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The purpose of this paper is to analyse five biases in the valuation of financial investments using a mental time travel framework involving thought investments – with no objective time passing.

An investment’s initial value, together with any periodic funding cash-flows, are mentally projected forward (at an expected rate of return) to give the value at the investment horizon; and this projected value is mentally discounted back to the present. If there is a difference between the initial and present values, then this can imply a bias in valuation.

The study identifies (and gives examples of) five real-world valuation biases: biased funding cash-flow estimates (e.g., mega infrastructure projects); biased rate of return projections (e.g., market crises, tech stock carve-outs); biased discount rate estimates (e.g., dual-listed shares, dual-class shares, short-termism, time-risk misperception, and long-termism); time-duration misestimation or perception bias when projecting (e.g., time-contracted projections which lead to short-termism); and time-duration misestimation or perception bias when discounting (e.g., time-extended discounting which also leads to short-termism). More than one bias can be operating at the same time and we give an example of low levels of retirement savings being the result of the biased discounting of biased projections. Finally, we consider the effects of the different biases of different agents operating simultaneously.

The paper examines key systematic misestimation and psychological biases underlying financial investment valuation pricing anomalies.

This paper explores the association between directors’ and officers’ liability insurance (D&O insurance) and management tone manipulation.

This study uses data from A-share listed non-financial companies from 2009 to 2021 as its sample for empirical tests. In addition, the study relies on text analysis and the construction of models to investigate the relationship between D&O insurance and management tone manipulation.

The authors find that the purchase of D&O insurance will lead to management tone manipulation in the “management discussion and analysis” part of companies’ annual reports, and operating risk and agent cost are the two paths for the effect. Further analysis shows that having a male CEO and employing high-quality auditors can weaken the positive impact of D&O insurance on tone manipulation.

This paper provides a new approach for studying the literature related to D&O insurance and management behavior, and the findings enrich our understanding of the influencing factors and the mechanism of management tone manipulation, thus revealing policy implications for further standardization of the terms and system of D&O insurance in China.

SPACs are reshaping the world of digital entrepreneurial finance. Firms in the digital sector often need access to public markets for long-term competitiveness. SPACs offer a viable solution for these entities to collect capital and transition to public ownership quicker than IPOs. In this context, the paper aims to analyse and compare the performance of SPACs with those of IPOs in the post-business combination phase. The objective is to provide novel insights into the determinants of SPAC operating and market performance by considering firm-specific and deal-specific characteristics and the broader implications of market uncertainty.

The analysis applies univariate and multivariate OLS regressions to a sample of 96 SPACs to investigate the drivers affecting SPACs' performance vis-a-vis IPOs.

The study finds that SPACs underperform the matched group of IPOs on both operating and stock market performance (buy-and-hold strategy). The time to execute a business combination negatively correlates with SPAC performance, and proximity to the 80% deal threshold negatively affects share price performance and EBITDA margin.

The objective is to offer insights for institutional investors to effectively select prime targets within the SPAC framework.

This study strengthens the findings related to the drivers influencing the long-term performance of SPACs that were previously identified in prior research.

This study aims to analyse the motivations and underlying assumptions of decision makers driving the adoption of sustainability-oriented targets in executive compensation (SCTs) to better understand SCTs’ impact on sustainability performance.

Through a qualitative approach, 15 in-depth interviews are conducted in a two-tier governance setting. Participants include management and supervisory board members, compensation consultants and other stakeholders involved in proxy voting.

SCT implementation is primarily determined by meeting shareholders’ expectations rather than those of other stakeholders. Decision makers react in a differentiated way to increased expectations by implementing either primarily symbolic or substantive measures and encounter different implementation challenges like insufficient data quality and a lack of experience within supervisory boards, both of which potentially contribute to decoupling.

The study offers valuable insights for companies in designing SCTs and emphasises the significance of addressing decoupling to effectively enhance sustainability performance through SCTs and provides a foundation for future studies aimed at analysing this phenomenon.

Using a neo-institutional theory lens, this study marks one of the first interview-based investigations to distinguish between symbolic and substantial SCTs. It delves deeply into the role of decoupling and the associated challenges, offering fresh perspectives within the under-researched framework of a two-tier corporate governance structure. Moreover, this study aims to meticulously capture the real-world design practices and implementation processes of SCTs through experts, an aspect that was emphasised as a limitation in previous studies.

The current scenario shows increased adoption of off-chain voting applications in decentralized autonomous organizations (DAOs) to avoid complexity and costs for user engagement in their governance. This paper aims to comprehend the trends and patterns within the DAO community with off-chain voting systems and blockchain usage.

This exploratory study uses a two-pronged quantitative approach, combining descriptive statistical analysis and fuzzy-set qualitative comparative analysis. Input data from different DAO proposals and votes were analyzed.

Results indicate that the 179 DAOs analyzed account for 26,538 proposals and 1,268,474 followers of the entire Snapshot base in January 2023, showing high concentration in engagement. The preferred social media communication channels are Twitter and GitHub, showing a decrease of Ethereum as a main chain, with Polygon and Binance Smart Chain already accounting for 22%. Basic voting can lead to greater user involvement in the voting process.

This study complements the traditional governance theory perspective and advances in the emerging literature on DAOs and blockchain with an empirical analysis.

As blockchain technology gains increasing adoption, comprehending trends and patterns within the DAO community becomes pivotal in identifying opportunities and challenges for innovation and improvement.

Findings can facilitate the development of improved governance models and decision-making processes for DAOs, leading to a more robust and sustainable ecosystem.

This study presents a broader IT-based governance foresight via blockchain while providing an understanding of the voting process, technology features and governance mechanisms for social community engagement and decision-making in DAOs.

The purpose of our study is to investigate the effects of politically-connected boards (PCBs) on over-(under-)investment in labor. We also examine the impacts of the supervisory board (SB)’s optimal tenure on the association between PCBs and over-investment in labor.

We constructed the proxy for PCBs using a dummy variable set to 1 (one) if a firm has politically-connected boards and zero (0) otherwise. For the robustness check, we used the number of politically-connected members on the boards as the proxy for PCBs.

We find that the presence of PCBs reduces over-investment in labor. Consistent with our prediction, we found no significant association between PCBs and under-investment in labor. We also find that the SB with optimal tenure strengthens the negative association between PCBs and over-investment in labor. In our channel analysis, we find that the presence of PCB mitigates over-investment in labor through a higher dividend payout ratio.

Due to the unavailability of data in firms’ annual reports regarding the number of poorly-skilled and highly skilled employees, we were not able to examine the effect of low-skilled and high-skilled employees on over-investment in labor. Also, we were not able to examine over-(under-)investment in labor by drawing a distinction between general (generalist) and firm-specific human capital (specialist) as suggested by Sevcenko, Wu, and Kacperczyk (2022). Generally, it is more difficult for managers to hire highly-skilled employees, specialists in particular, thereby driving the choice of either over- or under-investing in the labor forces. In addition, in the firms’ annual reports, there is no information regarding temporary employees. Therefore, if and when such data become available, this would provide another avenue for future research.

Our study offers several practical implications and insights to stakeholders (e.g. insiders or management, shareholders, investors, analysts and creditors) in the following ways. First, our study highlights significant differences between capital investment and labor investment. For instance, labor investment is considered an expense rather than an asset (Wyatt, 2008) because, although such investment is human capital and is not recognized on the firm’s balance sheet (Boon et al., 2017). In addition, labor investment is characterized by: its flexibility which enables firms to make frequent adjustments (Hamermesh, 1995; Dixit & Pindyck, 2012; Aksin et al., 2015), its non-homogeneity since every employee is unique (Luo et al., 2020), its direct impact on morale and productivity of a firm (Azadegan et al., 2013; Mishina et al., 2004; Tatikonda et al., 2013), and its financial outlay which affects the ongoing cash flows of a firm (Sualihu et al., 2021; Khedmati et al., 2020; Merz & Yashiv, 2007). Second, our findings reveal that the presence of PCBs could help to reduce over-investment in labor. However, if managers of a firm choose to under-invest in labor in order to obtain better profit in the short-term through cost saving, they should be aware of the potential consequences of facing a financial loss when a new business opportunity suddenly arises which requires a larger labor force. Third, our findings help stakeholders to re-focus on the labor investment. This is crucial due to the fact that labor investment is often neglected by those stakeholders because the expenditure of labor investment is not recognized on the firm’s balance sheet as an asset. Instead, it is written off as an expense in the firm’s income statement. Fourth, our findings also provide insightful information to stakeholders, suggesting that an SB with optimal tenure is more committed to a firm, and this factor plays an important role in strengthening the negative association between PCBs and over-investment in labor.

First, our findings provide a valuable understanding of the effects of PCBs on over-(under-)investment in labor. Stakeholders could use information disclosed in the financial statements of a publicly-listed firm to determine the extent of the firm’s investment in labor and PCBs, and compare this information with similar firms in the same industry sector. Second, our findings give a better understanding of the association between investment in labor and political connections , which are human and social capital that could determine the long-term survival and success of a firm. Third, for shareholders, the appointment of board members with political connections is an important strategic decision to build political capital, which is likely to have a long-term impact on the financial performance of a firm; therefore, it requires thoughtful consultation with firm insiders.

Our findings highlight the role of PCBs in reducing over-investment in labor. These findings are significant because both investment in labor and political connections as human and social capital can play an important role in determining the long-term survival and success of a firm.

This study aims to analyse the political connections of Portuguese companies through the members of the board of directors, exploring how these connections influence, in particular, the composition and characteristics of the boards.

The research used a strategy based on analysing the financial statements and curriculum vitae of the directors of Portuguese companies listed on Euronext Lisbon from 2014 to 2019. The political connections of board members were examined, considering the variables identified in the existing literature.

The results indicate that companies with political connections maintain these relationships for long periods and have a greater number of members on the board of directors compared to companies without such connections. Directors with political experience tend to occupy non-executive positions, suggesting that companies may value political contacts more than the management skills of these directors. It was also found that there are politically connected directors who belong to multiple boards and that women appointed to the board are less likely to have a political background, reflecting male dominance in Portuguese politics.

The main limitations of this study include the small number of listed companies in the sample, which may affect the statistical robustness of the results, as well as the use of secondary sources, which may not capture all relevant policy linkages. In addition, the results are specific to the Portuguese context and may not be generalisable to other countries or other regions of the world.

This study contributes to the understanding of political connections in Portuguese companies, offering valuable insights into how these connections influence board composition and can impact corporate strategy and governance. The findings of this study can be especially useful for business leaders looking to optimise the formation of their boards of directors.

This study aims to examine the effects of payment methods used in mergers and acquisitions (M&A) conducted by UK companies spanning the period from 2007 to 2019.

The study used the estimated expected returns method to identify abnormal returns during the deal announcement period, applying event study analysis with both univariate and multivariate regression models to detect cumulative abnormal returns around the announcement timeframe.

The results show a short-term positive return increase for acquiring firms, controlling for deal-specific characteristics like target firm location and payment methods. The authors observed a preference for cash financing across domestic and cross-border transactions. Multivariate analysis revealed insignificance between payment methods and deal characteristics like cross-border acquisitions and diversification.

The study’s focus on publicly traded firms in the UK and the absence of a comparative analysis across different regions and markets limits the sample size and may impact the generalizability of findings.

The study proposes three practical implications. Firstly, firms should tailor payment methods to each transaction, aligning with strategic goals to optimize value and mitigate risks. Secondly, decision-makers must prioritize comprehensive due diligence and strategic alignment throughout M&A processes to enhance success and maximize synergies. Finally, analysing broader strategic contexts and regulatory landscapes when structuring transactions enables goal attainment, such as market expansion or value creation.

The study’s findings can promote transparency and accountability among corporate decision-makers in M&A transactions. Stakeholders can advocate for transparent decision-making processes, enhancing trust in corporate governance.

This study provides valuable insights into the impact of payment methods on shareholder value in M&A transactions involving UK companies, informing strategic decision-making and contributing to the understanding of corporate finance dynamics.

Distance has been a core concept and issue in international business and management research. While scholars argue that distance through internationalization is increasing costs, distance is also associated with positive implications such as the integration of more diverse knowledge. Still, many firms struggle to manage distance effectively and efficiently in their multinational contexts. The purpose of this study therefore is to propose Open Strategy – increasing transparency and inclusion in the strategy process – as an attractive concept for managing distance.

This is a conceptual paper where the authors introduce Open Strategy to the IB community.

The authors argue that opening the strategy of multinational enterprises, enables firms to leverage diversity by re-combining the firms diverse and distant knowledge. It also reduces distance by moving beyond formal mechanisms of control and coordination to improve joint understanding, cooperative commitment and strategy implementation. The framework shows how firms can move beyond established dogmas in international business research by rendering their strategy processes more open.

Leveraging the Open Strategy literature, the authors are able to find a way to respond to the challenge of increasing distance, in fact even arguing that distance can be beneficial if framed as diversity.

Family businesses are on the rise and facing severe sustainability challenges. The overall purpose of this thesis is to examine the moderating role of technological resources in the relationship between marketing innovation and family business sustainability.

From a post-positivist perspective, this study utilized a quantitative approach and causal research design. 204 family businesses within the Accra Metropolitan Assembly were sampled for this study. Structural Equation Modeling (SMART PLS 4) was utilized for data analysis after a closed-ended questionnaire was used to gather data.

It was evidenced that marketing innovation has a positive significant effect on family business sustainability. Technological resources have a negative significant moderating effect on the relationship between marketing innovation and family business sustainability.

The originality of this study lies in examining the moderating effect of technological resources on the relationship between marketing innovation and family business sustainability in Ghana, where this phenomenon is less explored.