Search results

This paper aims to identify what are the moderating factors affecting the relationship between firms’ adoption of international financial and reporting standards (IFRS) and the firm’s opacity.

This study uses the meta-analysis methodology from Hunter et al. (1982) to find if the mere IFRS adoption reduces firm’s opacity and a meta-regression from Stanley and Jarrell (1989) to identify the moderating factors that may influence this relationship.

Contrary to previous studies, this study finds a low, negative and nonsignificant correlation between IFRS adoption and firms’ opacity, but this relationship depends on the geographical region. Using 34 results from 28 studies from different continents published between 2005 and 2018 this study finds that IFRS adoption reduces opacity in countries with common law (COML) and with more authorities’ oversight and power to enforce the rules.

This study finds two institutional commonalities between different previous studies that intend to assess the impact of the IFRS adoption upon firms’ opacity: the legal system and the authorities’ oversight power.

The purpose of this paper is to evaluate the influence of the informational environment on the relevance of accounting information in companies traded in stock exchanges of emerging markets.

For this purpose, the authors calculated indicators based on figures derived from the financial statements and variables that sought to capture the influence of the economic and institutional environment. The sample consisted of publicly traded companies from 20 countries classified as emerging by Standard & Poors. Macroeconomic information was obtained through the International Country Risk Guide database. The analysis period ranged from 2004 to 2013, excluding missing data, variables considered as outliers, besides the exclusion of data from companies that presented negative equity.

It was observed that the financial variables presented signs consistent with the literature, except for the price-to-book variable and the asset change variable. The inclusion of variables related to the accounting informational environment offered evidence that the more opaque the accounting environment in the country, the lesser the ability of the profits to portray the variations of stock returns. The variable that captured the adoption of international standards was consistent with expectations, i.e. the adoption of international standards would increase the quality of accounting information, showing a positive signal. Moreover, the variable aggressiveness of the earnings was statistically significant and negative, consistent with the literature.

The variables earnings smoothing and aversion to losses did not show the expected behaviour though, highlighting the possible limitations of these proxies used to capture the opacity of the earnings.

When institutional moderators were included, it was observed that the adoption of the IFRS standards positively affected the relationship, which is more relevant when the accounting figures were under its aegis. Recently, countless nations’ transition to international accounting standards has been justified by the need to use high-quality reporting standards. The research sought to contribute to strengthen this dimension, presenting evidence that the dummy variable included to capture the adoption of international standards had a positive effect on the relationship.

A series of research has focused on how virtual reality (VR) technology itself influences consumers' perceptions and attitudes. However, little is known about consumers' unique perceptions and behaviours that can be generated by the specific factors of the virtual stores that they visit. Therefore, the authors examine how the specific aspects of the virtual stores that consumers see on screens – namely, the opacity of virtual stores' exterior design can impact consumer perceptions and behaviours.

Across three studies, the authors employed 3D modelling software (Rhino 6 and Unity) and 3D architectural visualisation software (Twinmotion) to create 360° VR videos for the manipulation of the virtual store exterior design. The authors performed ANOVA and regression analyses with three studies, a total of 858 responses.

Results showed that virtual stores' opaque exterior design can promote product preferences, and this link is serially mediated by store prestige perceptions and product quality perceptions. In addition, this effect is particularly prominent among those with higher involvement in design elements.

By suggesting important design variables to virtual stores, it advances the emerging literature on VR. Furthermore, to our knowledge, this research is the first to highlight the importance of exterior opacity of a virtual store, and it deepens our understanding of how the opaque exterior of virtual stores influences store perceptions and consumer behaviours.

The growing frequency of cybersecurity incidents commonly requires organizations to notify customers of ongoing events. However, the content contained within these notifications varies widely, including differences in the level of detail, apportioning of blame, compensation and corrective action. This study seeks to identify patterns contained within cybersecurity incident notifications by constructing a typology of organizational responses.

Based on a detailed review of 1,073 global cybersecurity incidents occurring during 2020, the authors obtained and qualitatively analyzed 451 customer notifications.

The results reveal three distinct organizational response types associated with the level of detail contained within the notification (full transparency, guarded and opacity), as well as three response types associated with the benefitting party (customer interest, balanced interest and company interest).

This work extends past classifications of cybersecurity incident notifications and provides a template of possible notification approaches that could be adopted by organizations.

Amidst burgeoning attention for global value chains (GVCs) in international business (IB), this paper aims to identify a clear “missing link” in this literature and discusses implications for research and corporate social responsibility (CSR) policy-making and implementation.

The paper combines an overview of relevant literature from different (sub)disciplinary fields, with insights from practitioner and expert interviews and secondary data.

Because IB GVC research stems from a focus on lead firms and their producing suppliers, it lacks attention for intermediary actors that may significantly impact the organization of production in general, and firms’ CSR commitments in particular. Import intermediaries are often “hidden” in GVCs. This paper indicates the emergence of GVC parallelism with “frontstage” chains managed by lead firms and increasingly exposed to public scrutiny following calls for transparency and CSR, and “backstage” ones in which buyers and intermediaries operate more opaquely.

This study points at salient yet little known practices and actors that influence the organization of production and the implementation of CSR policies in various ways, and therefore offers ground for reflection on the design of proper supply chain and CSR policies.

This study exposes a hitherto neglected category of actors in GVCs and broader IB research and discusses implications, relevance and areas for further investigation. An illustrative example explicates the importance of carefully considering this “missing link”. The study emphasizes the need for further study into ways in which both lead firms and intermediaries deal with contradicting demands of implementing CSR policies and offering competitive prices with short lead times.

This study aims to investigate the relationship between family managers and firms’ risk levels in a context characterized by low investor protection and firm opacity. Specifically, this paper examines whether the level of risk faced by firms is affected by family shareholders’ ownership stake and activism.

Corporate governance data were hand-collected for a sample of 90 Italian listed companies and 540 observations from the year 2018. Regression analysis was then used to test the research hypotheses.

This study provides evidence of a positive association between active family ownership and risk faced by sampled firms. This study also finds that the number of inside directors is negatively correlated with firms’ risk-taking. Overall, the results confirm family managers’ influence on firms’ risk choices and show consistency with theoretical arguments in favor of hiring professional managers to guide family-owned firms.

Practical implications emerge from the study findings. First, family owners should consider to hire a larger number of professional managers to support firms’ wealth maximization and retention and to reduce default risks. Second, investors should take into account the firms’ board of directors and management composition to better assess the investments risk level. Finally, the positive correlation between active family owners and systematic risk suggests the opportunity for regulators to improve the legal requirements related to minority directors to increase their effectiveness and, therefore, minority shareholders’ protection.

This study extends the literature on the association between ownership structure and firms’ risk levels, showing the effect of family managers on firms’ risk levels. Besides, to the best of the authors’ knowledge, no previous study investigates professional executives’ influence on risk when family ownership prevails.

Independent directors are important corporate decision participants and makers. Based on the Chinese cultural background, this paper interprets the listing order of independent directors as independent directors’ status, exploring their influence on the corporate research and development (R&D) behavior.

This paper studies A-share listed firms in China from 2008 to 2018 as the sample. The main method is ordinary least square (OLS) regression. We also use other methods to deal with endogenous problems, such as the firm fixed effect method, change model method, two-stage instrumental variable method, and Heckman two-stage method.

(1) Higher independent directors’ status attribute to more effective exertion of supervision and consultation function, and positively enhance the corporate R&D investment. The increase of the independent director’ status by one standard deviation will increase the R&D investment by 4.6%. (2) The above effect is more influential in firms with stronger traditional culture atmosphere, higher information opacity and higher performance volatility. (3) High-status independent directors promote R&D investment by improving the scientificity of R&D evaluation and reducing information asymmetry. (4) The enhancing effect of independent director’ status on R&D investment is positively associated with the firm’s patent output and market value.

This paper contributes to understanding the relationship between the independent directors’ status and their duty execution from an embedded cultural background perspective. The findings of the study enlighten the improvement of corporate governance efficiency and the healthy development of the capital market.

This study aims to investigate whether social capital mediates the impact of financial capital on business performance in Cameroon.

The study uses quantitative data collected from 370 small businesses in Yaoundé and Douala in Cameroon. All businesses in the sample are formally registered and are in the services sector. A structural equation modelling (SEM) approach is used for the analysis.

Structural and relational capital constraints are significant mediators of formal and informal finance. The magnitude effects of relational capital are the largest, underlining information's importance in resolving small and medium enterprises’ (SMEs') financial constraints. In addition, the effect of informal finance constraints on business performance is larger in magnitude, confirming the substantial impact of informal finance on SME operations.

The paper confirms that relational and structural social capital are vital in business. However, the study did not investigate the disaggregated effects of these dimensions of social capital. Furthermore, how SMEs transition between formal and informal finance could provide further understanding of the role of social capital. A disaggregated and panel data set would help to provide additional insights.

Social capital emerges as a pivotal factor in enhancing SME access to finance. The results, therefore, confirm the relevance of a holistic approach to easing financial capital constraints for SMEs and enabling small businesses to connect more to various stakeholders to amplify business performance. In addition, the findings identified some intervention points for the governments in Cameroon as it seeks to use SMEs as its pivot for development and to catapult itself to emerging economy status in its Cameroon 2035 vision.

The value of the study lies in assessing the mediating effect of cognitive, relational and structural social capital constraints on business performance and comparing the effect of formal and informal financial constraints on business performance.

The purpose of this study is to shed light on the tools, processes and negotiations involved in the formation of acceptable current values in the context of goodwill impairment testing. The study raises the questions of how a current value for goodwill becomes a faithful representation and how one expectation about the future becomes more convincing than other expectations.

Drawing on the study of associations, the analysis presents a case study of a large, internationally active organisation. By combining field notes, interview transcripts and a variety of documents, the qualitative analysis focusses on strategies and mechanisms of persuasion.

The findings reveal how epistemological objectivity of current values forms in three moments of relational becoming that codify, depersonalise and proceduralise the valuation task. Further, the study suggests that a convincing argument forms with the help of four enablers: a bricolage of inscriptions, methodological mystification, transformed professional identities and a practical need for closure.

The study contributes with an analysis and illustration of financial accounting as practice, elaborating on the meaning and construction of faithful representation in cases of measurement uncertainty.

The aim of this paper is to provide additional insights on the association between real earnings management (REM) and crash risk, particularly from the perspective of an emerging market economy. It also examines the moderation role that internal and external corporate governance may play in this area.

Relying on archival data from the RESSET and CSMAR databases over a timeframe from 2010 to 2018 of China listed company, the authors test the hypotheses by regressing common measures of crash risk on the treatment variable (REM) and crash risk control variables identified in the prior crash risk literature. The authors also introduce monitoring proxies (internal controls as an internal governance and institutional ownership as an external governance) and assess how effective internal and external governance moderate the relation between REM and stock price crash risk.

The results suggest firms with higher REM have a significantly greater stock price crash risk, and that this association is mitigated by external monitoring. That is, greater institutional ownership, particularly pressure insensitive owners, mitigates the impact of REM on stock price crash risk. However, internal control does not mitigate the association between REM and stock price crash risk.

Following the passage of the Sarbanes–Oxley (SOX) Act, prior research has documented an increase in the use of REM and a positive association between REM and cash risk. The authors demonstrate that they persist in one of the largest emerging markets where institutional regulations, market conditions and corporate behaviors are different from those in developed markets. Also, the assessment of the moderation effect of internal and external governance mechanisms could have meaningful implications for investors and regulators in Chinese and other emerging markets.