Search results

This chapter investigates the cost of public debt for firms using a comprehensive sample consisting of 17,368 industrial bond issues from 1970 to 2011. The empirical evidence shows that yield spreads for seasoned bond issues are significantly lower than those for initial bond issues. This seasoning effect is robust across different sample periods, subsamples, and model specifications. On average, the yield spreads for seasoned bond issues are around 50 bps lower than those for initial bond issues. This difference cannot be explained by other bond and firm characteristics. The seasoning effect is more pronounced for firms with higher levels of uncertainty, lower information disclosure quality, and longer time intervals between the first and subsequent issues. Our empirical findings provide supportive evidence for the extant theories that aim to rationalize the information role in determining the cost of capital.

Art-infusion has become a common practice among brands across the globe. This is because marketers leverage the uniqueness and prestige of arts to earn superior profits. Hence, this research aims to understand and measure consumers' willingness to pay (WTP) for art-infused products.

A questionnaire was designed based on conjoint analysis and was responded to by 470 respondents from India. The estimation of preference functions in conjoint analysis was intended to use orthogonal arrays to measure WTP.

The study reveals consumers' utility and WTP for different art-infused products. The results indicated that consumers have the highest WTP for products that have artwork dominated by the visual elements of colour, shapes and space.

The paper presents valuable findings for marketers to develop their product design and earn superior profits.

This is the first study in the domain of the art infusion phenomenon that measures WTP for non-luxury art-infused products. Also, this is the first study to measure WTP for different kinds of art forms.

The purpose of this paper is to explore the role of three different audit characteristics in loan pricing—the most significant credit term for borrowers. Three characteristics include audit reputation, audit tenure and audit specialization.

To examine audit characteristics simultaneously to measure their effect on loan pricing, this study uses a full-rank, three-way interaction model and conducts slope difference tests. It also includes the joint effects of these variables to estimate any incremental benefits of possessing multiple qualifications.

When studying the three qualifications together, none of them alone is strong enough to affect the loan interest. But, a Big 4 auditor with tenure can benefit the client by reducing the interest by about 1.98%. The more expertise the auditor has, the better value it brings to borrowers. A highly qualified auditor with additional expertise can significantly reduce loan pricing further by about 2.96 percent.

Examining the costs and benefits of hiring certified auditors is crucial for borrowers. While the variables are not exhaustive, an understanding of the added value of hiring high-quality auditors with more than one or two qualifications to their potential premium fees helps borrowers in managers' audit selection decisions. At the same time, the results shed some light on which of the auditor's qualifications lenders might prioritize when pricing a borrower's loan.

This research investigates the barriers hindering women from pursuing entrepreneurship as a career choice, particularly in the Indian context.

The study employs rigorous data analysis techniques, including Confirmatory Factor Analysis and Multiple Regression Analysis, on a sample of 590 MBA students, comprising both male and female participants.

The findings reveal that social and psychological factors significantly influence women’s decisions regarding entrepreneurship. Social factors such as social stigma and cultural norms, along with psychological factors like societal expectations, emerge as major barriers.

The findings have implications for policymakers, practitioners, and academics in designing interventions to address social and psychological barriers effectively. Recommendations include promoting cultural sensitivity and fostering confidence among women entrepreneurs.

This study contributes to the existing literature by quantifying the specific barriers faced by women entrepreneurs in India. It offers insights into advancing gender equity and inclusive economic development through targeted policies and programs.

The relevance of this research is determined by the fact that the creation of innovative goods and services involves a set of marketing activities to assess the market situation. Intellectual leadership becomes the basis of strategic foresight. Understanding the horizon of opportunities for an industrial enterprise reflects the trends in the evolutionary development of industry markets and their respective competencies. The formation of key competencies contributes to the elimination of marketing myopia. In this regard, the authors identified changes in the main trends in consumer demand. The research aims to build a client-centric business model in the B2B market. The empirical basis of this research is the statistical data “Indicators of innovative activity: 2022” and the works of S. Yu. Glazyev, N. Nonaka, H. Takeuchi, K. Freeman, and F. Jansen. Based on the method of logical-structural analysis, the authors reveal the essence of the content of the category “innovative development of industry,” give a rationale for the main directions of innovative transformations of the industry based on the implementation of a competency-based approach in management, and determine the patterns of innovative development of industry in the context of building technological sovereignty. The practical significance of this research lies in the fact that strategic business thinking will create a condition for the formation of new functionality (a new product concept), which requires the development of new key competencies and the implementation of a strategy for advanced development.

The purpose of our study is to investigate the effects of politically-connected boards (PCBs) on over-(under-)investment in labor. We also examine the impacts of the supervisory board (SB)’s optimal tenure on the association between PCBs and over-investment in labor.

We constructed the proxy for PCBs using a dummy variable set to 1 (one) if a firm has politically-connected boards and zero (0) otherwise. For the robustness check, we used the number of politically-connected members on the boards as the proxy for PCBs.

We find that the presence of PCBs reduces over-investment in labor. Consistent with our prediction, we found no significant association between PCBs and under-investment in labor. We also find that the SB with optimal tenure strengthens the negative association between PCBs and over-investment in labor. In our channel analysis, we find that the presence of PCB mitigates over-investment in labor through a higher dividend payout ratio.

Due to the unavailability of data in firms’ annual reports regarding the number of poorly-skilled and highly skilled employees, we were not able to examine the effect of low-skilled and high-skilled employees on over-investment in labor. Also, we were not able to examine over-(under-)investment in labor by drawing a distinction between general (generalist) and firm-specific human capital (specialist) as suggested by Sevcenko, Wu, and Kacperczyk (2022). Generally, it is more difficult for managers to hire highly-skilled employees, specialists in particular, thereby driving the choice of either over- or under-investing in the labor forces. In addition, in the firms’ annual reports, there is no information regarding temporary employees. Therefore, if and when such data become available, this would provide another avenue for future research.

Our study offers several practical implications and insights to stakeholders (e.g. insiders or management, shareholders, investors, analysts and creditors) in the following ways. First, our study highlights significant differences between capital investment and labor investment. For instance, labor investment is considered an expense rather than an asset (Wyatt, 2008) because, although such investment is human capital and is not recognized on the firm’s balance sheet (Boon et al., 2017). In addition, labor investment is characterized by: its flexibility which enables firms to make frequent adjustments (Hamermesh, 1995; Dixit & Pindyck, 2012; Aksin et al., 2015), its non-homogeneity since every employee is unique (Luo et al., 2020), its direct impact on morale and productivity of a firm (Azadegan et al., 2013; Mishina et al., 2004; Tatikonda et al., 2013), and its financial outlay which affects the ongoing cash flows of a firm (Sualihu et al., 2021; Khedmati et al., 2020; Merz & Yashiv, 2007). Second, our findings reveal that the presence of PCBs could help to reduce over-investment in labor. However, if managers of a firm choose to under-invest in labor in order to obtain better profit in the short-term through cost saving, they should be aware of the potential consequences of facing a financial loss when a new business opportunity suddenly arises which requires a larger labor force. Third, our findings help stakeholders to re-focus on the labor investment. This is crucial due to the fact that labor investment is often neglected by those stakeholders because the expenditure of labor investment is not recognized on the firm’s balance sheet as an asset. Instead, it is written off as an expense in the firm’s income statement. Fourth, our findings also provide insightful information to stakeholders, suggesting that an SB with optimal tenure is more committed to a firm, and this factor plays an important role in strengthening the negative association between PCBs and over-investment in labor.

First, our findings provide a valuable understanding of the effects of PCBs on over-(under-)investment in labor. Stakeholders could use information disclosed in the financial statements of a publicly-listed firm to determine the extent of the firm’s investment in labor and PCBs, and compare this information with similar firms in the same industry sector. Second, our findings give a better understanding of the association between investment in labor and political connections , which are human and social capital that could determine the long-term survival and success of a firm. Third, for shareholders, the appointment of board members with political connections is an important strategic decision to build political capital, which is likely to have a long-term impact on the financial performance of a firm; therefore, it requires thoughtful consultation with firm insiders.

Our findings highlight the role of PCBs in reducing over-investment in labor. These findings are significant because both investment in labor and political connections as human and social capital can play an important role in determining the long-term survival and success of a firm.

The aim of this study is to analyze the existing literature available on corporate strategy and capital structure with the help of a bibliometric analysis.

A total of 133 studies indexed in the Scopus database over the period from 1979 to 2024 are included and analyzed using the Biblioshiny package in RStudio along with VOSviewer for network visualization. Additionally, this study used biblioMagika and OpenRefine to harmonize and clean the data.

This study identified the leading contributors in terms of countries, authors, sources and documents and used various analysis techniques. The USA, Canada and the UK exhibited the most significant level of contribution. Furthermore, Bradford’s Law is applicable to the results of this study. The bibliographic coupling resulted in the five clusters indicating emerging themes in the field.

The study’s findings will contribute to the academic landscape by providing an exhaustive examination of the concerned research field and will guide potential researchers for future research avenues. This study will also highlight the need for managers and policymakers to factor in diverse corporate strategies when shaping organization’s capital structures.

To the best of the authors’ knowledge, this study represents the first attempt to map the landscape of this field through the presentation of insights derived from bibliometric analysis.

This study aims to test the effect of individual audit quality on career advancement the audit labour market.

This paper uses data on auditors from two collapsed audit firms in China, namely, Ruihua and Zhengzhong Zhujiang, and tests the effect of individual audit quality on career advancement in the audit labour market.

The baseline results show that high-quality audits promote auditors’ career advancement. Our results hold after a battery of robustness tests. Further analyses support our hypothesis, indicating that client retention and audit fees are positively related to auditors’ prior audit quality. The effect of audit quality on career advancement does not hold for auditors from sanctioned branch offices or for auditors with prior culpable clients, as shared reputation damage can weaken the effect of high audit quality. Furthermore, this paper investigates whether the reputation enhancement effect of high audit quality can be strengthened by auditor experience, the title of “senior auditor” and IPO auditing experience. We also show that clients and audit firms place more weight on the quality of audits conducted by auditors in competitive markets and auditors with engagements matched with industries.

Together, these findings indicate the vital role of individual audit quality in auditors’ career development in the audit labour market, consistent with the reputation rationale for audit quality.

The objective of this study was to develop wearable suit platforms with various anchoring structure designs with the intention of improving wearability and enhancing user satisfaction.

This study selected fabrics and materials for the suit platform through material performance tests. Two anchoring structure designs, 11-type and X-type are compared with regular clothing under control conditions. To evaluate the comfort level of the wearable suit platform, a satisfaction survey and electroencephalogram (EEG) measurements are conducted to triangulate the findings.

The 11-type exhibited higher values in comfort indicators such as α, θ, α/High-β and lower values in concentration or stress indicators such as β, ϒ, sensorimotor rhythm (SMR)+Mid-β/θ, and a spectral edge frequency of 95% compared to the X-type while walking. The 11-type offers greater comfort and satisfaction compared to the X-type when lifting based on the EEG measurements and the participants survey.

It is recommended to implement the 11-type when designing wearable suit platforms. These findings offer essential data on wearability, which can guide the development of soft wearable robots.

This study enables one to critique the importance of adapting and innovating during challenging times to sustain and grow a business and also emphasizes the need for businesses to be flexible, resilient and willing to make necessary changes to stay relevant and thrive in dynamic and unpredictable environments.

In the competitive world of India’s quick-service restaurants industry, Shilpa Bhatt Bahuguna, the young entrepreneur behind “Pizza Italia,” aimed to secure the top spot in Uttarakhand. Despite facing setbacks by closing six out of the eight outlets during the COVID-19 pandemic, Bahuguna’s focus on product quality and localization had garnered word-of-mouth publicity for her brand. Now, with a limited budget for promotions, Bahuguna sought below-the-line strategies to ensure profitability and success for new outlets. Her determination to establish Pizza Italia as an indigenous brand and her plans for global expansion through franchising reflected her vision for growth and impact in the market. With her entrepreneurial spirit, Bahuguna remained poised to achieve even greater success in the future. Bahuguna aimed to leverage her product quality and word-of-mouth promotion to capture the market. She planned to expand her brand globally and open new outlets in Uttarakhand and London. However, Bahuguna was challenged to promote her brand on a limited budget, favoring “below-the-line” strategies.

This case study is appropriate for an undergraduate- or graduate-level program in marketing management.

Teaching notes are available for educators only.

CSS 11: Strategy