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1 – 10 of 12This study aims to examine the effects of audit quality on earnings management and cost of equity capital (COE) considering the impact of two owner types: government ownership and…
Abstract
Purpose
This study aims to examine the effects of audit quality on earnings management and cost of equity capital (COE) considering the impact of two owner types: government ownership and foreign ownership.
Design/methodology/approach
The study uses a panel data set of 236 Vietnamese firms covering the period 2007 to 2017. Because the two main dependent variables of the COE capital and the absolute value of discretionary accruals receive fractional values between zero and one, the paper uses the generalised linear model (GLM) with a logit link and the binomial family in regression analyses. The paper uses numerous audit quality measures, including hiring Big 4 auditors or the industry-leading Big 4 auditor, changing from non-Big 4 auditors to Big 4 auditors or the industry-leading Big 4 auditor, and the length of Big 4 auditor tenure. Big 4 companies include KPMG, Deloitte, EY and PwC, whereas the non-big 4 are the other audit companies.
Findings
The study finds a negative relationship between audit quality and both the COE capital and income-increasing discretionary accruals. The effects of audit quality on discretionary accruals and the COE capital depend on the ownership levels of two important shareholders: the government and foreign investors. Foreign ownership is negatively associated with discretionary accruals; however, the effect is more pronounced in the sub-sample of state-owned enterprises (SOEs), the firms where the government owns 50% or more equity, than in the sub-sample of Non-SOEs.
Originality/value
To the best of the knowledge, no prior similar study exists that used the GLM with a logit link and the binomial family regression. Global investors may be interested in understanding how unique institutional settings and capital markets of each country impact the financial reporting quality and cost of capital. Further, policymakers of developing markets may have incentives to improve the quality of financial reporting and reduce the cost of capital which should result in attracting more foreign investments.
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Chenchen Yang, Lu Chen and Qiong Xia
The development of digital technology has provided technical support to various industries. Specifically, Internet-based freight platforms can ensure the high-quality development…
Abstract
Purpose
The development of digital technology has provided technical support to various industries. Specifically, Internet-based freight platforms can ensure the high-quality development of the logistics industry. Online freight platforms can use cargo transportation insurance to improve their service capabilities, promote their differentiated development, create products with platform characteristics and increase their core competitiveness.
Design/methodology/approach
This study uses a generalised linear model to fit the claim probability and claim intensity data and analyses freight insurance pricing based on the freight insurance claim data of a freight platform in China.
Findings
Considering traditional pricing risk factors, this study adds two risk factors to fit the claim probability data, that is, the purchase behaviour of freight insurance customers and road density. The two variables can significantly influence the claim probability, and the model fitting outcomes obtained with the logit connection function are excellent. In addition, this study examines the model results under various distribution types for the fitting of the claim intensity data. The fitting outcomes under a gamma distribution are superior to those under the other distribution types, as measured by the Akaike information criterion.
Originality/value
With actual data from an online freight platform in China, this study empirically proves that a generalised linear model is superior to traditional pricing methods for freight insurance. This study constructs a generalised linear pricing model considering the unique features of the freight industry and determines that the transportation distance, cargo weight and road density have a significant influence on the claim probability and claim intensity.
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Jason Scott Entsminger and Lucy McGowan
This paper aims to investigate associations between firm resources and reliance on entrepreneurial marketing (EM) channels among agrofood ventures. It accounts for agropreneur…
Abstract
Purpose
This paper aims to investigate associations between firm resources and reliance on entrepreneurial marketing (EM) channels among agrofood ventures. It accounts for agropreneur gender and racial/ethnic status in the context of marketing channel portfolio composition. The authors examine the established assumption that resource limitations drive EM and whether socially disadvantaged status of agropreneurs is associated with marketing strategy beyond standard resourcing measures.
Design/methodology/approach
Using 2015 Local Foods Marketing Practices Survey data, the authors apply linear regression to investigate differences in the use of EM channels, accounting for resources, social status and other factors.
Findings
Limited-resource ventures rely more on consumer-oriented channels that require EM practices. Socially disadvantaged entrepreneurs favor these channels, even when accounting for resources. Notably, ventures headed by men of color rely more on the most customer-centric local foods marketing channel.
Research limitations/implications
Future research should investigate how social and human capital influences the use of EM.
Practical implications
Entrepreneurial support policy and practice for agropreneurs should be cautious about the “double-burden” folk theorem of intersectional disadvantage and review how to best direct resources on EM to groups most likely to benefit.
Originality/value
This paper uses a unique, restricted, nation-wide, federal data set to examine relationships between resource endowments, social status and the composition of agrofood enterprises’ marketing channel portfolios. To the best of the authors’ knowledge, it is the first to include racial- and ethnic-minority status of agropreneurs and to account for intersectionality with gender.
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Noah Olasehinde, Uche Abamba Osakede and Abdulfatai Adekunle Adedeji
This study investigates the effect of user fees on access and waiting time in Nigeria. For access, the effect of user fees on both preventive and curative care; and the effect of…
Abstract
Purpose
This study investigates the effect of user fees on access and waiting time in Nigeria. For access, the effect of user fees on both preventive and curative care; and the effect of user fees on waiting time at public healthcare facilities were examined. User fees are vital for the fiscal sustainability of healthcare provision for most African economies. Its imposition could debar healthcare access by the poor while its removal can reduce quality of care and induce longer waiting time.
Design/methodology/approach
The wave 3 of the Nigerian General Household Survey (2015/16) data was used for users of public health facilities. Access to healthcare was modelled using utilization data in a logistic regression model while waiting time was through the Negative Binomial Regression Model (NBRM).
Findings
The analyses showed significant effects of user fees on access to both preventive and curative care and on time spent waiting to make use of healthcare services. Individuals were able to access healthcare services regardless of amounts paid. Also, there was a non-negative effect of user fee imposition on waiting time.
Practical implications
Nigeria should improve healthcare facilities to address the enormous demand for healthcare services when designing policy for health sector.
Originality/value
This paper shows that even with the imposition of user fees, healthcare facilities could still not cater for the rising healthcare needs of the populace but cautioned that its abolition may not be a preferred option.
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Carla Ramos, Adriana Bruscato Bortoluzzo and Danny P. Claro
This study aims to capture how the association between a multichannel relational communication strategy (MRCS) and customer performance is contingent upon such customer…
Abstract
Purpose
This study aims to capture how the association between a multichannel relational communication strategy (MRCS) and customer performance is contingent upon such customer performance (low- versus high-performance customers) and to reconcile past contradictory results in this marketing-related topic. To this end, the authors propose and validate the method of quantile regression as an unconventional, yet effective, means to proceed to that reconciliation.
Design/methodology/approach
This study collected data from 4,934 customers of a private pension fund firm and accounted for both firm- and customer-initiated relational communication channels (RCCs) and for customer lifetime value (CLV). This study estimated a generalized linear model and then a quantile regression model was used to account for customer performance heterogeneity.
Findings
This study finds that specific RCCs present different levels of association with performance for low- versus high-performance customers, where outcome customer performance is the dependent variable. For example, the relation between firm-initiated communication (FIC) and performance is stronger for low-CLV customers, whereas the relation between customer-initiated communication (CIC) and performance is increasingly stronger for high-CLV customers but not for low-CLV ones. This study also finds that combining different forms of FIC can result in a negative association with customer performance, especially for low-CLV customers.
Research limitations/implications
The authors tested the conceptual model in one single firm in the specific context of financial services and with cross-sectional data, so there should be caution when extrapolating this study’s findings.
Practical implications
This study offers nuanced and precise managerial insights on recommended resource allocation along with relational communication efforts, showing how managers can benefit from adopting a differentiated-customer performance approach when designing their MRCS.
Originality/value
This study provides an overview of the state of the art of MRCS, proposes a contingency analysis of the relationship between MRCS and performance based on customer performance heterogeneity and suggests the quantile method to perform such analysis and help reconcile past contradictory findings. This study shows how the association between RCCs and CLV varies across the conditional quantiles of the distribution of customer performance. This study also addresses a recent call for a more holistic perspective on the relationships between independent and dependent variables.
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Oscar Espinoza, Luis Gonzalez, Luis Sandoval, Bruno Corradi, Yahira Larrondo and Noel McGinn
This study analyzed the impact on the persistence of Chilean university students who had received a government-guaranteed loan (CAE).
Abstract
Purpose
This study analyzed the impact on the persistence of Chilean university students who had received a government-guaranteed loan (CAE).
Design/methodology/approach
Using academic and administrative data from 2016 to 2019, provided by 11 Chilean universities, a discrete-time survival model was constructed. The model was based on data of 5,276 students in the 2016 cohort and included sociodemographic variables, academic background prior to entering university and academic performance once in university. As a robustness check of our results to observable confounding, the analysis was repeated using a control group constructed using propensity score matching (PSM).
Findings
The results reveal that students who receive a bank loan (CAE) were more likely to remain in undergraduate studies for at least the first two years of university, as opposed to their peers who did not receive financial aid. In addition, they show the importance of academic performance in retention.
Originality/value
The article advances in the identification of the impact of bank loans on permanence. Although previous research has evaluated the impact of the CAE, it has been conducted on small samples of students. These studies also lacked student records associated with their academic performance at the university. The present research overcomes both weaknesses, allowing us to estimate the impact of the CAE on a larger population of students that is representative of the system.
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Gurmeet Singh Bhabra and Ashrafee Tanvir Hossain
The purpose of this paper is to investigate the relationship between CEOs' inside debt holdings (pension benefits and deferred compensation) and the operating leverage of the…
Abstract
Purpose
The purpose of this paper is to investigate the relationship between CEOs' inside debt holdings (pension benefits and deferred compensation) and the operating leverage of the firms they manage, with the aim to examine whether CEO incentives play a role in corporate risk-taking.
Design/methodology/approach
The authors investigate the relation between CEO inside debt holdings (CIDH) (pension benefits and deferred compensation) and the operating leverage (DOL) of the firms they manage. Using a sample of 11,145 US firm-year observations over the period 2006–2017, the authors find a strong negative association between CIDH and DOL. Additional analyses reveal that the relationship between CIDH and DOL is more pronounced in firms with heightened agency issues, powerful CEOs and for CEOs with stronger professional networks. The results are robust to various sensitivity and endogeneity tests.
Findings
The authors find strong evidence confirming the expected negative association between CEO inside debt and DOL suggesting that firms with higher inside debt tend to maintain lower levels of operating leverage. These findings continue to hold with the alternative measure for the inside debt and operating leverage, and across a range of tests designed to rule out the possibility that the primary findings are in any way driven by potential endogeneity. In addition, the findings demonstrate that the presence of manager-shareholder agency conflicts can strengthen the inside debt–DOL relationship suggesting the strong role of inside debt in reducing firm risk.
Research limitations/implications
Findings in this paper have implications for design of compensation structures so that corporate boards can establish incentives as a tool for risk management. A limitation of this study is that it is focused on one market, i.e. US listed companies, so the findings may not be applicable on a global scale.
Originality/value
To the best of the authors’ knowledge, this is the first study that links firm-level management of operating leverage through design of CEO inside debt incentives (two obvious choices for risk-reduction at the CEOs’ disposal include reducing financial risk through reduction of firm leverage and reducing operating risk through reduction of operating leverage). While use of firm leverage as an instrument of choice has been explored in the past, use of operating leverage to achieve risk reduction when CEO possess high inside holding, has received very little attention.
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Clara Martin-Duque, Juan José Fernández-Muñoz, Javier M. Moguerza and Aurora Ruiz-Rua
Recommendation systems are a fundamental tool for hotels to adopt a differentiating competitive strategy. The main purpose of this work is to use machine learning techniques to…
Abstract
Purpose
Recommendation systems are a fundamental tool for hotels to adopt a differentiating competitive strategy. The main purpose of this work is to use machine learning techniques to treat imbalanced data sets, not applied until now in the tourism field. These techniques have allowed the authors to analyse the influence of imbalance data on hotel recommendation models and how this phenomenon affects client dissatisfaction.
Design/methodology/approach
An opinion survey was conducted among hotel customers of different categories in 120 different countries. A total of 135.102 surveys were collected over eleven quarters. A longitudinal design was conducted during this period. A binary logistic model was applied using the function generalized lineal model (GLM).
Findings
Through the analysis of a representative amount of data, the authors empirically demonstrate that the imbalance phenomenon is systematically present in hotel recommendation surveys. In addition, the authors show that the imbalance exists independently of the period in which the survey is done, which means that it is intrinsic to recommendation surveys on this topic. The authors demonstrate the improvement of recommendation systems highlighting the presence of imbalance data and consequences for marketing strategies.
Originality/value
The main contribution of the current work is to apply to the tourism sector the framework for imbalanced data, typically used in the machine learning, improving predictive models.
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Morgan A. Douglass, Meghan A. Crabtree, Linda R. Stanley, Randall C. Swaim and Mark A. Prince
This study aims to examine a second-order latent variable of family functioning built from two established protective factors for American Indian (AI) youth, i.e. family cohesion…
Abstract
Purpose
This study aims to examine a second-order latent variable of family functioning built from two established protective factors for American Indian (AI) youth, i.e. family cohesion and parental monitoring. This study then examines if family functioning is related to alcohol use frequency or age of initiation for AI youth. Additionally, this study examines if family functioning served as a moderator for the risk factor of peer alcohol use.
Design/methodology/approach
Data came from the 2021 Our Youth, Our Future survey. Participants were 4,373 AI adolescents from Grades 6–12 across the contiguous USA. Structural equation modeling (SEM) was used to test the latent variable of family functioning. Structural paths and interaction terms between peer use and family functioning were added to the SEM to explore direct and moderating effects.
Findings
Family cohesion and parental monitoring were best represented by a second-order latent variable of family functioning, which was related to later initiation and lower alcohol use frequency.
Practical implications
The findings regarding the initiation of alcohol use may be applicable to prevention programs, with family functioning serving as a protective factor for the initiation of alcohol use. Programs working toward alcohol prevention may be best served by focusing on family-based programs.
Originality/value
The latent variable of family functioning is appropriate for use in AI samples. Family functioning, which is an inherent resilience factor in AI communities, was shown to be protective against harmful alcohol use behaviors.
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Khaled Hamad Almaiman, Lawrence Ang and Hume Winzar
The purpose of this paper is to study the effects of sports sponsorship on brand equity using two managerially related outcomes: price premium and market share.
Abstract
Purpose
The purpose of this paper is to study the effects of sports sponsorship on brand equity using two managerially related outcomes: price premium and market share.
Design/methodology/approach
This study uses a best–worst discrete choice experiment (BWDCE) and compares the outcome with that of the purchase intention scale, an established probabilistic measure of purchase intention. The total sample consists of 409 fans of three soccer teams sponsored by three different competing brands: Nike, Adidas and Puma.
Findings
With sports sponsorship, fans were willing to pay more for the sponsor’s product, with the sponsoring brand obtaining the highest market share. Prominent brands generally performed better than less prominent brands. The best–worst scaling method was also 35% more accurate in predicting brand choice than a purchase intention scale.
Research limitations/implications
Future research could use the same method to study other types of sponsors, such as title sponsors or other product categories.
Practical implications
Sponsorship managers can use this methodology to assess the return on investment in sponsorship engagement.
Originality/value
Prior sponsorship studies on brand equity tend to ignore market share or fans’ willingness to pay a price premium for a sponsor’s goods and services. However, these two measures are crucial in assessing the effectiveness of sponsorship. This study demonstrates how to conduct such an assessment using the BWDCE method. It provides a clearer picture of sponsorship in terms of its economic value, which is more managerially useful.
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