Corporate cash savings and discretionary accruals

2020 ◽  
Vol 10 (4) ◽  
pp. 429-445
Author(s):  
Jianjun Jia ◽  
Lili Shao ◽  
Zhenzhen Sun ◽  
Fang Zhao
Keyword(s):  
Standard Deviation ◽  
Empirical Evidence ◽  
Design Methodology ◽  
Discretionary Accruals ◽  
Standard Deviation Increase ◽  
Content Type ◽  
Negative Effect ◽  
Saving Behavior ◽  
Cash Savings ◽  
Average Information

PurposeThis paper assesses how discretionary accruals (DAs) affect corporate cash savings policies and the motivation behind this cash saving behavior and, also whether the linkage between DAs and cash saving affect the market-perceived cash value.Design/methodology/approachWe construct the measure of DAs using the previous five-year average information to investigate the association of DAs with the change in cash. Moreover, the Faulkender and Wang (2006) methodology is utilized to examine the market-perceived cash value in DAs.FindingsThe key finding is that firms with high DAs save significantly more cash. A one standard deviation increase in DAs saves cash by 12.59%. Furthermore, the value of cash is low for these firms. The effect is stronger in firms with poor governance but not present in financially constrained firms.Research limitations/implicationsThe empirical evidence highlights DAs have negative effect on market-perceived cash value, which underscores the insight that managers manage earnings opportunistically using DAs.Originality/valueTaken together, we provide more evidence on the literature of accruals in earnings manipulation.

Immigration causes American businesses to fail and that is a good thing

2016 ◽  
Vol 5 (1) ◽  
pp. 63-72
Author(s):  
Ryan H Murphy ◽  
Rick Weber
Keyword(s):  
Standard Deviation ◽  
Failure Rate ◽  
Design Methodology ◽  
Explanatory Variable ◽  
Business Failure ◽  
Foreign Born ◽  
Standard Deviation Increase ◽  
Content Type ◽  
The Usa ◽  
The Relationship

Purpose – The purpose of this paper is to investigate the relationship between immigration rates and business failure, where business failure is viewed as a proxy for the presence of entrepreneurship. Design/methodology/approach – It employs a panel data approach to the USA, using the percentage of the population that is foreign born as the explanatory variable for the business failure rate ten years later. Findings – The authors find the effect to be large, with a one standard deviation increase in the foreign born population corresponding to a 1.09 standard deviation increase in business failure rate, and the authors argue, entrepreneurship. Originality/value – The effect the authors find is very large though perhaps also counterintuitive.

Effects of activity-based workspaces on employee belongingness

Facilities ◽  
2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shang Gao ◽  
Sui Pheng Low ◽  
Hua Qian Gong
Keyword(s):  
Attachment Theory ◽  
Design Methodology ◽  
Sense Of Control ◽  
Content Type ◽  
Corporate Real Estate ◽  
Positive Sense ◽  
Before And After ◽  
Negative Effect ◽  
Open Plan

Purpose The purpose of this study is to investigate the effects of the activity-based workspace (ABW) on employee belonging. Place attachment theory (PAT) is used as a proxy to understand and measure the belongingness of employees to their physical workplaces. Design/methodology/approach A case study of a bank’s newly retrofitted ABW office is conducted, providing fresh perspectives on the effect of ABW on employee belonging. A questionnaire survey was used to understand employee belongingness. Surveys are conducted with employees of the bank (n = 100) who experienced the transition from the conventional open-plan office with designated seats to an ABW, to understand and compare the change in employee belonging after the transition, by studying the level of belonging achieved in the space before and after. Findings The results showed that there was a positive sense of belongingness amongst employees working in the ABW space, as per the PAT framework and an increased sense of belongingness compared with the previous conventional open-plan office. However, ABWs were found to also have a negative effect on employees’ sense of control and security. Originality/value Maslow’s hierarchy of needs indicates that a feeling of belonging is fundamental to humans. The need for belonging is also applicable in the workplaces of today’s progressive corporate organisations, where there is increased pressure and incentive to appeal to and retain talent. This research was conducted in response to the huge growth in interest in activity-based working across the corporate real estate community. As there has been no prior research done in the area of the emotional need for belongingness in ABW.

The effect of teaching style and academic enthusiasm of accounting and auditing students on stress, aggression, and anxiety

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Arash Arianpoor ◽  
Hameed Mohsen Khayoon
Keyword(s):  
Structural Equation ◽  
Design Methodology ◽  
Sampling Method ◽  
Structural Model ◽  
Teaching Style ◽  
Equation Modeling ◽  
Statistical Population ◽  
Content Type ◽  
Confirmatory Factor ◽  
Negative Effect

Purpose This study aims to investigate the effect of teaching style and academic enthusiasm of Iraqi accounting and auditing students on their stress, aggression and anxiety. Design/methodology/approach The statistical population in this study consists of two parts. The first is the Iraqi accounting and auditing students in Iran and the second is the Iraqi accounting and auditing students in Iraq. By available non-probability sampling method, 62 people (Iraqi students in Iran) and 102 (Iraqi students in Iraq) were selected as samples. In this research, a questionnaire was used to collect information. The validity of the questionnaire’s structure was confirmed by confirmatory factor analysis. Also, Cronbach’s alpha coefficients in this study indicating the measurement tool’s reliability. In this research, structural equation modeling has been used to analyze and test the hypotheses. The primary criteria for determining the coefficient and evaluating the path coefficients were used to evaluate the structural model. Findings Findings indicate that in Iraqi students in Iraq and Iraqi students in Iran, teaching style negatively affects stress, aggression and accounting and auditing students’ anxiety. Also, in the group of Iraqi students in Iraq and the group of Iraqi students in Iran, the eagerness to study has a significant negative effect on accounting and auditing students’ stress and anxiety. In contrast, the effect of the desire to study accounting and auditing students’ aggression was confirmed only in Iraqi students in Iraq. Originality/value As the accounting and auditing professions are among the most stressful occupations that increase the characteristics of aggression and anxiety in the employees of that profession, the results of leading research can show that the stress, anxiety and aggression of accounting and auditing students how to reduce through training so that their stress, anxiety and aggression do not appear in the workplace and the reports of accountants and auditors are not affected.

What are the interpersonal antecedents of women’s network satisfaction?

2016 ◽  
Vol 31 (4) ◽  
pp. 266-280
Author(s):  
Maryline Bourdil ◽  
Mickael Géraudel
Keyword(s):  
Women Entrepreneurs ◽  
Design Methodology ◽  
Network Performance ◽  
Strong Ties ◽  
Content Type ◽  
Negative Effect ◽  
Common Interests ◽  
Women's Networks ◽  
Practical Implications

Purpose The purpose of this study is to determine whether women entrepreneurs are satisfied with belonging to a women’s network, as this issue is crucial for network performance and legitimacy. Design/methodology/approach The authors tested the hypotheses on a sample of 127 French women entrepreneurs who belonged to women’s networks using multiple regression analysis. Findings The authors showed that these women entrepreneurs were satisfied when they developed strong ties and when cliques in the network were limited. Education had a negative effect: the higher the educational level, the less satisfaction with their networks the women reported. Research limitations/implications The sample was small and composed only of women entrepreneurs who were members of women’s networks and not women who had left them. Practical implications The survey findings suggest ways that managers can optimize network satisfaction to keep current members while continuing to add new ones: create an environment with no cliques where members can develop strong ties. This means connecting members with similar values or status and common interests, while making sure that cliques do not develop. Originality/value To the authors’ knowledge, satisfaction with professional women’s networks has never been studied. The authors’ highlight the role of strong ties in these networks and identify the contingent effect of cliques.

Entrepreneurship in the digital press: a semantic analysis

2019 ◽  
Vol 26 (3) ◽  
pp. 416-431
Author(s):  
Myriam Martí-Sánchez ◽  
Desamparados Cervantes-Zacarés ◽  
Arturo Ortigosa-Blanch
Keyword(s):  
Empirical Evidence ◽  
Thematic Analysis ◽  
Design Methodology ◽  
Semantic Analysis ◽  
Word Association ◽  
Innovation Ecosystem ◽  
Content Type ◽  
The Public ◽  
The Media ◽  
The Way

Purpose The purpose of this paper is to analyse how the media addresses entrepreneurship and to identify the attributes linked to this phenomenon. Design/methodology/approach The sample is defined in terms of a linguistic corpus comprised of content related to entrepreneurship drawn from the digital editions of the three most important Spanish economic newspapers for the period 2010–2017. Word association and co-occurrence analyses were carried out. Further, a non-supervised clustering process was used as the basis for a thematic analysis. Findings Correspondence between social and media patterns related to the entrepreneurship phenomenon is revealed by the results. It is shown how attributes such as “success”, “innovation”, “ecosystem” and “woman” appear as very relevant and are linked to different co-occurrence scenarios. Relevant thematic groups are also identified related to lexical associations such as innovation, digital economy and public policies linked to entrepreneurship. Research limitations/implications It is important to emphasise that this study has identified and explored relationships between words, but not their evolution. Furthermore, conclusions cannot be drawn concerning whether there are differences in how each newspaper has dealt with entrepreneurship because of the way the corpus was constructed. Originality/value The study provides empirical evidence that helps to identify the way media approaches entrepreneurship. The authors carried out the analysis on the media contents and not on the perception of the public on the phenomenon.

scholarly journals Can compensation committees effectively mitigate the CEO horizon problem? The role of co-opted directors

2020 ◽  
Vol 34 (1) ◽  
pp. 1-21
Author(s):  
Ruonan Liu
Keyword(s):  
Corporate Governance ◽  
Research And Development ◽  
Empirical Evidence ◽  
Design Methodology ◽  
Ceo Compensation ◽  
Content Type ◽  
Horizon Problem ◽  
Accruals Management ◽  
Compensation Committees

Purpose This study aims to examine whether compensation committees dominated by co-opted directors are less effective in mitigating the CEO horizon problem. Design/methodology/approach The author uses a sample of 7,280 firm-year observations from 1998 to 2011. Findings In this study, the author finds evidence of opportunistic research and development (R&D) reduction and accruals management in firms with retiring CEOs and compensation committees dominated by co-opted directors. Moreover, it is found that R&D reduction and income-increasing accruals are less discouraged when determining the compensation for retiring CEOs by compensation committees that are dominated by co-opted directors. The results suggest that compensation committees dominated by co-opted directors are less effective in adjusting CEO compensation to mitigate the CEO horizon problem. Originality/value The study reveals that co-opted directors are weak monitors. Moreover, the study adds empirical evidence to the debate of organizations’ CEO horizon problem. Finally, the study adds to the literature on corporate governance, revealing that compensation committees play an important role in mitigating an organization’s CEO horizon problem by adjusting CEO compensation.

When signal swamps substance: the effects of multi-unit discount’s positive and negative cues on sales

2017 ◽  
Vol 26 (7) ◽  
pp. 750-758
Author(s):  
Devon DelVecchio ◽  
Timothy B. Heath ◽  
Max Chauvin
Keyword(s):  
Laboratory Experiment ◽  
Single Unit ◽  
Design Methodology ◽  
Unit Price ◽  
Negative Effects ◽  
Volume Increase ◽  
Content Type ◽  
Perishable Goods ◽  
Negative Effect ◽  
Purchase Quantity

Purpose Multi-unit discounts (MUDs, e.g. “3 for $4”) typically increase sales relative to other discounting frames. This study demonstrates the value of MUDs by showing that positive multi-unit price/quantity signals are potent enough to match and even exceed the sales produced by larger discounts on single items. However, there is reason to believe that MUDs can produce neutral effects in some cases (e.g. among consumers interested in only single-unit purchases) and even negative effects in others. In addition, the study considers whether MUDs can, in some cases, reduce purchase quantities by signaling smaller-than-otherwise-planned purchase amounts and/or lower-quality products. Design/methodology/approach The effectiveness of MUDs is tested in both the field and lab. Study 1 models purchase quantities stemming from 2,374 purchases of discounted items at a mass retailer. Purchased products ranged in type from pantry items to apparel and electronics, and ranged in price from 44¢ to $99.99. There were 1,530 single-unit discounts, 596 two-unit discounts and 248 discounts, involving three or more units. Study 2 consists of a laboratory experiment that overcomes the shortcomings of Study 1 by accounting for non-purchasers, controlling for product classes and testing whether smaller MUDs can lead to lower purchase quantities for larger-purchase-quantity products. Findings The results of both the field study and the laboratory experiment indicate that MUDs’ monetary cue (savings) and purchase-quantity cue (volume) increase purchase quantities. Generally, purchase quantities increased monotonically with the number of units offered in the discount. In fact, the quantity cue is so effective that it can increase sales enough as to substitute for larger discounts. However, in some instances, MUDs can decrease intended purchase quantities. The negative effect of MUDs is the most pronounced for larger unit deals, offering deeper discounts on perishable goods. Originality/value This research is the first to demonstrate that the power of the signals provided by MUDs may be so positive as to lead them to be more effective than discounts of substantially larger value but also so negative as to render them less effective than single-units discounts. This negative outcome poses a threat beyond those typically associated with discounts, in that rather than consumers simply discounting a discount, in which case the discount remains positive even if their impact at the margin wanes, the MUD frame may actually reduce sales.

Reaction of users as potential victims of information security breach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Suparak Janjarasjit ◽  
Siew H. Chan
Keyword(s):  
Information Security ◽  
Emotional Distress ◽  
Design Methodology ◽  
Mediating Effect ◽  
Security Breach ◽  
Content Type ◽  
Perceived Intensity ◽  
Good Intention ◽  
Negative Effect ◽  
A Company

Purpose The purpose of this study is to examine whether users’ perceived moral affect explains the effect of perceived intensity of emotional distress on responsibility judgment of a perpetrator and company, respectively, in an ill and good intention breach. Design/methodology/approach Participants completed a questionnaire containing items measuring their perceived intensity of emotional distress, perceived moral affect and responsibility judgment of a perpetrator and company, respectively. Findings The results support the mediating hypothesis on responsibility judgment of a perpetrator regardless of intention. The mediating hypothesis is also supported in an ill intention breach in responsibility judgment of a company. However, the mediating effect is not observed in a good intention breach when users assess a company’s responsibility. Originality/value The findings support the notion that users use the consequentialism approach when assessing a perpetrator’s responsibility because they focus on the victims’ emotional distress and discount a perpetrator’s intent, resulting in similar mediating effect of perceived moral affect in an ill and good intention breach. The results also indicate that perceived moral affect increases the negative effect of perceived intensity of emotional distress on responsibility judgment of a company, suggesting that users may exhibit empathetic feelings toward a company and perceive it as a victim of an ill intention breach. The lack of mediating effect in responsibility judgment of a company in a good intention breach may be attributed to the diminished effect of a perpetrator’s feelings of regret, sorrow, guilt and shame for causing emotional distress to the victims.

The effect of corporate political advocacy on brand perception: an event study analysis

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jan Klostermann ◽  
Chris Hydock ◽  
Reinhold Decker
Keyword(s):  
Event Study ◽  
Design Methodology ◽  
Political Advocacy ◽  
Moderating Effects ◽  
Negative Effects ◽  
Content Type ◽  
The Past ◽  
Negative Effect ◽  
Brand Perception

Purpose In recent years, brands have increasingly engaged in corporate political advocacy (CPA; also termed brand activism or corporate sociopolitical activity) by taking positions on polarizing sociopolitical issues. Recent experimental research suggests that consumers respond to CPA based on its alignment with their own values, and that it typically induces an overall negative response. This study aims to provide additional insights by exploring consumer brand perceptions following CPA. Design/methodology/approach An event study of 106 CPA events and weekly consumer brand perception data was conducted. A regression model was used to investigate the moderating effects of CPA effort, concurrence and the strength of the online protests evoked by the CPA. Findings The results show that CPA had a negative effect on consumers’ brand perceptions and that the effect was stronger for customers relative to non-customers. The negative effect was attenuated by CPA concurrence and amplified by effort. Additionally, online protests were driven by the CPA effort and had a strong negative effect on brand perception. Online protests were stronger in the past, and, in turn, the negative effects of CPA on brand perceptions have slightly weakened in recent years. Originality/value This study contributes to the existing literature by highlighting the role of online protests following CPA and distinguishing consumer and customer responses. This study also provides converging evidence of the moderating effects of effort and concurrence identified in previous studies.

Consequences of the implementation of expanded audit reports with key audit matters (KAMs) on audit quality

2020 ◽  
Vol 35 (8) ◽  
pp. 1095-1119
Author(s):  
Weerapong Kitiwong ◽  
Naruanard Sarapaivanich
Keyword(s):  
Design Methodology ◽  
Audit Quality ◽  
Discretionary Accruals ◽  
Regression Analyses ◽  
Content Type ◽  
Weak Evidence ◽  
Financial Restatements ◽  
Audit Reports ◽  
The Impact ◽  
Made In

Purpose This paper aims to ask whether the implementation of the expanded auditor’s report, which included a requirement to disclose key audit matters (KAMs) in Thailand since 2016, has improved audit quality. Design/methodology/approach To answer this question, the authors examined audit quality two years before and two years after its adoption by analysing 1,519 firm-year observations obtained from 312 companies. The authors applied logistic regression analyses to the firm-year observations. Findings The authors found some weak evidence that KAMs disclosure improved audit quality because of auditors putting more effort into their audits and audits being performed thoroughly after the implementation of KAMs. Interestingly, the number of disclosed KAMs and the most common types of disclosed KAMs are not associated with audit quality. Only disclosed KAMs related to acquisitions are more informative because the presence of this type of disclosed KAMs signals the greater likelihood of financial restatements being made in a later year. Originality/value Unlike previous studies on the impact of KAMs disclosure on audit quality, which used discretionary accruals as proxy for audit quality, this study used the occurrence of financial restatements.

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