
Author-X-Name-First: Zeynep
Author-X-Name-Last: İltüzer
Title: Predicting stock returns with financial ratios: A new methodology incorporating machine learning techniques to beat the market
Abstract:
This study proposes a methodology incorporating machine learning algorithms to predict stock returns and construct portfolios that beat the market. The performance evaluation is based on the statistical metrics as well as the return and Sharpe ratios of the portfolios. Additionally, a new performance evaluation metric, Safe-Side, is introduced to address the needs of conservative portfolio managers and investors. The results provide strong evidence that the machine learning algorithms can be used to predict the stock returns with approximately 86% classification accuracy. The proposed methodology also provides guidance for investors and portfolio managers for their portfolio selection problems.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 619-632
Issue: 3
Volume: 30
Year: 2023
Month: 05
X-DOI: 10.1080/16081625.2021.2007408
File-URL: http://hdl.handle.net/10.1080/16081625.2021.2007408
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# input file: RAAE_A_1934709_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Yujin Kim
Author-X-Name-First: Yujin
Author-X-Name-Last: Kim
Author-Name: Jungin An
Author-X-Name-First: Jungin
Author-X-Name-Last: An
Title: Initial credit ratings and voluntary disclosure : Evidence from Korea
Abstract:
This study examines the effect of initial credit ratings on voluntary disclosure in Korea. Managers are concerned about initial credit ratings because they become the benchmark for future debt issues. Therefore, firms may have incentives to opportunistic disclosure in order to get favorable credit ratings during the initial credit rating evaluation. We find that the frequency of voluntary disclosures at the time of initial credit rating evaluations are greater than during the two accounting periods before and after the evaluation. This study provides insights that firms have incentives to expand voluntary disclosure to obtain favorable initial ratings.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 820-832
Issue: 3
Volume: 30
Year: 2023
Month: 05
X-DOI: 10.1080/16081625.2021.1934709
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1934709
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:3:p:820-832
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# input file: RAAE_A_1871042_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Liangcheng Wang
Author-X-Name-First: Liangcheng
Author-X-Name-Last: Wang
Author-Name: Wenhui Zhu
Author-X-Name-First: Wenhui
Author-X-Name-Last: Zhu
Author-Name: Tao Peng
Author-X-Name-First: Tao
Author-X-Name-Last: Peng
Author-Name: Jie Hu
Author-X-Name-First: Jie
Author-X-Name-Last: Hu
Title: Employee quality and stock price crash risk
Abstract:
Employees are practitioners of firm activities and play an important role in corporate governance, and their quality will affect stock price crash risk. We investigate the effect of employee quality on stock price crash risk. Using a sample of Chinese-listed firms, we find that employee quality has a significant negative influence on stock price crash risk and the effect is only significant in state-owned enterprises and high-tech firms. The findings are robust to an alternative measure of employee quality and controlling for missing variables and endogeneity. We further find that the effect is achieved by improving internal control quality, therefore, internal control plays a mediating role in employee quality and stock price crash risk. Our study provides new empirical evidence for human capital theory of corporate governance, and also provide implications for monitoring stock price crash risk.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1047-1066
Issue: 4
Volume: 30
Year: 2023
Month: 07
X-DOI: 10.1080/16081625.2020.1871042
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1871042
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# input file: RAAE_A_2023025_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Shaner Chu
Author-X-Name-First: Shaner
Author-X-Name-Last: Chu
Author-Name: Erin Oldford
Author-X-Name-First: Erin
Author-X-Name-Last: Oldford
Title: Female directors, R&D activities and firms’ investment efficiency: evidence from China
Abstract:
In this study, we investigate if board composition, namely board gender diversity, constitutes a pathway to more efficient allocation of capital through greater restraint in R&D activities of Chinese-listed companies. Assessing a large panel of Chinese listed firms over the period of 2009–2017, we find a negative relation between board gender diversity and firms’ innovation inputs and outputs. Boards with more female directors exhibit lower investment inefficiency, resulting in better allocating firms’ resources and higher firm performance. This effect is accentuated in state-owned firms, illustrating that female directors help reduce firms’ investment inefficiency especially those controlled by state.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 890-911
Issue: 4
Volume: 30
Year: 2023
Month: 07
X-DOI: 10.1080/16081625.2021.2023025
File-URL: http://hdl.handle.net/10.1080/16081625.2021.2023025
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# input file: RAAE_A_1816184_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Waseem Ahmad Khan
Author-X-Name-First: Waseem Ahmad
Author-X-Name-Last: Khan
Author-Name: Zia Ur Rahman
Author-X-Name-First: Zia Ur
Author-X-Name-Last: Rahman
Author-Name: Jianming Ye
Author-X-Name-First: Jianming
Author-X-Name-Last: Ye
Title: Exploring the potential determinants of Chinese OFDI towards OBOR nations: an application of gravity model
Abstract:
This paper attempts to scrutinize the impact of natural resources, cultural, geographical, and institutional factors on Chinese OFDI toward OBOR signatories by using the Gravity model. The empirical estimates validated a significant positive relationship between China’s and OBOR Partners’ GDP, and the negative influence of geographical distance on Chinese OFDI. Institutional factors (government effectiveness, corruption control, rule of law, voice and accountability, regularity quality) have significant negative, while cultural factors (shared border, common language) have significant positive effect on Chinese OFDI. Also, current findings disclose that the host economy’s natural resources act as key driver for Chinese OFDI in OBOR.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1067-1085
Issue: 4
Volume: 30
Year: 2023
Month: 07
X-DOI: 10.1080/16081625.2020.1816184
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1816184
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:4:p:1067-1085
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# input file: RAAE_A_1828952_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Yi-Hui Tai
Author-X-Name-First: Yi-Hui
Author-X-Name-Last: Tai
Title: The relation between the corporate governance evaluation and abnormal returns: the role of company financial performance
Abstract:
This research investigates the association between the upgrade/downgrade of rankings in corporate governance evaluation exercises and stock price reactions. Using Taiwan equities as the research setting, this study finds that firms receiving an upgraded (downgraded) ranking from corporate governance evaluation exercises do not experience significantly positive (negative) abnormal returns, but there is actually a positive (negative) correlation between such an upgrade (downgrade) after these evaluation exercises as well as abnormal returns under the condition of better company financial performance. This study contributes to the extant literature by shedding additional light on the correlation among corporate governance evaluation exercises, abnormal returns, and company financial performance.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1086-1103
Issue: 4
Volume: 30
Year: 2023
Month: 07
X-DOI: 10.1080/16081625.2020.1828952
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1828952
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:4:p:1086-1103
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# input file: RAAE_A_2054831_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Xi Zhao
Author-X-Name-First: Xi
Author-X-Name-Last: Zhao
Author-Name: Teng Niu
Author-X-Name-First: Teng
Author-X-Name-Last: Niu
Title: Economic policy uncertainty and corporate cash holdings: the mechanism of capital expenditures
Abstract:
This study investigates the relation between economic policy uncertainty (EPU) and cash holdings in China. We find that EPU is positively related to cash holdings. Based on the mediation analysis, our results suggest that capital expenditures represent an important mechanism by which EPU affects cash holdings. However, there are two different theories to explain the mechanism of capital expenditures. Our results are consistent with the precautionary theory, but not with the real options theory. That is, reducing capital expenditures in the presence of higher EPU means weakening investment demands that, in turn, lead to fewer precautionary cash holdings.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 930-950
Issue: 4
Volume: 30
Year: 2023
Month: 07
X-DOI: 10.1080/16081625.2022.2054831
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2054831
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:4:p:930-950
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# input file: RAAE_A_2054435_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Chun-Chou Wu
Author-X-Name-First: Chun-Chou
Author-X-Name-Last: Wu
Author-Name: Wen Xu
Author-X-Name-First: Wen
Author-X-Name-Last: Xu
Title: Volatility forecasting using intraday information with the CARR models for the China stock markets
Abstract:
This study mainly focuses on utilizing the range-based CARR and CARRX models to explore the non-trading effects during the lunch break and overnight periods in volatility changes forecasting for the two stock markets in China. We find that the price difference in absolute values between the close price in day t-1 and the open price in day t are able to predict the volatility change in the morning trading session significantly. The price range during the lunch break and the trading volume change percentage in the morning session appear positive correlation with the volatility in the afternoon trading session.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 912-929
Issue: 4
Volume: 30
Year: 2023
Month: 07
X-DOI: 10.1080/16081625.2022.2054435
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2054435
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:4:p:912-929
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# input file: RAAE_A_1908153_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Abdulaziz Alzeban
Author-X-Name-First: Abdulaziz
Author-X-Name-Last: Alzeban
Title: Internal audit findings, audit committees, and firm performance evidence from UK
Abstract:
Although researchers have paid increasing attention to how corporate governance influences firm performance, there has been limited focus on how the internal audit function impacts firm performance. This study thus examines how the implementation of internal audit recommendations (IIAR) impacts firm performance and whether audit committee characteristics increase or decrease this impact. By using the proportion of implemented recommendations over the total number of internal audit findings to measure IIAR, the results indicate that IIAR drives higher firm performance. Further, certain audit committee characteristics increase the positive effect of IIAR on firm performance. Additional robustness tests support the main results.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 868-889
Issue: 4
Volume: 30
Year: 2023
Month: 07
X-DOI: 10.1080/16081625.2021.1908153
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1908153
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# input file: RAAE_A_2026232_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Xuejiao Zhang
Author-X-Name-First: Xuejiao
Author-X-Name-Last: Zhang
Author-Name: Limei Cao
Author-X-Name-First: Limei
Author-X-Name-Last: Cao
Author-Name: Wanfu Li
Author-X-Name-First: Wanfu
Author-X-Name-Last: Li
Author-Name: Qingyang Zhao
Author-X-Name-First: Qingyang
Author-X-Name-Last: Zhao
Author-Name: Lingwei Li
Author-X-Name-First: Lingwei
Author-X-Name-Last: Li
Title: Does litigation risk increase audit effort?
Abstract:
We examine audit firms’ responses to increased legal liability. Using audit-effort data in China, we find audit firms increase audit effort when they are forced to switch from limited liability corporations (LLCs) to limited liability partnerships (LLPs). Audit fees also increase after the switch from LLCs to LLPs. Furthermore, we show the increase in audit effort is greater for clients that are in financial distress and for clients that report higher discretionary accruals. Overall, our study suggests audit firms respond to increased legal liability by increasing their audit effort, and the increase in audit effort is more pronounced for risky clients.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 951-970
Issue: 4
Volume: 30
Year: 2023
Month: 07
X-DOI: 10.1080/16081625.2022.2026232
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2026232
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:4:p:951-970
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# input file: RAAE_A_2047743_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Bo Zhang
Author-X-Name-First: Bo
Author-X-Name-Last: Zhang
Author-Name: Fan Ping
Author-X-Name-First: Fan
Author-X-Name-Last: Ping
Author-Name: Limei Yang
Author-X-Name-First: Limei
Author-X-Name-Last: Yang
Title: Managerial academic experience and tone management: evidence from China
Abstract:
We examine the effect of managerial academic experience on tone management in the corporate annual report. We find that managerial academic experience reduces the likelihood of upward tone management. Furthermore, we find that the impact of academic experience on tone management is intensified when managers have stronger incentives to upwardly manage financial reporting tone and when the outside monitoring environment is weaker. The results hold under a variety of robustness tests. This study enriches the relevant research on executive characteristics and tone management, and the conclusion of this paper provides practical implications to improve the quality of information disclosure.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1104-1119
Issue: 4
Volume: 30
Year: 2023
Month: 07
X-DOI: 10.1080/16081625.2022.2047743
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2047743
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:4:p:1104-1119
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# input file: RAAE_A_2054833_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Yasuhiko Nakamura
Author-X-Name-First: Yasuhiko
Author-X-Name-Last: Nakamura
Title: Corporate social responsibility and endogenous competition structure in an industry composed of asymmetric firms with managerial delegation
Abstract:
This study focuses on the endogenous choice between price and quantity contracts in a duopoly composed of asymmetric firms that care about corporate social responsibility (CSR) with managerial delegation. We find that the optimal strategy of a firm that cares about social welfare does not depend on both the degree of homogeneity of goods and the degrees of importance of CSR, while the that of one that cares about consumer surplus strictly depends on the degree on importance of CSR within its rival firm.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 971-985
Issue: 4
Volume: 30
Year: 2023
Month: 07
X-DOI: 10.1080/16081625.2022.2054833
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2054833
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:4:p:971-985
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# input file: RAAE_A_1977663_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Hyungjin Cho
Author-X-Name-First: Hyungjin
Author-X-Name-Last: Cho
Author-Name: Ga-Young Choi
Author-X-Name-First: Ga-Young
Author-X-Name-Last: Choi
Title: Managerial ability and revenue-expense matching: accrual estimation versus real business decision
Abstract:
We investigate the association between managerial ability and revenue-expense matching. We find that firms having more capable managers exhibit a better contemporaneous revenue-expense matching, partly attributable to their ability at accrual estimation. We also find that the association between current revenue and past expense is weaker for firms having more talented managers due to cash flow effects. These findings are robust to a battery of control variables and to alternative proxies of managerial ability. Our study indicates that the relation between managerial ability and earnings attribute could be a function of accrual estimation process as well as real business decision. JEL codes: G32.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1120-1135
Issue: 4
Volume: 30
Year: 2023
Month: 07
X-DOI: 10.1080/16081625.2021.1977663
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1977663
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:4:p:1120-1135
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# input file: RAAE_A_1870508_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Hail Park
Author-X-Name-First: Hail
Author-X-Name-Last: Park
Author-Name: Jong Chil Son
Author-X-Name-First: Jong Chil
Author-X-Name-Last: Son
Title: The effectiveness of monetary policy instruments under dollarization: a cross-country analysis
Abstract:
This paper investigates the effectiveness of monetary policy instruments under dollarization in association with economic growth and inflation using 30 countries from 2000 to 2016. The estimation results indicate that first, the monetary aggregates, M2, are more relevant policy instruments while the interest rates including policy rates exhibit overall limited effectiveness under dollarization. Second, the effectiveness of monetary aggregates in association with economic growth is more significant and sizable in the countries with floating exchange rates. Finally, the relevancy of interest rate rules for monetary policies is relatively improved for the de-dollarization countries.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1029-1046
Issue: 4
Volume: 30
Year: 2023
Month: 07
X-DOI: 10.1080/16081625.2020.1870508
File-URL: http://hdl.handle.net/10.1080/16081625.2020.1870508
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:4:p:1029-1046
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# input file: RAAE_A_2047741_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Bo Zhang
Author-X-Name-First: Bo
Author-X-Name-Last: Zhang
Author-Name: Ruixue Zhou
Author-X-Name-First: Ruixue
Author-X-Name-Last: Zhou
Author-Name: Limei Yang
Author-X-Name-First: Limei
Author-X-Name-Last: Yang
Author-Name: Ximeng Zhang
Author-X-Name-First: Ximeng
Author-X-Name-Last: Zhang
Title: Population aging and corporate innovation: evidence from China
Abstract:
Using a sample of Chinese listed firms from 2007 to 2017, this study documents that corporate innovation is negatively associated with population aging, indicating that the aging workforce impedes corporate innovation. We further find evidence suggesting that education and stock-based incentive plans are two ways to alleviate the negative impact of population aging on corporate innovation. Our study complements existing research investigating the determinants of corporate innovation and extends the literature examining the economic consequences of population aging. This study also sheds light on the critical role of non-executive employees on corporate innovation.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 986-1007
Issue: 4
Volume: 30
Year: 2023
Month: 07
X-DOI: 10.1080/16081625.2022.2047741
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2047741
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:4:p:986-1007
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# input file: RAAE_A_2047742_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Yanyu Chen
Author-X-Name-First: Yanyu
Author-X-Name-Last: Chen
Author-Name: Lin Zhu
Author-X-Name-First: Lin
Author-X-Name-Last: Zhu
Author-Name: Zhihong Yi
Author-X-Name-First: Zhihong
Author-X-Name-Last: Yi
Title: Operating leverage and corporate cash holdings: evidence from China
Abstract:
This study examines the effect of operating leverage on firms’ cash holdings. We find that operating leverage can effectively increase corporate cash holdings. This effect is more pronounced among the firms with higher operating risks and asset specificity, indicating that operating risks and adjustment costs are two critical channels through which operating leverage increases cash holdings. The positive effect of operating leverage on firm’s cash holdings is only significant among the firms whose sales revenue grows discontinuously and rejects the alternative explanation. Our further study identifies that operating leverage can enhance the positive effect of cash holdings on firm value.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1008-1028
Issue: 4
Volume: 30
Year: 2023
Month: 07
X-DOI: 10.1080/16081625.2022.2047742
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2047742
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:4:p:1008-1028
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# input file: RAAE_A_1987937_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Xiaoyan Lu
Author-X-Name-First: Xiaoyan
Author-X-Name-Last: Lu
Author-Name: Manni Zheng
Author-X-Name-First: Manni
Author-X-Name-Last: Zheng
Title: Policy uncertainty and corporate innovation in a transitional economy: evidence from China
Abstract:
This paper systematically studies whether external shocks of mayor turnover in prefecture level cities in China, proxied for policy uncertainty, result in a reduction of firms’ R&D spending. We find that policy uncertainty is negatively correlated with firms’ R&D spending under mayor turnover. This finding only exists in state-owned enterprises (SOEs) that are inherently and closely connected with regional governments. The negative effect between R&D spending and policy uncertainty is more profound for SOEs operating in an uncertain macroeconomic environment, facing high risk and having financial constraints.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 849-867
Issue: 4
Volume: 30
Year: 2023
Month: 07
X-DOI: 10.1080/16081625.2021.1987937
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1987937
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:4:p:849-867
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# input file: RAAE_A_2067880_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Dong Chen
Author-X-Name-First: Dong
Author-X-Name-Last: Chen
Author-Name: Limin Cheng
Author-X-Name-First: Limin
Author-X-Name-Last: Cheng
Author-Name: Rui Fan
Author-X-Name-First: Rui
Author-X-Name-Last: Fan
Author-Name: Shangkun Liang
Author-X-Name-First: Shangkun
Author-X-Name-Last: Liang
Title: Payroll tax shields and wage stickiness:evidence from China’s 2008 corporate income tax law
Abstract:
Labor-cost adjustment has become an increasingly significant factor in enterprise development and economic growth, yet labor costs have proved ‘sticky’: more likely to rise with increasing revenue than fall when revenues decline. Although tax policies play an important role in wage determination, there is little research on how they affect wage stickiness. We treat China’s tax-reforming 2008 Corporate Income Tax Law as a shock and find that increases in nominal tax rates enhance wage stickiness in relation to ordinary employees but not executive compensation. The effect is most pronounced in enterprises with higher long-term debt ratios, state-owned enterprises, and labor-intensive industries.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1204-1225
Issue: 5
Volume: 30
Year: 2023
Month: 09
X-DOI: 10.1080/16081625.2022.2067880
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2067880
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:5:p:1204-1225
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# input file: RAAE_A_2067197_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Sheng Yao
Author-X-Name-First: Sheng
Author-X-Name-Last: Yao
Author-Name: ZhiPeng Zhang
Author-X-Name-First: ZhiPeng
Author-X-Name-Last: Zhang
Author-Name: Chen-Miao Lin
Author-X-Name-First: Chen-Miao
Author-X-Name-Last: Lin
Title: GDP manipulation and environmental information disclosure: evidence from China
Abstract:
We investigate the relation between gross domestic product (GDP) manipulation at the government level and the quality of firms’ environmental information disclosures. Using a sample of Chinese firms, we find that firms in the cities where GDP is manipulated by local leaders are more likely to disclose environmental information by using soft and unverifiable information. We also find that the results are stronger for state-owned companies, for high-polluting firms, and for firms with low-quality internal control. We further find that GDP manipulation is negatively associated with the level of trust in local government, which could potentially explain the relation between GDP manipulation and soft disclosures. This is the first study to investigate the influence of local politicians, who have incentives to inflate GDP growth, on a firm’s disclosure quality.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1165-1183
Issue: 5
Volume: 30
Year: 2023
Month: 09
X-DOI: 10.1080/16081625.2022.2067197
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2067197
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:5:p:1165-1183
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# input file: RAAE_A_2077779_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Jie Wu
Author-X-Name-First: Jie
Author-X-Name-Last: Wu
Author-Name: Jacob Wood
Author-X-Name-First: Jacob
Author-X-Name-Last: Wood
Author-Name: Keun-Yeob Oh
Author-X-Name-First: Keun-Yeob
Author-X-Name-Last: Oh
Author-Name: Yilin Li
Author-X-Name-First: Yilin
Author-X-Name-Last: Li
Author-Name: Md Iqbal Bhuyan
Author-X-Name-First: Md Iqbal
Author-X-Name-Last: Bhuyan
Title: Impact of TBT and SPS measures on domestic value-added exports: evidence from the United States
Abstract:
This study explores the impact that TBT and SPS measures have on 42 countries domestic value-added exports (DVAs) into the US. The results from this empirical analysis show that both TBT and SPS measures have no significant effect on gross exports, however, TBT measures have a significant inhibiting effect on DVAs, indicating that the traditional gross trade estimation approach underestimates the substantial impact of non-tariff measures on trade gains. To be specific, a 1 percentage point increase in TBT measures leads to DVA exports decrease of 2.37%. Moreover, the negative impact is mainly manifested in developing countries and high-technology products.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1150-1164
Issue: 5
Volume: 30
Year: 2023
Month: 09
X-DOI: 10.1080/16081625.2022.2077779
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2077779
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:5:p:1150-1164
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# input file: RAAE_A_2054832_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Chengxuan Geng
Author-X-Name-First: Chengxuan
Author-X-Name-Last: Geng
Author-Name: Ke Xu
Author-X-Name-First: Ke
Author-X-Name-Last: Xu
Author-Name: Xiaoshu Wei
Author-X-Name-First: Xiaoshu
Author-X-Name-Last: Wei
Title: Driving factors of capital allocation efficiency in the artificial intelligence industry in China– the perspective of a financing ecosystem
Abstract:
Based on a comprehensive consideration of financing ecological factors, this study constructs a financing ecosystem and capital allocation efficiency model to simulate the driving factors of capital allocation efficiency in the artificial intelligence (AI) industry. Our findings show that the capital allocation efficiency of the AI industry is expected to gradually decrease. Among the various components of the financing ecosystem, capital allocation efficiency is most sensitive to human capital quality, followed by the development of banking, marketisation level, degree of government intervention, and opening-up level. Finally, suggestions for optimising the financing ecosystem and improving capital allocation efficiency are presented.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1246-1263
Issue: 5
Volume: 30
Year: 2023
Month: 09
X-DOI: 10.1080/16081625.2022.2054832
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2054832
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:5:p:1246-1263
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# input file: RAAE_A_1929356_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Tien Nguyen
Author-X-Name-First: Tien
Author-X-Name-Last: Nguyen
Author-Name: John Shields
Author-X-Name-First: John
Author-X-Name-Last: Shields
Author-Name: Mark Westcott
Author-X-Name-First: Mark
Author-X-Name-Last: Westcott
Title: Re-examining the NED effect on firm financial performance: the impact and interplay of NED capital and NED equity incentives
Abstract:
Drawing on propositions from Hillman and Dalziel’s pioneering 2003 articulation of Board Capital Theory, this paper investigates the interaction between NED externally-derived capital (proxied by multi-factor capital breadth and focal industry capital depth), internally-derived capital (proxied by tenure overlap), and their equity ownership in the focal firm in influencing firm accounting and stock market performance, measured respectively by ROE and Tobin’s Q. Our analysis on a dynamic panel data comprised of the top ASX 213 companies from 2008 to 2012 shows that NED external capital breadth and depth both strongly predict ROE and Tobin’s Q. Further, we find that equity holding strengthens the impact of NED external capital depth on Tobin’s Q, whereas internally-derived capital interacts with NED external capital breadth to increase Tobin’s Q, but also with NED external capital depth to reduce ROE. These findings carry both confirmatory and revisionary implications for theory, research and corporate governance practice.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1390-1416
Issue: 5
Volume: 30
Year: 2023
Month: 09
X-DOI: 10.1080/16081625.2021.1929356
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1929356
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# input file: RAAE_A_1947858_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Ashish Chand
Author-X-Name-First: Ashish
Author-X-Name-Last: Chand
Author-Name: Ruixiang Jiang
Author-X-Name-First: Ruixiang
Author-X-Name-Last: Jiang
Author-Name: Zhenling Zhao
Author-X-Name-First: Zhenling
Author-X-Name-Last: Zhao
Title: National cultural distance and cross-border M&A
Abstract:
Using cross-border M&A activities and national cultural scores from the Hofstede Insights organization, we study the impact of national cultural distance on cross-border M&As from 2008 to 2017. The empirical evidence shows that both the success of M&A attempts and the post-acquisition stock returns are negatively related to national cultural distance. We also test this negative relation considering the country cluster and industry effects.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1350-1367
Issue: 5
Volume: 30
Year: 2023
Month: 09
X-DOI: 10.1080/16081625.2021.1947858
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1947858
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# input file: RAAE_A_2127807_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Morris Ming Liu
Author-X-Name-First: Morris Ming
Author-X-Name-Last: Liu
Author-Name: Patrick Kuok Kun Chu
Author-X-Name-First: Patrick Kuok Kun
Author-X-Name-Last: Chu
Author-Name: Wenya Zhou
Author-X-Name-First: Wenya
Author-X-Name-Last: Zhou
Title: How do investors view firm’s customer concentration through bank loan announcements? Evidence from China*
Abstract:
This study provides evidence on how investors evaluate the value of firms’ customer concentration. This study is the first study that divides the bank loan announcement data into approved loans and rejected loans to investigate investors’ reactions toward the bank loan announcements. We examine the relationship between the borrowing firm’s customer concentration and cumulative abnormal returns upon approved and rejected bank loan announcements for Chinese listed firms between 2002 and 2018. The effect of firm’s customer concentration on the abnormal returns is evaluated by OLS regression model controlled by some firm’s characteristics. The study finds that firms with higher customer concentration incur more negative cumulative abnormal returns upon rejected loan announcements but exhibit no significant difference upon approved loan announcements.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1226-1245
Issue: 5
Volume: 30
Year: 2023
Month: 09
X-DOI: 10.1080/16081625.2022.2127807
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2127807
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# input file: RAAE_A_2067200_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Zhiyong Niu
Author-X-Name-First: Zhiyong
Author-X-Name-Last: Niu
Author-Name: Xiaoyan Zhou
Author-X-Name-First: Xiaoyan
Author-X-Name-Last: Zhou
Title: Political uncertainty and corporate sustainability: how does official turnover affect environmental investment
Abstract:
In response to the growing interest in corporate environmental sustainability practices, this study examines the impact on corporate environmental investment (EI) of the political uncertainty caused by the turnover in government officials. Based on a large sample of 13,321 Chinese listed firms during the period 2000–2017, the study reveals that political uncertainty causes firms to reduce their environmental investment. In examining the moderating influences of political connection and the institutional environment on such a response, we find that the negative relationship between political uncertainty and environmental investment is strengthened when firms have strong political connection, but is weakened in a more developed institutional environment. The results of the study are robust to a variety of sensitivity tests. We also investigate the importance of industry differences in terms of the role of political uncertainty, but find this to be insignificant across different firm ownership and regional location types. The findings of this study extend the current understanding of how and why the sustainable behavior of enterprises varies depending on the effect of political factors, particularly in the Chinese context, and offer important implications for enterprises in their quest to achieve sustainable development.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1184-1203
Issue: 5
Volume: 30
Year: 2023
Month: 09
X-DOI: 10.1080/16081625.2022.2067200
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2067200
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# input file: RAAE_A_2003210_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Zhe Li
Author-X-Name-First: Zhe
Author-X-Name-Last: Li
Author-Name: Yirong Zou
Author-X-Name-First: Yirong
Author-X-Name-Last: Zou
Author-Name: Qinyuan Chen
Author-X-Name-First: Qinyuan
Author-X-Name-Last: Chen
Title: CEOs’ secretarial experience and MD&A disclosure quality: a study based on textual analysis
Abstract:
This study provides fresh evidence on the impact of CEOs’ secretarial experience on the quality of Management Discussion and Analysis (MD&A) disclosure. This study finds that in China, CEOs with secretarial experience significantly lead to more MD&A modifications (renew text information timelier). Cross-sectional analyses reveal that the improvement of information disclosure by CEOs with secretarial experience is more prominent for firms without political connection and for CEOs whose birthplace has a stronger cultural environment. Additional test shows that the modification of MD&A provides incremental information for investors and the stock price has a stronger response to the revision made by CEOs with secretarial experience, suggesting investors appreciate CEOs with secretarial experience. Overall, our evidence suggests that CEOs with secretarial experience are more skilled in comprehensive report writing and have stronger ability to provide incremental information.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1305-1326
Issue: 5
Volume: 30
Year: 2023
Month: 09
X-DOI: 10.1080/16081625.2021.2003210
File-URL: http://hdl.handle.net/10.1080/16081625.2021.2003210
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# input file: RAAE_A_1976228_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Jong-Yu Paula Hao
Author-X-Name-First: Jong-Yu Paula
Author-X-Name-Last: Hao
Author-Name: Fei Kang
Author-X-Name-First: Fei
Author-X-Name-Last: Kang
Author-Name: Chia-Ling Lee
Author-X-Name-First: Chia-Ling
Author-X-Name-Last: Lee
Title: Corporate social responsibility and non-audit service fees
Abstract:
In this study, we examine the association between corporate social responsibility (CSR) and the purchase of non-audit service (NAS). Due to the information asymmetry between stakeholders and managers, stakeholders are generally concerned about auditor’s independence and the firms’ reporting quality. We argue that firms engaging in CSR are more concerned about meeting stakeholder expectations and protecting their reputation of being socially responsible; therefore, they tend to purchase less NAS due to the concern of impaired audit quality. Consistent with our argument, we find that firms with higher CSR ratings incur lower NAS fees. We also document that the negative association of CSR-NAS fees is stronger for firms facing greater stakeholder demand, those with more reputation concerns, and those subject to higher litigation risk.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1327-1349
Issue: 5
Volume: 30
Year: 2023
Month: 09
X-DOI: 10.1080/16081625.2021.1976228
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1976228
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# input file: RAAE_A_1915166_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Soon Hong Park
Author-X-Name-First: Soon Hong
Author-X-Name-Last: Park
Author-Name: Byungkwon Lim
Author-X-Name-First: Byungkwon
Author-X-Name-Last: Lim
Title: Insider trade clustering and large variations in stock prices: evidence from the Korean market
Abstract:
This paper examines whether insider trade clustering is associated with large stock return variations (i.e. crash or jump risk) in Korea. To investigate private information of insider trade clustering, we separate insider trade clustering into sale clusters and purchase clusters and then document whether trading behavior of insider sale (purchase) clusters is related to the likelihood of a crash (jump). We find that insider sale clusters which occurred over the past month of a crash are strongly related to the information flowed over a short period of time. However, we find that insider purchase clusters are less associated with the likelihood of a jump. Our results provide empirical evidence that insiders share negative information and insider sale clusters contain robust short-lived information. Overall, our findings suggest that insider trade clustering, in particular insider sale clusters, results from agency problems.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1368-1389
Issue: 5
Volume: 30
Year: 2023
Month: 09
X-DOI: 10.1080/16081625.2021.1915166
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1915166
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# input file: RAAE_A_2092158_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Shiyong Zhao
Author-X-Name-First: Shiyong
Author-X-Name-Last: Zhao
Title: The impact of foreign direct investment on local entrepreneurship: blessing or curse?
Abstract:
This paper studies the impact of foreign direct investment on local entrepreneurship by using a panel data set containing 31 provinces of China over 1992–2017. The study finds that the effect is positive and significant. On average about 16 percent of China’s local entrepreneurship growth can be attributed to FDI inflow over the entire sample period. The knowledge diffusion and technology transfer effect more than offset the crowding-out effect of FDI on local entrepreneurship in general during China’s economic transition.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1137-1149
Issue: 5
Volume: 30
Year: 2023
Month: 09
X-DOI: 10.1080/16081625.2022.2092158
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2092158
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# input file: RAAE_A_2026230_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Jiamei Wu
Author-X-Name-First: Jiamei
Author-X-Name-Last: Wu
Author-Name: Zhibin Chen
Author-X-Name-First: Zhibin
Author-X-Name-Last: Chen
Title: Corruption culture and corporate social responsibility: evidence from China
Abstract:
This paper investigates the impact of corruption culture on corporate social responsibility (CSR) of listed firms in China. Based on the theory of resource constraints, we find that firms located in regions with high levels of corruption culture have lower CSR, and this association still exists after using alternative measures of corruption culture and addressing potential endogeneity. Besides, we complement the literature by showing that the decrease in CSR is greater for firms with stronger political connections. Finally, we document that this negative relationship is mediated by the increase in rent-seeking and self-consumption. This study has important implications for countries that suffer from corruption and firms that intend to get rid of the influence of corruption.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1286-1304
Issue: 5
Volume: 30
Year: 2023
Month: 09
X-DOI: 10.1080/16081625.2022.2026230
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2026230
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# input file: RAAE_A_2026231_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Huijie Cui
Author-X-Name-First: Huijie
Author-X-Name-Last: Cui
Author-Name: Yu Li
Author-X-Name-First: Yu
Author-X-Name-Last: Li
Author-Name: Ye Sun
Author-X-Name-First: Ye
Author-X-Name-Last: Sun
Author-Name: Yanan Zhang
Author-X-Name-First: Yanan
Author-X-Name-Last: Zhang
Title: Customer concentration and bank loan contracting: evidence from China
Abstract:
This study uses hand-collected data regarding bank loan terms for Chinese listed firms to investigate whether and how a concentrated customer base affects bank loan contracting. We find that a more concentrated customer base reduces suppliers’ credit risk, which results in more favorable bank loan contracting terms (i.e. lower interest rates, longer maturities, and larger loan sizes). Furthermore, we provide evidence that increased operational efficiency, reduced information risk and default risk are possible channels through which customer concentration reduces bank loan contracting costs. The results are robust to a set of additional tests. Overall, our findings document the benefits of customer concentration in developing countries such as China and reveal how this benefit is priced into bank loan contract terms.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1264-1285
Issue: 5
Volume: 30
Year: 2023
Month: 09
X-DOI: 10.1080/16081625.2022.2026231
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2026231
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# input file: RAAE_A_2186902_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Meng-Yi Tai
Author-X-Name-First: Meng-Yi
Author-X-Name-Last: Tai
Author-Name: Shih-Wen Hu
Author-X-Name-First: Shih-Wen
Author-X-Name-Last: Hu
Author-Name: Chi-Chur Chao
Author-X-Name-First: Chi-Chur
Author-X-Name-Last: Chao
Title: Pandemic, tourism, and the economy: a tourism-revenue target zone approach
Abstract:
The COVID-19 pandemic has negatively affected the tourist markets of many countries. This study develops a small, open macro model of tourism to analyze the price and revenue effects of establishing tourism target zones on tourism revenue in response to industry disturbances resulting from the pandemic. Such target zones improve tourism revenue and stabilize the economy by stabilizing tourism goods prices and exchange rates when domestic or foreign demand is strong and regardless of whether national borders are open. A tourism goods price subsidy can be employed to revitalize the tourism industry and improve tourism revenue after the pandemic.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1659-1674
Issue: 6
Volume: 30
Year: 2023
Month: 11
X-DOI: 10.1080/16081625.2023.2186902
File-URL: http://hdl.handle.net/10.1080/16081625.2023.2186902
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# input file: RAAE_A_2078379_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Jiancai Pi
Author-X-Name-First: Jiancai
Author-X-Name-Last: Pi
Author-Name: Yanwei Fan
Author-X-Name-First: Yanwei
Author-X-Name-Last: Fan
Title: Robots, factor intensities, and wage inequality
Abstract:
This paper investigates how robots affect wage inequality. We consider four cases, i.e. robots replacing skilled labor, robots replacing unskilled labor, robots replacing both skilled and unskilled labor, and robots serving as complements to human labor. Different from the existing literature on artificial intelligence and automation, we find that in all the four cases an increase in the importance of robots can increase or decrease wage inequality under different conditions. When robots are incorporated into the framework of wage inequality, factor intensities should be taken seriously.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1568-1586
Issue: 6
Volume: 30
Year: 2023
Month: 11
X-DOI: 10.1080/16081625.2022.2078379
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2078379
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# input file: RAAE_A_2067882_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Shaner Chu
Author-X-Name-First: Shaner
Author-X-Name-Last: Chu
Author-Name: Erin Oldford
Author-X-Name-First: Erin
Author-X-Name-Last: Oldford
Author-Name: Changchun Gao
Author-X-Name-First: Changchun
Author-X-Name-Last: Gao
Title: Does social capital alleviate financing constraints? A study of China’s creative economy
Abstract:
This study investigates the effect of social capital on financial constraints of Chinese cultural and creative enterprises (CCEs). We disaggregate a firm’s social capital into professional, political, and commercial capital. Our empirical results show that professional social capital can significantly reduce CCEs’ investment-cash flow sensitivity and help gain bank loans, thereby alleviating CCEs’ financial constraints. However, political and commercial social capital do not lessen financial constraints. We also find evidence that intellectual property protection acts to amplify the negative relation between professional social capital and financial constraints. These results are robust to alternative measures of key constructs and model specifications.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1518-1541
Issue: 6
Volume: 30
Year: 2023
Month: 11
X-DOI: 10.1080/16081625.2022.2067882
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2067882
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# input file: RAAE_A_2126378_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Lidan Li
Author-X-Name-First: Lidan
Author-X-Name-Last: Li
Author-Name: Xianzhong Song
Author-X-Name-First: Xianzhong
Author-X-Name-Last: Song
Author-Name: Yupeng Yang
Author-X-Name-First: Yupeng
Author-X-Name-Last: Yang
Author-Name: Xingxing Chen
Author-X-Name-First: Xingxing
Author-X-Name-Last: Chen
Title: Population mobility and employee social responsibility: evidence from hukou reform in China
Abstract:
Population mobility may have a profound impact on the labor market, affecting firms’ employment decisions. We consider hukou reform in China as a quasi-natural experiment in identifying the effects of population mobility on employee-related corporate social responsibility (employee social responsibility, or ESR). The empirical results show that hukou reform prompts firms to invest more in ESR activities, particularly in ESR activities with weak externalities and in regions with a smaller labor market size. Cross-sectional tests suggest that the effects of hukou reform on firms’ ESR investment are stronger for more financially constrained firms and those in high-tech industries, and in more competitive regions. The findings have important practical implications for employment strategies that firms should adopt when the labor market becomes more competitive.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1610-1626
Issue: 6
Volume: 30
Year: 2023
Month: 11
X-DOI: 10.1080/16081625.2022.2126378
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2126378
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# input file: RAAE_A_2081228_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Jie He
Author-X-Name-First: Jie
Author-X-Name-Last: He
Author-Name: Luling He
Author-X-Name-First: Luling
Author-X-Name-Last: He
Title: Saving or spending? Military CEOs and cost stickiness
Abstract:
Using Chinese A-share listed manufacturing firms from 2008 to 2018, we examine the effect of CEOs’ military experience on firms’ cost stickiness. We find that firms with military CEOs have higher cost stickiness than those without military CEOs. The results are more pronounced for firms with high social responsibility (in SOEs and firms with better corporate social responsibility performance and higher labor intensity) and weak corporate governance (in firms with CEO duality, less independent directors, no director shareholding and no Big Four auditor). Our research extends the understanding of military CEOs’ influence on firms and sheds light on how CEOs’ characteristics affect cost stickiness.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1675-1693
Issue: 6
Volume: 30
Year: 2023
Month: 11
X-DOI: 10.1080/16081625.2022.2081228
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2081228
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# input file: RAAE_A_2077778_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Dongshan Ma
Author-X-Name-First: Dongshan
Author-X-Name-Last: Ma
Author-Name: Jiayu Zhao
Author-X-Name-First: Jiayu
Author-X-Name-Last: Zhao
Author-Name: Shengqiang Zhang
Author-X-Name-First: Shengqiang
Author-X-Name-Last: Zhang
Author-Name: Cuifang Wang
Author-X-Name-First: Cuifang
Author-X-Name-Last: Wang
Title: Does the informal hierarchy of independent directors have a corporate governance effect? Evidence from China
Abstract:
Using a large sample of Chinese A-share listed firms during 2008–2017, this study investigates whether and how the informal hierarchy of independent directors affects two types of agency costs. We find that the informal hierarchy of independent directors is negatively correlated with the two types of agency costs and the negative effect is robust to alternative empirical designs. Moreover, our further research indicates that ownership structure matters for the performance of independent directors. We provide empirical evidence for optimizing the independent director team structure and improving corporate governance.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1694-1708
Issue: 6
Volume: 30
Year: 2023
Month: 11
X-DOI: 10.1080/16081625.2022.2077778
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2077778
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# input file: RAAE_A_2067883_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Hao Fang
Author-X-Name-First: Hao
Author-X-Name-Last: Fang
Author-Name: Chieh-Hsuan Wang
Author-X-Name-First: Chieh-Hsuan
Author-X-Name-Last: Wang
Author-Name: Hwey-Yun Yau
Author-X-Name-First: Hwey-Yun
Author-X-Name-Last: Yau
Author-Name: Chien-Ping Chung
Author-X-Name-First: Chien-Ping
Author-X-Name-Last: Chung
Author-Name: Yen-Hsien Lee
Author-X-Name-First: Yen-Hsien
Author-X-Name-Last: Lee
Title: The impact of board structure on bank loan herding via mediation of underperformance
Abstract:
When weak governance practices cause poor bank lending performance, banks are more likely to engage in ‘loan herding’ to avoid a sustained performance deterioration. Using the three main types of Chinese banks as our sample, this study first confirms the existence of loan herding and the positive effects of a weak board structure on poor lending performance (i.e. underperformance). Then, after finding positive impacts of this underperformance on loan herding, we examine whether board structure variables negatively affect loan herding. We find that higher director compensation, a moderate average age of directors, and higher director education levels significantly reduce bank loan herding, whereas board duality and the presence of very old directors significantly increase bank loan herding. Finally, we study the mediation effect of loan performance on the relationship between board structure and loan herding. Our results show that board governance quality affects loan performance, which, in turn, affects loan herding.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1494-1517
Issue: 6
Volume: 30
Year: 2023
Month: 11
X-DOI: 10.1080/16081625.2022.2067883
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2067883
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# input file: RAAE_A_2108856_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Wei Zhou
Author-X-Name-First: Wei
Author-X-Name-Last: Zhou
Author-Name: Min Jiang
Author-X-Name-First: Min
Author-X-Name-Last: Jiang
Author-Name: Jiani Zong
Author-X-Name-First: Jiani
Author-X-Name-Last: Zong
Title: Can anti-corruption reforms ease corporate financing constraints?—Empirical evidence from China
Abstract:
China has implemented its toughest anti-corruption policies in decades since late 2012. This paper empirically tests the economic spillover effect of anti-corruption from the perspective of corporate financing constraints based on the data from listed companies in China between 2010 and 2015. Our research shows that anti-corruption can significantly ease the financing constraints on enterprises. Due to China’s special system, the above relationship between anti-corruption and financing constraints is moderated by the nature of enterprise ownership and political connections. Furthermore, this study suggests that corporate financing constraints can be primarily eased by reducing bribery expenses and external financing frictions.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1477-1493
Issue: 6
Volume: 30
Year: 2023
Month: 11
X-DOI: 10.1080/16081625.2022.2108856
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2108856
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Handle: RePEc:taf:raaexx:v:30:y:2023:i:6:p:1477-1493
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# input file: RAAE_A_1872032_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Kang Sung Hur
Author-X-Name-First: Kang Sung
Author-X-Name-Last: Hur
Author-Name: in Tae Hwang
Author-X-Name-First: in Tae
Author-X-Name-Last: Hwang
Title: The effect of bank governance on borrowers’ accounting choices
Abstract:
This study analyzes the effect of bank CEO appointment structure and tenure on borrowers’ accounting practices and earnings management. Drawing on agency theory, we posit that agency costs are high for banks that frequently change CEOs and those that appoint CEOs from external sources. The results indicate firms that borrow from banks with high agency costs adopt less conservative accounting practices and employ real activities earnings management when deteriorating management conditions lead to negative cash flow. This study provides a strong empirical foundation for future research by verifying that appointment structure and tenure of bank CEOs affect borrowers’ accounting choices.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1417-1443
Issue: 6
Volume: 30
Year: 2023
Month: 11
X-DOI: 10.1080/16081625.2021.1872032
File-URL: http://hdl.handle.net/10.1080/16081625.2021.1872032
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# input file: RAAE_A_2020667_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Xin Yang
Author-X-Name-First: Xin
Author-X-Name-Last: Yang
Author-Name: Minghui Li
Author-X-Name-First: Minghui
Author-X-Name-Last: Li
Author-Name: Yujie Yang
Author-X-Name-First: Yujie
Author-X-Name-Last: Yang
Title: Signing auditors’ experience and client investment efficiency
Abstract:
This study explores the relationship between signing auditors’ experience and client investment efficiency in the Chinese stock market. After controlling for firm-level, audit firm-level, and other individual characteristics, results show that it is signing auditors’ industry experience, rather than total experience, that significantly restrains client investment inefficiency, including over- and under-investment. This means that industry-specific experience may be the important experience affecting client investment behavior. The mechanism test results also show that experienced auditors can enhance client investment efficiency not only by playing an information role, through which they reduce over- and under-investment, but also partly through a financing channel to mitigate under-investment and a monitoring channel to restrict over-investment, respectively. Further analyses suggest that the effect of signing auditors’ industry experience on client investment efficiency is more pronounced for firms audited by large audit firms, those audited by expertise audit firms, and those located in the region with higher level of marketization. Overall, this study provides evidence related to the economic consequences of auditor experience at the individual level, thus extending the related literature.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1444-1476
Issue: 6
Volume: 30
Year: 2023
Month: 11
X-DOI: 10.1080/16081625.2021.2020667
File-URL: http://hdl.handle.net/10.1080/16081625.2021.2020667
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# input file: RAAE_A_2156362_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Haozhe Han
Author-X-Name-First: Haozhe
Author-X-Name-Last: Han
Title: Does increasing the QFII quota promote Chinese institutional investors to drive ESG?
Abstract:
This paper assesses whether qualified foreign institutional investors (QFIIs) and domestic institutional investors in China drive the environmental, social, and governance (ESG) performance of firms. We first show that QFII ownership is positively associated with future ESG performance but that domestic institutional ownership is not. We then examine the effect of the increase in QFII investment funds on the decision of domestic institutional investors to drive ESG. We find that with the increase in QFII investment funds, domestic institutional investors start to promote firms to improve future ESG performance, especially domestic institutional investors who have held shares of one same firm as QFIIs at the same time. In particular, funds and security funds are affected by QFIIs, and the effect of institutional ownership is stronger in the ESG categories of corporate governance, workforce diversity and product quality. Overall, our results suggest that QFIIs motivate Chinese institutional investors to drive ESG.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1627-1643
Issue: 6
Volume: 30
Year: 2023
Month: 11
X-DOI: 10.1080/16081625.2022.2156362
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2156362
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# input file: RAAE_A_2078380_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Deng Liurui
Author-X-Name-First: Deng
Author-X-Name-Last: Liurui
Author-Name: Ke Jiafeng
Author-X-Name-First: Ke
Author-X-Name-Last: Jiafeng
Author-Name: Wang Dongfang
Author-X-Name-First: Wang
Author-X-Name-Last: Dongfang
Title: The influence of investment lag on company value in a non-financing constrained region
Abstract:
We focus on the impact of the investment time lag on a company’s value. We set up the original model in the start-up phase and the mature phase, which reflects the effect of investment time lag on the company’s value without financing constraints. Furthermore, based on the model, we obtain the explicit expressions of the company’s value in the start-up phase and the mature phase. In the empirical analysis, considering financing costs, investment opportunities and cash flow, we use PVAR to investigate how investment time lag affects the company’s value.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1542-1567
Issue: 6
Volume: 30
Year: 2023
Month: 11
X-DOI: 10.1080/16081625.2022.2078380
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2078380
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# input file: RAAE_A_2170892_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Yuanru Meng
Author-X-Name-First: Yuanru
Author-X-Name-Last: Meng
Author-Name: Suzhen Zhang
Author-X-Name-First: Suzhen
Author-X-Name-Last: Zhang
Title: The internet and product switching: an empirical test and mechanism analysis based on China
Abstract:
This study examined the influence of Internet use on product switching, as the Internet is an important channel for information acquisition. Using data from China, the study found that: (1) Internet use significantly increased the probability of companies to switch products; and (2) the impact of the internet is heterogeneous with respect to types of product switching. The Internet significantly prompts businesses to add products, but decreases two product-switching categories, i.e. both adding and dropping products, and only dropping products. Business innovation, product similarity and product core values are the keys to understanding the differentiation of internet influence.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1644-1658
Issue: 6
Volume: 30
Year: 2023
Month: 11
X-DOI: 10.1080/16081625.2023.2170892
File-URL: http://hdl.handle.net/10.1080/16081625.2023.2170892
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# input file: RAAE_A_2098786_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20
Author-Name: Qian Li
Author-X-Name-First: Qian
Author-X-Name-Last: Li
Author-Name: Mengting Guo
Author-X-Name-First: Mengting
Author-X-Name-Last: Guo
Author-Name: Mengxin Tong
Author-X-Name-First: Mengxin
Author-X-Name-Last: Tong
Title: Stock pledge and media slant: evidence from China
Abstract:
This paper explores the relationship between stock pledges and media slants. Using data from China, we find that firms with controlling shareholders that start to pledge shares or increase shares pledging for loans are covered with more positive media tones. The association is more prominent when firms with higher margin call pressure, closer relationships with media, more individual investor holdings, and less analyst coverage. We further investigate the underlying channels through which stock pledges may affect media slant. Our results show that stock-pledging firms promote media slants by releasing positive news in pre-announcements and increasing advertising expenditure. We also find that the optimistic media slant of pledging firms results from increased favorable media reports instead of reducing negative information. Moreover, positive media slants will lead to a higher excess stock return of pledging firms. Compared with negative news, positive media coverage is more likely to affect pledging firms’ stock returns. Our findings prove that share-pledging firms may engage in media management. We also provide evidence for the existence of media bias in emerging markets.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1587-1609
Issue: 6
Volume: 30
Year: 2023
Month: 11
X-DOI: 10.1080/16081625.2022.2098786
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2098786
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# input file: RAAE_A_2147965_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20231214T103247 git hash: d7a2cb0857
Author-Name: Robert Kim
Author-X-Name-First: Robert
Author-X-Name-Last: Kim
Author-Name: Yong Gyu Lee
Author-X-Name-First: Yong Gyu
Author-X-Name-Last: Lee
Author-Name: Gerald J. Lobo
Author-X-Name-First: Gerald J.
Author-X-Name-Last: Lobo
Title: Rounding of earnings per share and managerial insider selling
Abstract:
We hypothesize that managers anticipate a disproportionately larger price increase associated with rounded earnings per share (EPS) and make additional effort to round EPS when they plan to sell shares after the earnings announcement. Consistent with this hypothesis, we find that managers who round diluted EPS have higher managerial insider sales following the earnings announcement compared to managers who do not. Furthermore, we find that the positive association between rounding of diluted EPS and subsequent stock sales undertaken by chief financial officers (CFOs) is stronger when the level of abnormal stock repurchases is higher, consistent with managers’ strategic behavior.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 96-129
Issue: 1
Volume: 31
Year: 2024
Month: 01
X-DOI: 10.1080/16081625.2022.2147965
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2147965
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# input file: RAAE_A_2157292_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20231214T103247 git hash: d7a2cb0857
Author-Name: Hangsoo Kyung
Author-X-Name-First: Hangsoo
Author-X-Name-Last: Kyung
Author-Name: Albert Tsang
Author-X-Name-First: Albert
Author-X-Name-Last: Tsang
Title: Media sentiment divergence and analyst earnings forecasts
Abstract:
We examine whether media sentiment divergence (MSD), which refers to divergence in sentiment across the media’s coverage of a firm, is associated with the accuracy of analyst earnings forecasts. Our results reveal that the level of a firm’s MSD is positively associated with analyst forecast accuracy. In addition, we find that the time required by analysts to make their first annual earnings forecast is positively associated with MSD, suggesting that analysts need more time to process information from the media. Overall, we provide evidence that heterogeneity in the media’s interpretation of corporate news is an important factor affecting analysts’ forecast.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 25-49
Issue: 1
Volume: 31
Year: 2024
Month: 01
X-DOI: 10.1080/16081625.2022.2157292
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2157292
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# input file: RAAE_A_2082496_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20231214T103247 git hash: d7a2cb0857
Author-Name: Hrishikesh Desai
Author-X-Name-First: Hrishikesh
Author-X-Name-Last: Desai
Author-Name: Daniel Schaupp
Author-X-Name-First: Daniel
Author-X-Name-Last: Schaupp
Title: Play for time when the ship is threatening to sink? Voluntary disclosure choices under going concern uncertainty
Abstract:
Prior research on voluntary disclosures has long debated whether managers tend to withhold bad news. However, these studies have been conducted in settings in which, ex-ante, the trade-off between the potential benefits and the potential costs of withholding information is obscure. In this paper, we study voluntary disclosure choices using a context-rich setting of distressed firms in which potential benefits from withholding news (particularly bad news) are seemingly high, whereas the potential costs are seemingly low. Specifically, we focus on the question of how ‘going concern’ uncertainty affects management earnings forecasts in financially distressed firms. Our results suggest that as financial distress intensifies, there is a lower likelihood and frequency of management earnings forecasts, indicating that managers may be withholding news, particularly bad news, in distressed firm-years. For comparative purposes, we also present results for ‘safe’ firm-years and find that managers have a tendency to disclose bad news as the financial health of the firm worsens.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 76-95
Issue: 1
Volume: 31
Year: 2024
Month: 01
X-DOI: 10.1080/16081625.2022.2082496
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2082496
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# input file: RAAE_A_2156360_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20231214T103247 git hash: d7a2cb0857
Author-Name: Weihua Chen
Author-X-Name-First: Weihua
Author-X-Name-Last: Chen
Author-Name: Rogemar Mamon
Author-X-Name-First: Rogemar
Author-X-Name-Last: Mamon
Author-Name: Heng Xiong
Author-X-Name-First: Heng
Author-X-Name-Last: Xiong
Author-Name: Pingping Zeng
Author-X-Name-First: Pingping
Author-X-Name-Last: Zeng
Title: How do foreign investors affect China’s stock return volatility? Evidence from the Shanghai-Hong Kong Stock Connect Program
Abstract:
This paper examines the influence of foreign investors on the stock return volatility via the Shanghai- Hong Kong Stock Connect Program (SHSCP). By analysing portfolios’ characteristics and utilising the Fama-Macbeth regression, we find that investing in China’s mainland stock market via the SHSCP could tame the stock return volatility. The results remain significant after taking into account endogenous factors and performing several robustness tests. Our findings support the rationale for opening up China’s capital market.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 1-24
Issue: 1
Volume: 31
Year: 2024
Month: 01
X-DOI: 10.1080/16081625.2022.2156360
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2156360
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# input file: RAAE_A_2067198_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20231214T103247 git hash: d7a2cb0857
Author-Name: Ying Hao
Author-X-Name-First: Ying
Author-X-Name-Last: Hao
Author-Name: Junyi Li
Author-X-Name-First: Junyi
Author-X-Name-Last: Li
Author-Name: Juan Ni
Author-X-Name-First: Juan
Author-X-Name-Last: Ni
Author-Name: Danni Han
Author-X-Name-First: Danni
Author-X-Name-Last: Han
Title: Military experience and corporate social responsibility: evidence from china
Abstract:
In this paper, we investigate how moral attitudes across top executives are related to CSR practices. We find that firms run by military executives are significantly more likely to engage in CSR activities. Specifically, military executives have a moral obligation to place extra weight on caring for shareholders and staff and protecting customers and suppliers’ rights and the environment, while military experience has little influence on the firms’ social contributions. These effects appear to be more pronounced in sinful firms, firms with longer tenured executives, and non-SOE firms. Overall, this study adds evidence to the growing literature regarding the influence of top executives’ personal characteristics on corporate outcomes, as well as enriching the knowledge about firms’ business practices in light of CSR.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 50-75
Issue: 1
Volume: 31
Year: 2024
Month: 01
X-DOI: 10.1080/16081625.2022.2067198
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2067198
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# input file: RAAE_A_2067881_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20231214T103247 git hash: d7a2cb0857
Author-Name: Lingmin Xie
Author-X-Name-First: Lingmin
Author-X-Name-Last: Xie
Author-Name: Zhimin Xie
Author-X-Name-First: Zhimin
Author-X-Name-Last: Xie
Author-Name: Zhehan Wang
Author-X-Name-First: Zhehan
Author-X-Name-Last: Wang
Author-Name: Bo Pang
Author-X-Name-First: Bo
Author-X-Name-Last: Pang
Title: Intraregional effect of IPOs on firm-level real earnings management: evidence from the governance role of financial analysts
Abstract:
Using 12,950 firm-year observations of Chinese listed companies from 2010 to 2019, we find that city-level IPOs have positive spillover effects on real earnings management of regional incumbent firms. We identify the geographical segmentation of the governance role of financial analysts as the underlying explanation. IPOs distract analysts from previously covered regional peers and make them less effective in monitoring earnings manipulation through real actions. The findings are driven mainly by firms experiencing reduced analyst attention and weaker for firms monitored by other types of governance mechanisms. We rule out alternative explanations of intraindustry spillover effect or resource competition.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 130-151
Issue: 1
Volume: 31
Year: 2024
Month: 01
X-DOI: 10.1080/16081625.2022.2067881
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2067881
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# input file: RAAE_A_2228836_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: Hyorim Lee
Author-X-Name-First: Hyorim
Author-X-Name-Last: Lee
Author-Name: Seok Woo Tiger Jeong
Author-X-Name-First: Seok Woo Tiger
Author-X-Name-Last: Jeong
Title: Economic policy uncertainty, audit quality, and earnings manipulation
Abstract:
This study examines how audit quality is related to the risk of earnings management when economic policy uncertainty increases. After analyzing 10,524 firm-year samples in Korea from 2012 to 2019, we find that when economic policy uncertainty is high, audit quality, measured by audit fees, audit hours, revised disclosure of financial reports, and discretionary accruals, increases. This implies that auditors increase audit quality at a time of economic policy uncertainty, which results in the improvement in financial information quality. Also, we find that during periods of high economic policy uncertainty, companies with high risk of earnings manipulation disclose higher quality financial information, but pay less audit fees. This suggests that auditors who audit firms with high risk of earnings manipulation adjust to increased audit risk by putting more effort into improving financial information quality, but such increased audit efforts are not reflected in audit fees. The results of the study imply that auditors’ efforts to control audit risks contribute to improving financial information quality in the presence of earnings manipulation risk where information asymmetry increases due to economic policy uncertainty.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 269-299
Issue: 2
Volume: 31
Year: 2024
Month: 03
X-DOI: 10.1080/16081625.2023.2228836
File-URL: http://hdl.handle.net/10.1080/16081625.2023.2228836
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# input file: RAAE_A_2147966_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: Yucheng Zhou
Author-X-Name-First: Yucheng
Author-X-Name-Last: Zhou
Author-Name: Di Huo
Author-X-Name-First: Di
Author-X-Name-Last: Huo
Author-Name: Dejun Wu
Author-X-Name-First: Dejun
Author-X-Name-Last: Wu
Title: Investor inattention to weekend disclosure of environmental punishment: evidence from China
Abstract:
The inattention hypothesis suggests that investors have a weak response to company information on weekends. Using a sample of Chinese listed companies from 2007 to 2019, we empirically study the strategic timing effect of disclosing environmental punishment information (EPI) on weekends. We find a significantly lower market reaction to EPI disclosed on weekends compared with disclosure on weekdays. Further tests show that the weekend timing effect is more pronounced when severe punishment and weak external supervision exist. Our evidence supports the inattention hypothesis from the perspective of weekend disclosure of negative environmental information.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 176-195
Issue: 2
Volume: 31
Year: 2024
Month: 03
X-DOI: 10.1080/16081625.2022.2147966
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2147966
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# input file: RAAE_A_2176327_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: Zhizhu Yuan
Author-X-Name-First: Zhizhu
Author-X-Name-Last: Yuan
Author-Name: Ziyue Wang
Author-X-Name-First: Ziyue
Author-X-Name-Last: Wang
Author-Name: Bai Liu
Author-X-Name-First: Bai
Author-X-Name-Last: Liu
Title: Employee education level and real earnings management: evidence from China
Abstract:
Employees play an important role in earnings management. Using a sample of Chinese listed firms, we find that the higher education level of employees exhibits less real earnings management. The additional tests show the moderating effects between employee education level and real earnings management including top executives’ power, employee stock ownership plans, reliance on employees, internal control weakness, and state-owned enterprises. This study sheds light on how high-quality human capital creates firms value from the perspective of accounting practice.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 221-246
Issue: 2
Volume: 31
Year: 2024
Month: 03
X-DOI: 10.1080/16081625.2023.2176327
File-URL: http://hdl.handle.net/10.1080/16081625.2023.2176327
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# input file: RAAE_A_2170891_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: Jianhui Jian
Author-X-Name-First: Jianhui
Author-X-Name-Last: Jian
Author-Name: Keke He
Author-X-Name-First: Keke
Author-X-Name-Last: He
Author-Name: Yuan Liu
Author-X-Name-First: Yuan
Author-X-Name-Last: Liu
Author-Name: Yulong Sun
Author-X-Name-First: Yulong
Author-X-Name-Last: Sun
Title: Corporate social responsibility: opportunistic behavior under earnings management?
Abstract:
This paper investigates whether companies actively use social responsibility to divert public attention from the quality of their accounting information when implementing earnings management. The results show a significant positive relationship between EM and CSR. The mechanism of influence suggests that the risk of share price collapse, investor sentiment and the cost of capital play a mediating role. Subgroup tests reveal that this corporate masking and rent-seeking motive is more pronounced in underperforming, non-family-owned and non-state owned firms. Further research finds that corporate governance mechanisms such as equity incentives, fund ownership, and high concentration of equity can moderate this opportunism.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 247-268
Issue: 2
Volume: 31
Year: 2024
Month: 03
X-DOI: 10.1080/16081625.2023.2170891
File-URL: http://hdl.handle.net/10.1080/16081625.2023.2170891
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# input file: RAAE_A_2176329_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: Saule Dyussembina
Author-X-Name-First: Saule
Author-X-Name-Last: Dyussembina
Author-Name: Kunsu Park
Author-X-Name-First: Kunsu
Author-X-Name-Last: Park
Author-Name: Young Mok Choi
Author-X-Name-First: Young Mok
Author-X-Name-Last: Choi
Title: Income smoothing and firm value: the moderating role of foreign ownership
Abstract:
This study examines whether foreign ownership plays a moderating role in the relation between income smoothing and firm value. We first find that income smoothing is negatively related to firm value. We then find that the negative relation between income smoothing and firm value is weaker for firms with high foreign ownership than for those with low foreign ownership. This finding suggests that foreign ownership serves a positive moderating role in the income smoothing-firm value relation. Finally, we further find that the positive moderating effect of foreign ownership on the income smoothing-firm value nexus is stronger for firms that have higher profitability and pay dividends. Overall, our empirical evidence sheds light on the moderating role of foreign ownership in the association between income smoothing and firm value.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 153-175
Issue: 2
Volume: 31
Year: 2024
Month: 03
X-DOI: 10.1080/16081625.2023.2176329
File-URL: http://hdl.handle.net/10.1080/16081625.2023.2176329
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Handle: RePEc:taf:raaexx:v:31:y:2024:i:2:p:153-175
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# input file: RAAE_A_2147969_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: Jing Tang
Author-X-Name-First: Jing
Author-X-Name-Last: Tang
Author-Name: Chuyuan Liu
Author-X-Name-First: Chuyuan
Author-X-Name-Last: Liu
Title: Financial comment letters, geographic proximity and audit quality
Abstract:
This paper studies the role of the financial comment letter (CL) in auditing by investigating how CLs affect auditors’ performance. We find that the CL can stimulate auditors to improve audit quality and that the result mainly derives from the individual auditor level. Considering geographic proximity, our results show that the positive influence of CLs on audit quality is more pronounced when auditors are located closer to their clients and regulators. Additional analyses indicate that individual auditors’ independence and industry specialization can strengthen the relationship between commented auditors and audit quality. Our results suggest that CLs can motivate better audit outcomes and that geographic proximity can further influence the effect of CLs on audit quality.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 196-220
Issue: 2
Volume: 31
Year: 2024
Month: 03
X-DOI: 10.1080/16081625.2022.2147969
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2147969
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Handle: RePEc:taf:raaexx:v:31:y:2024:i:2:p:196-220
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# input file: RAAE_A_2147967_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: Tolulola Lawal
Author-X-Name-First: Tolulola
Author-X-Name-Last: Lawal
Author-Name: Yoshikatsu Shinozawa
Author-X-Name-First: Yoshikatsu
Author-X-Name-Last: Shinozawa
Title: Financial reporting lag during COVID-19: evidence from flash reporting in Japan
Abstract:
Considering the waiver of the ‘within 45 days’ rule in Japan following the coronavirus disease 2019 pandemic, we conduct empirical investigations to examine the determinants of the timeliness of flash reporting and the market reactions to flash announcements during the pandemic, distinguishing between early and late filers and between the ‘waiver’ year (2020) and ‘non-waiver’ year (2021). We find that the complexity of operations and earnings news explain the observed reporting delay. We also find significant support for market reactions to flash reporting, suggesting that the waiver policy has no significant impact on the information value of flash announcements.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 320-338
Issue: 3
Volume: 31
Year: 2024
Month: 05
X-DOI: 10.1080/16081625.2022.2147967
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2147967
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Handle: RePEc:taf:raaexx:v:31:y:2024:i:3:p:320-338
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# input file: RAAE_A_2156359_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: He Xiao
Author-X-Name-First: He
Author-X-Name-Last: Xiao
Title: Institutional investors’ corporate site visits and tax avoidance
Abstract:
This study examines the association between institutional investors’ corporate site visits (CSVs) and the visited firms’ tax avoidance. This paper uses unique corporate site visit data from China to evidence that institutional investors’ CSVs reduce the visited firms’ tax avoidance. The primary economic channel is that dedicated institutional investors have a higher probability of visiting the corporate sites, and their long-term investment horizons discourage corporate tax avoidance. Another channel stems from the CSVs’ influence on the visited firms’ information environment and its monitoring mechanism for managers.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 423-440
Issue: 3
Volume: 31
Year: 2024
Month: 05
X-DOI: 10.1080/16081625.2022.2156359
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2156359
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Handle: RePEc:taf:raaexx:v:31:y:2024:i:3:p:423-440
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# input file: RAAE_A_2147968_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: Qilong Cao
Author-X-Name-First: Qilong
Author-X-Name-Last: Cao
Author-Name: Jinglei Li
Author-X-Name-First: Jinglei
Author-X-Name-Last: Li
Title: Bank competition and corporate financialization: evidence from China
Abstract:
By integrating the banks and firms’ latitude and longitude information, this study innovatively constructs firm-level bank competition indicators, and systematically examines the mechanism of bank competition on the financialization of nonfinancial listed companies. The findings revealed that bank competition could promote corporate financialization. The result is still valid after several robustness tests and consideration of endogenous issues. Bank competition primarily affects corporate financialization through two channels: easing corporate financial constraints and decreasing corporate loan costs. Moreover, this role is even more apparent in non-state-owned firms and well-managed firms.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 378-394
Issue: 3
Volume: 31
Year: 2024
Month: 05
X-DOI: 10.1080/16081625.2022.2147968
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2147968
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Handle: RePEc:taf:raaexx:v:31:y:2024:i:3:p:378-394
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# input file: RAAE_A_2170894_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: Burcu Dinçergök
Author-X-Name-First: Burcu
Author-X-Name-Last: Dinçergök
Author-Name: Hakkı Ozan Eruygur
Author-X-Name-First: Hakkı Ozan
Author-X-Name-Last: Eruygur
Title: Capital structure decisions under uncertainty: the case of Turkey
Abstract:
This study analyzes the relationship between uncertainty and target leverage ratios on manufacturing firms listed in Borsa Istanbul between 2005–2020. To handle possible instrument proliferation and weak instrument problems of System GMM methodology of dynamic panel data, we mainly adopted the Quasi Maximum Likelihood estimator and found that uncertainty has a significant negative marginal effect on target leverage ratios. Our analysis revealed that firms with high levels of uncertainty have lower average leverage ratios than other firms. ANCOVA analysis results show that uncertainty is in the first three time-varying variables which have the highest impact on target leverage variation.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 441-456
Issue: 3
Volume: 31
Year: 2024
Month: 05
X-DOI: 10.1080/16081625.2023.2170894
File-URL: http://hdl.handle.net/10.1080/16081625.2023.2170894
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Handle: RePEc:taf:raaexx:v:31:y:2024:i:3:p:441-456
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# input file: RAAE_A_2194887_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: Yiru Yang
Author-X-Name-First: Yiru
Author-X-Name-Last: Yang
Author-Name: Deyu Chen
Author-X-Name-First: Deyu
Author-X-Name-Last: Chen
Title: Influence of COVID-19 on asymmetric cost behavior and intellectual capital efficiency: a comparison of Australian and Chinese listed firms
Abstract:
This study examines whether intellectual capital efficiency affects the asymmetric cost behavior of managers and whether such influences were impacted by the COVID-19 pandemic in Australia and China. The sample consists of Australian and Chinese-listed firms from 2018 to 2021. The results found that intellectual capital efficiency increases the cost stickiness in general for both countries. However, the degree of cost stickiness caused by intellectual capital efficiency is significantly more pronounced in Australia than in China. When Chinese firms have government connections, the degree of cost stickiness caused by the intellectual capital efficiency increases and the significant difference in cost stickiness between China and Australia ceases. In addition, this study found that COVID-19 affected the degree of cost stickiness in China more profoundly than in Australia. This study presents important implications for external stakeholders to assess a firm’s cost behavior by considering a firm’s intellectual capital efficiency as the determinant of asymmetric cost behavior.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 477-493
Issue: 3
Volume: 31
Year: 2024
Month: 05
X-DOI: 10.1080/16081625.2023.2194887
File-URL: http://hdl.handle.net/10.1080/16081625.2023.2194887
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Handle: RePEc:taf:raaexx:v:31:y:2024:i:3:p:477-493
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# input file: RAAE_A_2194893_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: Xiaochun Li
Author-X-Name-First: Xiaochun
Author-X-Name-Last: Li
Author-Name: Min Li
Author-X-Name-First: Min
Author-X-Name-Last: Li
Author-Name: Yunyun Wu
Author-X-Name-First: Yunyun
Author-X-Name-Last: Wu
Title: Research on effects of integration of primary, secondary, and tertiary industries in rural areas of developing countries: an approach of rural capital subsidies
Abstract:
We set up a four-sector general equilibrium model and a rural industrial integration indicator to investigate impacts of capital subsidies given to capital-using sectors in rural industrial chain on rural industrial integration and social welfare. Our findings are as follows: Rural capital subsidies can enhance rural industrial integration (but need to satisfy certain conditions in the short-run) and reduce the economic gap between urban and rural areas. In numerical simulation part, we discover that capital subsidy for rural secondary industry has a more favourable impact on rural industrial integration, social welfare, and narrowing urban–rural economic gap than rural tertiary capital subsidy.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 457-476
Issue: 3
Volume: 31
Year: 2024
Month: 05
X-DOI: 10.1080/16081625.2023.2194893
File-URL: http://hdl.handle.net/10.1080/16081625.2023.2194893
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Handle: RePEc:taf:raaexx:v:31:y:2024:i:3:p:457-476
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# input file: RAAE_A_2105726_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: Qingqing Fei
Author-X-Name-First: Qingqing
Author-X-Name-Last: Fei
Title: Are supervisory activities of independent directors under effective supervision of media? Evidence from board voting records in China
Abstract:
Given the role of media as a crucial institutional factor in corporate governance, this study explores the impact of media on independent directors’ voting decisions. With the availability of voting records, we conduct both firm- and director-level analyses and find that media exposure prompts independent directors to fulfill supervisory duties. An additional analysis reveals a negative moderating effect of director compensation. We also find that dissent triggers unplanned departures, after which the remaining and newly appointed independent directors are less sensitive to media attention. These findings provide evidence supporting a specific channel through which media influences corporate governance.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 301-319
Issue: 3
Volume: 31
Year: 2024
Month: 05
X-DOI: 10.1080/16081625.2022.2105726
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2105726
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Handle: RePEc:taf:raaexx:v:31:y:2024:i:3:p:301-319
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# input file: RAAE_A_2092159_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: Wei Zhang
Author-X-Name-First: Wei
Author-X-Name-Last: Zhang
Title: Short Selling and Managerial Ability
Abstract:
Using a balanced panel of treatment and control firms based on Regulation SHO of 2004 which suspended short sale price tests for a third of the stocks in the Russell 3000 index, we examine the impact of short selling on managerial ability. We found evidence that short selling enhances managerial ability in treatment firms during the period in which short sale price tests were suspended. Subsample analysis suggests that our results could be interpreted within the context of risk-taking behavior of CEOs.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 360-377
Issue: 3
Volume: 31
Year: 2024
Month: 05
X-DOI: 10.1080/16081625.2022.2092159
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2092159
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Handle: RePEc:taf:raaexx:v:31:y:2024:i:3:p:360-377
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# input file: RAAE_A_2147964_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: Yu Liu
Author-X-Name-First: Yu
Author-X-Name-Last: Liu
Author-Name: Julia Junxia Liu
Author-X-Name-First: Julia Junxia
Author-X-Name-Last: Liu
Author-Name: Qingquan Xin
Author-X-Name-First: Qingquan
Author-X-Name-Last: Xin
Title: Does industry audit risk similarity affect auditor expertise? Evidence from China
Abstract:
This study examines whether auditors develop expertise in audit risk homogenous industries. Using critical audit matters (CAMs) disclosed in audit reports of Chinese listed companies, we construct a homogeneity measure that captures the similarity of audit risks in a client industry. We find that individual partner expertise occurs in industries with high levels of CAM similarity. We also find that industry expert partners provide fee discounts in more homogenous industries, whereas audit quality is unchanged. These results suggest that auditors benefit from achieving economies of scale rather than providing quality-differentiated audits, by specializing in industries with similar audit risks.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 339-359
Issue: 3
Volume: 31
Year: 2024
Month: 05
X-DOI: 10.1080/16081625.2022.2147964
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2147964
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Handle: RePEc:taf:raaexx:v:31:y:2024:i:3:p:339-359
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# input file: RAAE_A_2147963_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20240209T083504 git hash: db97ba8e3a
Author-Name: Yuan Zhang
Author-X-Name-First: Yuan
Author-X-Name-Last: Zhang
Author-Name: Shaoling Chen
Author-X-Name-First: Shaoling
Author-X-Name-Last: Chen
Author-Name: Honghua Zhang
Author-X-Name-First: Honghua
Author-X-Name-Last: Zhang
Title: A network analysis on fund portfolio mismatch and market volatility: evidence from China
Abstract:
A large number of studies suggest that network analysis can better explain the formation and contagion of financial risks. However, it’s controversial whether the financial network connection act as a booster or a stabilizer for market volatility. This paper proves that the degree of network connection is an essential factor in determining its impact on market volatility. It is found that actual industry-dimensional portfolios mismatch with the optimal portfolio constructed based on Markowitz portfolio theory, and the actual networks are over-connected by constructed the actual and optimal fund portfolio networks. Furthermore, it shows that the actual and optimal networks both act as stabilizer for market volatility, while the over-connection of networks exacerbates the market volatility and weaken the stability effect from the optimal network.
Journal: Asia-Pacific Journal of Accounting & Economics
Pages: 395-422
Issue: 3
Volume: 31
Year: 2024
Month: 05
X-DOI: 10.1080/16081625.2022.2147963
File-URL: http://hdl.handle.net/10.1080/16081625.2022.2147963
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Handle: RePEc:taf:raaexx:v:31:y:2024:i:3:p:395-422