Search results

We examine whether loan securitization has an impact on bank efficiency. Using a sample of large US commercial banks from 2002 to 2012, we find that bank loan securitization has a significant and positive impact on bank efficiency, and this relationship is stronger for banks with higher capital ratios, higher default risk, and lower level of liquidity and diversification. Our results are robust to Heckman self-selection correction and difference-in-difference (DID) analysis. In addition, these results are found mainly in non-mortgage loan securitizations but not in mortgage loan securitizations. Finally, we show that loan sales also have a positive impact on bank efficiency.

The purpose of this study is to examine whether corporate social responsibility (CSR) affects dividend policy (the propensity to pay dividends as well as the dividend payout ratio) and what role family ownership plays in this regard in an emerging market.

The study uses a sample of 1,480 observations from Pakistan for the period 2010–2016 and accounts for Hackman self-selection bias and endogeneity issues using a robust regression analysis. CSR activity is measured by CSR score developed through a content analysis of firms' annual reports.

The study finds that the greater number of CSR activities increases the propensity to pay dividends, but reduces the dividend payout in dividend-paying firms. On the other hand, in family firms, the greater number CSR activities decreases the propensity to pay dividends, but increases the dividend payout in dividend-paying firms. The findings hold for a series of robustness and sensitivity checks, for example, alternative measures, specifications and estimators.

A trade-off between firms' CSR activities and dividend policy needs to be the point of concern for investors, minority shareholders and policy makers. The role of the non-executive and independent directors becomes more important, especially in the family firms where family members sitting on the boards may drive CSR activities in their own interests opportunistically. The potential opportunistic behaviour of family members warrants the need for policy reform initiatives to strengthen the protection of other stakeholders' interests.

The study highlights that family owners' efforts to preserve their socio-emotional wealth in family firms affect the relationship between CSR activities and dividend policy. Further, the relationship between CSR and dividend policy in emerging markets is different from developed markets. This study simultaneously focuses on both the propensity to pay dividends and the amount of dividend payment and documents that the implications of CSR are different for them.

Marketers have begun to investigate the potential of gamification for influencing consumer behavior by using game design elements in realms varying from branding, retail, sales and health services. Marketers have also begun to explore consumer behavior in sustainability. This paper aims to provide contributions to build on both literatures.

This research tests gamification principles in a large field study on real consumers that includes data from pre-post surveys, gamified app analytics and household energy meters. The data are analyzed using ANOVA’s and structural equation modeling.

The findings demonstrate: gamification significantly enhanced consumers’ knowledge, attitudes, behavioral intentions and realized bill savings compared to a control group; reward-based game design elements including points, badges and other rewards contribute to enhancing sustainable behavior outcomes.

Future research in settings outside of sustainability may extend upon the findings of the current research to further understanding the impact of reward-based game design elements in marketing.

The findings have important practical implications for how organizations might use serious games to promote sustainable and other desirable behavior. In particular, how reward-based game design elements, points, trophies and badges, can be used to create a chain of relationships that leads to reduced electricity consumption.

This paper fulfills the need to understand if the impact of gamification extends outside of controlled environments and into the field. Further, it demonstrates how reward-based game design elements contribute to consumers changing their behavior, a relationship that is not yet thoroughly understood in the marketing literature.

In this study, the author examines the effect of managers’ perception of product market competition on accruals and real earnings management.

The author develops a new text-based measure of the emphasis managers place on product market competition by conducting a textual analysis of firms’ 10-K filings. Using this measure, the author conducts a battery of econometric analyses and robustness checks to investigate the impact of this measure of product market competition on measures of accruals and real earnings management.

This study finds robust evidence that when management perceives more competitive threats, they are more likely to engage in accruals-based earnings manipulation but are less likely to engage in real earnings management activity. The author argues that these findings are due to managers’ career concerns enticing them to manage earnings via accrual when competition is high, but that greater product market competition discourages real earning management activity as it can diminish firms’ competitiveness.

The findings of this paper have important policy and practical implications since it signals that managers’ perceptions of product market competition is able to affect accounting choices, information environments and economic outcomes in firms.

This study develops a new text-based measure of managers’ perception of product market competition with the aid of GPT-4. The author then using this measure provides firm-level evidence on how this relates to earnings management.

This study aims to investigate the presence of the audit partner ethnicity on audit fees within the Indonesian context.

The sample consists of 803 firm-year observations from the Indonesia Stock Exchange during the period of 2014–2018. The study uses fixed-effect regression analysis to examine the relationship between audit partner ethnicity and audit fees.

This study reveals that firms audited by audit partners from the main ethnic group demonstrate lower audit fees, indicating a more extensive audit business network for this particular group of auditors compared to those from minority ethnic groups. Particularly, the study finds that firms audited by audit partners from the three largest ethnicities, namely, Balinese, Javanese and West Sumatranese, are associated with lower audit fees compared to others. These findings further contribute to the existing narrative and literature that highlight the ethnic background of audit partners as a form of social capital that influences lower audit fees.

This study provides valuable practical and academic implications regarding the impact of audit partner ethnicity on audit fees. The findings highlight the importance for audit firms to strive for a balanced representation of ethnic diversity in their auditor characteristics, as it can positively influence both governance and marketing strategies. By recognizing and addressing the significance of ethnic diversity among audit partners, firms can enhance their overall effectiveness and success in the auditing profession.

This study makes a unique contribution by providing empirical data on audit pricing theory in Indonesia, specifically focusing on the role of ethnic diversity as a determinant of audit pricing. Previous research has not extensively explored the connection between auditor ethnicity and audit fees, particularly in relation to the business network as a channel mechanism. The theoretical explanations for the fee differentials have also been limited in prior studies. The current study addresses this gap by offering a theoretical basis that highlights the advantage of the dominant ethnic group in establishing an efficient audit market system. Consequently, these auditors are able to charge lower fees to clients without compromising on the quality of their services. This finding aligns with the existing literature on audit fees and underscores the importance of the main ethnic group in fostering an effective audit market, resulting in lower audit fees compared to mixed audit markets.

The purpose of this paper is to investigate whether analysts’ optimism affects the stock crash risk.

The sample covers 49,246 firm-year observations for the period between 1995 and 2015. The authors use OLS regressions with firm and year fixed effects for analyses.

The study finds that there is a positive association between analysts’ optimism and stock crash risk. Such a positive impact is more pronounced for firms with opaque information environment and for analysts who are considered ex ante credible.

The results indicate that analysts’ optimism can be an important source of stock crash risk.

The findings can be useful for informational users of analyst reports. Given that information provided by analysts might have negative consequences, the empirical results can be useful in assessing future stock return behaviors.

This paper has the potential to shed light on the large literature of crash risk. Prior studies suggest that crash is driven by the agency tension between shareholders and managers. It remains possible that crashes could be caused by overpriced stocks in the absence of bad news hoarding. The paper investigates crash from a perspective, financial analysts, that is underexplored.

Using the most recent observations (2005‐2011) from a sample of UK listed companies, This paper aims to investigate whether Big 4 audit firms exhibit a “fee premium” and, if this is the case, whether the premium is related to the delivery of a better audit service.

Univariate tests, multivariate regressions and two methodologies that control for self‐selection bias are used to answer the proposed research questions. Data are collected from DataStream.

Findings provide consistent evidence about the existence of an “audit fee premium” charged by Big 4 firms while they do not highlight any significant relationship between audit quality and type of auditor with respect to the audit quality proxies investigated.

Evidence from this paper might signal the need for legislative intervention to improve the competitiveness of the audit market on the basis that its concentrated structure is leading to “excessive” fees for Big 4 clients. Findings might also enhance Big 4 client bargaining power. However, as the paper analyses only one country, generalizability of the results might be a limitation.

This study joins two streams of the extant literature that investigate the existence of a “Big 4 audit fee premium” and different levels of audit quality among Big 4 and non‐Big 4 clients. Evidence supports the concerns raised by the UK House of Lords in 2010 that the concentrated structure of the audit market could be the driver of “excessive” fees for Big 4 clients as it does not find differences in audit quality between Big 4 and non‐Big 4 clients.

Using a large sample of diversified firms from 38 countries we investigate the influence of several national-level institutional factors or “institutional voids” on the value of corporate diversification. Specifically, we explore whether the presence of frictions in a country’s capital markets, labor markets, and product markets, affects the excess value of diversified firms. We find that the value of diversified firms relative to their single-segment peers is higher in countries with less-efficient capital and labor markets, but find no evidence that product market efficiency affects the relative value of diversification. These results provide support for the theory of internal capital markets that argues that internal capital allocation would be relatively more beneficial in the presence of frictions in the external capital markets. In addition, the results show that diversification can be beneficial in the presence of frictions in the labor market.

Young graduates in Morocco are encountering an increasingly challenging labor market environment. Confronted with intense competition, job insecurity, and unclear career trajectories, many find themselves in low-skilled positions despite possessing relevant qualifications. This issue is particularly pronounced among vocational training graduates, who experience professional downgrading at a rate three times higher (33.6%) compared to their peers from general education (11.6%) (HCP, 2018). Our study aims to investigate professional downgrading among young vocational training graduates in Morocco, focusing on the factors contributing to this phenomenon and identifying potential solutions to address it.

Our study is based on the insertion and career path survey conducted by the Department of Professional Training with graduates of professional training programs in Morocco. For this edition, the survey was conducted in 2020, encompassing all 31,498 graduates of the 2016 professional training programs. The Heckman self-selection model is employed to analyze and explore various dimensions of downgrading. Factors such as gender, age, marital status, parental education, and the choice of vocational training field are scrutinized to understand their influence on downgrading.

The study reveals several key findings: Women exhibit a lower probability of professional downgrading compared to men. Young graduates are more vulnerable to downgrading, emphasizing the necessity for career guidance and mentorship programs to facilitate their entry into the job market. Marital status plays a role, with married individuals having a higher likelihood of downgrading. Parental education, particularly that of mothers, proves critical in preventing subjective downgrading of vocational training graduates, highlighting the need for adult literacy and education programs. The effectiveness of the National Agency for the Promotion of Employment and Competencies (ANAPEC) programs in preventing downgrading among vocational training graduates is questioned, suggesting the need for program revisions tailored to this population. The choice of vocational training field significantly impacts downgrading, with graduates of technical training programs experiencing advantages. This emphasizes the importance of diversifying training fields and aligning them with market demands.

This study provides valuable insights into the phenomenon of professional downgrading among young vocational training graduates in Morocco. The findings emphasize the need for targeted policy interventions. Recommendations include supporting young graduates, reassessing programs offered by the ANAPEC, and enhancing technical training to better align with the evolving demands of the labor market.

While the phenomenon of R&D offshoring has become increasingly popular, scholars have mostly focused on R&D offshore outsourcing from the point of view of the client firms, who are often from an advanced country. By examining vendor firms, in this paper the authors shift the focus to the second party in the dyadic relationship of R&D offshore outsourcing. Specifically, the authors compare vendor firms with nonvendor firms from the same emerging economy and industry to look at whether vendor firms from emerging economies can improve their innovation performance by learning from their clients. The authors also look at the role of depth and breadth of existing technological capabilities of the vendor firm in its ability to improve its innovation performance.

This study is based on firm-level data from the Indian biopharmaceutical industry between 2005 and 2016. The authors use the Heckman two-stage model to control for self-selection by firms. The authors compare the innovation performance of vendor firms with nonvendor biopharmaceutical firms (group vs nongroup analysis) as well as innovation performance across vendor firms (within group comparison).

The authors find that, compared to nonvendor firms, R&D offshore outsourcing vendor firms from emerging economies have higher innovation performance. The authors argue that this higher innovation performance among vendor firms is due to learning from their clients. Among vendor firms, the authors find that the innovation gains are contingent upon the two factors of depth and breadth of the vendor firms' technological capabilities.

This paper makes three contributions: First, the authors augment the nascent stream of research on innovation from emerging economy firms. The authors introduce a new mechanism for emerging economy firms to learn and upgrade their capabilities. Second, the authors contribute to the literature on global value chains, by showing that vendor firms are able to learn from their clients and upgrade their capabilities. Third, by examining the innovation by vendor firms, the authors contribute to the R&D offshore outsourcing, which has largely focused on the client.

The study findings have important implications for both clients and vendors. For client firms, the authors provide evidence that knowledge spillovers do happen, and R&D offshore outsourcing can turn vendors into potential competitors. This research helps firms from emerging economies by showing that becoming vendors for R&D offshore outsourcing is a viable option to learn from foreign firms and improve innovation performance. Going outside geographic boundaries may be a large hurdle for these resource-strapped, emerging economy firms. Providing offshore outsourcing services for narrow slices of R&D activities may be a starting point for these firms to upgrade their capabilities.

This paper is among the first to quantitatively study the innovation performance of vendor firms from emerging economies. The authors also contribute to the nascent literature on innovation in emerging economy firms by showing that providing R&D offshore outsourcing services to client firms from advanced countries can improve firms' innovation performance.