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We examine the use of relative performance evaluation (RPE), asymmetry in pay for skill/luck, and compensation benchmarking for a sample of firms involved in a spinoff. The spinoff affects firm characteristics that influence the use of the identified compensation practices. We test for differences in the compensation practices for the pre- and post-spinoff firms. We find that RPE is used for post-spinoff CEOs, but not pre-spinoff CEOs. Post-spinoff CEOs are also paid asymmetrically for luck where they are rewarded for good luck but not punished for bad luck. Both pre- and post-spinoff CEOs receive similar levels of compensation benchmarking. The study provides additional evidence on factors that influence compensation practices. Our spinoff sample allows us to examine how compensation practices are affected by changes in firm characteristics while keeping other determinants of compensation constant (i.e., the board and, in many cases, the CEO). Our findings contribute to the understanding of how the identified compensation practices are used.

This study aims to analyze the effect of top management team (TMT) expertise on real earnings management (REM) and accrual earnings management (AEM) activities in companies in Indonesia by examining a hand-collected secondary data from non-financial publicly listed companies in Indonesia in 2016 and 2017. The expertise of TMT members is measured by possession of a master’s degree, understanding and experience of managed core functional areas, and possession of accounting certifications such as CA or CPA. The results of the study show that the expertise of the members of the TMT has no influence on the activity of AEM in companies in Indonesia. Meanwhile, understanding and experience on the managed core functional areas have a positive influence on REM activities through abnormal cash flows. Possession of accounting certification has a positive influence on REM activities in companies that are in accordance with managerial entrenchment effects, as well as a negative influence on REM activities in companies through abnormal discretionary expenses that are in line with incentive-reduction effects.

Rural poverty has been a significant problem in Indonesia for decades. To address this issue, rural microfinance institutions play an essential role. Badan Kredit Desa (Village Credit Institution/BKD) is an existing microfinance institution at the village level. This study aims to assess the financial health of BKD and explore whether transformation into a formal form of microfinance institutions can be done to help improve the welfare and economy of people in rural areas. This study used a mixed-method approach to understand the rural microfinance institution's condition by analyzing financial data for the 2016–2018 period and conducting an in-depth interview with BKD stakeholders to explore the possibility of transformation. This study found 15 out of 20 BKDs with relatively healthy criteria that can be transformed into a formal microfinance institution. In comparison, five BKDs that fall under the criteria cannot be transformed into formal ones. Moreover, BKDs have to face internal and external problems that might cause their low financial performance in conducting their operational activities. This research has several significant implications; first, as a baseline for local governments to determine the future of BKDs; second, transformed BKD will foster entrepreneurship by giving productive loans to village people; third, more economic activities as a result of increased entrepreneurship will lower poverty levels in the village; fourth, increased entrepreneurship and reduced poverty will support positive economic growth for Indonesia.

In the early days of the COVID-19 pandemic, an area could only report its first positive cases if the infection had spread into the area and if the infection was subsequently detected. A standard probit model does not correctly account for these two distinct latent processes but assumes there is a single underlying process for an observed outcome. A similar issue confounds research on other binary outcomes such as corporate wrongdoing, acquisitions, hiring, and new venture establishments. The bivariate probit model enables empirical analysis of two distinct latent binary processes that jointly produce a single observed binary outcome. One common challenge of applying the bivariate probit model is that it may not converge, especially with smaller sample sizes. We use Monte Carlo simulations to give guidance on the sample characteristics needed to accurately estimate a bivariate probit model. We then demonstrate the use of the bivariate probit to model infection and detection as two distinct processes behind county-level COVID-19 reports in the United States. Finally, we discuss several organizational outcomes that strategy scholars might analyze using the bivariate probit model in future research.

The financing of entrepreneurship has seen marked changes over time and continues to evolve rapidly. From the traditional sequence of self-funding, Angel financing, the rigors of securing Venture Capital, and, for successful firms, Initial Public Offerings (IPOs), the funding sequence has undergone substantial changes. Recent observations such as in the Wall Street Journal (November 05, 2018) suggest that many successful young firms (often tech companies) have continued to raise capital from private equity sources rather than in the public equity markets via IPOs. These additional fundraising efforts generally follow an extended period of business development and revenue generation wherein when many successful entrepreneurial firms that had proven large enough to go public stayed private (so called “unicorns”) because of the extent to which their funding requirements can in recent times flow from private sources. But today, there are many indications that some such firms (e.g. Uber, Lyft) are now seeing the advantages of going public, engaging in IPOs, which are often followed rapidly in very recent times by raising additional public share capital in a relatively short interval after the IPO.

This research discusses technology, business sector, and infrastructure, reflecting government spending, consumption, net exports, economic growth, and poverty. This study uses secondary data from world banks and processed regression using the moving average autoregression method. We find that technology, infrastructure, and business sector investment encourage public consumption, increase net exports, promote economic growth, and alleviate poverty in Indonesia. The impact of poverty alleviation comes from an increase in population income and economic growth, reflecting population.

Development policies should boost the potency of human and natural resources. Reducing poverty and disparities and economic growth between regions still require hard work from stakeholders in North Maluku. Our study presents that poverty reduction and unemployment reduction in North Maluku have not been optimal. The poverty rate in North Maluku Province in 2011 was 9.17%, while the unemployment rate in the same period was 5.4%.

This study uses an experimental approach to examine how the perceptions and decisions of prospective nonprofessional investors are influenced by risk disclosures in the Management Discussion and Analysis (MD&A). The between-subjects experiment used 157 MBA students as nonprofessional investors. The participants were given a firm's financial statements. In addition, the experimental group received the section on risk in the MD&A, whereas the control group did not receive any part of the MD&A. The participants were then asked to make several investment assessments and a final investment decision. The results show that the information included in the risk section of the MD&A has a significant negative effect on perceptions of the firm's future performance, a significant positive influence on perceptions of the stock's risk, and a marginally significant negative effect on the investment decision. The effect on the investment decision is mediated by respondents' perceptions of the firm's future performance and stock risk. By providing evidence on the effect of risk disclosures on nonprofessional investors' investment decision-making process, this study can help professional bodies and national market regulators understand how some market participants react to risk information provided under their regulations. In fact, the results indicate that there is little to be gained by firms voluntarily providing these risk disclosures. This would seem to support the fact that disclosure of risk information needs to be mandated by market regulators.