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An intractable effect of revenue and expense recognition based on tax regulation and accounting rules is unresolved and may be manageable only by reducing the value of deferred taxes. Therefore, in this study, the authors examined the relationship between the International Accounting Standard 12 (IAS 12) and deferred income taxes associated with tax and accounting rules.

The authors used a large sample of balanced data from 144 firms across 1992–2019. To mitigate the problem of superfluous results, the authors used the same number of firms and years for pre- and post-IAS 12 periods. The authors employed robust econometric estimations to establish the impact of IAS 12 on deferred tax.

The regression results show that deferred tax assets decreased significantly, whereas deferred tax liabilities increased significantly, in the post-IAS 12 period. These contrasting results imply that IAS 12 implementation has increased conservatism and prudence in financial reporting. However, the authors find that the increase in deferred tax assets post-IAS 12 is value destructive, suggesting that its implementation has unintended consequences. The results are robust to alternative measurements and econometric identification strategies.

While prior studies have explored topics such as deferred tax measurement and the impact of income and expense recognition, the authors specifically analyzed how IAS 12 affects deferred taxes and their effect on the market valuation. The authors find that certain accounting standards may not be relevant to the capital market.

Study of the interdependence among economies is of considerable importance. This area includes issues such as the increasing importance of regional economic interactions, the effects of economic growth and recession in the advanced economies on emerging market countries, and financial contagion. A wide range of related terms and methodologies are used in the literature of interdependence. The purpose of this paper is to review the major concepts and various measurements of interdependence in financial markets and the real economy, serving as a reference and benchmark for future research on interdependence among specific regional or global economies.

Major measurements of interdependence are reviewed from simple approach to more complicated ones, and strengths and weaknesses of the various measurements of interdependence are discussed.

This paper surveys the various major measurements of interdependence and illustrates how they have been used to address a substantial range of issues.

The paper shows that studies of macroeconomic and financial interdependence use the same types of econometric measurements. The review and critiques of these various types of measures should be of value to those wishing to do research in these areas and also to those wishing to have a better understanding of papers that they read.

The purpose of this study is to analyze short- and long-run market-sensitive drivers of housing affordability. The study highlights an ongoing housing affordability crisis in an emerging market context by also providing an empirical tool to combat the crisis.

To investigate determinants of uniquely constructed effective housing affordability index and house price to income ratio index, the author uses a bound testing approach to cointegration and error correction models, besides causality tests, variance decompositions and impulse response functions. This study uses Turkish data for the period of 2007 M06 and 2017 M12.

The evidence suggests that the housing affordability crisis is mainly driven by credit expansion, rent and construction costs. A sensible housing policy response would target these variables. This evidence suggests that housing affordability mostly depends on housing market dynamics rather than policies because of the exogeneous/cyclical natures of the drivers.

Data constraints shape the study. A regional or an aggregate-level panel study cannot be developed because of a lack of data. This limitation inevitably results in the exclusion of relevant socio-economic/political factors and is also the main reason for the lack of comparative analysis in a cross-country setting.

This study argues that dependency on neoliberal housing market practices seems the underlying reason for the lack of efficient policy answers and the ongoing affordability crisis. From a policymaking perspective, the study suggests that necessary policy measures to resolve the housing affordability crisis may give a specific emphasis on housing rent, housing credit volume and construction costs as the major components of the crisis.

This study develops a novel measure and presents a new conceptual framework by combining quantitative research methods and policymaking in housing affordability. In this respect, to the best of the author’s knowledge, this is the first work to comparatively investigate the determinants of uniquely developed monthly housing affordability measurements.

This chapter reviews the recent developments in the estimation of panel data models in which some variables are only partially observed. Specifically we consider the issues of censoring, sample selection, attrition, missing data, and measurement error in panel data models. Although most of these issues, except attrition, occur in cross-sectional or time series data as well, panel data models introduce some particular challenges due to the presence of persistent individual effects. The past two decades have seen many stimulating developments in the econometric and statistical methods dealing with these problems. This review focuses on two strands of research of the rapidly growing literature on semiparametric and nonparametric methods for panel data models: (i) estimation of panel models with discrete or limited dependent variables and (ii) estimation of panel models based on nonparametric deconvolution methods.

The purpose of this paper is to look inside the “black box” in corporate governance (CG) measurement, and shed some light on how to construct a transparent, reliable and valid index, considering equally both the academics and practitioners’ perspectives.

A synthesized literature review is presented and a CG index is developed combining the strengths of three different methodologies: the Delphi method, the classical test theory (CTT) and the analytic hierarchy process (AHP). This approach helps authors to break the process into separate steps and to select the appropriate techniques to support their decision regarding the norms, the criteria, the variables and the weights that someone should use to construct a CG index.

The authors’ analysis indicates that a well-designed CG index requires a combination of research methods to identify the best options to solve several methodological issues in index construction. For the application of this multi-methodology in Greece, the authors used two equal and independent samples to explore the different perspectives regarding the importance of the index criteria and sub-criteria. This process provides evidence that the opinion of academics and practitioners in Greece tend to converge. Moreover, it is found that this multi-methodology produces the highest variation in CG scores and ranking orders, as opposed to a traditional approach, in measuring CG disclosure, an important issue with econometric implications.

The limitations of this study are associated with the methods used.

This paper provides practical implications for investors and commercial vendors. For the former, it highlights the need to be more cautious and/or suspicious when they use CG ratings, meaning that they should comprehend the base of the ratings models, and for the latter, it demonstrates the importance of enhancing the transparency in CG indices construction.

The value of the paper lies in improved understanding of the methodological issues in constructing CG indices. This is quite interesting because this approach could serve as a roadmap for other researchers.

This article investigates the relationship between family ownership and export performance in the context of SMEs while also considering the moderating role of the financial dimension and, in particular, financial constraints and financial flexibility.

We select a sample of 1,132 Italian SMEs to examine through an econometric analysis the role and impact of family ownership and the financial moderating variables being used on their export performance.

The results indicate that there is a U-shaped relationship between family ownership and export performance: the highest levels of export performance correspond to the lowest and highest family ownership levels, whereas when a mixture of family and nonfamily ownership exists, the performance suffers because of “conflicting voices” dominating strategic visions and approaches, harming the firm's export commitment. Moreover, the findings show that lower financial constraints and/or stronger financial flexibility improve the relationship between family ownership and export performance.

Our findings show that the ownership structure is important for export performance; in particular, firms should avoid a mixture between family and nonfamily ownership because it is detrimental to export performance. Moreover, Italian SMEs need to develop sources of financing other than the banking channel, and policy makers should favour this process to overcome financial constraint problems and improve financial flexibility. Limitations concern the use of other econometric approaches and measurement variables to further investigate the connection between family ownership and export performance.

The present study enhances the comprehension of the complex relationship between family ownership and export performance by documenting the relevance of the level of family ownership and considering the moderating role of financial constraints and flexibility.

The purpose of this paper is to empirically examine the effect of royal family members on firm performance of publicly listed companies in Saudi Arabia.

Using 491 firm-year observations of non-financial publicly listed firms in Saudi Arabia’s stock market between 2009 and 2013, the study employs, besides others, the advanced econometric technique GMM-system estimator. This allows the dynamic nature and control of the endogeneity problem to be accounted for in corporate governance and firm performance.

The main result is that the attendance of royal family members at board meetings negatively influences firm performance but does not have an influence on firm value. The results also show that firms with many independent royal family members on the board of directors have better firm performance and firm value. In addition, firms with a high number of royal family members presenting on the board have better firm performance.

This study offers guidance to assist the further investigation of the SA Royal Family’s BoD membership either in SA or in other monarchy countries. It is interesting to compare these results in order to further understand the different effects that the Royal Family’s BoD membership have in such countries. This study’s results suggest that independent members of SA’s Royal Family on the BoD have some influence on firm performance in both the short and long term. Thus, policymakers should encourage the members of SA’s Royal Family to become more involved in firms’ BoDs.

This study offers guidance for further investigation of royal family members in the region or in other monarchy countries. It will be interesting to compare these results. The study suggests that royal family members on the board have a partial influence on firm performance, especially the independent ones. Thus, the policymakers should encourage more involvement of independent royal family members on the board.

Foreign and minority investors, who invest in SA’s publicly listed firms, should note that when independent members of SA’s Royal Family are on the BoD their investment will benefit from the reduced risks and uncertainty.

To the best of the author’s knowledge, this is the first study undertaken to investigate empirically the influence a royal family’s presence on the board of directors has on firm performance. This study is based on both theories, namely the agency theory and resource dependence theory.

This study aims to examine the effect of liquidity risk on deposit money banks’ (DMBs) performance in Sub-Saharan Africa. This study also tests the interaction effect of liquidity risk and nonperforming loans on the performance of DMBs’ in Sub-Saharan Africa.

This study uses a two-step system generalized method of moment to test the influence of liquidity risk on DMBs’ performance in Sub-Saharan Africa. A sample of 50 listed banks across six Sub-Saharan African countries, including Nigeria, Ghana, South Africa, Zambia, Kenya and Tanzania, were used. The bank performance proxy used are return on asset and return on equity, while net interest margin is used for robustness check.

The study’s findings reveal a significant and negative association between liquidity risk and bank performance. Moreover, the relationship between the nonperforming loan and bank performance is negative and significant. Furthermore, the interaction effect of liquidity risk and nonperforming loans on bank performance is found to be significantly negative for the two proxies of bank performance. The result is robust for the alternative bank performance measurements and econometric model, which adequately addresses endogeneity tendency.

To the best of the researchers’ knowledge, this is one of the earliest empirical studies that examine the effect of liquidity risk on DMBs’ performance across Sub-Saharan African countries. This study further differs from previous studies with the interaction term of liquidity risk and nonperforming loan included in the model.

The problem of measurement errors in the national accounts has been recognized for a long time. The error chiefly arises from various source data and the timing of the flow of data received from providers. This chapter first discusses the type of measurement errors confronted by statistical agencies. Second, it presents a model of their behavior that illustrates the trade-offs that must be made in dealing with such errors. Third, the chapter discusses how the quality of the estimates can be gauged given measurement error and the inability to conduct standard statistical tests. Although the focus is on the production of U.S. Gross Domestic Product, the principles are applicable to all national statistical agencies.

The purpose of this paper is to investigate the effect of corruption and institutional governance indicators on capital flight in Sub-Saharan Africa.

Using a Portfolio Choice Framework, the study employs two different estimation techniques as Generalized Method of Moment and Fixed Effect Regression on panel data sets of 32 countries in Sub-Saharan Africa over the period 2000-2012.

The variable of interest, corruption, retains its expected positive sign and statistically significant across all the estimations. The relationship remains very strong even when other equally important institutional variables such as regime durability, rule of law and independence of the executive are taken into account. This suggests that a higher perception of corruption among public authorities as in bribery, kickbacks in public procurement, embezzlement of public funds, among others facilitates an increase in capital outflow from SSA. The findings further indicate that regime durability and rule of law are important institutional variables that also significantly influence capital flights in SSA.

The findings imply that institutional reforms should be encouraged if SSA is to win the war against corruption and by extension against capital flight. There should be a creation of democratic environment and good governance practices that foster stronger governance institutions, decline in corruption and better domestic investment climate to help reverse the high spate of capital flight in the region.

The main value of this paper is using the portfolio choice framework to analyze the relationship between capital flight and corruption in the Sub-Saharan African context.