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Article
Publication date: 26 February 2024

Grace Low and Qi Li

This study aims to examine the effect of corporate social responsibility (CSR) on banks’ capital, value and risk by investigating its impact on capital inflows and asset quality…

Abstract

Purpose

This study aims to examine the effect of corporate social responsibility (CSR) on banks’ capital, value and risk by investigating its impact on capital inflows and asset quality. The authors aim to investigate the value-protective characteristics of socially responsible performance.

Design/methodology/approach

This study uses a two-stage least squares approach with instrumental variables, with bank and year fixed effects to address concerns regarding endogeneity, specifically reverse causality and unobservable factors.

Findings

The results confirm a positive association of CSR with capital adequacy, including higher quality Tier 1 Capital. The authors find strong evidence that banks with higher CSR scores are associated with greater bank value and lower risk. The extended analyses find that the improvement in capital is from annual growth in capital and lower risky assets.

Originality/value

The research advances the field by providing new empirical evidence of a positive association between CSR and capital, including high-quality Tier 1 Capital. This study complements the prior research by simultaneously examining the dynamic links between CSR and capital, bank risk and bank value. The findings are consistent with the view that there is a dynamic link in which CSR affects the operations of banks.

Details

Meditari Accountancy Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2049-372X

Keywords

Article
Publication date: 22 August 2023

Zhe Li, Xinrui Liu and Bo Wang

Accounting scandals and earnings management problems at large firms such as Global Crossing and Enron have resulted in lots of wealth loss not only to corporate investors but also…

Abstract

Purpose

Accounting scandals and earnings management problems at large firms such as Global Crossing and Enron have resulted in lots of wealth loss not only to corporate investors but also led tremendous damage to societies. Hence, policymakers and academic researchers have started to explore mechanisms to prevent improprieties in financial reporting and further enhance firm value. Using data from United States (US)-listed companies between 2000 and 2018, this article explores the effect of ex-military executives on earnings quality, the role of financial analysts in their interplay and the firm value implication of earnings quality driven by ex-military executives.

Design/methodology/approach

This study employs a firm fixed-effects model to validate the main conjecture and adopts the weighted least squares, Granger causality analysis, instrumental variable approach, propensity score matching, entropy balancing approach and dynamic system Generalized Method of Moments (GMM) estimator to address robustness and endogeneity issues.

Findings

Authors reveal that companies run by ex-military senior executives exhibit lower levels of accruals-based and real earnings management than those without. The effect of management military leadership on constraining earnings management is more prominent for companies with low analyst coverage, suggesting that the military experience of executives could be a substitute for external monitoring. Authors also find that these ethical managers alleviate the negative impact of earnings management on firm value and that companies managed by these managers exhibit higher firm performance.

Practical implications

This study highlights the importance of the intrinsic motivation behind the effect of military experience on senior managers' personalities and offers essential stakeholder-related implications regarding the effect of military experience. The military experience of senior managers helps facilitate the attainment of broader corporate governance and economic objectives.

Originality/value

This article adds new insights to the literature on the role of managerial military experience in decision-making processes, financial reporting outcomes and firm performance by employing the upper echelons and imprinting theoretical perspectives.

Details

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

Keywords

Article
Publication date: 18 March 2024

Peter Smagorinsky

This study aims to consider the role of emotions, especially those related to empathy, in promoting a more humane education that enables students to reach out across kinship…

Abstract

Purpose

This study aims to consider the role of emotions, especially those related to empathy, in promoting a more humane education that enables students to reach out across kinship chasms to promote the development of communities predicated on a shared value on mutual respect. This attention to empathy includes a review of the rational basis for much schooling, introduces skepticism about the façade of rational thinking, reviews the emotionally flat character of classrooms, attends to the emotional dimensions of literacy education, argues on behalf of taking emotions into account in developmental theories and links empathic connections with social justice efforts. The study’s main thrust is that empathy is a key emotional quality that does not come naturally or easily to many, yet is important to cultivate if social justice is a goal of education.

Design/methodology/approach

The author clicked Essay and Conceptual Paper. Yet the author required to write the research design.

Findings

The author clicked Essay and Conceptual Paper. Yet the author required to write the research design.

Research limitations/implications

The author clicked Essay and Conceptual Paper. Yet the author required to write the research design.

Originality/value

The paper challenges the rational emphasis of schooling and argues for more attention to the ways in which emotions shape thinking.

Details

English Teaching: Practice & Critique, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1175-8708

Keywords

Article
Publication date: 26 March 2024

Pratik Modi, Vivek Pandey and Abhi Bhattacharya

This research investigates the impact of strategic research and development (R&D) (one led by a firm’s innovation orientation) on stock market performance during the economic…

Abstract

Purpose

This research investigates the impact of strategic research and development (R&D) (one led by a firm’s innovation orientation) on stock market performance during the economic disruption caused by the 2016 demonetization of high-value currency notes in India. It shows how firms’ strategic focus on innovation and integrated R&D initiatives can help mitigate shareholders’ losses and protect market value during negative macroeconomic shocks.

Design/methodology/approach

We analyzed financial and administrative data from firms listed in the Bombay Stock Exchange (BSE) 500 index and used the Fama French market model with appropriate instruments accounting for possible endogeneity to identify the impact. To ensure the reliability of our findings, we conducted robustness checks with alternate event windows, estimation methods, and variable measurements.

Findings

Strategic R&D plays a crucial role in building resilience against macroeconomic shocks. It effectively mitigated shareholders’ losses in the immediate aftermath of the shock, with an elasticity of abnormal returns of 7.65% on day zero, 13.1% during the first five days and 10.5% after the first fortnight. We also find that firms that are business-to-business (B2B), as well as those that are older and less leveraged, are better able to combat such a shock.

Research limitations/implications

The study looked at one shock, namely demonetization. Future research is needed to demonstrate the generalizability of results during other macroeconomic shocks, like the COVID-19 pandemic. The study focuses on relatively near-term impacts, leaving the long-term value-creation effects of strategic R&D unexplored.

Practical implications

Innovation orientation acts as a structural enabler, allowing firms to make strategic R&D investments that mitigate losses during macroeconomic shocks. It explains that managers should avoid myopically managing R&D investments and align them with the firm’s innovation focus to enhance value creation.

Social implications

While the currency demonetization was widely considered to be detrimental for firms as an unannounced negative monetary shock, our research shows that firms with high levels of strategic R&D were successfully able to counteract such a shock.

Originality/value

This is the first study to examine the short-term loss mitigation impact of firms’ focus on innovation and strategic R&D. It emphasizes the role of innovation-focused strategies during economic crises.

Details

Marketing Intelligence & Planning, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0263-4503

Keywords

Article
Publication date: 12 December 2023

Peiyuan Huang, Junguang Gao, Wenyuan Cai and Fuzhen Gu

This study aims to use institutional and upper echelons theories to comprehensively investigate the intricate interplay between TMT legal expertise and firms' adaptive strategies…

Abstract

Purpose

This study aims to use institutional and upper echelons theories to comprehensively investigate the intricate interplay between TMT legal expertise and firms' adaptive strategies in legal contexts, notably within emerging economies. It explores how upper echelons experiences shape opportunistic compliance strategies, impacting value and risk perceptions. Drawing on upper echelons theory, the research probes how TMT legal expertise molds firms’ involvement in significant lawsuits, accounting for influential roles. It scrutinizes TMT’s impact on legal strategies, positing that managerial discretion emerges from environmental factors, organizational attributes and executive traits. The study underscores TMT’s internal incentives and external factors’ interplay, molding strategic legal engagement.

Design/methodology/approach

To validate this framework, statistical analysis is performed on data from 2,584 Chinese-listed firms. The data set spans 2010–2015, with 5,713 material lawsuits. Chosen due to reliable institutional-level incentives data from the China Market Index Database, years 2016–2019 are excluded for methodological disparities. Moreover, 2007–2009 is omitted to mitigate the potential financial crisis impact. This study’s 11,272 observations ensure robust empirical exploration, offering insights into the interplay of TMT legal expertise, institutional factors and firms’ legal strategies.

Findings

The study reveals that firms led by executives with legal expertise are more prone to engage in significant lawsuits, indicating strategic use of legal skills. TMT age moderates this, with older teams less likely to engage. TMT tenure’s effect remains unclear due to tenure-risk preference complexity. Institutional factors matter; less legally mature regions reduce managers’ legal risk intention. Results confirm hypotheses and highlight executive human capital’s impact on firms’ legal strategies.

Research limitations/implications

This study acknowledges contributions while highlighting limitations, including the need for detailed distinctions in lawsuit roles and exploration of heterogeneous TMT power dynamics. Further research is proposed for nuanced power dynamics and comprehensive TMT legal background data. The study advances upper echelons theory by introducing TMT legal expertise as a factor influencing strategic lawsuit behavior. It challenges institutional theory by showing the adaptable legal context, beyond fixed constraints. Moderating factors – group risk attitude and external knowledge – deepen understanding of upper echelons’ impact. Enhanced data collection is encouraged to address limitations and refine findings.

Practical implications

This study’s implications extend to managerial practices. Firms should acknowledge the dynamic legal system, using TMT legal expertise for strategic legal challenges. Executives should pragmatically approach regulations. While legal professionals enhance compliance, caution is needed in selecting TMT members with legal expertise due to the risk of misusing it for unnecessary litigation, potentially misaligned with financial performance goals.

Originality/value

This study combines institutional and upper echelons theories to explore TMT legal expertise’s impact on firms’ adaptive strategies in emerging economies. It challenges the idea of a universally constraining legal environment and highlights how TMT legal expertise enhances firms’ management of complex legal risks. The research introduces TMT legal expertise as an influencing factor in strategic lawsuits, revealing nuanced relationships between legal contexts and strategic decisions. The findings enrich upper echelons theory, challenge conventional institutional views and identify moderating factors that deepen the understanding of upper echelons’ influence in legal landscapes.

Details

Chinese Management Studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1750-614X

Keywords

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