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The purpose of this article is to analyze the effects of accruals-based earnings management (AEM) and institutional and financial development on corporate risk of Latin-American firms.

The GMM estimator was used according to Arellano and Bond (1991) for panel data on a sample of 914 non-financial companies between 2005 and 2017.

AEM practices significantly increase corporate risk. This result indicates that the risk increase is associated to weakening of the corporate governance of companies. Positive discretionary accruals also have the same impact on corporate risk. In addition, accrual-based earnings management has a non-linear impact on corporate risk. Higher institutional and financial development systemically reduces the risk of Latin American firms. Institutional development can mitigate the effects of earnings management on corporate risk.

These results support that AEM represents a practice that managers use to weaken firms' corporate governance and expropriate wealth from shareholders. These practices promote higher firm's risk. However, the institutional and financial development reduces the corporate risk and contributes to mitigate the impact of AEM on it. These results have relevant implications for firms' corporate governance because they warn the relevance to control AEM practices and its impact over corporate risk perception by investors. These results also are relevant to policymakers because they orient the financial policies design to strengthen the institutional and financial development as a systematic way to reduce the firm's risk.

El propósito de este artículo es analizar los efectos de la gestión de ganancias basada en devengos (AEM) y el desarrollo institucional y financiero sobre el riesgo corporativo de las empresas latinoamericanas.

Se utilizó el estimador GMM de Arellano y Bond (1991) sobre una muestra de 914 empresas no financieras entre 2005 y 2017.

Las prácticas de AEM aumentan significativamente el riesgo corporativo. Este resultado indica que el aumento del riesgo está asociado al debilitamiento del gobierno corporativo de las empresas. Los devengos discrecionales positivos también tienen el mismo impacto en el riesgo corporativo. Además, la gestión de ganancias basada en el devengo tiene un impacto no lineal sobre el riesgo. Un mayor desarrollo institucional y financiero reduce sistémicamente el riesgo de las empresas. El desarrollo institucional puede mitigar los efectos de la gestión de ganancias sobre el riesgo corporativo.

Estos resultados revelan que AEM es una práctica que debilita los gobiernos corporativos y permite expropiar riqueza de los accionistas. Estas prácticas promueven un mayor riesgo corporativo, aunque el desarrollo institucional y financiero lo reduce. Estos resultados tienen implicancias relevantes para el gobierno corporativo de las empresas porque indican la relevancia de controlar estas prácticas en la percepción de riesgo de los inversionistas. Estos resultados también son relevantes para los reguladores porque orientan el diseño de políticas financieras hacia el fortalecimiento del desarrollo institucional y financiero como una vía sistemática que reduce el riesgo de las empresas.

Using hedging theories, we analyse the variables that determine the decision to hedge with foreign currency debt.

Using a sample of 100 Spanish companies with a significant social and economic role in Latin American during 2004‐2007, we estimated probit models for panel data.

Our results showed that the main determinants are scale economies and the use of derivatives. On the one hand, we found that this hedging is positively related to tax loss carry‐forwards and long‐term economic sectors, and on the other, that it is related negatively to information asymmetries and growth opportunities. Results were mixed for foreign currency exposure.

The limitations of this paper are associated to the availability of information from annual reports and the SABI database, especially the variables in relation to operational hedging. Therefore, as a future line of research, we propose gathering of data on these internal hedging practices in order to obtain more accurate evidence about its use in companies and their relationship with financial hedging.

This paper makes three major contributions to the existing literature. First, it contributes by illustrating currency hedging practices used by Spanish firms – which are important in Latin markets – to manage exchange rate exposure in. Second, we used more variables for the empirical analyses to contrast the hedging theories than previous studies had. Finally, we used a data panel because it allows the control of unobservable heterogeneity and endogeneity problems. Previous studies only used cross‐section estimations.

Este trabajo analiza la cobertura cambiaria con deuda en divisa utilizando las teorías de cobertura.

Se estimaron modelos probit para datos de panel usando una muestra de 100 empresas españolas con un papel económico‐social relevante en Latinoamérica durante el período 2004‐2007.

Los resultados muestran que esta cobertura se relaciona principalmente con las economías de escala y el uso de derivados. Asimismo, existe una relación positiva con la convexidad impositiva y la localización empresarial en sectores orientados al largo plazo, y negativa con las asimetrías informativas y oportunidades de crecimiento. No existe evidencia concluyente para la exposición cambiaria.

La investigación tuvo como limitación la disponibilidad de algunos datos en los informes anuales de las empresas y la base de datos SABI, en especial, aquellos referidos a la cobertura operativa. En consecuencia, una línea de trabajo futura es la mejora de la información sobre esta cobertura, lo cual permitiría aportar mayor evidencia sobre su utilización y su relación con la cobertura financiera.

Esta investigación realiza tres contribuciones a la literatura existente: a) permite un mejor conocimiento de la cobertura cambiaria en empresas españolas internacionales que ejercen un papel relevante en los mercados latinoamericanos; b) utiliza un conjunto de variables más amplio para contrastar las teorías de cobertura que el aplicado en estudios precedentes; c) emplea la metodología de datos de panel y no estimaciones en sección cruzada como presentan los trabajos previos, lo cual permite controlar la heterogeneidad inobservable y posibles problemas de endogeneidad.

This paper aims to investigate the relationship between organisational identification and identification with work group and profession for knowledge workers. The literature points to two competing standpoints, first, a compatible relationship between focal points of identity and second, a trade off relationship whereby an increase in one is at the expense of another.

Using the population of a large public UK sector organisation ordinary least squares regression was used to examine these relationships.

The findings established a strong relationship in which work group, organisational and professional identification were compatible.

The findings indicate, at least in this context, that no inherent trade off or problem reconciling multiple identities was evident. Regrettably the authors do not have the capacity to comment on the weighting or the relative importance placed on each focus of identity; this is an area for future research.

This paper seeks to contribute to the discussions of is the relationship between organisational identification and allegiances with the workgroup or profession, which is underdeveloped in the literature.

The magnetic field integral equation for electromagnetic scattering from a perfectly conducting body of revolution is solved by the method of moments. A Fourier series in ø is used. The t dependence of the expansion functions is subsectional. Pulses are used for the ø component of the unknown electric current induced on the surface S of the body of revolution. Triangles divided by the cylindrical coordinate radius are used for the t component. Here, t and ø are orthogonal coordinates on S, t being the arc length along the generating curve of S and ø the azimuthal angle.

This study aims to investigate the association between executives with foreign backgrounds and the audit fees paid by the Chinese-listed firms over the period from 2010 to 2020.

To examine the association between executives’ foreign experience and audit fees, this study constructs the following empirical model: Lnfee_i,t = β₀ + β₁Foreign background_i,t + ∑β_j Control_i,t + YearFE + IndFE + ε_i,t (1).

This study finds that auditors charge higher fees for firms hiring more executives with foreign backgrounds. The results are robust to a battery of robustness checks, including fixed effects, alternative measures of independent variable, controlling for other characteristics of executives and auditors and entropy balancing method.

This study sheds light on how executives’ foreign backgrounds affect audit fees, enriching the literature on executive heterogeneity and audit fees and providing important implications for audit practitioners.

This paper aims to explore the spillover impacts that domestic or global aspects of geopolitical risk generate on uncertainty. The latter is derived from a spectrum of different sources in the USA (economic policy, monetary policy, fiscal policy, national security, government spending, taxation) from 1985 up to November 2022.

Vector autoregressive schemes are used to detect causality and reverse causality between each aspect of geopolitical risk and each source of US uncertainty.

Notably, national security generates higher geopolitical risk by almost 8% in the first month but decreases GPR by 2% in the third month after the shock. USA is found to constitute a cornerstone as regards global peace and that the overall economic or monetary conditions or war status in the USA are remarkably more influential toward domestic and global geopolitical uncertainty than separate strands of fiscal policymaking. Reverse causality displays sizably weaker effects overall.

This study sheds light on the determinants of geopolitical risk and domestic instability by an international perspective and provides a compass for better decision-making for fiscal and monetary policymakers and market participants.

This study aims to seek to analyse the relationships between profitability, productivity, external debt and growth in SMEs. The authors also analyse firm size and age as explicative variables of small and medium-sized enterprise (SME) growth.

In this paper the data were collected for 3309 SMEs for the period 2010–2019. The authors estimate the model using the system generalised method of moments dynamic estimator.

The results show that after a certain level of profitability, this determinant positively impacts SME growth. Productivity influences positively the firm growth. There is a positive effect of external debt on SME growth, which can be explained by the insufficiency of internally generated funds. The authors obtained a negative signal between size and firm growth, contradicting Gibrat's Law (1931). Moreover, the results suggest that SMEs grow less after a certain age, suggesting that small firms grow less after reaching the minimum scale of efficiency.

For SME owner-managers, this study enhances the importance of profitability and labour productivity for firm growth. For policymakers, the results suggest the need for favourable conditions for SMEs in accessing external finance.

Profitability negatively impacts on SME growth. However, the authors found that above a certain level of profitability, probably, as firms accumulate retained earnings, profitability has a positive effect on SME growth. Moreover, this study shows that labour productivity and debt positively impact on SME growth, evidencing the importance of the availability of financial resources to sustain the growth of these firms.

This paper aims to investigate the impact of corporate culture on stock price crash risk and explore the underlying mechanisms.

This paper uses a novel firm-level culture measure of Li et al. (2020), which evaluates corporate culture from the perspectives of integrity, teamwork, innovation, respect and quality. Using a sample of 4,017 US firms from 2001 to 2018, this paper uses panel data regressions to explore the impact of corporate culture on stock price crash risk.

This paper finds that among five cultural dimensions, integrity reduces crash risk and quality increases crash risk. The mitigating effect of integrity culture on crash risk is concentrated among firms with a strong incentive or ability to hoard bad news. The exacerbating effect of quality culture on crash risk is concentrated among firms with low managerial flexibility.

This paper helps investors and regulators to understand the determinants of stock price crash risk, which facilitates investors’ wealth management and stabilizes social welfare.

To the best of the authors’ knowledge, this is the first study that uses time-varying firm-level measure of corporate culture to investigate its impact on stock price crash risk, contributing to the literature on the determinants of crash risk. Besides, this is the first study that explores the possible mechanism of managerial flexibility in influencing stock price crash risk.

This study investigated the impact of corporate ownership structure on agency costs in the insurance industry.

The study sample included 23 insurance companies listed on the Amman Stock Exchange (ASE) from 2010 to 2019. Panel regression was used to account for the firm- and time-specific unobservable variables and system-GMM estimation was used to address endogeneity concerns.

The results show that managerial ownership positively (negatively) affects selling, general and administrative (SG&A) expenses (assets turnover), implying that unmonitored managers engage in activities that serve their own interests rather than those of shareholders. The largest shareholder's ownership has no impact on agency costs, implying that the ownership of the largest shareholder is irrelevant. However, as the wedge between the percentage of capital owned by the largest shareholders and managers increases, SG&A expenses (efficiency ratio) decrease (increases), indicating that the existence of large non-management shareholders reduces agency costs. After accounting for the endogeneity problem, the impact of ownership structure on agency costs measured by asset turnover remains robust.

To the best of the authors' knowledge, this study is the first to provide unique evidence and useful insights into the determinants of agency costs from a frontier market in the Middle East and North Africa (MENA), with a focus on the insurance sector. Additionally, this study uses a new measure of separation between ownership and control by calculating the wedge between managers' and large shareholders' ownership.

The authors test the weak-form efficiency in cryptocurrency markets using the most recent and comprehensive data as of 2021. The authors apply various technical indicators to take a long or short position on 99 cryptocurrencies and compare the 10-day returns based on the technical trading strategies to the simple buy-and-hold returns. The authors find that the trading strategies based on single indicators or the combination of two indicators do not generate higher returns than buy-and-hold returns among cryptos. These findings suggest that cryptocurrency markets are weak-form efficient in general.