Opportunities and Barriers for Valorizing Waste Incineration Bottom Ash: Iberian Countries as a Case Study

Incineration bottom ashes (IBA) are the main waste from municipal solid waste (MSW) incineration. In the Iberian countries (Portugal and Spain), MSW incineration with energy recovery (WtE) plays an important role in MSW management. IBA is highly produced and managed differently both between and within countries. This paper aims to provide a comprehensive overview of the management model of IBA using the Iberian Peninsula as a case study, addressing its properties, current management, incentives and difficulties in valorizing, and prospects. For this purpose, incineration plants of both countries were approached, and a broad literature review was conducted to gather information. About 10% and 41% of IBA have been landfilled in Portugal and Spain, respectively. Metals (mostly ferrous) from Portuguese (6% of IBA) and Spanish (9% of IBA) WtE plants are recycled. In Portugal, the remaining IBA (84%) has been temporarily stored (11%), applied to landfills as a substitute for soil in intermediate and final covers, construction of paths, accesses, and platforms (41%), or used in civil engineering work and road construction (48%). In Spain, the remaining IBA (50%) has been reused mainly as a secondary raw material in the construction and civil engineering fields (77%), while the rest has been temporarily stored (11%), applied in the conditioning of landfills (4%), alsoa secondary aggregate replacing natural materials. Both countries regulate IBA reuse outside landfills but consider different requirements and criteria. Nevertheless, there are both drivers and barriers to valorization. In the future, different IBA applications will likely continue to be developed, with the concern of protecting the environment. Growing confidence in IBA reuse following the publication of proper studies is expected. Globally, uniform legal frameworks among EU members with the same standards would likely lead to better IBA valorization.

Doing good when doing well: evidence on real earnings management

We provide evidence on earnings management by exploiting temporary exogenous shocks to utility firms’ sales arising from weather variation. We find that sample firms’ sales are highly sensitive to annual changes in average temperatures in the region where the firm operates, but this sensitivity disappears quickly as one moves down the income statement. This evidence, while indirect, is suggestive of earnings management activities. In search of direct evidence, we study charitable giving decisions by sample firms and uncover a significant positive sensitivity of charitable spending to weather-driven demand shocks, behavior that is highly consistent with the presence of real earnings management efforts. We find no convincing evidence supporting possible alternative explanations for this evidence, but we do find limited support for the presence of a larger giving–weather relation when earnings management incentives are likely to be elevated. If other real decisions with similar characteristics scale proportionally to charitable giving, our findings suggest that the overall magnitude of real earnings management activities could be quite substantial.

Tournament Incentives and Corporate Social Responsibility Performance

Management incentives for engaging and excelling in corporate social responsibility (CSR) performance is an important theme as business sustainability gains momentum. We examine the role of tournament incentives, which are created by competition among non-CEO (chief executive officer) senior executives (vice presidents [VPs]) for promotion to the CEO position, in firms’ CSR performance. Using a sample of U.S. Standard & Poor (S&P) 1500 firms from 1993 to 2014, we find that tournament incentives proxied by pay gaps between CEOs and VPs are negatively associated with CSR performance, suggesting that competition for promotion could be detrimental for CSR performance. We further show that such association is more pronounced when the perceived probability of promotion increases prior to CEO turnover. This article provides policy, practical, and education implications and contribute to the literature on the integration of CSR into the business culture and strategic management processes.

The Usefulness of Financial Accounting Information: Evidence from the Field

We examine how investment professionals assess the usefulness of financial accounting information depending on their information acquisition objectives and preparers’ earnings management incentives. We conduct a survey experiment based on face-to-face interviews with investment professionals and document two main results. First, we find that, compared with investment professionals assigned a firm valuation objective, those assigned a managerial performance evaluation objective assess accounting information as significantly less useful. Second, we find no systematic evidence that preparers’ earnings management incentives negatively affect investment professionals’ assessments of accounting information usefulness. To elucidate this second finding, we conduct a large-scale follow-up online experiment. Our results continue to offer no support for the effect of earnings management incentives on investment professionals’ assessments of accounting information usefulness, irrespective of preparers’ corporate governance quality. Instead, we find that poor corporate governance, by itself, reduces the usefulness of accounting information to investment professionals.

From venture capital towards venture firm innovation performance: evidence from SMEs of China

Based on information asymmetry, agency theory and resource-based view (RBV), this study investigates the impact of venture capital (VC) on venture firm innovation performance, ascertains the extent to which VC affects venture firm innovation performance and finds the mediating effect of management incentives. Constructing a sample of a novel panel dataset of firms listed on the SME Board of China, we examined a sample of 927 start-ups between 2008 and 2017, showing a notable negative relationship between VC and Patent, and a positive relationship between VC and total factor productivity (TFP), providing stable evidence that VC could not spur firm patent directly, but facilitate the commercialization of innovation. Moreover, it shows that management equity incentives (MEI) and management cash incentives (MCI) playing significant positive mediating role between VC and TFP, while there is no mediating effect between VC and Patent. Findings of this study strengthen the experience of VC and suggest how practitioners of SMEs to enhance the commercialization of innovation, considerably extends our understanding of the impact of VC on venture firm innovation performance.

Time to get it Right: An Examination of Post-Acquisition Fair Value Adjustments

I examine the role of preparer information gathering and processing constraints in fair value measurement. Using two business combination samples, I investigate whether acquirers adjust the initial fair value measurements of identifiable assets and liabilities during the one-year measurement period permitted by FASB Statement 141(R). Empirical proxies for preparers' information gathering and processing costs explain variation in the incidence and magnitude of measurement period adjustments (MPAs). I classify abnormally large MPAs that allow firms to exceed the consensus analyst forecast as suspect adjustments. Suspect adjustments exhibit little association with earnings management incentives and no association with future goodwill impairment. Overall, the results suggest that acquirers use the measurement period when there are concerns about the quality or availability of information, consistent with the FASB's intentions.