Corporate innovation in a world of common ownership

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Cheng-Huei Chiao ◽  
Bin Qiu ◽  
Bin Wang
Keyword(s):  
Protective Role ◽  
Least Square ◽  
Content Type ◽  
Ordinary Least Square ◽  
Corporate Innovation ◽  
Common Ownership ◽  
Regulatory Perspective ◽  
Innovation Output ◽  
The Difference ◽  
The Impact

PurposeThe purpose of this paper is to examine the impact of common ownership on corporate innovation, including innovation input, innovation output and postgrant patents.Design/methodology/approachThis paper uses the ordinary least square model and the difference-in-differences technique to evaluate the effect of institutional interlocking shareholdings on the life cycle of corporate innovation.FindingsThe results show that common ownership impedes innovation measured by patent grants and citations through reduced R&D expenditures. However, common ownership protects postgrant patents by lowering the likelihood that a co-owned firm gets involved in patent litigation and by accelerating the settlement of lawsuits between co-owned firms.Practical implicationsFrom a regulatory perspective, common ownership in younger firms that rely heavily on R&D investment to produce innovation outputs is detrimental and needs to be regulated. However, common ownership in mature firms, which hold a big pool of patents or rely on acquiring patents to compete, is of less concern because of the protective role detected.Originality/valueThe paper provides a first comprehensive look into how same-industry common ownership affects innovation input, innovation output and postgrant patents. The research also reconciles the anticompetitive effect and the coordinative effect of common ownership documented in the literature.

Islamic calendar and stock market behaviour in India

2018 ◽  
Vol 45 (11) ◽  
pp. 1550-1566
Author(s):  
Dharani Munusamy
Keyword(s):  
Stock Market ◽  
Least Square Method ◽  
Least Square ◽  
Stock Market Returns ◽  
Content Type ◽  
Ordinary Least Square ◽  
Average Return ◽  
Year Effect ◽  
The Common ◽  
The Impact

Purpose The purpose of this paper is to examine the behavior of the stock market returns in the different days of the week and different months of the year in accordance with the Islamic calendar. Further, the study estimates the risk-adjusted returns to test the performance of the indices during the Ramadan and non-Ramadan days. Finally, the study investigates the impact of Ramadan on the returns and the volatility of the stock market indices in India. Design/methodology/approach Initially, the study applies the Ordinary Least Square method to test the day-of-the-week and the month-of-the-year effect of the common and Shariah indices. Next, the study employs the risk-adjusted measurement to examine the underperformance and over-performance of the indices for both the periods. Finally, the study estimates the GARCH (1,1) and GJR-GARCH (1,1) models to observe the impact of Ramadan on the returns and the volatility of the Shariah indices in India. Findings The study finds that an average return of the indices during the Ramadan days are higher than non-Ramadan days. Further, the average returns of the Shariah indices are significantly higher on Wednesday than other days of the week. In addition, the highest and significant mean returns and mean risk-adjusted returns of the indices during the Ramadan days are observed. Finally, the study finds an evidence of the Ramadan effect on the returns and volatility of the indices in India. Originality/value The study observes evidence that the Ramadan effect influences the Shariah indices, but not the common indices in the stock market of the non-Muslim countries. It indicates that the Ramadan creates the positive mood and emotions in the investors buying and selling activities. The study suggests that investors can buy the shares before Ramadan period and sell them during the Ramadan days to get an abnormal return in the emerging markets.

scholarly journals Getting CFO on board – its impact on firm performance and earnings quality

2020 ◽  
Vol 33 (2) ◽  
pp. 435-454
Author(s):  
Lien Duong ◽  
John Evans ◽  
Thu Phuong Truong
Keyword(s):  
Firm Performance ◽  
Negative Impact ◽  
Earnings Quality ◽  
Least Square ◽  
Chief Financial Officers ◽  
Outside Directors ◽  
Content Type ◽  
Ordinary Least Square ◽  
Board Membership ◽  
The Impact

Purpose This paper aims to investigate the impact of Australian Chief Financial Officers (CFOs) as board insiders on firm performance and earnings quality with reference to agency theory and theory of friendly board. Design/methodology/approach The ordinary least square, two-stage least-squares and propensity score matching regressions are performed with various proxies for firm performance and accruals quality. Findings Firms with CFOs as board insiders experience significantly lower firm performance and earnings quality. In firms with powerful CEOs, the negative impact of CFO board membership on earnings quality is further magnified. Additionally, the negative impact of CFO board membership on firm values and earnings quality is only present in firms with bigger boards or firms with less outside directors. The findings are consistent with the agency perspective and in sharp contrast to the US market. Originality/value This is the first Australian study to examine the impact of CFO board membership on firm performance and earnings quality. The findings suggest that the monitoring of executives is best done by a small or independent board and that the insider board membership should be optimised.

Understanding IFRS adoption

2019 ◽  
Vol 20 (4) ◽  
pp. 543-570 ◽  
Author(s):  
Olfa Riahi ◽  
Walid Khoufi
Keyword(s):  
Logistic Regression ◽  
Least Square ◽  
Future Research ◽  
Behavioral Factors ◽  
Content Type ◽  
Ordinary Least Square ◽  
Ifrs Adoption ◽  
Starting Point ◽  
Behavioral Attribute ◽  
The Impact

Purpose The purpose of this paper is to discern the impact of main behavioral factors that could affect the decision of adopting IFRS in developing countries (DCs). In other words, this work looks to identify the different variables that are likely to influence the adoption of IFRS in these countries. Design/methodology/approach The methodological orientation of this research is to highlight and analyze the correlation between the cited factors and the IFRS adoption in DCs. Tested models are functions of logistic regression. To assess the parameters of these functions, the commonly used method is not that of ordinary least square but the maximum likelihood technique. In short, this study followed a hypothetical-deductive methodology by referring to the application of a logistic regression for each of the variables presumed to be analyzed. The authors implement this empirical model by using the neo-institutional approach and basing on a sample of 108 DCs. Findings The empirical results show that there exists a bidirectional causal relationship between the majority of the developed behavioral variables and the decision of whether adopting or unadopting IFRS by DCs. They also indicate through multivariate analysis that the selection of IFRS by DCs is primarily legitimized by institutional and social pressures (institutional isomorphism). Research limitations/implications It is essential to indicate that some limits might be assigned to the study. They are attached principally to the use of a dichotomous dependent variable which presents a restriction in a sense where the robust inequality at the level of the numbers of the countries of sub-samples can relatively weaken the findings. There are also few studies that jointly analyze the behavioral dimensions within a country and the adoption of IFRS. Institutional theory emanated from the research has proved useful in escaping this limit. Practical implications These empirical insights are of particular interest to local accounting standard setters of the selected countries since they can provide a better discernment of factors that can encourage the adoption of IFRS. Indeed, the research can be a reference for governments to better identify the economic, political and institutional obstacles that have an impact on behaviors which could compel countries to flee the adoption of IFRS. This paper will also be helpful for future research studying the links between human behavior and accounting in a general way. It should be noted that the results will be significant for future studies looking for real behavioral factors that drive a country to adopt an accounting framework. The studies will be able to use the empirical variables as a starting point and then they can extract new measures to identify the impact of behavior on decisions to adopt any standards. Originality/value At the present study, the authors strive to provide input to the literature by focusing on the determinants of the choice of an accounting practice in a DC reverberating to a new dimension which is the behavioral attribute.

Electronic fraud: an emerging cause of bank failure in Nigerian deposit money banks

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Folowosele Folarin Akinwale ◽  
Ikpefan Ochei Ailemen ◽  
Isibor Areghan
Keyword(s):  
Deposit Insurance ◽  
Descriptive Analysis ◽  
Secondary Data ◽  
Least Square Method ◽  
Least Square ◽  
Annual Reports ◽  
Content Type ◽  
Ordinary Least Square ◽  
Unethical Practices ◽  
The Impact

Purpose This study aims to review the degree to which fraud and other unethical practices especially in the digital space have affected the Nigerian banking industry both in the past and present, and how it will be a growing concern in the imminent future. The objective of the study was to examine the impact of electronic fraud on the quality of assets and return on assets of Nigerian deposit money banks. Design/methodology/approach The research used secondary data for the periods 2006 till 2018, which were collected from the Nigeria Deposit Insurance Corporation annual reports. Descriptive analysis and the ordinary least square method of regression analysis were used for data analysis. Findings Findings revealed that electronic fraud cases increased progressively over most of the years of study, which can be attributed to the increased bank products that are electronic-based. Originality/value Many of the reviewed literature examined electronic fraud and its impact on bank profitability but this study examined the cause of electronic fraud and what can be done to curtail it.

Political connections and audit report lag: Indonesian evidence

2018 ◽  
Vol 26 (1) ◽  
pp. 59-80 ◽  
Author(s):  
Ahsan Habib ◽  
Abdul Haris Muhammadi
Keyword(s):  
Large Body ◽  
Least Square ◽  
Political Connections ◽  
Audit Report ◽  
Financial Reports ◽  
Content Type ◽  
Related Party Transactions ◽  
Ordinary Least Square ◽  
Ordinary Least Square Regression ◽  
The Impact

Purpose This paper aims to investigate the association between political connections and the audit report lag and whether related party transactions moderate the association between the two. Design/methodology/approach An ordinary least square regression is estimated whereby audit report lag is regressed on political connections, related party transactions and the interaction between the two. Data on the number and amounts of RPTs are hand-collected from audited financial reports. A firm-year observation is politically connected if at least one large shareholder (controlling at least 10 per cent of the votes directly or indirectly) or board member or commissioner is a current or former Member of Parliament, a minister or head of local government or closely related to a politician or party. Findings Findings show that the audit report lag is relatively short for politically connected firms but increases when such firms conduct both operating and loan-type related party transactions. This suggests that auditors understand the incentives for, and the implications of, related party transactions and hence exert additional audit efforts in scrutinizing financial statements: activities that will increase the audit report lag. Originality/value Although a large body of empirical research exists on the determinants of audit report lag, none has examined the impact of political connections. This paper further contributes to the auditing literature by documenting auditors’ evaluation of related party transactions in a developing country.

Remittances and households’ savings behaviour in Bangladesh

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sarah Salahuddin ◽  
Muhammad Mehedi Masud ◽  
Kwek Kian Teng
Keyword(s):  
Regression Analysis ◽  
National Level ◽  
Least Square ◽  
Pension Scheme ◽  
Analysis Method ◽  
Content Type ◽  
Ordinary Least Square ◽  
Least Square Regression ◽  
Ordinary Least Square Regression ◽  
The Impact

Purpose The purpose of this study is to examine the impact of remittance inflow on households’ savings behaviour in Bangladesh. Remittances are considered as the countercyclical flow of income for its recipient economies. It surges the liquidity of the households receiving remittances, allows them to endure local economic shocks and facilitates them to practice productive activities. Remittances often form a big pool of resources for investment which complement the national savings and support the country’s growth through higher rates of capital accumulation. Therefore, if a significant portion of the remittance is used for savings it can lead to prominent economic growth in the long term. Design/methodology/approach Existing literature indicates remittance-receiving households have a greater propensity to use remittance income to meet basic consumption. However, based on the survey conducted by the Bangladesh Bureau of Statistics on remittances and household savings (SIR, 2016) and using the ordinary least square regression analysis method, to identify the connection between remittances and household’s saving (SIR, 2016) and using the ordinary least square regression analysis method, to identify the connection between remittances and household’s savings behaviour in Bangladesh. Findings The findings of this study represent remittances encourage households to pursue different kinds of savings in Bangladesh. Savings are made in the form of opening savings accounts, deposit pension scheme/fixed deposits/Bonds, insurance policies, also savings through non-governmental organizations, cooperative societies and savings at home. Other than remittances the demographic characteristics of the household head also influence the savings choices. Originality/value To enable the implementation of appropriate policies to boost savings, analysis from both perspectives; the household and the national level, requires strong vigilance and surveillance.

The impact of audit committee attributes on the quality and quantity of environmental, social and governance (ESG) disclosures

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad Arif ◽  
Aymen Sajjad ◽  
Sanaullah Farooq ◽  
Maira Abrar ◽  
Ahmed Shafique Joyo
Keyword(s):  
Audit Committee ◽  
Reporting Quality ◽  
Management Control ◽  
Least Square ◽  
Global Reporting Initiative ◽  
Favourable Effect ◽  
Content Type ◽  
Ordinary Least Square ◽  
Environmental Disclosures ◽  
The Impact

Purpose The purpose of this research is to ascertain the impact of audit committee (AC) activism and independence on the quality and quantity of environmental, social and governance (ESG) disclosures for energy sector firms in Australia. This paper aims to understand how AC attributes such as meeting frequency, and the number of independent directors influence the compliance with the global reporting initiative (GRI) guidelines and quantity of ESG disclosures. Design/methodology/approach Bloomberg ESG disclosure scores and company reported AC attributes are collected and analysed using the pooled ordinary least square (OLS) regression framework with Petersen’s (2009) technique by using a two-dimensional cluster at the firm and year level. Further, this paper uses a lagged independent variable and two-stage least square approach to address endogeneity concerns. Findings The results show a significant positive effect of AC activism and independence on the level of compliance with the GRI guidelines, indicating the favourable effect of AC attributes on ESG reporting quality. Likewise, AC attributes positively affect the quantity of ESG disclosures. Notably, the impact of AC attributes is more pronounced on environmental disclosures. Originality/value This paper validates the significance of the management control mechanism in improving the quality and quantity of ESG disclosures for an environmentally sensitive sector, hence offering a potential answer to reduce agency and legitimacy issues for the sensitive industry firms.

Host country corruption and headquarters-subsidiary relationships in emerging economies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad Shujaat Mubarik ◽  
Miao Miao ◽  
Muhammad Faraz Mubarak ◽  
Syed Imran Zaman ◽  
Syed Hasnain Alam Kazmi ◽  
...  
Keyword(s):  
Host Country ◽  
Positive Association ◽  
Primary Objective ◽  
Least Square ◽  
Host Countries ◽  
Significant Positive Association ◽  
Content Type ◽  
Ordinary Least Square ◽  
Weak Institutions ◽  
The Impact

PurposeThe primary objective of this study is to investigate the impact of a host country's corruption on the autonomy of a foreign subsidiary from a country with lower tolerance for corruption. In doing so, the study examines the moderating role of subsidiary-headquarters communication and multinational corporation's (MNC's) prior international experience in countries with a higher tolerance for corruption.Design/methodology/approachThe data were collected from 182 foreign subsidiaries of 57 Malaysian MNCs operating in 16 host countries. The study employed ordinary least square (OLS) using Stata16.1 to analyze the modeled relationships.FindingsThe findings of this study reveal a significant positive association between the extent of corruption in the host country and the subsidiary's autonomy. The findings illustrate that an MNC's prior experience in the country with an increased tolerance for corruption does not moderate the association between corruption and subsidiary autonomy. However, the findings also confirm that the extent of headquarters-subsidiary communication negatively moderates the association between corruption and subsidiary autonomy.Originality/valueThe study uses unique data collected from Malaysian MNCs. Furthermore, the study contributes to the literature by bringing forth subsidiary autonomy as a counter strategy to potential risks that can arise due to weak institutions and widespread corruption in a host country.

Does dollarization reduce or produce inflation?

2015 ◽  
Vol 42 (3) ◽  
pp. 358-376 ◽  
Author(s):  
Lula G. Mengesha ◽  
Mark J. Holmes
Keyword(s):  
Least Square ◽  
Market Exchange ◽  
Content Type ◽  
Vector Error Correction ◽  
Ordinary Least Square ◽  
Long Run ◽  
Short Run ◽  
Market Exchange Rate ◽  
The Impact ◽  
Partial Dollarization

Purpose – The purpose of this paper is to address the unresolved outcome of the research on the impact of dollarization on inflation by examining the partially dollarized economy of Eritrea. Design/methodology/approach – Inflation under partial dollarization is modelled based on money demand and supply framework. Using quarterly data for the study period 1996Q1-2008Q4, estimation is based on a vector error correction model together with dynamic ordinary least square. Findings – The results indicate that inflation increases as a result of an increase in dollarization. This applies to both the short-run and long-run estimations regardless of whether official or black market exchange rate data are used in the analysis. In terms of the short-run dynamics involved in the long-run relationship between dollarization and inflation, the speed of adjustment toward long-run equilibrium ranges from negative 7.2-7.6 percent per quarter. Research limitations/implications – The main policy implication of the finding is that the extent of dollarization should not be overlooked in controlling inflation in the short run and the long run. Originality/value – Despite a number of studies that examine the consequences of dollarization, the impact of partial dollarization on inflation in the Eritrean economy has never been addressed. This study, therefore, is original in its kind and resolves the controversial outcomes on the studies of inflation and dollarization by modelling inflation under partial dollarization, providing new evidence and revealing potential economic reasons for the discrepancies in the findings of the literature on partial dollarization.

scholarly journals Stock option, contract elements design and corporate innovation output – an analyse based on risk-taking and performance-based incentives

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Qi Shi ◽  
Shufang Xiao ◽  
Kaiwen Chang ◽  
Jiaying Wu
Keyword(s):  
Risk Taking ◽  
Stock Options ◽  
Dominant Role ◽  
Critical Factor ◽  
Stock Option ◽  
Technological Advancement ◽  
Content Type ◽  
Corporate Innovation ◽  
Innovation Output ◽  
The Impact

Purpose With the accelerated technological advancement, innovation has become a critical factor, which affects the core competitiveness of a company. However, studies about the relationship between internal stock option mechanisms and innovation productivity remain limited. Therefore, this paper aims to examine the impact of stock options and their elements design on innovation output from an internal mechanism perspective. Design/methodology/approach Using a sample of 302 stock option incentive plans announced and implemented between 2006 and 2016, this study uses the propensity score matching and difference-in-difference model to find out whether the implementation of stock options improves the innovation outputs of enterprises. Findings Based on the statistical analysis, it is concluded that: stock options can stimulate corporate innovation; a stock option may drive innovation outputs through two ways, performance-based incentives and risk-taking incentives, with the latter one playing a more dominant role and the risk-taking incentives of stock options, could be optimised when the non-executives granting proportion is larger, the granting range is limited, the incentive period is longer, the exercisable proportion is increasing, the price-to-strike ratio is lower and relatively loose performance assessment criteria are applied. Originality/value The conclusion reached in the study may provide valuable information to listed firms in designing and implementing the stock option plans.

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