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The purpose of this study is to extend the Fraud Diamond Theory to celebrity Special Purpose Acquisition Companies (SPACs) and investigate their post-Initial Public Offering (IPO) stock market performance.

After obtaining a sample of celebrity SPACs from the Spacresearch.com database, fraud risk characteristics were obtained from Lexis Nexus searches. Buy and hold abnormal returns were calculated for celebrity SPACs versus a small-cap equity benchmark for time intervals after IPO, and multiple regression analysis was performed to examine the relationship between fraud risk features and post-IPO returns.

Celebrity SPACs exhibit Fraud Diamond characteristics and significantly underperform a small-cap stock portfolio on a risk-adjusted basis after IPO.

This study only examines celebrity SPACs that conducted IPOs on the NYSE and NASDAQ/AMEX and does not include those that are traded on the Over the Counter Bulletin Board (OTCBB).

Celebrity endorsement of SPAC vehicles attracts investors who may not be properly informed regarding the risk characteristics of SPACs. Accordingly, investors should be warned that celebrity SPACs underperform a small-cap equity portfolio and exhibit significant elements of fraud risk.

The use of celebrity endorsement as a marketing device to attract investment in SPACs has regulatory implications.

To the best of the authors’ knowledge, this paper is the first to examine the fraud risk characteristics and post-IPO performance of celebrity SPACs.

In this study, we investigate what drives the MAX effect in the South Korean stock market. We find that the MAX effect is significant only for overpriced stocks categorized by the composite mispricing index. Our results suggest that investors' demand for the lottery and the arbitrage risk effect of MAX may overlap and negate each other. Furthermore, MAX itself has independent information apart from idiosyncratic volatility (IVOL), which assures that the high positive correlation between IVOL and MAX does not directly cause our empirical findings. Finally, by analyzing the direct trading behavior of investors, our results suggest that investors' buying pressure for lottery-like stocks is concentrated among overpriced stocks.

This paper aims to examine the relationship between the community and environment disclosures and the long-run share price performance of Malaysian initial public offering (IPO) companies.

This study used secondary data through the content analysis of the annual reports and DataStream of 115 sampled IPOs listed on Bursa Malaysia from 2007 to 2015. The present study incorporated weighted least squares and quantile least squares to evaluate the relationship between the community and environment disclosures and IPO performance.

The results show a positive and significant relationship between the extent and quality of community disclosures and IPO performance; while the extent and quality of environment disclosures have a negative and positive relationship, respectively, with IPO performance. These results suggest that community and environmental activities can be considered an effort to enhance Malaysian IPOs.

These results suggest that Malaysian IPO companies should be involved consistently in corporate social responsibility disclosure, i.e. community and environmental activities, as they have a significant impact on the performance of Malaysian IPOs. The findings can facilitate financial institutions and regulatory agencies in driving companies to be more responsible regarding community and environmental disclosures.

To the best of the authors’ knowledge, this study provides new insights into the relationship between the community and environment disclosures and the performance of Malaysian IPO companies.

Stirred by scant regard for market phases in portfolio performance assessments, the current paper investigates the active versus passive investment strategies under the bull and bear market conditions in emerging markets focusing on South Africa as a case study.

Methodologically, the measures of Jensen's alpha and Treynor index are applied to the monthly returns of 20 funds from January 2010 to June 2022.

The results are enlightening; though they contradict developed market evidence, they are consistent with emerging market trends. The findings show that actively managed funds outperform the market benchmark and passive investing style under bear and normal market conditions. Passive investment strategy outperforms both market benchmark and actively investing style under bull market conditions.

In the face of improved market efficiency, increased liquidity and recent technological impact, the findings of this study have practical application. The study outcomes should inform and update global investors, especially asset managers interested in emerging markets; however, the limitations of the study should also be considered.

While limited studies consider market conditions when comparing and contrasting the performance of passive versus active investing, such consideration is lacking in emerging markets. The current study corrects this literature imbalance.

This article analyses the recent inverse transition from goodwill impairment to goodwill amortisation implemented in Spain in 2016. The authors contribute to the existing literature by describing their differing impact over goodwill and impairment figures and testing the impact of goodwill on balances over stock prices.

First, using a database with all Spanish non-financial firms with positive goodwill on their balance sheets, the authors describe the impact of the regulatory change over goodwill and impairment figures. Second, focussing on listed firms only, the authors study the impact of financial reporting of goodwill and impairment on stock prices.

Average goodwill per company and the share of goodwill over total assets significantly reduced after 2016, but the results cannot be easily extrapolated to listed firms due to lack of data. When testing the impact of potentially inflated goodwill balances on prices, the authors find that investors kept overvaluing firms with inflated goodwill balances also with the amortisation method.

The lack of data for listed firms with goodwill in Spain makes it difficult to obtain statistically sound evidence, the results could be biased by the cultural traits of the country and related to the intensity of enforcement and monitoring.

This might suggest that the effects of the impairment method linger, so the authors conform to the interpretation that the systematic amortisation paired with a periodic impairment test may lead to accounting that better reflects the underlying economics of goodwill.

To the best of the authors' knowledge, there are no recent articles that analyse this new “turn-around” requiring again the systematic amortisation of goodwill.

This study aims to examine the diametrically opposite effects of probabilistic (risk) and nonprobabilistic uncertainty (ambiguity) on accounting conservatism.

This study uses panel regression models with year and industry-fixed effects. It uses financial and market data from the communication and energy sectors of 24 countries, encompassing 1,946 firms and 5,838 firm-year observations.

The study reveals that conservatism is a rational response to risk. However, in the presence of higher ambiguity where uncertainty exceeds firm control and outcomes become unpredictable, management reduces conservative accounting practices. Robustness tests support the validity of these findings across different institutional frameworks, agency risks, sample selection and heterogeneity.

This study contributes to the existing literature by exploring the contrasting effects of risk and ambiguity on accounting conservatism. It enhances the understanding of how various institutional factors influence the asymmetric recognition of bad news compared to good news under conditions of uncertainty.

By understanding the role of accounting conservatism in responding to uncertainties, regulators can develop more informed and effective policies that align with the dynamic nature of business environments.

This research provides novel and original ideas suggesting that the change in accounting conservatism is contingent upon the firms’ ambiguity or risk.

The purpose of this study is to examine the association between related party transactions (RPTs) in terms of sales and purchases and earnings management (EM).

The authors use the estimation method of system generalized method of moments (Sys-GMM) on a sample of 413 non-financial firms in Vietnam in the period from 2015 to 2019, totaling 1,638 firm-year observations. Multiple proxies for RPTs and EM are used to provide a comprehensive assessment of the relationship between the two factors.

There is a positive association between RPTs and EM, suggesting that both types of RPTs could reduce financial reporting quality and allow firms to be more engaged in earnings manipulation.

There are a number of studies investigating the above link, but they tend to use aggregate values (the sum of both sales and purchases with related parties) or just either accruals-based earnings or real EM. This study is the first to extend the literature on the relationship between RPTs and EM by examining both sales-based and purchases-based RPTs on both real and accruals-based earnings manipulation. This approach helps uncover the differences in the effect of the two types of RPTs on both types of upward EM.

The aim of the paper is to explore within-firm vertical pay inequality and its relation to firm size and firm performance.

Using firm-level microdata for Kazakhstan, the authors measure within-firm pay inequality as the wage differential between the top- and the bottom-level job occupations. The authors carry out their analysis based on panel regression models.

The authors find that within-firm pay inequality increases as firms grow. Further, they identify that this trend is mainly driven by top-occupation workers receiving more significant wage increases compared to lower-level workers as firms expand. Once the authors address concerns about endogeneity, they find that pay inequality is negatively associated with firm performance.

Developing strategies and policies that prioritize fairness and transparency in compensation practices is crucial during the expansion process of firms. By actively discouraging rent-seeking behavior, firms can create a work environment that promotes productivity and sustainability, ultimately leading to improved firm performance. The research findings highlight the importance of implementing context-specific interventions, recognizing that different environments may require tailored approaches to address pay inequality effectively.

This study contributes to the study of within-firm pay inequality, firm size and performance in an emerging economy, an area that has been largely overlooked in previous empirical research. The contrasting findings show the importance of the structural and industrial characteristics of emerging markets that contribute to broader and deeper impact of pay inequality compared to developed economies.

The regulatory design of Indian stock market provides us with the opportunity to disaggregate initial returns into two categories, i.e. voluntary premarket underpricing and post market mispricing. This study explores the impact of investor attention on the disaggregated short-run returns and long-run performance of initial public offerings (IPOs).

The study employs regression techniques on the sample of IPOs listed from 2005 to 2019. It measures investor attention with the help of the Google Search Volume Index (GSVI) extracted from Google Trends. Along with GSVI, the subscription rate is used as a proxy to measure investor attention.

The empirical results suggest a positive and significant relationship between initial returns and investor attention, thus validating the attention theory for Indian IPOs. Furthermore, when the returns are analysed for a more extended period using buy-and-hold abnormal returns (BHARs), it was found that price reversal holds in the long run.

This study highlights the importance of information diffusion in the market. It emphasizes the behavioural tendency of the investors in the pre-market, which reduces the market efficiency. Hence, along with fundamentals, investor attention also plays an essential role in deciding the returns for an IPO.

According to the best of the authors’ knowledge, this is one of the first studies that has attempted to explore the influence of investor attention and its interplay with underpricing and long-run performance for IPOs of Indian markets.

This study aims to determine whether the stock holdings of equity mutual funds are informative for predicting future stock performance in the Chinese market. It is a puzzle that actively managed mutual funds underperform passive benchmarks, whereas retail investors still delegate investment decisions to the fund managers. The present study sheds light on whether mutual fund managers possess security selection skills in their top ten holdings.

By regression analysis and portfolio sorting, this study focuses on 830 Chinese A-share stocks in the industry research reports from the Guotai Junan Securities Company. It collects mutual fund's top ten holdings data from the Wind Financial Terminal between 2019Q1 and 2021Q1. As robustness checks, the result holds for the fixed-effect model, an additional measure of ranks in the top ten holdings, the predictability test based on the confusion matrix and two stage least square (2SLS) regression.

The authors find that the top ten holdings by equity mutual funds are informative for predicting stock performance and can provide valuable information for investors to support their decision-making.

The findings of this study provide insightful guidance for retail investors in making investment decisions and support the hypothesis that active fund management adds value.

Firstly, the authors find that the top ten holdings of Chinese mutual funds show significantly positive signals for future stock excess returns, indicating the selection skills of fund managers. Secondly, the above positive relationship exhibits a diminishing marginal effect with more funds holding this stock. Thirdly, the authors find that the predictability horizon of the number of overweighing funds is up to three quarters and then diminishes in the fourth quarter. Finally, investors have a 59% prediction accuracy for the whole stock sample and an 85% precision conditional on the predicted positive subsample to outperform the market. The authors also address the endogeneity and reverse causality issues.