scholarly journals Impact of cyberattacks on stock performance: a comparative study

2018 ◽  
Vol 26 (5) ◽  
pp. 637-652 ◽  
Author(s):  
Samuel Tweneboah-Kodua ◽  
Francis Atsu ◽  
William Buchanan
Keyword(s):  
Cross Section ◽  
Large Scale ◽  
Financial Sector ◽  
Cumulative Effects ◽  
Financial Industry ◽  
Data Breach ◽  
Content Type ◽  
Listed Firms ◽  
Technology Firms ◽  
Tools And Techniques

Purpose The study uses cyberattacks announcements on 96 firms that are listed on S&P 500 over the period from January 03, 2013, to December 29, 2017. Design/methodology/approach The empirical analysis was performed in two ways: cross-section and industry level. The authors use statistical tests that account for the effects of cross-section correlation in returns, returns series correlation, volatility changes and skewness in the returns. Findings These imply that studying the cumulative effects of cyberattacks on prices of listed firms without grouping them into the various sectors may be non-informative; financial sector firms tend to react cumulatively to cyberattacks over a three-day period than other sectors; and technology firms tend to be less reactive to the announcement of a data breach. Such firms may possibly have the necessary tools and techniques to address large-scale cyberattacks. Research limitations/implications For cross-section analysis, the outcome shows that the market does not significantly react to cyberattacks for all the event windows, except [−30, 30], while for the sector-level analysis, the analysis offers two main results. Practical implications First, while there is a firm reaction to cyberattacks for long event window for retail sector, there is no evidence of a cumulative firm reaction to cyberattacks for both short and long event windows for the industrial, information technology and health sectors. Second, the firms in the financial sector, there is a strong evidence of cumulative reaction to cyberattacks for [−1, 1] for the financial industry, and the reactions disappear for relatively longer event windows. Social implications These imply that studying the cumulative effects of cyberattacks on prices of listed firms without grouping them into the various sectors may be non-informative, the financial sector firms tend to react cumulatively to cyberattacks over a three-day period than other sectors, technology firms tend to be less reactive to the announcement of a data breach, possibly such firms may have the necessary tools and techniques to address large-scale cyberattacks. Originality/value The work provides new insights into the effect of cyber security on stock prices.

Abnormally long audit report lags and future stock price crash risk: evidence from China

2019 ◽  
Vol 15 (4) ◽  
pp. 611-635
Author(s):  
Ahsan Habib ◽  
Hedy Jiaying Huang
Keyword(s):  
Internal Control ◽  
Stock Price ◽  
Large Scale ◽  
Crash Risk ◽  
Research Database ◽  
Audit Report ◽  
Content Type ◽  
Audit Opinion ◽  
Listed Firms ◽  
International Investors

PurposeAlthough a substantial body of literature investigates the determinants of audit report lag (ARL), scant empirical evidence exists on the consequences of ARL. The purpose of this paper is to examine the association between abnormally long ARL and future stock price crash risk.Design/methodology/approachThis quantitative study employed a large scale (14,445 firm-year observations) of annual financials, audit and ownership information for the Chinese listed companies during 2002–2013 which were retrieved from the China Stock Market and Accounting Research database.FindingsThis study finds evidence that abnormally long ARL increases the risk of a future stock price crash. Furthermore, the study finds that this adverse consequence is more pronounced for firms with a poor internal control environment.Practical implicationsRecently literature started to explore the consequences of abnormal ARL such as going concern audit opinion and restatements in the subsequent periods. This paper reveals that abnormal ARL has consequences for investor wealth losses as well. This is relevant in China, where the ongoing economic growth has attracted, and will continue to attract, a growing body of domestic and international investors. Understanding what factors could expose investors to wealth losses is of paramount importance for allocating their scarce capital.Originality/valueThis study extends the scant literature on the consequences of ARL, and provides useful insights for the Chinese regulatory authorities when considering the appropriateness of the current filing deadline for listed firms.

The use of optimistic tone by narcissistic CEOs

2018 ◽  
Vol 31 (2) ◽  
pp. 531-562 ◽  
Author(s):  
Frerich Buchholz ◽  
Reemda Jaeschke ◽  
Kerstin Lopatta ◽  
Karen Maas
Keyword(s):  
Financial Reporting ◽  
Fixed Effects ◽  
Large Scale ◽  
Seasoned Equity Offerings ◽  
Equity Offerings ◽  
Content Type ◽  
Listed Firms ◽  
Upper Echelons Theory ◽  
Financial Disclosures ◽  
Ceo Narcissism

Purpose The purpose of this paper is to examine how CEO narcissism can be related to the usage of an abnormal optimistic tone in financial disclosures. Drawing on upper echelons theory, this paper suggests a link between CEO characteristics, such as narcissism, and accounting choices, such as optimistic financial reporting language. Design/methodology/approach To measure the narcissistic trait of a CEO, the study builds on a model using a set of 15 archival indicators. The usage of an abnormal optimistic tone is assessed quantitatively when looking at firms’ 10-K filings, where “abnormal” refers to tone that is unrelated to a firm’s performance, risk, and complexity. This approach allows for the use of firm-fixed effects for a sample of US listed firms over the period 1992-2012. Findings The results show that CEO narcissism is significantly positively related to abnormal optimistic tone in 10-K filings. If a highly abnormal optimistic tone is present, the level of CEO narcissism is positively related to the likelihood of future seasoned equity offerings and larger future investments in research and development. Research limitations/implications The findings are relevant for shareholders and stakeholders as well as auditors and legislators. All stakeholders should be aware of the overly optimistic reporting language resulting from CEO narcissism and need to make allowances for it when assessing firm performance based on financial disclosures. Originality/value This study is the first to show in a large-scale sample how CEO narcissism can be related to a firm’s use of optimistic language, and thus contributes to the question of how personality traits affect an organization’s financial reporting strategy.

Board characteristics, ownership concentration and firms’ performance

2019 ◽  
Vol 8 (2) ◽  
pp. 146-165 ◽  
Author(s):  
Abdul Waheed ◽  
Qaisar Ali Malik
Keyword(s):  
Corporate Governance ◽  
Financial Sector ◽  
Resource Dependence Theory ◽  
Ownership Concentration ◽  
Independent Directors ◽  
Data Set ◽  
Content Type ◽  
Listed Firms ◽  
Board Characteristics ◽  
Concentrated Ownership

Purpose The purpose of this paper is to extend the understanding and application of interactive ties creating value through board characteristics, ownership concentration and firms’ performance by using a contingent theoretical-based framework based on the amalgamation of resource dependence theory, stakeholder theory, agency theory, stewardship theory and institutional theory in a country with weak political environment. Design/methodology/approach This study includes a sample of an unbalanced panel of 309 non-financial sector firms listed on Pakistan Stock Exchange (PSX) from 2005 to 2016. In order to address the issue of unobserved heterogeneity, simultaneous and dynamic endogeneity, the current study employed the technique Arellano–Bond dynamic panel data estimation under assumptions of GMM (Arellano–Bond, 1991). Findings The empirical results suggest that the presence of concentrated ownership moderates and helps to overcome the agency problems through different governance mechanisms (such as board size, independent directors and CEO duality). The larger boards are found to be beneficial whereas the higher representation of independent directors in the board is found to be detrimental for Pakistani firms. Research limitations/implications Limitations of the study are, first the current study has analyzed public-listed firms from the non-financial sector, and second the study has only focused on the financial aspect of the performance. The future research could include other proxies of corporate governance and ownership structure such as board diversity and meetings, audit committee and managerial ownership, etc. Practical implications The research also helps Pakistani policy makers in numerous ways. First, the current study confirms the monitoring and expropriation effect of ownership concentration in corporate governance and performance mechanism. Thus, the Security and Exchange Commission of Pakistan (SECP) should make such policies which protect the corporate board against the influence of concentrated ownership so that the interests of the minority shareholders are protected. Second, SECP should ensure that all the listed firms declare a comprehensive profile of their directors (such as academic qualification, age and experience) in their annual reports for the better understanding of the governance−performance mechanism. Originality/value The current study augments the emerging body of literature on corporate governance and firm performance mechanism through the amalgamation and testing of existing theories in an emerging economy like Pakistan by using wider and newer data set.

Identifying territory-linked family business groups: a methodological proposal

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Aitor Garmendia-Lazcano ◽  
Cristina Iturrioz-Landart ◽  
Cristina Aragon-Amonarriz
Keyword(s):  
Family Business ◽  
Large Scale ◽  
Business Groups ◽  
Political Support ◽  
Territorial Development ◽  
Firm Level ◽  
Data Set ◽  
Content Type ◽  
Listed Firms ◽  
Family Business Groups

PurposeThe purpose of this paper is to design a methodology to identify territory-linked family business groups (TLFBGs) in order to overcome the methodological challenges and ease studies about family business groups' (FBGs) impact on territories.Design/methodology/approachThe paper applied an algorithm to a data set of firms located in Gipuzkoa that were registered in the SABI database in 2018.FindingsThe paper defined a new construct, TLFBGs, and proposed a methodology that automatized the identification of TLFBGs by a seven-stage algorithm that was intended to be applicable to any firm-level economic and financial data set, including all registered firms and not only listed firms.Practical implicationsTLFBGs unveil the real relevance that family businesses have in the territorial development, encouraging the political support to family business. Additionally, the methodology provided allows understanding growth processes of family business.Originality/valueThe paper defines a new construct, TLFBGs, that highlights both the underexplored links existing between family and territory and between family and business groups, providing the process and criteria to capture it. The paper opens up large-scale empirical research on the social (and economic) influence of TLFBGs in territorial development.

scholarly journals Reaction of Stock Volatility to Data Breach: an Event Study

2020 ◽  
pp. 1-19
Author(s):  
Samuel Tweneboah-Koduah ◽  
Francis Atsu ◽  
Ramjee Prasad
Keyword(s):  
Cross Section ◽  
Statistical Tests ◽  
Event Analysis ◽  
Stock Market Volatility ◽  
Financial Industry ◽  
Data Breach ◽  
Cross Sectional ◽  
Stock Volatility ◽  
Industry Level ◽  
Significant Difference

The paper assesses how stock market volatility reacts to data breach disclosure. The paper applies Volatility Event Analysis and Kolmogorov-Smirnov Test to analyse how equity risk (stock volatility) of 96 firms listed on the S&P 500 index reacted to the announcement of a data breach using records from Breach Level Index (BLI ) over the period between January 2013 and December 2018. Two levels of empirical analysis were performed: cross-section level and industry level. We employ statistical tests that adjust for the effects of cross-section firm-specific mean and volatility. The analysis delivers the following results: Firstly, cross-sectional analysis shows that there is evidence of significant abnormal across the firms and significant difference between before and after cyberattacks announcements. Secondly, the industry level analysis reveals that the firms in the financial industry exhibit more abnormal volatility and returns than firms in other sectors. Additionally, there is significant evidence of the difference in pre and post cyberattacks or data breach announcements, however, this effect tends to be more pronounced after the announcement of a data breach. Implying that data breach announcements can significantly influence equity volatility. In conclusion, the paper posits, equity investors and other stakeholders should reconsider their approach to cybersecurity events when updating the risk measures of their stocks and portfolios.

Stratigraphic Architecture of a Fluvial-lacustrine Basin-fill Succession at Desolation Canyon, Uinta Basin, Utah: Reference to Walthers’ Law and Implications for the Petroleum Industry

2016 ◽  
Vol 53 (1) ◽  
pp. 5-28 ◽  
Author(s):  
Grace Ford ◽  
David Pyles ◽  
Marieke Dechesne
Keyword(s):  
Cross Section ◽  
Oil Shale ◽  
Large Scale ◽  
Green River Formation ◽  
Sand Content ◽  
Fluvial System ◽  
Uinta Basin ◽  
Green River ◽  
Lacustrine Basin ◽  
Basin Fill

A continuous window into the fluvial-lacustrine basin-fill succession of the Uinta Basin is exposed along a 48-mile (77-kilometer) transect up the modern Green River from Three Fords to Sand Wash in Desolation Canyon, Utah. In ascending order the stratigraphic units are: 1) Flagstaff Limestone, 2) lower Wasatch member of the Wasatch Formation, 3) middle Wasatch member of the Wasatch Formation, 4) upper Wasatch member of the Wasatch Formation, 5) Uteland Butte member of the lower Green River Formation, 6) lower Green River Formation, 7) Renegade Tongue of the lower Green River Formation, 8) middle Green River Formation, and 9) the Mahogany oil shale zone marking the boundary between the middle and upper Green River Formations. This article uses regional field mapping, geologic maps, photographs, and descriptions of the stratigraphic unit including: 1) bounding surfaces, 2) key upward stratigraphic characteristics within the unit, and 3) longitudinal changes along the river transect. This information is used to create a north-south cross section through the basin-fill succession and a detailed geologic map of Desolation Canyon. The cross section documents stratigraphic relationships previously unreported and contrasts with earlier interpretations in two ways: 1) abrupt upward shifts in the stratigraphy documented herein, contrast with the gradual interfingering relationships proposed by Ryder et al., (1976) and Fouch et al., (1994), 2) we document fluvial deposits of the lower and middle Wasatch to be distinct and more widespread than previously recognized. In addition, we document that the Uteland Butte member of the lower Green River Formation was deposited in a lacustrine environment in Desolation Canyon. Two large-scale (member-scale) upward patterns are noted: Waltherian, and non-Waltherian. The upward successions in Waltherian progressions record progradation or retrogradation of a linked fluvial-lacustrine system across the area; whereas the upward successions in non-Waltherian progressions record large-scale changes in the depositional system that are not related to progradation or retrogradation of the ancient lacustrine shoreline. Four Waltherian progressions are noted: 1) the Flagstaff Limestone to lower Wasatch Formation member records the upward transition from lacustrine to fluvial—or shallowing-upward succession; 2) the upper Wasatch to Uteland Butte records the upward transition from fluvial to lacustrine—or a deepening upward succession; 3) the Uteland Butte to Renegade Tongue records the upward transition from lacustrine to fluvial—a shallowing-upward succession; and 4) the Renegade Tongue to Mahogany oil shale interval records the upward transition from fluvial to lacustrine—a deepening upward succession. The two non-Waltherian progressions in the study area are: 1) the lower to middle Wasatch, which records the abrupt shift from low to high net-sand content fluvial system, and 2) the middle to upper Wasatch, which records the abrupt shift from high to intermediate net-sand content fluvial system.

Financial distress determinants among SMEs: empirical evidence from Sweden

2020 ◽  
Vol 47 (3) ◽  
pp. 547-560 ◽  
Author(s):  
Darush Yazdanfar ◽  
Peter Öhman
Keyword(s):  
Financial Crisis ◽  
Financial Distress ◽  
Large Scale ◽  
Global Financial Crisis ◽  
Binary Logistic Regression ◽  
Data Availability ◽  
Cross Sectional ◽  
Data Set ◽  
Content Type ◽  
The Global Financial Crisis

PurposeThe purpose of this study is to empirically investigate determinants of financial distress among small and medium-sized enterprises (SMEs) during the global financial crisis and post-crisis periods.Design/methodology/approachSeveral statistical methods, including multiple binary logistic regression, were used to analyse a longitudinal cross-sectional panel data set of 3,865 Swedish SMEs operating in five industries over the 2008–2015 period.FindingsThe results suggest that financial distress is influenced by macroeconomic conditions (i.e. the global financial crisis) and, in particular, by various firm-specific characteristics (i.e. performance, financial leverage and financial distress in previous year). However, firm size and industry affiliation have no significant relationship with financial distress.Research limitationsDue to data availability, this study is limited to a sample of Swedish SMEs in five industries covering eight years. Further research could examine the generalizability of these findings by investigating other firms operating in other industries and other countries.Originality/valueThis study is the first to examine determinants of financial distress among SMEs operating in Sweden using data from a large-scale longitudinal cross-sectional database.

The dialectics of authoring expansive learning: tracing the long tail of a Change Laboratory

2016 ◽  
Vol 28 (4) ◽  
pp. 245-262 ◽  
Author(s):  
Annalisa Sannino ◽  
Yrjö Engeström ◽  
Johanna Lahikainen
Keyword(s):  
Large Scale ◽  
Scale Transformation ◽  
Dialectical Tensions ◽  
Content Type ◽  
Organization Model ◽  
Expansive Learning ◽  
Conceptual Argument ◽  
University Library ◽  
Dialectical Process ◽  
Cultural Historical Activity

Purpose The paper aims to examine organizational authoring understood as a longitudinal, material and dialectical process of transformation efforts. The following questions are asked: To which extent can a Change Laboratory intervention help practitioners author their own learning? Are the authored outcomes of a Change Laboratory intervention futile if a workplace subsequently undergoes large-scale organizational transformations? Does the expansive learning authored in a Change Laboratory intervention survive large-scale organizational transformations, and if so, why does it survive and how? Design/methodology/approach The paper develops a conceptual argument based on cultural–historical activity theory. The conceptual argument is grounded in the examination of a case of eight years of change efforts in a university library, including a Change Laboratory (CL) intervention. Follow-up interview data are used to discuss and illuminate our argument in relation to the three research questions. Findings The idea of knotworking constructed in the CL process became a “germ cell” that generates novel solutions in the library activity. A large-scale transformation from the local organization model developed in the CL process to the organization model of the entire university library was not experienced as a loss. The dialectical tension between the local and global models became a source of movement driven by the emerging expansive object. Practitioners are modeling their own collective future competences, expanding them both in socio-spatial scope and interactive depth. Originality/value The article offers an expanded view of authorship, calling attention to material changes and practical change actions. The dialectical tensions identified serve as heuristic guidelines for future studies and interventions.

FINRA’s disciplinary actions in 2017: increased restitution ordered with minimal changes in number of cases

2018 ◽  
Vol 19 (2) ◽  
pp. 19-23
Author(s):  
Brian Rubin ◽  
Adam Pollet
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
Disciplinary Actions ◽  
Financial Industry ◽  
Electronic Communications ◽  
Content Type ◽  
The Past ◽  
Expert Analysis ◽  
Research Analysts ◽  
Practical Implications

Purpose The purpose of this paper is to analyze the Financial Industry Regulatory Authority’s (FINRA) 2017 disciplinary actions, the issues that resulted in the most significant fines and restitution and the emerging enforcement trends from 2017 and beyond. Design/methodology/approach The approach of this paper discusses the disciplinary actions in 2017 and prior years, details the top 2017 enforcement issues measured by total fines assessed, including anti-money laundering, trade reporting, electronic communications, books and records, research analysts and research reports, and explains current enforcement trends, including restitution, suitability cases and technological issues. Findings In 2017, restitution more than doubled from the prior year, resulting in the fourth highest total sanctions (fines combined with restitution and disgorgement) assessed by FINRA over the past 10 years. Practical implications Firms and their representatives should heed the trends in both the substantial restitution FINRA is ordering and the related enforcement issues in the cases FINRA has brought. Originality/value This paper provides expert analysis and guidance from experienced securities enforcement lawyers.

Dynamic output feedback control for nonlinear large-scale interconnected systems

2020 ◽  
Vol 39 (4) ◽  
pp. 801-821
Author(s):  
Ezzeddine Touti ◽  
Ali Sghaier Tlili ◽  
Muhannad Almutiry
Keyword(s):  
Decentralized Control ◽  
Output Feedback ◽  
Large Scale ◽  
Optimization Problem ◽  
Lyapunov Theory ◽  
Interconnected Systems ◽  
Dynamic Output Feedback ◽  
Content Type ◽  
Dynamic Output ◽  
Control Scheme

Purpose This paper aims to focus on the design of a decentralized observation and control method for a class of large-scale systems characterized by nonlinear interconnected functions that are assumed to be uncertain but quadratically bounded. Design/methodology/approach Sufficient conditions, under which the designed control scheme can achieve the asymptotic stabilization of the augmented system, are developed within the Lyapunov theory in the framework of linear matrix inequalities (LMIs). Findings The derived LMIs are formulated under the form of an optimization problem whose resolution allows the concurrent computation of the decentralized control and observation gains and the maximization of the nonlinearity coverage tolerated by the system without becoming unstable. The reliable performances of the designed control scheme, compared to a distinguished decentralized guaranteed cost control strategy issued from the literature, are demonstrated by numerical simulations on an extensive application of a three-generator infinite bus power system. Originality/value The developed optimization problem subject to LMI constraints is efficiently solved by a one-step procedure to analyze the asymptotic stability and to synthesize all the control and observation parameters. Therefore, such a procedure enables to cope with the conservatism and suboptimal solutions procreated by optimization problems based on iterative algorithms with multi-step procedures usually used in the problem of dynamic output feedback decentralized control of nonlinear interconnected systems.

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