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The purpose of this paper is to examine the impact of greater reporting prominence of translation results following Accounting Standard Update (ASU) 2011-05 on net investment (NI) hedging practice. The authors investigate the role of increased transparency on the decision to engage in NI hedging (participation), the degree of NI hedging (level) and the hedging vehicle choice.

This paper uses the Heckman two-stage procedure (Heckman, 1979) in the hedging choice analysis. In the first stage, the authors model the participation decision as a function of reporting transparency, translation results and other control variables. In the second stage, the authors include the Inverse Mills ratio from the first stage Probit to examine both the level and vehicle choice decisions.

When translation is reported more prominently, the authors find an increase in the level of NI hedging and a greater likelihood of debt as the hedging vehicle, but no evidence firms are more likely to hedge. Regardless of where translation results are reported, firms facing ongoing translation losses are more likely to hedge.

This paper examines S&P 500 firms in the years surrounding the effective date of ASU 2011-05. The findings suggest managers respond to the increase in reporting transparency by increasing hedging for long-term risk management purposes, supporting accounting authorities’ efforts to promote other comprehensive income information transparency. The results should hold for comparable firms with similar currency exposure, size and visibility, but may not apply to smaller firms with limited translation exposure. As only about a quarter of firms with translation exposure engage in NI hedging, the primary results are based on a relatively limited number of firms.

To the best of the authors’ knowledge, this is the first study that examines NI hedging behavior changes following ASU-2011-05. Second, the authors are the first to explore why firms are almost equally split between derivatives and debt as their exclusive hedging vehicle.

This study aims to examine the relationship between the individual auditor’s industry specialization and the audit report lag (hereafter ARD). Further, it explores whether changing in the audit reporting requirement (i.e. the adoption of ISA701) influences the auditor’s industry specialization effect on the ARD.

A large data set of companies listed on the NASDAQ OMX Stockholm over the period 2010–2019 has been analyzed. Least squares regressions have been estimated to provide empirical evidence for the researched hypotheses.

The research findings indicate that the ARD is shorter for client firms audited by an industry specialist audit partner. Testing for the moderating role of changing in the auditing reporting regulation on the relation between the audit partner’s industry specialization and the ARD, the authors reveal that all client firms (except client firms with industry specialist audit partners) experienced an increase in the ARD. Overall, the baseline regression findings are found to be robust to the endogenous auditor choice and multiple measures of both the ARD and the auditor’s industry specialization.

This paper provides novel evidence on the relationship between the audit reporting lag and industry specialization from the individual auditor perspective, an issue that has hitherto been unexplored. The regression results further contribute to the upsurge debate about the consequences of changing in the audit reporting model by providing consistent support for the importance of industry specialization of the audit partner in minimizing costs derived from the former requirement.

Emerging economy firms seek strategic assets through cross-border acquisitions (CBAs) to upgrade their capabilities. The paper explores the relation between emerging economy firms' investments in CBAs and subsequent investments in domestic R&D. It investigates the underlying mechanism that links a firm's decision to pursue CBAs and the outcomes from the CBAs. The main idea behind the study is that firms have higher possibility of creating value from cross-border acquisitions when they simultaneously invest in domestic R&D though both investments are constrained by financial and managerial resources.

The hypotheses are tested on a panel data set of 296 Indian firms over a period of 13 years (2003–2015). The authors use a two-stage Heckman procedure for testing their hypotheses. In the first stage, a probit model predicts the probability of a firm being a cross-border acquirer. The second stage model is estimated by a pooled-data GLS (generalized least squares) regression technique.

The authors find a nonlinear (inverted U-shaped) relationship between firm's investments in CBAs and domestic R&D. This suggests a complementary relation between investments in CBAs and a firm's domestic R&D at lower levels of investments in CBAs. At higher levels of investments in CBAs, CBA investments begin to substitute for firm's domestic R&D investments. For firms with higher international product-market experience and those operating in the hi-tech industry, the relationship between investments in CBAs and domestic R&D is complementary even at higher levels of CBA investments.

The study highlights the role of an emerging market firm's investment in domestic R&D as a link between the decision to invest in CBAs and related outcomes thereof. Emerging market firms face resource constraints while pursuing simultaneous investments in CBAs and R&D, but investment in R&D is essential for realizing the acquisition objectives. The authors also establish the significance of industry context and experiential learning in deciding the allocation of resources between CBAs and internal R&D.

The purpose of this paper is to investigate the effect of share pledging by controlling shareholders on earnings informativeness.

Using a sample of 23,120 firm-year observations from 2003 to 2019 in China, this paper examines how share pledging by controlling shareholders affects earnings informativeness, measured by earnings persistence and earnings response coefficients.

This paper finds that share pledging by controlling shareholders makes earnings less informative. The adverse impacts are more pronounced when share pledging distorts incentives of controlling shareholders to a greater extent and when the signaling of share pledging about a firm’s weak future performance is stronger. Finally, this paper further shows that the 2018 new regulation on share pledging effectively alleviates the negative impacts of share pledging on earnings informativeness.

First, this paper adds to the growing literature on the economic consequence of share pledging by documenting the adverse impacts of share pledging on earnings informativeness. The literature on the economic consequence of share pledging is often mixed, which justifies further research on the impacts of share pledging on earnings informativeness. Second, this paper documents a new signaling channel through which share pledging affects earnings informativeness. Third, the finding of this paper on the 2018 new regulation on share pledging may be interesting to research agencies, such as the Chartered Financial analyst institute and Institutional Shareholder Services institute that recommend tightening regulations on share pledging.

This paper empirically investigates whether female CEOs (She-E-Os) have an effect on firm innovation among Chinese listed firms based on patent data. This study also delved further by looking at whether the internal corporate environment moderates the effect of female CEOs on innovation, that is, state ownership. Finally, this study investigates an additional test of financial constraints to examine whether financial constraints also moderate the impact of female CEOs on firm innovation.

This study used the data of all A-share listed companies on the Shanghai and Shenzhen stock exchanges for the period from 2008 to 2017. The authors use ordinary least squares regression as a baseline methodology, along with firm-fixed effect, lagged measure of female CEOs, alternative measures of innovation, Heckman two-step model and negative binomial regression to check and control the possible issue of endogeneity.

The authors’ findings show that CEO gender plays an important role in producing higher levels of innovation output by improving the governance structure. However, female CEOs have no effect on state-owned enterprises' (SOEs) innovation activities, which suggests that the main goal of SOEs is achieving sociopolitical objectives. Furthermore, female CEOs' influence on innovation output is weaker in firms with financial constraints.

This study adds to the emerging global discussion on gender diversity. Many legislative bodies require a quota for women on corporate boards due to gender inequality. This study's findings reinforce such guidelines by emphasizing the economic benefits of including women in top management positions.

This study provides new insights by highlighting the role of female CEOs in increasing firms' innovation activities. Additionally, this study provides evidence on whether the internal corporate environment (state ownership and financial constraints) moderates female CEOs' effect on innovation.

This study aims to explore the relationship between the level of busyness of Chief Executive Officers (CEOs) and investment efficiency in the context of emerging markets.

The sample includes firms listed on the Indonesia Stock Exchange from 2010 to 2018 using ordinary least square estimation.

The findings suggest that companies led by busy CEOs tend to exhibit lower investment efficiency, thus providing support for the hypothesis that as CEOs’ commitments increase, their ability to concentrate on the company diminishes. Furthermore, our analysis reveals that companies with busy CEOs tend to demonstrate a greater tendency to over-invest, potentially in response to market pressures to showcase strong performance. A more in-depth examination of the data shows that the negative impact of busy CEOs on investment efficiency is especially noticeable in firms lacking risk and management committees (RMC).

These findings have substantial practical implications for the structuring and composition of corporate boards. They highlight the significance of conducting comprehensive assessments to gain insights into the external commitments of incoming CEOs.

This study underscores the importance of establishing RMC.

With the goal of helping consumers bounce back from the financial challenges they faced as a result of the COVID-19 pandemic, many firms developed and announced consumer-targeted resiliency programs (e.g. Walgreens waived delivery fees, Associated Bank allowed deferred mortgage payments). However, there is a paucity of research examining the unique features of these programs, and whether firms' investors (the first external stakeholder group to provide them with feedback regarding their strategies) were receptive to these programs during a period of time in which firms themselves were suffering financially. Drawing on resilience theory and stakeholder theory, the present research incorporates an event study of consumer-targeted resiliency program announcements to understand their financial implications for firms, and to learn whether firms witnessed different financial effects as a result of firm- and program-specific factors.

This study referred to business news publications and newswire services to collect a comprehensive list of consumer-targeted resiliency programs announced by publicly traded U.S. firms during the pandemic. The resulting dataset consisted of 145 announcements made during the period of February–June 2020. An event study was conducted in order to precisely measure the main effect of consumer-targeted resiliency programs on firm value, as manifested through abnormal stock returns. Finally, a moderation analysis (regression) was conducted to uncover whether firm characteristics or specific features of firms' consumer-targeted resiliency programs lead certain firms to witness stronger financial effects than others.

The main effect of consumer-targeted resiliency programs on firm value was found to be positive – a 1.9% increase on average. The moderation analysis finds that non-financial firms were rewarded more positively than financial firms (e.g. banks and credit card companies). In addition, financial aid (i.e. allowing customers to defer their payments to a firm for its products/services, versus a reduction in the price of a product/service or offering it for free or giving cash back to customers) and temporal characteristics (i.e. an offer being framed as limited-time, vs being indefinite or for the foreseeable future) are not found to have a moderating effect.

This theory-driven empirical study uncovers practical implications for managers of firms interested in whether investing in corporate social responsibility during times of crisis is a wise allocation of resources. Any form of financial aid for consumers, regardless of temporal limitations, is received positively by investors.

This paper aims to examine the impact of the auditor's characteristics on bank's earnings management (EM) through loan loss provisions (LLP) for African banks.

This study is based on 360 bank-year observations from 14 African countries for the period 2011–2016, discretionary LLP is used as proxy for EM. Panel regressions have been conducted.

The authors' findings reveal that auditor's industry specialization and tenure exert a negative and significant influence on the extent of LLP-based EM. The results also show that total fees paid to the banks' auditors are positively related to the extent of EM. In a further analysis, the authors find that industry specialist auditors are more effective in reducing the incoming-increasing. Similarly, the positive relationship previously found between EM and total fees still holds only for income-increasing. Moreover, auditor tenure negatively impacts both income-increasing and income-decreasing EM. As for auditor change, results reveal differential effect on EM.

The current research extends prior literature and provides an understanding of an important external monitoring mechanism, the external audit, within African banks. To the best of the authors' knowledge, there is a paucity of cross-country studies that has addressed the influence of auditors' attributes on banks' EM in Africa.

Ownership structure plays a significant role in determining board demographic diversity. However, it is still unclear how different ownership configurations impact the structures of firm's boards and how board diversity influences firm performance. This study aims to investigate the relationship between family ownership and board diversity. Therefore, in this study, the authors argue that family firms have a lower level of board demographic diversity (in terms of age, gender and nationality) than non-family firms and that board diversity moderates the relationship between ownership and firm performance.

To test the authors’ hypotheses, we draw data from a sample of 341 German family and non-family firms for a period of five years.

The results show that family firms are less diverse in terms of age, gender and nationality diversity than non-family firms.

This study contributes to the general understanding of family firms and in particular the role ownership plays in shaping board demographic diversity.

This paper aims to examine the impact of female AC representation (ACFEMALE) following the adoption of gender quota legislation on the trade-off between accrual-based (AEM) and real earnings management (REM), taking into consideration their demographic attributes.

A sample of 89 companies listed in the SBF 120 during the period 2012–2018 has been employed. The authors have obtained the explanatory variables using the principal component analysis method. To provide empirical evidence for the testable hypotheses, the authors have estimated a least squares regression. A differences-in-differences analysis has been estimated to analyze the impact of the gender quota law imposition.

The regression results indicate that companies with a higher proportion of ACFEMALE have more tendency to use REM rather than AEM. The authors further denote that the ACFEMALE expertise negatively affects AEM. Moreover, the authors find that the ACFEMALE experience helps reduce both AEM and REM. Results from the DID analysis exhibit that the ACFEMALE effect on the trade-off between REM and AEM occurs for the period that follows the implementation of the French gender quota law. Furthermore, the authors denote that the negative link between the ACFEMALE experience and AEM and REM dissipates for both the pre- and the postgender quota law adoption.

This study extends the prior existing research by examining, for the first time, the relationship between female directors’ appointments and the trade-off between accrual-based and REM. As well as, the research provides primary evidence on the channels through which female directors may affect the managerial preference regarding the earnings management techniques AEM or REM.