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1 – 10 of 240Zijian Cheng, Zhangxin (Frank) Liu and Jiaxin Xie
Does the choice of listing process matter in determining a firm's future crash risk? It is understood that the main function of an equity market is to provide price discovery…
Abstract
Purpose
Does the choice of listing process matter in determining a firm's future crash risk? It is understood that the main function of an equity market is to provide price discovery, however, it is not clear whether the choice of listing methods would matter to the shareholders' wealth in the long term. We are the first to answer this question by utilising a hand-collected dataset that identifies all companies that went public via reverse merger (RM) in a growing emerging market.
Design/methodology/approach
Using hand-collected data from 2000 to 2018 in China, we follow the literature to construct two crash risk measures for RM and IPO firms. Our main analysis is performed using OLS regressions on the full sample as well as a sample using Propensity Score Matching. Our results hold with a number of robustness checks.
Findings
We find that reverse merger (RM) firms exhibit higher future stock price crash risk than initial public offering (IPO) firms. This relationship is more predominant in non-state-owned enterprises, and we find weak evidence suggesting such relationship weakens as firms stay longer in the market. There is no significant difference in future stock price crash risk between RM firms listed during IPO suspension periods and normal IPO firms.
Originality/value
We are the first to study the choice of listing method and its impact on firms' future stock price crash risk.
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The way to measure the value of an enterprise’s R&D investments remains elusive for theoretical and empirical study on innovation economics. The paper aims to discuss this issue…
Abstract
Purpose
The way to measure the value of an enterprise’s R&D investments remains elusive for theoretical and empirical study on innovation economics. The paper aims to discuss this issue.
Design/methodology/approach
This paper expands the asset-value model pioneered by Griliches (1981) and applies it for the first time to the Chinese stock market to calculate the value of R&D investment instilled by Chinese manufacturing listed companies (CMLCs) from 2003 to 2014.
Findings
The authors find that: the assets-value model can better explain the enterprise value composition of CMLCs; with equal input, the value of R&D is higher than that of tangible assets, and lower than that of organizational assets; compared with the developed countries, the R&D value of CMLCs is lower; and the R&D value of CMLCs saw a downward trend from 2007 to 2014.
Originality/value
Furthermore, by rationally estimating the value of organizational assets and non-tradable shares, and innovatively introducing semi-annual momentum indicators from the perspective of behavioral finance to control the influence of investor sentiment on enterprise value, this paper tries to develop the asset-value model and provides a feasible solution to the problem of measuring the value of Chinese enterprises’ R&D investment.
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Qingquan Xin, Ruitao Li and Sonia Wong
The purpose of this paper is to provide an introduction to the reverse mergers (RMs) conducted in the Chinese stock market by summarizing the regulatory system, surveying the…
Abstract
Purpose
The purpose of this paper is to provide an introduction to the reverse mergers (RMs) conducted in the Chinese stock market by summarizing the regulatory system, surveying the literature on RMs and analyzing the major characteristics of 161 RM cases.
Design/methodology/approach
This paper introduces the characteristics and evolution of the regulatory framework governing RM activity in China. Then the paper reviews relevant academic studies on the RMs in China and other countries. Finally, the paper identifies and discusses the major characteristics of 161 RM cases in the Chinese stock market from 2006 to 2016.
Findings
Private companies that go public via RMs in China not only have superior asset quality but also demonstrate good accounting and stock price performance after listing, and these results are unlike those of studies on the quality of RMs in other countries.
Research limitations/implications
This paper is based on a survey of 161 RM cases in China’s stock market, with the major characteristics of the RMs being identified and analyzed. The limitations of previous studies and suggestions for further research are discussed.
Originality/value
This paper suggests that the relative superior performance of RMs in the Chinese stock market is caused by the interplay of market forces and regulatory oversight. The Chinese regulator’s pragmatic and flexible approach plays an important role in formulating regulatory policies that respond to the changing macroeconomic environment and financial markets.
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Kangkang Yu, Jack Cadeaux, Ben Nanfeng Luo and Cheng Qian
This study aims to extend ambidexterity theory from the perspective of organisational learning and examine how process ambidexterity, which comprises operational flexibility and…
Abstract
Purpose
This study aims to extend ambidexterity theory from the perspective of organisational learning and examine how process ambidexterity, which comprises operational flexibility and operational routine, responds to environmental uncertainty and ultimately reduces organisational risks.
Design/methodology/approach
This study tests the hypotheses by analysing 464 annual reports of 115 listed companies in the Chinese agricultural and food industry using content and secondary data analyses. Four case studies are also provided.
Findings
The results show that (1) environmental uncertainty has a positive effect on either operational flexibility or operational routine; (2) both operational flexibility and operational routine have negative effects on organisational risks, supporting the view that process ambidexterity mediates the relationship between environmental uncertainty and organisational risks; and (3) organisational slack plays the role of “double-edged sword” by negatively moderating the effect of environmental uncertainty on operational flexibility and positively moderating the effect of environmental uncertainty on operational routine.
Originality/value
In an uncertain environment, companies are exposed to greater risk. This study contributes to risk management in three ways: first, it extends ambidexterity theory to process management and proposes how process ambidexterity balances operational flexibility and routines. Second, it distinguishes between the different conditions under which flexibility or routines are superior. Third, it explains the mechanisms related to how organisations can resolve environmental uncertainty into risk through process ambidexterity.
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Kwong Chau and Wai Lai
Examines the problems of valuing properties in China, as part of anongoing research project on the developing of the socialist marketeconomy in China. Identifies these problems by…
Abstract
Examines the problems of valuing properties in China, as part of an ongoing research project on the developing of the socialist market economy in China. Identifies these problems by examining the valuation reports in the listing documents of the Chinese State enterprises issuing what is termed “H‐shares” in Hong Kong′s Stock Exchange. Comments on the approaches adopted in these valuation reports from both legal and theoretical points of view. Makes reference also to the property laws in China and the guidelines issued by the Hong Kong Stock Exchange for valuation of property in developing markets including China. Despite the different terminology used by Chinese officials, China is moving towards being a capitalist economy. This is evident in many events that have been happening in China. One such event, which started a number of years ago, is the land reform in China which allows private ownership and transfer of land use rights. As a result, nowadays most listed companies in Hong Kong possess, in one form or other, land use rights in China. On the other hand, despite the speed of such changes, China is still very different from other capitalist economies in terms of the organization and operation of its “markets” including the “property market”. Another more recent event is the “privatization” of state‐owned enterprises by way of listing in the stock exchanges of capitalist economies such as Hong Kong and New York, with the former predominating. These two changes have given rise to an issue which is of interest to both academic and practising surveyors: how should property which is situated in China and owned by the state enterprises be valued for the purpose of listing in Hong Kong′s Stock Exchange?
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Lixia Wang, Yingqian Gu and Wanxin Liu
Under the background of continuous sluggishness of the real economy and expansion of asset sectors, the Chinese economy exists a trend of “from the real to the virtual.” Managing…
Abstract
Purpose
Under the background of continuous sluggishness of the real economy and expansion of asset sectors, the Chinese economy exists a trend of “from the real to the virtual.” Managing the corporate financialization is the key to prevent the real economy “from real to virtual.” The paper explores the influence of family involvement on corporate financialization since family firms are an important proportion of real sectors.
Design/methodology/approach
Based on Socioemotional Wealth Theory, this paper makes empirical study using the data of Chinese A-share listed companies from 2008 to 2022 to explore the influence of family involvement on corporate financialization, mainly from the perspectives of family engagement, family identity of CEO and family control power.
Findings
These are the findings: (1) Family engagement will inhibit corporate financialization; (2) Compared with employing external managers, family members acting as CEOs will decrease corporate financialization; (3) The proportion of family ownership is negatively correlated with the level of corporate financialization.
Originality/value
The originality of this paper include these: (1) Analyzing the differences in the financialization of real enterprises with different characteristics and attributes; (2) Expanding the research on the internal motivation of the financialization of the real enterprises, and supplementing the research literature on family firms and corporate financialization; (3) Exploring the internal influence mechanism of financialization of family firms under the background of Chinese culture.
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David J. Harper, Darren Ellis and Ian Tucker
This chapter focusses on the ethical issues raised by different types of surveillance and the varied ways in which surveillance can be covert. Three case studies are presented…
Abstract
This chapter focusses on the ethical issues raised by different types of surveillance and the varied ways in which surveillance can be covert. Three case studies are presented which highlight different types of surveillance and different ethical concerns. The first case concerns the use of undercover police to infiltrate political activist groups over a 40-year period in the UK. The second case study examines a joint operation by US and Australian law enforcement agencies: the FBI’s operation Trojan Shield and the AFP’s Operation Ironside. This involved distributing encrypted phone handsets to serious criminal organisations which included a ‘backdoor’ secretly sending encrypted copies of all messages to law enforcement. The third case study analyses the use of emotional artificial intelligence systems in educational digital learning platforms for children where technology companies collect, store and use intrusive personal data in an opaque manner. The authors discuss similarities and differences in the ethical questions raised by these cases, for example, the involvement of the state versus private corporations, the kinds of information gathered and how it is used.
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Ruey‐Dang Chang, Yee‐Chy Tseng and Ching‐Ping Chang
The purpose of this paper is to examine whether companies engage in earnings management during the specific years when convertible bonds are issued and redeemed; also to determine…
Abstract
Purpose
The purpose of this paper is to examine whether companies engage in earnings management during the specific years when convertible bonds are issued and redeemed; also to determine if any differences exist in earnings management when convertible bonds are issued domestically or abroad.
Design/methodology/approach
Discretionary current accruals are adopted as proxies for earnings management and the regression models are used to control the related variables.
Findings
The empirical results indicate that companies conduct earnings management in the years when convertible bonds are issued, and that there is no significant difference between earnings management when convertible bonds are issued in Taiwan or abroad. However, data after 2001 indicate that companies issuing convertible bonds abroad perform less earnings management compared to those issuing convertible bonds domestically. The results show no significant difference in earnings management in the years when convertible bonds are redeemed; the reasons may be due to the relatively small sample size and that the majority of convertible bonds are still outstanding.
Originality/value
This paper advances findings from previous studies, that firms conducting seasoned equity offerings manage earnings upward to increase the offering proceeds. This paper highlights the linkage between convertible bonds and earnings management. Conducting an integrated analysis of the relationship between convertible bonds and earnings management, it aims to provide a better understanding of the process.
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Eileen M. Decker, Matthew Morin and Eric M. Rosner
Cyber threats present constantly evolving and unique challenges to national security professionals at all levels of government. Public and private sector entities also face a…
Abstract
Cyber threats present constantly evolving and unique challenges to national security professionals at all levels of government. Public and private sector entities also face a constant stream of cyberattacks through varied methods by actors with myriad motivations. These threats are not expected to diminish in the near future. As a result, homeland security and national security professionals at all levels of government must understand the unique motivations and capabilities of malicious cyber actors in order to better protect against and respond to cyberattacks. This chapter outlines the most common cyberattacks; explains the motivations behind these attacks; and describes the federal, state, and local efforts to address these threats.
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