scholarly journals BEHAVIORAL BIASES IN INVESTMENT DECISIONS: HOME BIAS CASE

2021 ◽  
Author(s):  
Pavlo Dziuba ◽  
Kyryl Shtogrin
Keyword(s):  
Comparative Analysis ◽  
Financial Reporting ◽  
Home Bias ◽  
International Diversification ◽  
Theory And Practice ◽  
Local Bias ◽  
Advantages And Disadvantages ◽  
Developed Markets ◽  
International Portfolio ◽  
The Impact

The place of home bias in the modern paradigm of international portfolio investing is determined. The differences between theory and practice of international portfolio investing resulting from such a bias are identified. Main advantages of international diversification of investment portfolios in terms of performance-risk ratio are defined. It is determined that the growing level of financial markets globalization accompanied by the increase in correlation of returns of financial assets have not affected the benefits of international diversification. The primary problems in determining the reasons for home bias are identified. The main economic and mathematical formalization of home bias in the form of indexes is distinguished. The local bias is investigated. It is revealed that local bias is not limited to national borders. It is determined that home bias is negatively correlated with the wealth of an investor. The extent of home bias for particular groups of countries according to their level of economic development is investigated. It is determined that the highest level of home bias is observed in several developed markets, including China, Japan, the USA, and France, while Luxembourg, the Netherlands, and Switzerland have the highest level of international diversification. The benefits of international diversification based on the MSCI indexes are determined. It is revealed that the benefits from international diversification through emerging markets are higher than those of developed markets. A comparative analysis of portfolios of several countries in the instruments of foreign and local markets is carried out. It is determined that the Great Recession of 2007-2008 promoted the increase in the level of home bias but since 2013 the global level of international diversification has been increasing. Approaches to the analysis of factors of presence of home bias are determined and their main advantages and disadvantages are analyzed based on comparative analysis. The impact of asymmetry of information, financial reporting standards, non-tradable sector of the economy, volumes of investment, inflation, transaction costs, institutional factors on the level of international diversification of the investment portfolio is investigated. A new approach to systematization of factors of home bias through their clustering for institutional, behavioral, transaction and other factors is suggested.

Unfunded Public Employee Health Care Benefits and GASB No. 45

2007 ◽  
Vol 21 (3) ◽  
pp. 245-263 ◽  
Author(s):  
Elizabeth K. Keating ◽  
Eric S. Berman
Keyword(s):  
Health Care ◽  
Financial Reporting ◽  
Full Range ◽  
Financial Reports ◽  
Employment Benefits ◽  
Care Plans ◽  
Advantages And Disadvantages ◽  
Government Accounting ◽  
The Government ◽  
The Impact

The Government Accounting Standards Board (GASB) recently released Statement No. 45, Accounting and Financial Reporting by Employers for Post-Employment Benefits Other Than Pensions and its companion Statement No. 43 for pooled stand-alone health care plans, which will profoundly affect American governmental finance. The goal of this article is to encourage governments to consider carefully a full range of options in funding and restructuring other post-employment benefits (OPEB). This article will review Statement No. 45's potential impact on governments and review existing disclosures in financial reports as well as bond offering statements. The article will discuss the statement's impact on budgets and governmental operations, including collective bargaining. Funding options under Statement No. 45 will be detailed, including the advantages and disadvantages of irrevocable trusts and OPEB bonds. The article will also discuss the impact of Medicare Part D subsidies received by governments, as well as the bond rating implications of policy decisions surrounding OPEB. As the largest government entities are just now implementing GASB Statement No. 45, estimates of the magnitude of unfunded OPEB liabilities are limited as are the strategies likely to be adopted to cover these obligations. This article offers a summary of the unfunded OPEB liabilities reported by states and major cities and suggests some measures for assessing the ability of these entities to address these costs.

scholarly journals The Impact of Financial Statement Comparability on Earnings Management: Evidence from Frontier Markets

2020 ◽  
Vol 8 (4) ◽  
pp. 73
Author(s):  
Wil Martens ◽  
Prem W. S. Yapa ◽  
Maryam Safari
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Common Law ◽  
Accounting Standards ◽  
Real Earnings Management ◽  
Financial Statement ◽  
Financial Reporting Standards ◽  
Developed Markets ◽  
Accounting Comparability ◽  
The Impact

This paper examined whether financial statement comparability constrains opportunistic earnings management in frontier market countries. Using a large sample of 19 frontier market countries, and an accounting comparability method that maps comparability across several accounting standards, the results show that enhanced financial comparability constrains accruals earnings management (AEM). Contrary to developed markets and novel to this study, a significant relationship between financial comparability and real earnings management (REM) was not found. For greater robustness, AEM and REM were also tested on both International Financial Reporting Standards (IFRS) adopting and non-adopting countries. The results suggest IFRS adoption constrains AEM, yet exhibited no impact on constraining REM. Additionally, the use of BigN auditors failed to conclusively show an ability to moderate EM. When combined, the results suggest that frontier markets engage in less REM than expected. It is also noted that the legal roots (civil vs. common law) play a significant role in constraining earnings management. Common law countries exhibited lower AEM when comparability increased; this significance was not found in countries that were rooted in civil law. Contributions from this study show that findings from developed markets cannot be generalised to frontier markets.

scholarly journals The problem of distance learning in higher educational institutions during quarantine

2021 ◽  
Vol 2021 (3 (136)) ◽  
pp. 120-127
Author(s):  
Nataliia Shylina
Keyword(s):  
Distance Education ◽  
Academic Success ◽  
Distance Learning ◽  
Comparative Analysis ◽  
Social Life ◽  
Theoretical Research ◽  
Educational Institutions ◽  
Traditional Learning ◽  
Advantages And Disadvantages ◽  
The Impact

The article is devoted to the problem of distance education, namely training and educating under conditions of the pandemic. The issue of the coronavirus epidemic, which forced the urgent restructuring of all spheres of social life of people around the world, is addressed in the article. As a result, the problem of the global transition to distance learning under severe quarantine is becoming urgent. The author analyzes domestic and foreign pedagogical experience of distance education. Among domestic authors this problem was studied by Gorbatyuk R. M, Turanov Y. O., Rak V. I., Vdovenko I. S., Bodnar S. V., Dekusar G. G., Kuznetsova O. V., Opanasenko Ya. Foreign researchers (Amanda Morin, Berman Grace, and Dubinsky Alison) are more likely to point out that distance learning is associated with many difficulties. The aim of our study was to highlight the problem of distance learning in the quarantine period, its advantages and disadvantages over traditional learning, as well as a comparative analysis of the traditional and distance forms of educational activities. In the process of solving problems, theoretical research methods were used: analysis, systematization, classification of educational and methodological literature to substantiate the theoretical and methodological foundations of research, surveys, analysis of the products of the students’ pedagogical activities. The article presents data from the study of the groups consisting of first- and fifth-year students who studied in different periods: in the first half of 2019, when the study was in classrooms, and in the first half of 2020 during the quarantine, when the study was carried out using distance education. The data according to three criteria: academic success, students’ attendance and students’ satisfaction with the learning process were analyzed by the author. A comparative analysis of the traditional and distance learning is shown in the article. Some conclusions about the ambiguity of the impact of distance learning on different contingents of students have been made.

Possibilities and limitations of the use of bankruptcy prediction models for insolvency prevention

2021 ◽  
pp. 73-94
Author(s):  
Olga Lvova
Keyword(s):  
Financial Reporting ◽  
Financial Distress ◽  
Financial Stability ◽  
Prediction Models ◽  
Organizational Factors ◽  
Bankruptcy Prediction ◽  
Operating Conditions ◽  
Advantages And Disadvantages ◽  
Qualitative Variables ◽  
The Impact

The paper provides the solution to the problem of an integrated classification of existing bankruptcy prediction based on the content analysis of 270 relevant foreign and Russian publications issued within a period of 1910-2020. The author identifies two main groups of models– normative and positive, with the latter categorized into expert, mixed and objective including traditional statistical models and artificial intelligent techniques; and considers the specific features of certain predicting models, their advantages and disadvantages. He then reveals the economic content of such models and the set of ratios applied for identifying company’s financial distress with the following conclusions: approaches to the variables selection are rarely justified, indicators are usually borrowed from previous models or generated automatically by the database configuration; the accounting approach to bankruptcy forecasting based on financial ratios prevails and has serious limitations for Russian companies; the most significant market, value and qualitative variables indicating a decline in the business financial stability are highlighted. Significant limitations of the general use of bankruptcy prediction models for making decisions aimed at insolvency prevention are identified: the inability to anticipate the impact of informal factors that are irregular, unable to extrapolate, and affect companies in different ways; the need to take into account the economic conditions of the national economy, financial reporting standards, and the level of availability of diverse data; the impossibility of creating a universal indicative basis to identify decline of sustainability of any business due to the high volatility of operating conditions in Russia. Bayesian methods and nowcasting, as well as the development of forecasting models for certain industries, are promising areas for the development of modern approaches to bankruptcy prediction, but the fundamental activity for preventing insolvency is not forecasting by models, but the implementation of continuous monitoring of the overall business performance in relation to influencing market, operational, investment, financial, managerial and organizational factors, taking into account significant qualitative variables.

Government Relations: theory, strategies and national practices. Complete guide

2018 ◽  
Author(s):  
Рашид Мухаев ◽  
Rashid Muhaev
Keyword(s):  
Comparative Analysis ◽  
Western Europe ◽  
The United States ◽  
Theory And Practice ◽  
Federal State ◽  
Government Relations ◽  
Advantages And Disadvantages ◽  
Educational Standard ◽  
Science And Art ◽  
State Educational

This publication is one of the first textbooks on the subject "Theory and practice of Government Relations" and a complete guide to GR, the content of which is based on a comparative analysis of the theories, strategies and technologies of communication of interested groups with state and municipal authorities in different countries. The status and nature of GR as a science and art are revealed, methodological and applied issues of designing strategies and practices for converting functional groups ' requests, including business structures, into a mechanism for making and implementing political decisions are revealed. When using the strategy of comparative analysis, communicative practices of interaction of interested groups and authorities in the United States are considered. in the countries of Western Europe, Japan and China, the advantages and disadvantages of national models of GR are revealed, strategies and technologies of positioning of interest groups in Russia, the mechanism of promotion of corporate requests in the public sphere are shown. Corresponds to the Federal state educational standard of higher education of the last generation. The legislation of different countries on GR-practices is relevant as of July 1, 2018. For students of higher educational institutions studying in the areas of "Advertising and PR", "State and municipal administration", "political Science".

scholarly journals Are intangibles really a source of future economic benefits? Evidence from the technology sector

2019 ◽  
Vol 23 (4) ◽  
pp. 442-457
Author(s):  
Ilídio Tomás Lopes
Keyword(s):  
Financial Reporting ◽  
Linear Models ◽  
Accounting Standards ◽  
Economic Benefits ◽  
Current Approach ◽  
Theory And Practice ◽  
Content Type ◽  
Innovative Strategies ◽  
The World ◽  
The Impact

Purpose The purpose of this paper is to identify the impact of intangibles as drivers of economic future benefits, in the top technological companies in the world. It also aims to identify whether the distribution of those intellectual capital (IC) drivers depends on the region and on the accounting standards, used in the preparation of firms’ financial reporting. Design/methodology/approach Using information from the major technological firms for a range of time of five years, a set of IC proxies were identified and regressed. Three linear models were used, and hypotheses were performed toward the identification of significant impacts on firms’ turnover prediction. Findings A set of intangibles was identified as significant drivers of firms’ turnover. Results suggest that the distribution of those proxies differ among regions and depend on the accounting standards. Firms from North-American evidence higher levels of intangibles, their boards composition is differentiated, additionally tending to increasingly invest in research and development activities. Research limitations/implications In spite of the limitations, the authors underline the sample size. However, the current approach can be replicated over time, and based in other rankings, applicable to other activity sectors and using different metrics. Practical implications Based on the major technological firms worldwide, the research adds value to the already known scope of intangibles, by providing additional and complimentary outcomes. A new direction, based on the scope of intangibles accounting standards used in the preparation of financial statements, was flagged toward theory and practice alignment. Originality/value This research adds value to the current literature by exploring the effects of intangibles in the major technological companies in the world. Focused in a sector strongly marked by innovative strategies, it provides a new and complimentary overview.

scholarly journals Integrated Reporting as a Tool for Communicating with Stakeholders – Advantages and Disadvantages

2018 ◽  
Vol 35 ◽  
pp. 06004
Author(s):  
Iwona Matuszyk ◽  
Bartosz Rymkiewicz
Keyword(s):  
Comparative Analysis ◽  
Financial Reporting ◽  
Information Needs ◽  
Primary Source ◽  
Financial Data ◽  
Literature Analysis ◽  
Integrated Reporting ◽  
Main Interest ◽  
Advantages And Disadvantages ◽  
Wide Range

Financial and non-financial reporting from the beginning of its existence is the primary source of communication between the company and a wide range of stakeholders. Over the decades it has adapted to the needs of rapidly changing business and social environment. Currently, the final link in the evolution of organizational reporting, such as integrated reporting, assumes integration and mutual connectivity to both financial and non-financial data. The main interest in the concept of integrated reporting comes from the value it contributes to the organization. Undoubtedly, the concept of integrated reporting is a milestone in the evolution of organizational reporting. It is however important to consider whether it adequately addresses the information needs of a wide range of stakeholders, and whether it is a universal tool for communication between the company and its stakeholders. The aim of the paper is to discuss the advantages and disadvantages of the concept of integrated reporting as a tool for communication with stakeholders and to further directions of its development. The article uses the research methods such as literature analysis, the content analysis of the corporate publications and comparative analysis.

scholarly journals The determinants of home bias

2016 ◽  
Vol 13 (4) ◽  
pp. 198-206
Author(s):  
Mouna Baccouri ◽  
Fedhila Hassouna
Keyword(s):  
Growth Rate ◽  
Gross Domestic Product ◽  
Information Asymmetry ◽  
Rule Of Law ◽  
Home Bias ◽  
International Diversification ◽  
International Macroeconomics ◽  
Developed Markets ◽  
Irrational Behavior ◽  
Economic Volatility

Despite the well-known gains of the international diversification, investors have the tendency to overinvest in domestic equities. This irrational behavior is called home bias. It is considered by Obstfeld and Rogoff (2000) as one of the six major puzzles in the international macroeconomics. The present paper examines the different determinants to understand this major puzzle. Based on a sample of 564 observations (countries-years) that cover the period 2003 to 2013, we found that home bias is explained by the information asymmetry that exists between countries and their economic volatility (assessed by the growth rate of the gross domestic product). Furthermore, our findings indicate that home bias decreases among developed markets and countries characterized by a higher rule of law.

scholarly journals Comparative analysis of USA and Chinese entrepreneurship: experience for Kazakhstan

2021 ◽  
Vol 16 (2) ◽  
pp. 86-97
Author(s):  
A. M. Myrzakhmetova ◽  
A. E. Mukhametzhan
Keyword(s):  
United States ◽  
Economic Growth ◽  
Comparative Analysis ◽  
Well Being ◽  
The United States ◽  
Entrepreneurial Activity ◽  
Advantages And Disadvantages ◽  
The World ◽  
Effective Development ◽  
The Impact

Вusinesses are the backbone of the national economy and play an important role for the effective functioning of the economy of any country in the world. The authors studied the experience of the United States and China, in which small and medium-sized businesses have been successfully developing for a long time, both during periods of economic growth and during periods of economic recession.The purpose of the article is to study the features and conduct a comparative analysis of the organization of entrepreneurial activity in the United States and China, and, based on the experience of these countries, develop proposals for the effective development of entrepreneurship in Kazakhstan. The authors analyzed the dynamics and factors of the development of small and medium-sized businesses, the advantages and disadvantages of entrepreneurial activity in the United States and China, and identified the impact of the COVID-19 pandemic on entrepreneurial activity in these countries and in Kazakhstan. In the course of the study, various methods of scientific knowledge were used: data collection and processing, economic, comparative and statistical analysis, generalization, synthesis, induction, deduction. We collected and processed fresh quantitative data on the state and dynamics of the development of small and medium-sized enterprises in the United States and China in the period from 2011 to 2021.Small and medium business is an integral and important part of the economic development of all countries of the world, the experience of countries such as the United States and China can be useful and interesting for the Kazakh economy. Entrepreneurship performs a number of important socio-economic functions for the country: providing employment, creating a competitive environment, supporting and introducing innovations, reducing social inequality, attracting natural, human, material and technical resources into the production and commercial process, stimulating economic growth and improving the well-being of people.The authors, based on a study of the experience of entrepreneurial activities of two large leading countries of the world economy, have developed proposals that will contribute to the development of small and medium-sized businesses in the Republic of Kazakhstan.

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