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The purpose of this study is to use recent US legislative activity surrounding changes to the Environmental Protection Agency (EPA)/Clean Air Act in 2010, which changes the practice of environmental policy of a firm, and the unique setting of Utility industry to examine the relationship between a firm’s voluntary accounting disclosure and environmental performance.

This study features hand-collected data of environmental disclosure and examines its relation with environmental performance. To address the endogeneity problem, a difference-in-differences test with propensity score matching is performed to study the impact of policy change on environmental disclosure.

The findings of this study show that measures of environmental performance have a significant and positive association with a firm’s voluntary disclosure. The results from difference-in-differences test show that adjustments in environmental performance after regulatory change have a causal and positive effect on a firm’s voluntary disclosure.

The findings support theories of signaling and voluntary disclosure that better-performing firms provide more information disclosure of their environmental performance.

The findings show real adjustments in firm environmental performance and consistent voluntary disclosure around the enactment of environmental legislation, which may have important implications for environmental rule making bodies and management about the effectiveness of their regulations.

This study is among the first to examine the causal relationship between environmental performance and disclosure within the context of recent changes in US environmental regulation. This study also provides the Utility industry experiment with difference-in-differences test to tackle endogeneity in the relation between performance and disclosure.

The purpose of this paper is to examine the ways in which stock market valuation and managerial incentives jointly affect merger and acquisition (M&A) decisions and post‐M&A performance, and to provide new evidence on the agency implications where such acquisitions are driven by the stock market.

Utilizing all publicly‐traded US firms in the NYSE, AMEX and NASDAQ during the period from 1992 to 2005 (excluding financial and utility firms), obtained from COMPUSTAT, CRSP, I/B/E/S, and the M&A database provided by SDC Platinum, this paper adopts a two‐stage approach: the first stage, predicts the probability of an M&A based on the market valuation variables; the second stage, regresses the post‐M&A firm performance on the predicted probability of a merger or acquisition from the first stage and other control variables.

Market valuation has a significant influence on corporate acquisition decisions, particularly for those firms whose compensation packages include less managerial equity ownership, more executive stock options and no long‐term incentive plans, and in those firms where CEOs are serving on the board of directors. The value‐destroying acquisitions made by these types of managers are likely to be financed using the firms' stocks, executed with high premiums and undertaken during periods of high market valuation.

The main finding suggests that market‐driven acquisitions could be value destroying when managers engage in opportunistic acquisitions for reasons of self‐interest. Managerial myopia, overconfidence, misaligned incentives, empire‐building motives and poor corporate governance can all exacerbate the agency problem of market‐driven acquisitions.

The purpose of this paper is to gain insight in how South African local governments organize citizen engagement. The new South African constitution provides ways to construct and implement citizen engagement at local level. However, understanding citizen engagement at local level is still a challenge and municipalities search for proper structures and mechanisms to organize citizen engagement efficiently.

Interviews with different municipal actors were analyzed using a single case study method. As a primary unit of analysis, a specific project in which citizen engagement is organized was used. In addition, document analysis and a focus group were used to deepen understanding.

The findings reveal that citizen engagement is a viable strategy to identify the needs of the community if facilitated by a third party and that learning leadership is important when organizing citizen engagement.

The value of this research is the exploration of the citizen engagement process. It sheds light on the conditions that play a role when a local government organizes citizen engagement. As local governments search for ways to effectively organize and structure citizen engagement, insight into these conditions is helpful.

This paper aims to investigate whether the cyclicality of local real estate prices affects the systematic risk of local firms using a geography-based measure of land availability as a quasi-exogenous proxy for real estate price cyclicality.

This paper uses the geography-based land availability measure as a proxy for the procyclicality of real estate prices and the location of a firm’s headquarters as a proxy for the location of its real estate assets. Four-factor asset pricing model (market, size, value and momentum factors) is used to examine whether firms headquartered in more land-constrained metropolitan statistical areas have higher systematic risks.

The results show that real estate prices are more procyclical in areas with lower land availability and firms headquartered in these areas have higher systematic risk. This effect is more pronounced for firms with higher real estate holdings as a ratio of their tangible assets. Moreover, there are no abnormal returns to trading strategies based on land availability, consistent with stock market betas reflecting this local real estate factor.

This paper contributes to the literature on local asset pricing factors, the collateral role of firms’ real estate holdings and the co-movement of security prices of geographically close firms.

This paper has important managerial implications by showing that, when firms decide on the location of their buildings (e.g. headquarters building, manufacturing plant and retail outlet), the location’s influence on systematic risk should be part of the decision-making process.

This paper is among the first to use a geography-based measure of land availability to study whether the procyclicality of local real estate prices influences firm risk independent of the procyclicality of the local economy. Thus, both the portfolio formed and firm-level analyses provide a more direct evidence of the positive relation between the procyclicality of local real estate prices and firm risk.

This study aims to investigate how credit rating agencies and banks, important credit market participants, incorporate corporate social responsibility (CSR)-related information in their assessment of firm’s creditworthiness.

The authors collect stand-alone CSR reports published by Fortune 500 companies from 2002 to 2014 and use file size as a readability measure to investigate the impact of stand-alone CSR reports’ readability on firms’ credit ratings and cost of borrowing.

The authors find that firms with higher CSR report readability enjoy higher credit ratings and lower costs of bank loans, suggesting that rating agencies and banks perceive lower default risk for firms with more readable CSR reports. Further analysis indicates that the positive association between CSR report readability and credit ratings is more pronounced for firms with high CSR performance. Conversely, the negative association between CSR report readability and bank loan spreads is more pronounced for firms with low CSR performance and credit quality, suggesting complementary roles of rating agencies and banks in their use of CSR reports.

Overall, the results highlight the importance of improving the textual characteristics of CSR reports, especially readability, in reducing information risk in the credit market.

This paper aims to consider the effect of the chief executive officer’s (CEO) ability on the amount of cash stock at the firm level.

The empirical hypothesis is examined via fixed-effect regression models using data from US incorporated firms.

Consistent with the upper echelon theory and cash holding motives, the results reveal that able CEOs are associated with an increased level of cash stock, ceteris paribus. Further analysis shows that the association between CEO ability and firm cash holding is more profound for financially sound firms. The authors also demonstrate that firm size significantly affects the relationship between CEO ability and cash management. The results are robust to various sensitivity analyses and additional tests.

This work is subject to limitations inherent in the use of relevant proxies. Thus, the study implements several model specifications to ensure the validity of findings in a more generic context. Future research should investigate the board structure’s role and the monitoring procedures on the CEOs’ cash holding behavior as a natural extension to this study.

The insights derived from the study are expected to advance the decision-making process of cash policies and CEO selection for shareholders, business executives and investment strategists.

Overall, the study provides new evidence that CEO ability is a contingent factor of corporate cash stock.

There is a growing trend that hospitality brands are allowing employees to personalize their workplace display. Following this trend in practice, this paper aims to examine the influence of employees’ conspicuous consumption cues (ECCCs) on consumer responses toward service failures in luxury dining.

Two experiments were conducted. Study 1 adopted a 2 (ECCC: present vs absent) × 2 (employee physical attractiveness: control vs high) between-subject experiment to test the effect of ECCCs in interactional service failures. Study 2 tested the hypotheses in core service failures.

The results of Study 1 indicate that the presence of ECCCs lowers consumers’ negative behavioral intentions in interactional service failures when employees are highly attractive. When employees’ attractiveness is not distinctive, however, ECCCs lead to higher levels of negative behavioral intentions. Mediation test results demonstrate that perceived employee service competence drives this effect. Results of Study 2 show that the joint effect of ECCCs and physical attractiveness is attenuated when core service failures are not attributable to the service employee.

Extending previous research, this study reveals the impact of employees’ physical characteristics on consumers’ post-failure responses. In addition, the effect of ECCCs on consumers’ post-failure responses was driven by the psychological process of perceived competence.

Findings of this research emphasize the importance for hospitality brands to practice tight control over employee esthetics. For hospitality brands that embrace individuality in the workplace, results of this research highlight the importance of service training in customer interactions.

This research examines an underexplored phenomenon in the hospitality service setting: employees’ display of conspicuous consumption cues and its impact on consumers’ responses to service failures.

The purpose of this paper is to identify and describe the drivers of trading company strategy that explain trading company success in international business.

The strategy tripod that results from combining the industry-, resource- and institution-based views, each of which proposes specific drivers of strategic success, was used as the framework for investigating, in a longitudinal perspective, the drivers of the strategy of a trading company and its success in emerging economies. Data were collected using in-depth interviews, document analysis and non-participant observation and analyzed using content analysis techniques.

Rather than a single driver, the authors found that strategic choices were driven at times by the demands of industrial competitiveness, at times by firm resources and capabilities, and at times by institutional conditions. There was evidence neither of a linear chronological order for these drivers, nor of driver obsolescence. On the contrary, findings suggest that drivers are cumulative and interactive. Changes in organizational resources and capabilities or in competitive or institutional environments can force review and re-thinking of strategic objectives.

Generalization is affected by the fact that the study focusses on the experience of one individual trading company.

From a pragmatic, managerially oriented perspective, the findings show the importance to be alert to all the tripod legs over time, and not belittle the institutional context. This fact is noted by the data, which not realize a timeline or order between the drivers and the strategies adopted by the firm.

The paper is of value in showing the drivers of trading company strategy and the determinants of trading company success in emerging economies using a longitudinal perspective rather than the more usual sectional perspective. In addition, the study is original in simultaneously investigating all three legs of the strategy tripod and providing empirical evidence about how the respective drivers interact over time.