scholarly journals The Relationship Of Development Status Of Investee Countries And Investor Perceptions Of Foreign Earnings

2012 ◽  
Vol 11 (7) ◽  
pp. 785
Author(s):  
Chen-Lung Chin ◽  
Yu-Ju Chen ◽  
Gary Kleinman ◽  
Picheng Lee
Keyword(s):  
Value Relevance ◽  
Developed Countries ◽  
Policy Implications ◽  
Development Status ◽  
Earnings Response Coefficient ◽  
Foreign Earnings ◽  
Positive Effects ◽  
Earnings Response ◽  
Corporate Internationalization ◽  
The Impact

This study investigates the impact of corporate internationalization and the development status of investee countries on the foreign earnings response coefficient (FERC), which is a measure of the value-relevance of foreign earnings. To improve competitiveness, firms worldwide have expanded aggressively into foreign markets, thereby increasing their exposure to external risks and uncertainties on the one hand, and sources of growth and reward on the other. Using a Taiwanese sample, we found that greater corporate internationalization via investments in developed countries was positively related to the foreign ERC. We expected, and found, that companies can enhance the positive effects of internationalization by investing in countries that are relatively better developed than in countries that are less well developed. The public policy implications of these findings are discussed.

Do government expenditure reduce income inequality: evidence from developing and developed countries

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Noor Zahirah Mohd Sidek
Keyword(s):  
Developing Countries ◽  
Income Inequality ◽  
Driving Forces ◽  
Government Expenditure ◽  
Developed Countries ◽  
Policy Implications ◽  
Content Type ◽  
Positive Effects ◽  
The Impact ◽  
Developing And Developed Countries

Purpose This paper aims to re-examine the impact of government expenditure on income inequality. Existing studies provide mixed results on whether government expenditure reduces or increases income inequality. In this paper, government expenditure is viewed as a tool for redistribution, hence, its impact on inequality is examined. Design/methodology/approach A sample of 122 countries with 91 and 31 countries categorized as developing and developed countries is used. The dynamic panel threshold regression is used to examine the impact of government expenditure on income inequality and to estimate the turning point of the negative or positive effects. Findings The major findings suggest that, in general, government expenditure does reduce income inequality. Results from developed countries support the inversed U-shaped Kuznet curve where higher government expenditure initially led to more inequality but would eventually bring about a positive effect after a certain threshold level. For developing countries, education and development expenditure were the driving forces towards lower income inequality. Practical implications Several policy implications can be derived from this paper. First, government expenditure is a useful tool to alleviate the problem of income inequality. More integration with the global economy via trading activities is also an important channel to help reduce income inequality. Finally, better institutional quality provides an effective ecosystem in promoting better redistribution of income via government expenditure. Originality/value This paper presents a maiden attempt to estimate a threshold value or when government expenditure starts to reduce or increase income inequality. The sample is segregated into developed and developing countries to further control the effect of government size and the level of development of a country.

Discussion—The Role of “Other Information” in the Valuation of Foreign Income for U.S. Multinationals

2005 ◽  
Vol 20 (4) ◽  
pp. 379-383
Author(s):  
Suresh Radhakrishnan
Keyword(s):  
Research Design ◽  
Value Relevance ◽  
Future Research ◽  
Earnings Response Coefficients ◽  
Earnings Response Coefficient ◽  
Foreign Earnings ◽  
Earnings Components ◽  
Response Coefficient ◽  
Other Information ◽  
Earnings Response

The value-relevance of earnings components is an important issue for accounting regulators because it can help them assess the benefit of mandating disclosures with respect to value-relevant earnings components (see, e.g., Barth et al. [2001]). Hope and Kang (hereafter HK) examine the value-relevance of earnings components—specifically, foreign and domestic earnings—by building on Bodnar and Weintrop (1997; hereafter BW). BW show that while both domestic and foreign earnings are value- relevant, the foreign earnings response coefficient is higher than the domestic earnings response coefficient. They also find that the foreign earnings response coefficient is higher than the domestic earnings response coefficient because of higher growth opportunities in foreign operations relative to domestic operations. The objective of HK is to provide an alternative explanation for BW's finding. Specifically, they argue that BW's result could be a statistical artifact due to the omission of an explanatory variable that is correlated with the foreign earnings in BW's research design. HK make the case for the omission of “other information” that is correlated with foreign earnings in BW's research design. They include a variable for “other information” based on analysts' future earnings forecasts in BW's research design and find that the foreign and domestic earnings response coefficients are similar in magnitude. My discussion centers, first, on certain limitations of the research design and proxy for other information employed by HK; second, I will then interpret the results in light of these limitations. For highlighting the limitations of the research design and proxies employed, I begin by providing a simple framework of stock valuation that provides insights into the drivers of earnings response coefficients. Finally, I will state my conclusions and suggest future research directions.

The impact of earnings management on the value relevance of earnings

2017 ◽  
Vol 32 (1) ◽  
pp. 50-74 ◽  
Author(s):  
Wael Mostafa
Keyword(s):  
Earnings Management ◽  
Value Relevance ◽  
Operating Performance ◽  
Accounting Earnings ◽  
Content Type ◽  
Earnings Response Coefficient ◽  
Response Coefficient ◽  
Data Limitations ◽  
Earnings Response ◽  
The Impact

Purpose This paper aims to examine the association between earnings management and the value relevance of earnings (the latter is operationalized by earnings response coefficient). Specifically, this study examines whether opportunistic earnings management has a negative impact on the value relevance of earnings for a sample of firms listed on the Egyptian Stock Exchange. Design/methodology/approach Different from prior work and due to data limitations in the Egyptian market, this paper first examines for the existence of earnings management based on the whole operating performances of the firms by testing whether firms with low/poor operating performance are more likely to choose income-increasing actions (strategies) than firms with high operating performance. After confirming that low operating performance firms manage earnings upward, the authors then assess whether this opportunistic earnings management by these low operating performance firms reduces the value relevance of earnings. This is performed by estimating a model of the relationship between stock returns and accounting earnings with a dummy variable that allows parameter shifts for earnings of low operating performance firms. Findings The results show that discretionary accruals are positive and significantly higher for firms with low operating performance than those for firms with high operating performance. These results indicate that low operating performance firms increase the earnings management practices by probably increasing their reported earnings opportunistically to mask their low performance. Furthermore, the results show that the earnings response coefficient is significantly smaller for earnings of low operating performance firms than that for earnings of high operating performance firms. These results suggest that earnings of firms with low operating performance (that are engaged in opportunistic earnings management strategies) have less value relevance than earnings of firms with high operating performance, i.e. the informativeness of managed earnings is lower than that of non-managed earnings. Practical implications Based on these results, it is plausible that the presence of opportunistic earnings management adversely affects the value relevance of accounting earnings. Originality/value Consistent with previous results from developed countries, this study shows that earnings management is a significant factor that affects value relevance of earnings in Egypt.

The Value Relevance of Earnings in the Presence of Earnings Management: Indonesia as Evidence

2021 ◽  
pp. 097215092110602
Author(s):  
Ratnaningrum Ratnaningrum ◽  
Rahmawati Rahmawati ◽  
Djuminah Djuminah ◽  
Ari Kuncara Widagdo
Keyword(s):  
Earnings Management ◽  
No Value ◽  
Value Relevance ◽  
Stock Exchange ◽  
Manufacturing Companies ◽  
Earnings Response Coefficient ◽  
Panel Data Regression ◽  
Data Regression ◽  
Earnings Response ◽  
The Impact

This study examines the influence of earnings management on the value relevance of earnings, that is, the value relevance of level and changes of earnings. The sample consists of manufacturing companies listed on the Indonesia Stock Exchange (IDX), comprising 606 observations. By using panel data regression, this study provides evidence that the level of earnings has no value relevance; conversely, changes in earnings have value relevance, indicating that earnings have less value relevance. Furthermore, the results of the relevance test of earnings value with the presence of earnings management show that the relevance of the value of the earnings level increases with the presence of earnings management; on the contrary, the relevance of earnings changes decreases with the presence of earnings management. Based on the value of earnings response coefficient, the impact of earnings management on the value relevance of level and changes of earnings appears to indicate that earnings management reduces the value relevance of earnings.

scholarly journals Effects of Institutional Quality on FDI in Provinces of Vietnam: Empirical Evidence Based on Differenced Panel GMM

2015 ◽  
Vol 22 (03) ◽  
pp. 26-45
Author(s):  
Bon Nguyen Van
Keyword(s):  
World Economy ◽  
Institutional Quality ◽  
Total Sample ◽  
Developed Countries ◽  
Evidence Based ◽  
Fdi Inflows ◽  
Positive Effects ◽  
The Past ◽  
The Impact ◽  
Developing And Developed Countries

Foreign direct investment (FDI) has been strongly affecting the world economy during the past years and is a critical topic for both developing and developed countries. Most countries, particularly developing ones, always attempt to adjust and modify appropriate policies and institutions to attract FDI inflows. In the context of Vietnam, does the institutional quality have any effect on attracting FDI inflows in provinces? To answer clearly and exactly this question, the impact of institutional quality on attracting FDI inflows is empirically investigated in a sample of 43 provinces of Vietnam over the period of 2005–2012 via the estimation technique of difference panel GMM. Estimated results indicate that in the total sample of all provinces the institutional quality has significantly positive effects on the FDI flows. However, in the sub-sample of provinces the impact of the institutional quality on attracting FDI inflows in Northern and Southern regions are statistically significant while that in Central region is not.

scholarly journals Do consistent CSR activities matter for firm value?

2016 ◽  
Vol 14 (1) ◽  
pp. 340-350 ◽  
Author(s):  
Loai Alsaid
Keyword(s):  
Stock Returns ◽  
Firm Value ◽  
Value Relevance ◽  
Explanatory Variables ◽  
Earnings Response Coefficient ◽  
Unexpected Earnings ◽  
Valuation Effect ◽  
Interaction Variables ◽  
Earnings Response ◽  
Corporate Social

This paper investigates how investments in corporate social responsibility (CSR) activities affect firm value. We categorise firms’ CSR activities as strategic or opportunistic based on consistency, and analyse the differential value relevance effect. We use the Egyptian Economic Justice Index (EEJI) as the most representative measure for firms’ CSR activities in Egypt. To measure valuation effect, we adopt an earnings response coefficient (ERC) model. Our main explanatory variables are interaction variables with unexpected earnings and two dummy variables; one indicating CSR activities, and one indicating their consistency. We document these variables as positively and negatively significant. Our findings show that investing in CSR activities consistently and strategically may increase firm’s profitability and firm value. However, firms that sporadically invest in CSR activities show a smaller relationship between unexpected earnings and stock returns than firms that consistently invest in CSR activities.

scholarly journals Review of sustainable diets: are nutritional objectives and low-carbon-emission objectives compatible?

2020 ◽  
Vol 101 (1) ◽  
pp. 117-146 ◽  
Author(s):  
Erica Doro ◽  
Vincent Réquillart
Keyword(s):  
Greenhouse Gas ◽  
Food Systems ◽  
Ad Hoc ◽  
Meat Products ◽  
Developed Countries ◽  
Economic Modeling ◽  
Gas Content ◽  
Low Carbon ◽  
Positive Effects ◽  
The Impact

Abstract Food systems in developed countries face one major challenge, namely the promotion of diets that are both healthy and generate less greenhouse gas emissions (GHGE). In this article, we review papers evaluating the impact of a change in diets on both health and GHGE. We address the following questions: How big are the health and environmental impacts that could be induced by a switch to healthier diets? In monetary value, what is the relative importance of the health impact and the environmental impact? Is it possible to design an economic policy to increase global welfare that also takes into account the externalities on both health and the environment? Since the way the change in diet is modeled is a key issue, we classify papers according to the methodology used for simulating diet changes: ad hoc scenarios, optimized diets, and economic modeling. We find that it is possible to design economic policies that have positive impacts on both dimension. Because the substitutions/complementarities between food products are complex, it is not granted that a policy targeting one dimension will generate positive effects on the other dimensions. However, given the diversity of substitution and the complementarity possibilities between products, it is possible to design a policy that does improve both dimensions. A carbon-based tax policy that targets the products with a high greenhouse gas content (e.g., meat products) and reinvests the revenues collected with the tax to subsidize the consumption of fruit and vegetables, is likely to have positive effects on both dimensions.

scholarly journals The changes of the agribusiness impact on the competitive environment of agricultural enterprises

2012 ◽  
Vol 48 (No. 10) ◽  
pp. 449-455 ◽  
Author(s):  
V. Bečvářová
Keyword(s):  
Market Power ◽  
Food Chain ◽  
Research Output ◽  
Developed Countries ◽  
Food Distribution ◽  
Agricultural Enterprises ◽  
Positive Effects ◽  
Regulatory Policies ◽  
Long Time ◽  
The Impact

The market extension generally affects growth performance positively by allowing an expansion of markets, by increasing outside competition as well as by more rapid diffusion of new products, processes and research output between national economies. The positive effects of considerable market on productivity are indubitable. However, two other weighty phenomena of the process are necessary to investigate, effects of regulatory policy and market power exhibits. Agriculture as a sector belongs to those, where the support policies exist for a long time. Nevertheless, the last decades have witnessed considerable changes in this sector among most of developed countries and their agricultural/regulatory policies. It has been perceived, that the agriculture for 21st century cannot be separated from the other components of agri-food sector. The economic importance of the processing and finalization stages (i.e. food industry and food distribution) has increased over time. There are concerned inter-relationships between the market structures development and the crucial factors of the interconnected markets developments in the framework of production verticals of agricultural commodities. Reflecting the steadily more sophisticated supply side behaviour, solution is based upon the demand oriented approach explaining changes of the position of agriculture within the agri-food chain. Conflict of interest between the regulatory/agricultural policy and the market power of input supply and output processing firms and retail notably has increased dramatically. Economic manifestation of the increasing market power on the demand side as well as the impact of market interrelationships and change of policy regulation efficiency within commodity chains are characterised there.  The position of agriculture within the agri-food chain has changed and the influence of farmers has decreased. Success of agricultural enterprises in achieving their operational goals is still more influenced by improvements in productivity and by competitiveness of other “links” of the agri-food chain.

scholarly journals Impacts of high-speed rail development on urban land expansion and utilization intensity in China

2021 ◽  
Vol 14 (1) ◽  
pp. 583-601
Author(s):  
Xin Li ◽  
Xiaodong Ma
Keyword(s):  
High Speed ◽  
Joint Effect ◽  
Urban Land ◽  
Urban Land Use ◽  
Policy Implications ◽  
Eastern Region ◽  
Significance Level ◽  
Positive Effects ◽  
Urban Land Expansion ◽  
The Impact

Urban land expansion (ULE) is a crucial factor for socioeconomic and environmentally sustainable development. However, nowadays, the unprecedented scale of high-speed railway (HSR) construction in China could exert an important influence on ULE. This manuscript first reveals the influence mechanism of HSR on ULE and then employs difference-in-difference (DID) models to investigate this effect based on the data of 280 prefectures and above level cities of 2001-2016. We analyze that HSR exerts a joint effect on ULE from the territorial and local levels and then affects urban land-use intensity (ULUI). HSR opening and HSR station distance both have notably positive effects on ULE, with elastic coefficients of 4.1% and 0.5%, respectively. HSR opening and HSR station distance also both exert positive effects on ULE of the central, eastern region cities and large cities of China, while for the western region and small to medium cities, they are not significant. The impact of HSR station distance on ULUI is negative with a significance level of 0.073, while the impact of HSR opening on ULUI is not significant. Lastly, relevant policy implications are proposed to alleviate urban land waste and spatial disequilibrium under the context of HSR building. This study can provide an important basis for sustainable urban land allocation.

scholarly journals EFFECT AND IMPORTANCE OF CREDIT FLOWS FROM MONETARY POLICY MANAGEMENT ASPECT

2019 ◽  
Vol 31 (1) ◽  
pp. 143-148
Author(s):  
Nikola Vidović ◽  
Milenko Dželetović ◽  
Hatidža Beriša
Keyword(s):  
Monetary Policy ◽  
Banking Sector ◽  
Transition Period ◽  
Developed Countries ◽  
Economic Activities ◽  
Positive Effects ◽  
Personal Consumption ◽  
National Economies ◽  
The Impact ◽  
World Function

The paper focuses on a topic that explains the impact of credit flows on the conduct of monetary policy, as well as their impact on economic activities within national economies in certain countries in the world. Function and importance for the banking sector, as well as for all economic entities, which are categorized by company size, and the impact on the performance and realization of business activities.By comparing similarities and differences, there is a clear distinction between the basic banking channel of credit and the credit channel in the wider sense, as well as their degree of operation in the period before, during, and after the global economic crisis. The paper highlights the positive effects, as well as the negative, ie how their implementation affects the actors of a country's economic system and what are the consequences with a focus on demand, personal consumption, inflation and employment. The problems of adequate application of the model in periods of recession, as well as the degree of representation in developed countries, moderately developed, and countries in the transition period are studied.

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