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Article
Publication date: 14 March 2023

Arifur Khan, Sutharson Kanapathippillai and Steven Dellaportas

The purpose of this study is threefold: to examine the impact of a remuneration committee (RC) on the level of chief executive officer (CEO) remuneration; whether firms with a RC…

Abstract

Purpose

The purpose of this study is threefold: to examine the impact of a remuneration committee (RC) on the level of chief executive officer (CEO) remuneration; whether firms with a RC, pay a premium to CEOs with different skill sets (general or specific); and whether a pay premium mitigates the potential for CEO turnover.

Design/methodology/approach

This study uses a sample of 5,305 firm-year observations on a data set drawn from companies listed on the Australian Securities Exchange for the period 2007 to 2014. The authors use ordinary least squares as well as logit regression techniques to test the formulated hypotheses. Difference in difference and propensity score matching techniques were undertaken to address the endogeneity concerns.

Findings

The findings show that firms with a RC pay a higher total remuneration to CEOs compared to firms without a RC. Furthermore, firms with a RC, value and reward CEOs with general skills by paying a premium not offered to CEOs with industry-specific skills. Paying a premium, in turn, mitigates CEO turnover by strengthening the CEO’s commitment to the organisation.

Originality/value

The study helps us to understand the critical role played by the RC in the remuneration of CEOs. The findings show that RCs act as an effective governance mechanism to deal with issues of executive remuneration and to retain skilled CEOs. Additionally, CEOs who acquire and develop general managerial skills will be able to extract higher pay from improved bargaining power. The findings will be of relevance to shareholders, regulators and company management who have an interest in executive pay and performance.

Details

Meditari Accountancy Research, vol. 32 no. 2
Type: Research Article
ISSN: 2049-372X

Keywords

Open Access
Article
Publication date: 11 September 2023

Raffaella Santolini

The paper aims to examine the role played by property tax in influencing strategic decisions regarding marital separation and divorce in Italian municipalities.

Abstract

Purpose

The paper aims to examine the role played by property tax in influencing strategic decisions regarding marital separation and divorce in Italian municipalities.

Design/methodology/approach

The empirical analysis is conducted on a sample of 6,458 Italian municipalities by applying the ordinary least squares (OLS) and instrumental variables (IVs) approaches.

Findings

The estimation results show a small increase in marital separations and divorces as the difference between the municipal secondary and primary home tax rate increases. Specifically, an increase of 1‰ in the property tax rate differentials is accompanied by an increase of six marital separations and four divorces per 1,000 inhabitants.

Research limitations/implications

The main limitation of the analysis is that the strategic behavior of the married couple is inferred from econometric analysis with data aggregated at the municipal level. To investigate this phenomenon more precisely, it would be useful to have individual data collected by surveys on strategic divorce decisions due to property tax incentives.

Originality/value

This study contributes to the scant existing literature on the tax incentives for strategic divorce. It is the first study to empirically investigate the effects of property tax on separation and divorce decisions by investigating the Italian context. In Italy, a property tax was introduced in 1993, encouraging “false” divorces by spouses with a second home since the tax on the secondary home was set at a rate higher than that on the primary residence. Moreover, there were no tax deductions and no additional tax breaks on the secondary home, while they were established on the primary one. Higher property taxes and the absence of tax breaks on the secondary home may have encouraged a strategic behavior whereby many married couples filed for false separation and divorce in order to recover part of property tax rebates.

Details

Journal of Economic Studies, vol. 51 no. 9
Type: Research Article
ISSN: 0144-3585

Keywords

Open Access
Article
Publication date: 22 December 2023

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.

2097

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.

Details

European Journal of Marketing, vol. 58 no. 13
Type: Research Article
ISSN: 0309-0566

Keywords

Article
Publication date: 18 December 2023

Arpit Gupta and Arya Kumar Srustidhar Chand

The purpose of this paper is to study the spillover effects of foreign direct investment (FDI) on skilled–unskilled wage inequality in the Indian manufacturing industries.

Abstract

Purpose

The purpose of this paper is to study the spillover effects of foreign direct investment (FDI) on skilled–unskilled wage inequality in the Indian manufacturing industries.

Design/methodology/approach

The authors show theoretically with a model of spillover that if foreign firms (receiving FDI) have a negative spillover effect on domestic firms (not receiving FDI), then the level of capital and skilled workers in the domestic firms falls down. Consequently, the authors conduct an empirical analysis by using system GMM estimation technique on the firm-level data of the Indian organised manufacturing sector.

Findings

The authors show that wage inequality worsens when there is negative spillover effects like competition spillover or skill spillover effect of FDI in India.

Originality/value

To the best of the authors’ knowledge, this is the first attempt to measure the various spillover effects of FDI on the wage inequality in the Indian manufacturing industries by using firm-level data.

Details

Indian Growth and Development Review, vol. 17 no. 1
Type: Research Article
ISSN: 1753-8254

Keywords

Article
Publication date: 14 September 2023

Rachana Kalelkar and Emeka Nwaeze

The authors analyze the association between the functional background of the compensation committee chair and CEO compensation. The analysis is motivated by the continuing debate…

Abstract

Purpose

The authors analyze the association between the functional background of the compensation committee chair and CEO compensation. The analysis is motivated by the continuing debate about the reasonableness of executive pay patterns and the growing emphasis on the role of compensation committees.

Design/methodology/approach

The authors define three expert categories—accounting, finance, and generalist—and collect data on the compensation committee (CC) chairs of the S&P 500 firms from 2008 to 2018. The authors run an ordinary least square model and regress CEO total and cash compensation on the three expert categories.

Findings

The authors find that firms in which the CC chair has expertise in accounting, finance, and general business favor performance measures that are more aligned with accounting, finance, and general business, respectively. There is little evidence that CC chairs who are CEOs of other firms endorse more generous pay for the host CEO; the authors find some evidence that CC chairs tenure relative to the host CEO's is negatively associated with the level of the CEO's pay.

Research limitations/implications

This study suggests that firms and regulators should consider the background of the compensation committee chair to understand the variations in top executive.

Practical implications

Companies desiring to link executive compensation to particular areas of strategy must also consider matching the functional background of the compensation committee chair with the target strategy areas. From regulatory standpoint, requiring compensation committees to operate independent of inside directors can reduce attempts by inside directors to skim the process, but a failure to also consider the impact of compensation committees' discretion over the pay-setting process can distort the executives' pay-performance relation.

Originality/value

This is the first study to examine the effects of the functional background of the compensation committee chair on CEO compensation.

Details

Asian Review of Accounting, vol. 32 no. 2
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 11 May 2023

Naruanard Sarapaivanich, Erboon Ekasingh, Jomjai Sampet and Paul Patterson

This study examines how professional service firms' communication effectiveness (affiliative communications style, social dialogue and information provision), social cognitive…

Abstract

Purpose

This study examines how professional service firms' communication effectiveness (affiliative communications style, social dialogue and information provision), social cognitive capital and rapport established between an auditor and SME client are instrumental in influencing the latter's evaluation of the technical quality of an audit.

Design/methodology/approach

The study combines qualitative and quantitative methodologies to create a cross-sectional survey covering four geographic regions in an emerging economy – Thailand. The authors examine the hypotheses by employing social interaction theory.

Findings

A study of 744 SME executives plus post-survey interviews with three audit partners revealed that an affiliative communications style and information provision are positively associated with the rapport developed between financial auditor and client, and that rapport, in turn, had a strong association with client perceptions of audit quality. In addition, affiliative communication style, information provision and social cognitive capital had a direct (positive) association with perceptions of audit quality. The effects of communication effectiveness and social cognitive capital varied, depending on whether or not the SME client possessed formal accounting qualifications.

Originality/value

The study contributes to the literature on the business-to-business professional services, and accounting in particular, by explicating the important roles of communication effectiveness, rapport, and social cognitive capital in the relationship between an auditor and a client. Moreover, the paper reveals that the differences in educational background of clients result in differential impacts of communication effectiveness and social cognitive capital on rapport and perceptions of audit quality.

Details

Journal of Accounting in Emerging Economies, vol. 14 no. 2
Type: Research Article
ISSN: 2042-1168

Keywords

Article
Publication date: 22 March 2024

Mohammad Dehghan Afifi, Bahram Jalili, Amirmohammad Mirzaei, Payam Jalili and Davood Ganji

This study aims to analyze the two-dimensional ferrofluid flow in porous media. The effects of changes in parameters such as permeability parameter, buoyancy parameter, Reynolds…

Abstract

Purpose

This study aims to analyze the two-dimensional ferrofluid flow in porous media. The effects of changes in parameters such as permeability parameter, buoyancy parameter, Reynolds and Prandtl numbers, radiation parameter, velocity slip parameter, energy dissipation parameter and viscosity parameter on the velocity and temperature profile are displayed numerically and graphically.

Design/methodology/approach

By using simplification, nonlinear differential equations are converted into ordinary nonlinear equations. Modeling is done in the Cartesian coordinate system. The finite element method (FEM) and the Akbari-Ganji method (AGM) are used to solve the present problem. The finite element model determines each parameter’s effect on the fluid’s velocity and temperature.

Findings

The results show that if the viscosity parameter increases, the temperature of the fluid increases, but the velocity of the fluid decreases. As can be seen in the figures, by increasing the permeability parameter, a reduction in velocity and an enhancement in fluid temperature are observed. When the Reynolds number increases, an increase in fluid velocity and temperature is observed. If the speed slip parameter increases, the speed decreases, and as the energy dissipation parameter increases, the temperature also increases.

Originality/value

When considering factors like thermal conductivity and variable viscosity in this context, they can significantly impact velocity slippage conditions. The primary objective of the present study is to assess the influence of thermal conductivity parameters and variable viscosity within a porous medium on ferrofluid behavior. This particular flow configuration is chosen due to the essential role of ferrofluids and their extensive use in engineering, industry and medicine.

Article
Publication date: 18 April 2023

Abdul Rashid, Muhammad Akmal and Syed Muhammad Abdul Rehman Shah

This study aimed at exploring the differential effects of different corporate governance (CG) indicators on risk management practices in Islamic financial institutions (IFIs) and…

Abstract

Purpose

This study aimed at exploring the differential effects of different corporate governance (CG) indicators on risk management practices in Islamic financial institutions (IFIs) and conventional financial institutions (CFIs) of Pakistan. It also investigated the moderating role of institutional quality (IQ) in shaping the effects of CG practices on financial institutions of Pakistan.

Design/methodology/approach

A sample of 57 financial institutions including commercial banks, insurance companies and Modarba companies over the period 2006–2017 is used to carry out the empirical analysis. The authors applied the robust two-step system-generalized method of moments estimator, which is also called the dynamic panel data estimator. They also built the PCA-based composite index of CG and IQ by using different indicators to investigate the moderating role of IQ. They used three proxies for risk taking, five for CG and one for Shari’ah governance. To test the validity of the instruments, they applied the Arellano and Bond’s (1991) AR (1) and AR (2) tests and the J-statistic of Hansen (1982).

Findings

The results provided strong evidence that several individual characteristics of CG and the composite index are significantly related to the operational risk, the liquidity risk and the Z-score (a proxy for solvency risk). The results also revealed that IQ significantly and substantially contributes in reducing the level of risks. Finally, the estimation results indicated that the effects of CG on risk management are significantly different at IFIs and CFIs. This differential impact is mainly attributed to the fundamental differences in business models, operational strategies and contractual obligations of both types of institutions.

Practical implications

The findings of this study are important for enhancing our understanding of how CG relates to risk taking in Islamic and conventional financial services industries and how good quality institutions are important for formulating the governance effects on the risk-taking behavior of financial institutions. The findings suggest that a suitable size of board should be chosen to manage the risk effectively. As the findings show that the risk-taking behavior of IFIs differs from that of CFIs, the regulators and international standard setting bodies should tailor the regulatory frameworks accordingly.

Originality/value

This paper is different from the existing studies in four aspects. First, to the best of the authors’ knowledge, this is the first empirical investigation in Pakistan, which does the comparison of IFIs and CFIs while examining the impacts of CG on risk management. Second, the paper constructs the composite index of CG by considering several different indicators of governance and examines the combined effect of governance indicators on risk management process. Third, this paper adds to the growing literature on the role of IQ by investigating whether it acts as a moderator between CG structures and risk management and if yes, then whether this moderating role is different for IFIs and CFIs. Finally, the paper builds upon the existing research work on the CG effects for different types of financial institutions by proposing a single regression based analytical framework for comparing the effects across two different types of institutions, harvesting the benefits of higher degrees of freedom and avoiding/minimizing the measurement error.

Details

Journal of Islamic Accounting and Business Research, vol. 15 no. 3
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 16 May 2023

Bolaji Iyiola and Richard Trafford

The theory of managerial discretion and the direct insights it provides in the understanding of the varying impact strategic and operational actions have on organizational change…

Abstract

Purpose

The theory of managerial discretion and the direct insights it provides in the understanding of the varying impact strategic and operational actions have on organizational change and business fortunes is an area of research potential underexplored in the UK. This study aims to establish whether the measurement of managerial discretion is constant between the two similar societal corporate frameworks of the UK and the USA listed markets.

Design/methodology/approach

The extant managerial discretion ranking model, established in the USA, is empirically assessed for its validity and effectiveness across a sample of high- and low-discretion companies from the FTSE 350.

Findings

Using accounting measures, a clear and significant difference is established between UK high and low managerial discretion entities. The results prove to be significant in enabling the differential comparative analysis of the institutional characteristics of corporates.

Originality/value

To the best of the authors’ knowledge, no study of this nature has been conducted previously in the UK context. While the original model developed in the USA is now several decades old, the UK results reflect similar industry rankings as found originally in the USA, subject to some differences considered to be a result of the changing nature of global business since the 1990s. This study opens a new seam of novel research, which has the potential to uncover, at a granular level, the differential mores and character of management ethics, styles and practices in such issues as organizational change, corporate culture, governance and social responsibility.

Details

Journal of Accounting & Organizational Change, vol. 20 no. 2
Type: Research Article
ISSN: 1832-5912

Keywords

Article
Publication date: 21 July 2023

Chaofan Yang, Yongqiang Sun, Nan Wang and Xiao-Liang Shen

Although extant studies have investigated the antecedents of negative electronic word of mouth (eWOM), they treated it as a unidimensional concept without classification. To…

Abstract

Purpose

Although extant studies have investigated the antecedents of negative electronic word of mouth (eWOM), they treated it as a unidimensional concept without classification. To bridge this knowledge gap, this paper distinguishes rational negative eWOM (RNW) from emotional negative eWOM (ENW) and leverages the consumer value framework to investigate their drivers in the context of peer-to-peer accommodation platforms (PPAPs).

Design/methodology/approach

This study collected data through an online survey of 437 PPAP users. Partial least squares (PLS) were used to validate the proposed hypotheses. Further, the path coefficients comparison method was adopted to distinguish the different impacts of consumer values on RNW and ENW.

Findings

This research showed that self-presentation exerted a positive impact on RNW, but its relationship with ENW was insignificant. Anger and regret were, respectively, positively related to ENW and RNW. Besides, altruism exerted a positive effect on RNW, whereas it had a negative effect on ENW.

Originality/value

First, this paper makes a fresh attempt to categorize negative eWOM into RNW and ENW. Second, this paper draws upon the consumer value framework to dissect varied motivations for posting RNW versus ENW on PPAPs. Third, this paper empirically verifies the differential influences that consumer values exert on RNW and ENW.

Details

Internet Research, vol. 34 no. 2
Type: Research Article
ISSN: 1066-2243

Keywords

1 – 10 of 127