Hedge accounting and investors’ view of FX risk

2019 ◽  
Vol 27 (3) ◽  
pp. 407-424
Author(s):  
Li Wang ◽  
Stephen Makar
Keyword(s):  
Risk Management ◽  
Cash Flow ◽  
Risk Premium ◽  
Relevant Information ◽  
Content Type ◽  
Risk Premiums ◽  
Risk Effects ◽  
Positive Effects ◽  
Hedge Accounting ◽  
The Relationship

Purpose This paper aims to examine the foreign exchange (FX) risk effects of cash flow hedge accounting (HA). To the extent the HA qualification criteria and detailed documentation give investors confidence that FX derivatives effectively hedge risk, market-assigned FX risk premiums will be lower for firms using cash flow HA. Design/methodology/approach Probit analyses rely on the HA designation to examine the decision to use cash flow HA. Primary analyses test the hypothesized relationship between the magnitude of FX risk premiums and such HA use. Additional analyses allow for the interaction between cash flow HA use and the extent of FX derivatives use. Findings Hypothesis tests indicate that the magnitude of the FX risk premium is, on average, lower for firms designated as effective cash flow hedgers. In additional tests, the evidence suggests that the market assigns a lower FX risk premium to firms using a higher level of FX derivatives as effective cash flow hedges. Practical implications The findings suggest that cash flow HA provides risk-relevant information to investors. Such positive effects of HA on investors’ understanding of risk management may guide US accounting regulators in their efforts to improve HA. Corporate treasurers also may benefit from these insights into evaluating the use of HA. Originality/value Responding to the call for research on the risk relevance of cash flow HA, this paper merges the HA literature with the FX risk management literature to directly examine the relationship between HA use and FX risk premiums for manufacturing firms. The authors take an innovative approach using FX rates to which each firm is most exposed and provide evidence consistent with the argument that this approach is helpful in understanding both the decision to use cash flow HA and the effect of such HA use on market-assigned FX risk premiums.

Exploring privacy and trust for employee monitoring

2015 ◽  
Vol 115 (1) ◽  
pp. 88-106 ◽  
Author(s):  
Shuchih Ernest Chang ◽  
Anne Yenching Liu ◽  
Sungmin Lin
Keyword(s):  
Organizational Culture ◽  
Employee Performance ◽  
Full Time ◽  
Negative Effects ◽  
Content Type ◽  
Positive Effects ◽  
Study Results ◽  
Employee Monitoring ◽  
Communication Privacy ◽  
The Relationship

Purpose – The purpose of this paper is to evaluate privacy boundaries and explores employees’ reactions in employee monitoring. Design/methodology/approach – The research used the metaphor of boundary turbulence in the Communication Privacy Management (CPM) theory to demonstrate the psychological effect on employees. The model comprised organizational culture, CPM, trust, and employee performance in employee monitoring to further investigated the influence exerted by organizational culture and how employees viewed their trust within the organization when implementing employee monitoring. Variables were measured empirically by administrating questionnaires to full-time employees in organizations that currently practice employee monitoring. Findings – The findings showed that a control-oriented organizational culture raised communication privacy turbulence in CPM. The communication privacy turbulence in CPM mostly had negative effects on trust in employee monitoring policy, but not on trust in employee monitoring members. Both trust in employee monitoring policy and trust in employee monitoring members had positive effects on employee commitment and compliance to employee monitoring. Research limitations/implications – This research applied the CPM theory in workplace privacy to explore the relationship between employees’ privacy and trust. The results provide insights of why employees feel psychological resistance when they are forced to accept the practice of employee monitoring. In addition, this study explored the relationship between CPM and trust, and offer support and verification to prior studies. Practical implications – For practitioners, the findings help organizations to improve the performance of their employees and to design a more effective environment for employee monitoring. Originality/value – A research model was proposed to study the impacts of CPM on employee monitoring, after a broad survey on related researches. The validated model and its corresponding study results can be referenced by organization managers and decision makers to make favorable tactics for achieving their goals of implementing employee monitoring.

Improving new product development performance by risk management

2016 ◽  
Vol 31 (3) ◽  
pp. 418-425 ◽  
Author(s):  
Mehran Salavati ◽  
Milad Tuyserkani ◽  
Seyyede Anahita Mousavi ◽  
Nafiseh Falahi ◽  
Farshid Abdi
Keyword(s):  
Risk Management ◽  
Product Development ◽  
New Product Development ◽  
Small Sample Size ◽  
New Product ◽  
Small Sample ◽  
Content Type ◽  
Total Performance ◽  
The Relationship ◽  
Npd Performance

Purpose The principal aim of this study is to investigate the relationship between technological, marketing, organizational and commercialization risk management on new product development (NPD) performance. Design/methodology/approach Based on questionnaire, the data were collected from a sample of general automotive industry in Iran. Based on theoretical considerations, a model was proposed and descriptive statistic and hierarchical regression were used to measure the relationship between risk management factors and NPD performance. Findings Data analysis revealed that if organization can amplify their knowledge and information about risk and main factors that affect NPD process, not only can they do their work better but can also increase their ability to predict future happenings that affect performance. Research limitations/implications First, due to the relatively small sample size, caution should be exercised when interpreting the results. Second, the data were collected from automotive producer in Iran, which may restrict to some extent generalizability of the findings. Practical implications The results suggest that managers should consider more attention to risk management. If managers spread the risk management in all aspects of the NPD project, total performance will be increased and it can develop the probability of NPD success. Also organizations should perform great market research due to best commercialization. Originality/value Past researches have presented complete information about NPD process. But identifying and considering the effect of the risk management parameters that are connected to the NPD process were the main thrusts to perform the study. In this paper, based on past research about risk management of NPD, the extra aspect of process that can improve total performance of NPD has been examined.

The optimism-pessimism ratio as predictor of employee creativity: the promise of duality

2018 ◽  
Vol 21 (3) ◽  
pp. 423-442 ◽  
Author(s):  
Arménio Rego ◽  
Miguel Pina e Cunha ◽  
Dálcio Reis Júnior ◽  
Cátia Anastácio ◽  
Moriel Savagnago
Keyword(s):  
Cross Sectional ◽  
Content Type ◽  
Future Studies ◽  
Positive Effects ◽  
The Status ◽  
Single Moment ◽  
Quasi Experimental ◽  
Creativity And Innovation ◽  
The Relationship ◽  
Practical Implications

Purpose The purpose of this paper is to study if the employees’ optimism-pessimism ratio predicts their creativity. Design/methodology/approach In total, 134 employees reported their optimism and pessimism, and the respective supervisors described the employees’ creativity. Findings The relationship between the optimism-pessimism ratio and creativity is curvilinear (inverted U-shaped); beyond a certain level of the optimism-pessimism ratio, the positive relationship between the ratio and creativity weakens, suggesting that the possible positive effects of (high) optimism may be weakened by a very low level of pessimism. Research limitations/implications Being cross-sectional, the study examines neither the causal links between the optimism-pessimism ratio and creativity nor other plausible causal links. The study was carried out at a single moment and did not capture the dynamics that occur over the course of time involving changes in optimism/pessimism and creativity. Future studies may adopt longitudinal or quasi-experimental designs. Practical implications Managers and organizations must consider that, even though positivity promotes creativity, some level of negativity may help positivity to produce creativity. Originality/value This study suggests that scholars who want to study the antecedents of creativity (and innovation) must be cautious in focusing only on the positive or the negative sides of individuals’ characteristics, and rather they must explore the interplay between both poles. Individuals may experience both positive and negative states/traits (Smith et al., 2016), and this both/and approach may impel them to think divergently, to challenge the status quo and to propose “out the box” and useful ideas.

We dreamed a dream that entrepreneurial ecosystems can promote sustainability

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mario Raposo ◽  
Cristina I. Fernandes ◽  
Pedro M. Veiga
Keyword(s):  
Policy Formulation ◽  
Logistic Distribution ◽  
Future Research ◽  
Community Innovation Survey ◽  
Content Type ◽  
Positive Effects ◽  
Entrepreneurial Ecosystems ◽  
Future Research Agenda ◽  
Company Policy ◽  
The Relationship

PurposeResearch into the relationship between entrepreneurial ecosystems and sustainability has deepened in terms of both quantity and quality even while still remaining a fragmented and divergent field. Hence, the purpose of this study is to put forward empirical evidence to advance the literature on the relationship between entrepreneurial ecosystems and sustainability. To this end, the authors furthermore identify and highlight a future research agenda.Design/methodology/approachThe source of the empirical analysis in this article stems from the Community Innovation Survey, the leading statistical inquiry of innovation in companies carried out by Eurostat based upon the conceptual framework set out in the Oslo Manual. For modelling the variables, the authors applied binary regression based on logistic distribution.FindingsThe results of the research demonstrated how all of the variables considered for entrepreneurial ecosystems (co-operation with suppliers, co-operation with clients or customers, co-operation with universities; co-operation with government, public or private research institutes) return positive impacts on national sustainabilityResearch limitations/implicationsDespite the data spanning only the nine countries in the database, the results enable insights into the theory as the results serve to strengthen already existing considerations on the positive effects of entrepreneurial ecosystems for the sustainability of countries.Practical implicationsThe results of the research may generate important implications for company policy formulation. The identification of the relevance of the different actors in entrepreneurial ecosystems and their impact on sustainability may assist firms and policymakers to identify the leading actors and the resources necessary to sustaining their activities and thereby correspondingly establishing their priorities.Originality/valueThe research (1) both deepens the prevailing knowledge on this theme and fills a gap encountered in the existing literature; (2) in practical terms, for managers, entrepreneurs and politicians to better grasp how entrepreneurship constitutes a systemic phenomenon and these systems require approaching in terms of their impacts and greater contributions to obtaining sustainability.

Impact of regulatory announcements on systemic risk in the Indian telecom sector

2018 ◽  
Vol 13 (5) ◽  
pp. 1395-1416 ◽  
Author(s):  
Sushma Priyadarsini Yalla ◽  
Som Sekhar Bhattacharyya ◽  
Karuna Jain
Keyword(s):  
Risk Premium ◽  
Systemic Risk ◽  
Service Providers ◽  
Policy Makers ◽  
Content Type ◽  
Risk Premiums ◽  
Buffering Hypothesis ◽  
Research Findings ◽  
Telecom Sector ◽  
The Impact

Purpose Post 1991, given the advent of liberalization and economic reforms, the Indian telecom sector witnessed a remarkable growth in terms of subscriber base and reduced competitive tariff among the service providers. The purpose of this paper is to estimate the impact of regulatory announcements on systemic risk among the Indian telecom firms. Design/methodology/approach This study employed a two-step methodology to measure the impact of regulatory announcements on systemic risk. In the first step, CAPM along with the Kalman filter was used to estimate the daily β (systemic risk). In the second step, event study methodology was used to assess the impact of regulatory announcements on daily β derived from the first step. Findings The results of this study indicate that regulatory announcements did impact systemic risk among telecom firms. The study also found that regulatory announcements either increased or decreased systemic risk, depending upon the type of regulatory announcements. Further, this study estimated the market-perceived regulatory risk premiums for individual telecom firms. Research limitations/implications The regulatory risk premium was either positive or negative, depending upon the different types of regulatory announcements for the telecom sector firms. Thus, this study contributes to the theory of literature by testing the buffering hypothesis in the context of Indian telecom firms. Practical implications The study findings will be useful for investors and policy-makers to estimate the regulatory risk premium as and when there is an anticipated regulatory announcement in the Indian telecom sector. Originality/value This is one of the first research studies in exploring regulatory risk among the Indian telecom firms. The research findings indicate that regulatory risk does exist in the telecom firms of India.

The direct and indirect effect of the existence of risk management on the relationship between audit committee and corporate social responsibility disclosure

2018 ◽  
Vol 25 (9) ◽  
pp. 4125-4138 ◽  
Author(s):  
Sami R.M. Musallam
Keyword(s):  
Risk Management ◽  
Indirect Effect ◽  
Audit Committee ◽  
Committee Meeting ◽  
Content Type ◽  
Financial Expertise ◽  
Csr Disclosure ◽  
Corporate Social ◽  
Relationship Of ◽  
The Relationship

PurposeThe purpose of this paper is to investigate the direct and indirect effect of the existence of risk management on the relationship between audit committee and corporate social responsibility (CSR) disclosure in Palestine.Design/methodology/approachThe study utilizes a panel data of 31 Palestinian listed companies from 2010 to 2016. It also utilizes structural equation modeling (SEM) model.FindingsThe results of SEM model find a significant positive relationship of the existence of risk management, audit committee meeting and audit committee size with CSR disclosure. However, audit committee financial expertise has a significant negative relationship with CSR disclosure. The results also find a significant relationship of audit committee meeting and audit committee financial expertise with CSR disclosure through the existence of risk management.Practical implicationsThis study is important to policymakers, accounting professionals and shareholders on the extent to which audit committee related to such committee efficiency in monitoring CSR disclosure.Social implicationsThis study adds to the existing literature by investigating the direct and indirect effect of the existence of risk management on the relationship between audit committee and CSR disclosure in Palestine as one of the youngest market in region that assists to test the validity of agency theory in a young and small emerging market context.Originality/valueIt is the first study to investigate the direct and indirect effect of the existence of risk management on the relationship between audit committee and CSR disclosure in Palestine.

scholarly journals Supplier-initiating risk management behaviour and supply-side resilience: the effects of interpersonal relationships and dependence asymmetry in buyer-supplier relationships

2020 ◽  
Vol 40 (7/8) ◽  
pp. 971-995
Author(s):  
Yiyi Fan ◽  
Mark Stevenson ◽  
Fang Li
Keyword(s):  
Risk Management ◽  
Interpersonal Relationships ◽  
Supply Side ◽  
Large Set ◽  
Supplier Relationships ◽  
Content Type ◽  
Management Behaviour ◽  
Wide Range ◽  
Dependence Asymmetry ◽  
The Relationship

PurposeThe aim of the study is to explore how two dimensions of interpersonal relationships (i.e. size and range of relationships) affect supplier-initiating risk management behaviours (SIRMB) and supply-side resilience. Further, the study aims to explore the moderating role of dependence asymmetry.Design/methodology/approachNine hypotheses are tested based on a moderated mediation analysis of survey data from 247 manufacturing firms in China. The data are validated using a subset of 57 attentive secondary respondents and archival data.FindingsSIRMB positively relates to supply-side resilience. Further, SIRMB mediates the positive relationship between range and supply-side resilience, and this relationship is stronger at lower levels of dependence asymmetry. Yet, although dependence asymmetry positively moderates the relationship between range and SIRMB, it negatively moderates the relationship between size and SIRMB. We did not, however, find evidence that size has a conditional indirect effect on supply-side resilience through SIRMB.Practical implicationsManagers in buying firms can incentivise SIRMB to enhance supply-side resilience by developing a diverse rather than a large set of interpersonal relationships with a supplier. This might include allocating particular employees with a wide range of contacts within a supplier to that relationship, while it may be necessary to adopt different networking strategies for different supplier relationships. Firms in a highly asymmetrical relationship may seek to raise supplier expectations about the necessity to initiate risk management behaviour or look to change the dynamic of the relationship by managing contracts for fairness.Originality/valueNew knowledge on SIRMB as a mediating variable underpinning the relationship between interpersonal relationships and supply-side resilience is provided; and empirical evidence on the opposing moderation effect of dependence asymmetry is presented.

scholarly journals Pengaruh Pengungkapan Manajemen Risiko Terhadap Nilai Perusahaan Melalui Kinerja Keuangan Di Industri Perbankan Indonesia

Owner ◽  
2020 ◽  
Vol 4 (2) ◽  
pp. 467
Author(s):  
Agung Supriyadi ◽  
Christina Tri Setyorini
Keyword(s):  
Risk Management ◽  
Firm Value ◽  
Sampling Method ◽  
Stock Exchange ◽  
Relevant Information ◽  
Government Regulations ◽  
Management Disclosures ◽  
The Relationship ◽  
Positive Effect ◽  
Determining Factor

Investors assess and demand banks to improve their risk management. Then, the profit earned by the bank is not yet known the effect of risk management on firm value. The aim of this study is to determine the effect of risk management disclosures on firm value with profitability as a mediating variable. The population used in this study are all banks listed on the Indonesia Stock Exchange (IDX) in the period of 2016 to 2018. This type of research is a correlational study consisting of thirty-six banks as research samples. Furthermore, the sampling method used in this study was purposive sampling. The results showed that the disclosure of risk management has a positive effect on profitability and firm value. Then, the risks and opportunities in this study can be managed well by the company so that it has a positive effect on increasing the company's profitability. The market implication assumes that risk management disclosures can be used as one of the relevant information to increase the value of the company. However, profitability in this study cannot mediate the relationship between risk management disclosure and firm value. The size of profitability produced in banks in Indonesia is not a determining factor in managing a company's risk management activities. So it can be concluded that risk management is disclosed solely because it fulfills corporate responsibilities and complies with government regulations.

Effects of online advertising on automobile sales

2014 ◽  
Vol 52 (5) ◽  
pp. 834-851 ◽  
Author(s):  
Jianping Peng ◽  
Guoying Zhang ◽  
Shaoling Zhang ◽  
Xin Dai ◽  
Jing Li
Keyword(s):  
Online Advertising ◽  
Content Type ◽  
Search Advertising ◽  
Positive Effects ◽  
Advertising Strategies ◽  
Automobile Sales ◽  
Advertising Spending ◽  
The Relationship ◽  
Practical Implications ◽  
Allocation Strategies

Purpose – The purpose of this paper is to explore the effects of online advertising spending on automobile sales through both search and non-search advertising. Design/methodology/approach – Sales data of the top 52 vehicle models were collected in two consecutive years in China. The advertising spending data of both formats were collected from a leading consulting company and a major search engine company. Then several empirical models were proposed to evaluate the effects of online advertising on automobile sales. Two extended models were further investigated for search advertising. Findings – The results revealed that both formats of online advertising have significantly positive effects on automobile sales. However, excessive spending on non-search advertising does not help sales and a moderate budget is preferred. On the other hand, spending on search advertising has no such constraint to improve the vehicle sales. Practical implications – The empirical findings have proved the importance of online advertising to the automobile companies and thus can help companies improve their decision making in online advertising allocation strategies. Originality/value – This study provides a better understanding of the relationship between online advertising spending and automobile sales, and helps business to define sophisticated online advertising strategies to improve sales performance.

Individual unlearning, organizational unlearning and strategic flexibility

2019 ◽  
Vol 14 (1) ◽  
pp. 2-18 ◽  
Author(s):  
Xiangyang Wang ◽  
Ying Qi ◽  
Yingxin Zhao
Keyword(s):  
Theoretical Model ◽  
Survey Data ◽  
Design Methodology ◽  
Mediating Effect ◽  
Strategic Flexibility ◽  
Content Type ◽  
Positive Effects ◽  
The Relationship

PurposeThe purpose of this paper is to explore the relationship between unlearning and strategic flexibility from the down-up change perspective.Design/methodology/approachDrawing on the routine-updating process, this study builds a theoretical model and examines it using survey data from 233 firms in China.FindingsUnlearning is the enabler to strategic flexibility. Specifically, individual unlearning and organizational unlearning both have positive effects on strategic flexibility. Organizational unlearning exerts a partly mediating effect on the relationship between individual unlearning and strategic flexibility.Originality/valueThe paper examines the different mechanisms of individual and organizational unlearning on strategic flexibility and suggests that unlearning is a useful method or approach for strategic flexibility. In addition, this study is useful to help managers or practitioners determine how to embrace strategic flexibility by unlearning.

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