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Article
Publication date: 13 October 2022

Yane Chandera

The author examines the presence of foreign currency effects and the risk-mitigation channel through which a foreign-currency denomination reduces the loan spread.

Abstract

Purpose

The author examines the presence of foreign currency effects and the risk-mitigation channel through which a foreign-currency denomination reduces the loan spread.

Design/methodology/approach

The author runs regression analyses using loan data of firms incorporated in member countries of the Association of Southeast Asian Nations (ASEAN) from 2000 to 2020. The author also runs several robustness tests to address forward exchange rate bias, endogeneity concern and sample-selection bias.

Findings

Consistent with the currency matching motive of foreign debt use, the results show that a foreign currency denomination is associated with a lower spread and the relationship is amplified when there is a positive correlation between the changes in the return on assets and in the exchange rate.

Research limitations/implications

This paper enriches existing studies on the use of foreign debt as an exchange rate risk management tool.

Practical implications

The results suggest that as firms utilize foreign debt and policymakers need to design banking regulations that not only oversee but also encourage the use of foreign debt as a hedging instrument to lower firms' borrowing costs.

Originality/value

This paper contributes to extant studies by examining the presence of foreign currency effects in emerging countries' loan markets and by exploiting the micro-level demand-side factors as the channel through which the currency denomination affects the loan spread.

Details

International Journal of Managerial Finance, vol. 19 no. 5
Type: Research Article
ISSN: 1743-9132

Keywords

Article
Publication date: 21 June 2023

Clayton Kuma, Peni Fukofuka and Sue Yong

This paper aims to investigate the practice of accounting in the Seventh-day Adventist church of the Pacific Islands and pays particular attention to the coexisting of two control…

Abstract

Purpose

This paper aims to investigate the practice of accounting in the Seventh-day Adventist church of the Pacific Islands and pays particular attention to the coexisting of two control devices: accounting and religion.

Design/methodology/approach

This paper implemented a qualitative field study design collecting interview data from church members from the Solomon Islands, Tonga and Fiji. Data were also collected through focus group discussions, document reviews, website analysis and participant observations. Pierre Bourdieu’s thinking on symbolic violence, doxa and capital are used to interpret the findings.

Findings

This paper’s main contribution shows that while there is a divine and profane divide, social agents, given their agency, can move back and forth from one side of the divide to the other. Accounting as a control device does not include features such as faith, which is helpful for decision-making; accordingly, religion is relied upon when it comes to decision-making. In contrast, accounting has features that are useful for stewardship purposes. Accordingly, when it comes to the church’s stewardship function accounting in the form of financial reports is relied upon.

Research limitations/implications

Pacific Island culture almost permeates all facets of life, including church life; however, this study did not clarify this. Later studies can explore the implications of culture on the deployment of accounting in a religious setting.

Practical implications

This rich empirical study describes the control dynamics and the tension between accounting and religion in a religious organisation. Accounting needs to adapt to churches’ unique characteristics, whereby religious/doctrinal beliefs must be accounted for and respected. Unlike in the corporate world, accountants in churches cannot fully practice their training or exercise the kind of influence they usually hold in organisations due to their religious belief systems.

Originality/value

To the best of the authors’ knowledge, this research is one of a few studies on the religion-accounting relationship. While the focus of earlier studies was generally on a secular and sacred divide, this study looks at coexisting of accounting and religion. This study adds to the sparse literature on accounting and religion and their controlling influence.

Details

Pacific Accounting Review, vol. 35 no. 5
Type: Research Article
ISSN: 0114-0582

Keywords

Book part
Publication date: 24 October 2023

Umesh Sharma and Denise Frost

The purpose of this chapter is to examine the budgeting process in a local church from a social capital perspective. The social capital provides novel insights into the…

Abstract

The purpose of this chapter is to examine the budgeting process in a local church from a social capital perspective. The social capital provides novel insights into the construction of budgets and its social aspects. A qualitative case study was adopted, with an interpretive methodology. Semi-structured interviews were used to interview 14 managers involved in the budgeting process at a local independent church. The interview data were supplemented by documentary evidence. Nahapiet and Ghoshal (1998) framework of social capital was used to analyse the data. The main finding was that budgeting was found to be a social process – that can best be explained by social capital theory. There may be an element of self-selection, as the church agreed to participate in the study and chose to allow a researcher to examine social aspects of its budgeting process. The chapter contributes to both social capital theory and church literature. Social capital provides novel insights into the construction of budgets and its social aspects. In addition, contemporary budgeting practices are studied in a church in a denomination and country not previously studied.

Details

Advances in Management Accounting
Type: Book
ISBN: 978-1-83753-917-8

Keywords

Article
Publication date: 17 October 2023

Niels Mygind

The purpose of this paper is to give an updated overview over the development of employee-ownership in Italy, France, Spain including Mondragon, the UK and the US with relatively…

Abstract

Purpose

The purpose of this paper is to give an updated overview over the development of employee-ownership in Italy, France, Spain including Mondragon, the UK and the US with relatively many employee-owned firms. How have the barriers for employee-ownership been overcome in these countries?

Design/methodology/approach

The overview is based on updated descriptions of the development of employee-ownership included in this special issue. The analysis follows the structure of overcoming five barriers: the organization problem; the problem of entry and exit of employee-owners; the startup and takeover problem; the capital- and the risk problem.

Findings

Italy, France and Spain have overcome the barriers by specific legislation for worker cooperatives, this includes rules for entry and exit of employee members. Cooperative support organizations play an important role for monitoring and managing the startup problem and for access to capital. The Mondragon model includes individual ownership elements and a group structure of cooperatives. The EOT and ESOP models are well suited for employee takeovers, financing are eased by tax advantages and they are all-employee schemes. While the EOT has no individual risks, the ESOP model has the possibility for capital gains for employees but also the risk of losing these gains.

Originality/value

Comprehensive and updated overview of the development in employee-ownership in the five countries to identify successful formats of employee-ownership for implementation in countries with few employee-owned firms.

Details

Journal of Participation and Employee Ownership, vol. 6 no. 3
Type: Research Article
ISSN: 2514-7641

Keywords

Article
Publication date: 22 August 2022

Oscar F. Briones, Segundo M. Camino-Mogro and Veronica J. Navas

The purpose of this research is to examine Micro-, small- and medium-sized enterprises (MSMEs). Which have limited access to financial resources from financial intermediaries…

Abstract

Purpose

The purpose of this research is to examine Micro-, small- and medium-sized enterprises (MSMEs). Which have limited access to financial resources from financial intermediaries. Thus, resource allocation is a primary concern for them.

Design/methodology/approach

This research studies the determinants of cash conversion cycle components and cash flow of MSMEs operating in Ecuador. This study examined a robust sample of 19,680 firms from 2000 to 2020, using the two-step generalized methods of moments to control for endogeneity and multicollinearity of independent variables issues.

Findings

The sample was divided into working capital intensive and fixed capital intensive firms. It was found that in every segment (micro-, small- and medium-sized), the majority of firms are working capital intensive and their average return is higher. This implies that small business owners assign the majority of their resources to current assets, which thus far have enabled them to achieve higher profitability.

Originality/value

Research investigated Ecuadorian MSMEs in a dollarized developing environment. Scrutinizing working capital intensive vs fixed capital intensive.

Details

Journal of Entrepreneurship in Emerging Economies, vol. 16 no. 2
Type: Research Article
ISSN: 2053-4604

Keywords

Article
Publication date: 10 May 2023

Kinshuk Saurabh

The aim of this study is to understand a family firm's choice of related-party transaction (RPT) types and analyze their value impacts to separate the abusive from benign RPTs.

Abstract

Purpose

The aim of this study is to understand a family firm's choice of related-party transaction (RPT) types and analyze their value impacts to separate the abusive from benign RPTs.

Design/methodology/approach

It uses a 10-year panel of BSE-listed 378 family (and 200 non-family) firms. The fixed effects, logit and difference-in-difference (DID) models help examine value effects, propensity and persistence of harmful RPTs.

Findings

Loans/guarantees (irrespective of counterparties) destroy firm value. Capital asset RPTs decrease the firm value but enhance value when undertaken with holding parties. Operating RPTs increase firm value and profitability. They improve asset utilization and reduce discretionary expenses (especially when made with controlled entities). Family firms have larger loans/guarantees and capital asset volumes but have smaller operating RPTs than non-family firms. They are less likely to undertake loans/guarantees (and even operating RPTs) and more capital RPTs vis-à-vis non-family firms. Family firms persist with dubious loans/guarantees but hold back beneficial operating RPTs, despite RPTs being in investor cross-hairs amid the Satyam scam.

Research limitations/implications

Rent extractability and counterparty incentives supplement each other. (1) The higher extractability of related-party loans and guarantees (RPLGs) dominates the lower extraction incentives of controlled parties. (2) Holding parties' bringing assets, providing a growth engine and adding value dominate their higher extraction incentives (3) The big gains to the operational efficiency come from operating RPTs with controlled parties, generally operating companies in the family house. (4) Dubious RPTs seem more integral to family firms' choices than non-family firms. (5) Counterparty incentives behind the divergent use of RPTs deserve more research attention. Future studies can give more attention to how family characteristics affect divergent motives behind RPTs.

Practical implications

First, the study does not single out family firms for dubious use of all RPTs. Second, investors, auditors or creditors must pay close attention to RPLGs as a special expropriation mechanism. Third, operating RPTs (and capital RPTs with holding parties) benefit family firms. However, solid procedural safeguards are necessary. Overall, results may help clarify the dilemma Indian regulators face in balancing the abusive and business sides of RPTs.

Originality/value

The study fills the gap by arguing why some RPTs may be dubious or benign and then shows how RPTs' misuse depends on counterparty types. It shows operating RPTs enhance operating efficiencies on several dimensions and that benefits may vary with counterparty types. It also presents the first evidence that family firms favor dubious RPTs more and efficient RPTs less than non-family firms.

Details

Asian Review of Accounting, vol. 31 no. 4
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 1 May 2023

Heba Abou-El-Sood and Rana Shahin

Motivated by recent financial liberalization policies in emerging markets, this study investigates whether bank competition and regulatory capital affect bank risk taking in an…

Abstract

Purpose

Motivated by recent financial liberalization policies in emerging markets, this study investigates whether bank competition and regulatory capital affect bank risk taking in an international banking context.

Design/methodology/approach

Bank competition is regressed, using GLS regression, on various measures of bank risk, to reflect regulatory, accounting and market-based risk-taking. The authors use a sample of publicly traded banks operating in Africa during 2004–2019.

Findings

Results show that higher level of bank competition increases bank risk taking and results in greater financial fragility in the absence of banking capital regulations. Furthermore, larger capital adequacy ratios control the risk-taking incentives of managers and guard banks against the risk of default. Further tests confirm the significance of market-based risk measures over accounting and regulatory measures.

Practical implications

Findings are relevant to bank managers and regulators in their sustained effort of finding an optimal balance between bank competition and financial stability. Increased competition should be balanced with capital regulations to curtail bank excessive risky behavior and derive the social benefits of greater competition in the market while sustaining overall economic growth.

Originality/value

This study provides novel evidence in an international context. First, it uses regulatory, accounting and market-based measures of bank risk taking to reflect regulators', management and market participants' emphasis. Another original contribution is the investigation of bank competition across African economies characterized by financial liberalization, stringent banking system and interesting socio-economic challenges.

Details

Managerial Finance, vol. 49 no. 10
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 5 September 2023

Zhuo June Cheng, Yinghua Min, Feng Tian and Sean Xin Xu

The purpose of this paper is to investigate how customer relationship management (CRM) implementation affects internal capital allocation efficiency, the efficiency with which a…

Abstract

Purpose

The purpose of this paper is to investigate how customer relationship management (CRM) implementation affects internal capital allocation efficiency, the efficiency with which a firm allocates its capital across its business segments.

Design/methodology/approach

The authors use a statistical regression method to analyze a sample of 801 unique firms in the USA from COMPUSTAT and the Computer Intelligence database. This analysis examines the relation between CRM implementation and internal capital allocation efficiency and identifies the conditions under which firms benefit more from CRM implementation. They also use instrumental variables (IVs) to address endogenous concerns with a two-stage least squares (2SLS) model.

Findings

The authors find that CRM implementation is positively related to internal capital allocation efficiency. The results are robust to the 2SLS analysis with IVs. This positive relation is more pronounced for firms with effective internal control and for those operating in highly competitive markets.

Practical implications

The research implies that that CRM can have a significant cross-functional effect on corporate financing and budgeting. This also suggests that when chief marketing officers plan marketing initiatives and implement CRM, they should communicate to chief financial officers not only the direct effect but also the indirect strategic benefits of such initiatives to a firm.

Originality/value

The authors reveal a previously overlooked aspect of marketing accountability by suggesting marketing’s impact on internal capital markets. They also enrich the body of literature on CRM benefits by showing a cross-functional benefit from marketing to finance (or capital allocation).

Details

Journal of Business & Industrial Marketing, vol. 39 no. 2
Type: Research Article
ISSN: 0885-8624

Keywords

Article
Publication date: 5 December 2023

Zouhair Boumlik, Badia Oulhadj and Olivier Colot

This paper aims to analyze the effect of family control and influence dimension of the socioemotional wealth (SEW) on capital structure of large listed firms in the North African…

Abstract

Purpose

This paper aims to analyze the effect of family control and influence dimension of the socioemotional wealth (SEW) on capital structure of large listed firms in the North African region.

Design/methodology/approach

The study uses panel data of the top 98 largest listed firms in the North African capital markets over the period from 2018 to 2022. The analysis is conducted employing random effects models.

Findings

Findings suggest that large listed firms in North African region rely on more use of equity rather than debt financing. Further, results show that family control and influence dimension of the SEW, has no significant impact on the capital structure of North African large listed firms. This implies that the financing behavior of large firms listed in the North African countries is driven by financial and rationale factors rather than non-economic considerations. Indeed, findings support assumptions of the pecking order theory.

Originality/value

This transnational study provides new insights into relevancy of socioemotional theory in explaining capital structure decisions within large family businesses in emerging markets. Findings have the potential to enhance analysts', investors' and practitioners' understanding of financing decisions by large listed firms in this region. This, in turn, can aid in conceiving adapted financing solutions.

Details

Journal of Family Business Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2043-6238

Keywords

Article
Publication date: 5 February 2024

Ari Budi Kristanto and June Cao

This systematic literature review presents the evolution of accounting-related research in the Indonesian context. We examine 55 academic articles from the initial 296 records of…

Abstract

Purpose

This systematic literature review presents the evolution of accounting-related research in the Indonesian context. We examine 55 academic articles from the initial 296 records of accounting and finance research in the Q1 Scopus-indexed journals from 1995 to 2022. This study sheds light on Indonesia’s main research streams, unique settings and urgent future research agenda.

Design/methodology/approach

This study adopts a systematic approach for a comprehensive literature review. We select articles according to a series of criteria and compile the metadata for the bibliographic mapping.

Findings

Our bibliometric analysis suggests five main research streams, namely (1) political connection, (2) capital market, (3) audit and accountability, (4) firm policy and (5) banking. We identify the following distinctive country settings, which are well discussed in extant literature: political connection, two-tier board system, weak accounting profession, information opacity and cultural impact on accounting. We outline prospective agendas to examine the institutional mechanisms’ role in addressing major environmental challenges through accountability.

Originality/value

This study offers unique contributions to the literature by comprehensively reviewing accounting-related research in Indonesia. Despite Indonesia’s economic and environmental importance, it has received limited attention from scholars. Using dynamic topic analysis, we highlight the need to examine the role of informal institutions, such as political connections and culture and formal institutional mechanisms, such as corporate governance and environmental disclosure.

Details

Journal of Accounting Literature, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0737-4607

Keywords

1 – 10 of over 6000