Search results

1 – 10 of over 26000
Article
Publication date: 25 April 2022

Fangjun Sang, Pervaiz Alam and Timothy Hinkel

Prior studies find that US firms with managerial incentives may manipulate the earnings gap to obscure higher performing segments to competitors or to hide underperforming…

Abstract

Purpose

Prior studies find that US firms with managerial incentives may manipulate the earnings gap to obscure higher performing segments to competitors or to hide underperforming segments from external monitors. The purpose of this study is to complement extant research by examining the association between managerial incentives and segment earnings reporting of cross-listed firms in the USA and the impact of country-level characteristics on this association.

Design/methodology/approach

The dependent variable is the earnings gap between firm-level earnings and sum of segment-level earnings. Managerial incentives are proxied by proprietary cost and agency cost. Proprietary cost is measured by the Herfindahl index. Agency cost is measured by inefficient resource transfer activities across segments. Foreign firms in this study are companies listed on major US Stock Exchanges with headquarters outside the USA. Comparable US firms are selected using the Propensity Score Matching procedure as a control group.

Findings

The authors find that 1) proprietary cost motive is not the determinant of earnings gap reporting for cross-listed firms; 2) cross-listed firms motivated by agency costs are more likely to manipulate segment earnings reporting than US firms; and 3) among cross-listed firms motivated by agency costs, firms in weak rule of law countries demonstrate more manipulation in segment earnings than firms in strong rule of law countries.

Originality/value

Extant research with regard to segment reporting exclusively focuses on US firms, and little is known about the practice of segment reporting by cross-listed firms originating from different legal regimes. This study fills the gap in the literature by comparing cross-listed firms to US firms in the reporting of segment earnings. The results of this study have implications for regulators and investors who are interested in evaluating the extent of cross-listed firms’ financial reporting quality.

Details

Review of Accounting and Finance, vol. 21 no. 3
Type: Research Article
ISSN: 1475-7702

Keywords

Article
Publication date: 2 October 2019

Shiheng Wang and Serena Wu

The purpose of this paper is to examine two channels through which accounting standard differences could affect cross-listing: compliance costs and/or comparability benefits.

Abstract

Purpose

The purpose of this paper is to examine two channels through which accounting standard differences could affect cross-listing: compliance costs and/or comparability benefits.

Design/methodology/approach

The authors use two settings to disentangle the two channels. First, financial reporting requirements are more stringent for cross-listings via direct listings than cross-listings via depositary receipts; as a result, the effect of compliance costs (if any) would be manifested differently in the two venues of cross-listings. Second, some host countries allow foreign firms to report under International Financial Reporting Standards (IFRS) without mandating IFRS for domestic firms; compared to host countries that mandate IFRS for both domestic and foreign firms, these IFRS-permitting countries provide a setting to test the importance of comparability benefits while holding constant compliance costs.

Findings

The authors find that prior to IFRS adoption, direct listings decrease with accounting standards differences between two countries while depositary receipts increase with such differences, consistent with the costs of complying with host country’s accounting standards affecting firms’ cross-listing decisions. After the harmonization of accounting standards, the authors find that IFRS-mandating host countries gain cross-listings from other IFRS-mandating jurisdictions, while IFRS-permitting countries do not experience such gains. These combined results suggest that accounting related compliance costs and comparability benefits both influence cross-listing decisions.

Originality/value

The paper employs unique settings that enable an in-depth examination of the role of compliance costs vs that of comparability benefits on cross-listing decisions. The settings employed by the authors allow them to disentangle the two channels and provide an important insight that accounting standard-related compliance costs and comparability benefits both affect cross-listing decisions.

Details

Asian Review of Accounting, vol. 27 no. 4
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 24 January 2022

Shuang Meng and Yueling Sima

This study aims to investigate how and why corporate social responsibility (CSR) among domestic firms in emerging countries is affected by foreign competition.

Abstract

Purpose

This study aims to investigate how and why corporate social responsibility (CSR) among domestic firms in emerging countries is affected by foreign competition.

Design/methodology/approach

The paper combines the resource-based view with the institution-based view to explain how different levels of firm–government relationships prompt firms to enact CSR when facing foreign competition. First, this paper examines how domestic firms engage in CSR in the presence of foreign competition, followed by the consideration of how different firm–government relationships affect CSR strategies for firms faced with foreign competition. Using a database of 1,665 publicly listed Chinese firms between 2011 and 2017, this paper tests four hypotheses regarding CSR behaviors, foreign competition and firm–government relationships, and the findings of this paper generally support all four hypotheses.

Findings

This study contributes to the literature by demonstrating that domestic firms in China respond to foreign competition by increased engagement in CSR, and this positive relationship is heterogeneous among different firm–government relationships. CSR is attenuated by state ownership but enhanced by high industry competition and high regional marketization.

Practical implications

The findings of this research have implications for managers regarding the integration of internal and external resources to enhance CSR as a nonmarket strategy to help maintain firms’ competitive advantages. For the government, policymakers should establish and maintain a fair and market-oriented environment that encourages firms to increase CSR engagement.

Originality/value

The paper contributes to the literature exploring the mechanisms that motivate firms’ pursuit of CSR as a nonmarket strategy under the impact of intensified foreign competition.

Details

Chinese Management Studies, vol. 17 no. 1
Type: Research Article
ISSN: 1750-614X

Keywords

Article
Publication date: 27 February 2019

Huiying Hou and Hao Wu

Foreign firms entering into the domestic real estate industry and foreign investment control are significant in global hot markets such as Australia. Despite their market impact…

Abstract

Purpose

Foreign firms entering into the domestic real estate industry and foreign investment control are significant in global hot markets such as Australia. Despite their market impact and policy sensitivity, developer choice is rarely studied. The purpose of this paper is to study domestic and overseas property developers for their motive and preference in response to market growth and market barriers including regulatory constraint.

Design/methodology/approach

International trade theory suggests local and overseas firms can vary significantly for their risk profile when engaging in location-specific development opportunities. Using a comprehensive decision factor system for the residential development process, the authors conducted an experimental survey to collect the prime data to measure stated preference of domestic and overseas developers in the context of the Melbourne residential market.

Findings

Results suggest high consistency between the samples of domestic and overseas developers. Possible explanations include vertical integration by innovative contracting, strict regulatory constraint dictates domestic and overseas firms’ preference or sample selection bias. This micro-analysis of developer stated preference highlights their entrepreneurial ability to combine substitution and integration for innovative contractual strategy. This ability to join asset holding and project management enables firm flexibility to mitigate business risk in rapidly globalising capital and factor markets.

Practical implications

These insights of firm-level decision making contribute to the decision literature of real estate developers and are relevant to the broader literature of industrial economics and international trade. Government may evaluate policy strategies based on the explicit entrepreneur (e.g. developer) preference for their “comparative advantage”.

Originality/value

This paper highlights developer’s ability to jointly consider investment and project management for decision making. It found that other than political cost such as national interest and domestic interest group pressure, domestic and overseas developers in the Melbourne residential market actually think quite alike. It suggests that irrespective of property ownership conditions, market integration occurs in the Melbourne residential sector.

Details

Journal of Property Investment & Finance, vol. 37 no. 2
Type: Research Article
ISSN: 1463-578X

Keywords

Article
Publication date: 7 August 2009

Thomas G. O'Connor

The purpose of this paper is to study the valuation effects of cross listing in the USA for a panel of emerging market firms over the period from 1990 to 2003.

Abstract

Purpose

The purpose of this paper is to study the valuation effects of cross listing in the USA for a panel of emerging market firms over the period from 1990 to 2003.

Design/methodology/approach

Using firm‐level data from Worldscope, the paper examines the valuation effects of listing in the USA for a panel of emerging market firms. Specifically, the following techniques are employed in order to control for self‐selection bias: calculate the average effect of the treatment on the treated using propensity score matching, pooled ordinary least squares with Mundlak corrections, firm‐fixed effects, and panel treatment effects models.

Findings

In line with previous researches, only those firms from high‐disclosure regimes gain from Level 2/3 listing in the USA. The gains are not immediate, but materialize once the firm has listed in the USA for at least five years. Also documented were long‐term, but not immediate valuation gains for Level 1 over‐the‐counterissues. In contrast to Level 2/3 issues, the gains are concentrated amongst firms from low‐disclosure regimes. No positive valuation effects were found for Rule 144a private placements. The results suggest that the decision on the part of the majority of firms from low‐disclosure regimes not to list as exchange traded depositary receipts is warranted.

Research limitations/implications

It may have been interesting to further examine the causes of the results. For example, it would have been interesting to see how firm visibility (media and analyst coverage), liquidity, and capital issuance changed around the time of listing. However, data availability prevented such an analysis.

Originality/value

As opposed to standard event studies, this paper examines the effect of listing on firm value using valuation metrics, i.e. Tobin's q. Second, and unlike event studies, the techniques employed are substantially more robust to self‐selection bias.

Details

Review of Accounting and Finance, vol. 8 no. 3
Type: Research Article
ISSN: 1475-7702

Keywords

Article
Publication date: 10 November 2020

Haifeng Yan, Qihu Wang, Yi Ke and Juan Wang

It is widely accepted that business excellence comes from firm-specific factors. However, it is still unclear how institutional relatedness – the degree of embeddedness with the…

Abstract

Purpose

It is widely accepted that business excellence comes from firm-specific factors. However, it is still unclear how institutional relatedness – the degree of embeddedness with the dominant institutions that confer resources and legitimacy, influences the business excellence of the firm. The purpose of this study is to explore the influence of three kinds of institutional relatedness, i.e. home government ties, initial public offerings (IPOs) and alliances with foreign firms, on the business excellence of Chinese firms.

Design/methodology/approach

This study uses a sample of firms enlisted on the “Most Respected Companies” rank in China during the period 2002–2015 and their paired firms who are absent from the list, by means of ordinary least square regression estimator, to explore the relationship between institutional relatedness and business excellence.

Findings

The empirical results suggest that IPOs and alliances with foreign firms significantly strengthen firms’ business excellence. Furthermore, home government ties have positive effects on outbound IPOs and alliances with foreign firms but hinder business excellence.

Originality/value

This study extends the business excellence literature by characterizing institutional rather than firm-specific factors from an institution-based view. It also enriches research on outcomes of institutional relatedness through investigating empirically its impact on business excellence. The findings provide new insights into the dual role of home government ties in achieving business excellence.

Details

Chinese Management Studies, vol. 15 no. 2
Type: Research Article
ISSN: 1750-614X

Keywords

Article
Publication date: 1 February 2016

Sun Liu

The purpose of this paper is to investigate the association between ownership structure and the properties of analysts’ forecasts in China’s unique corporate setting.

Abstract

Purpose

The purpose of this paper is to investigate the association between ownership structure and the properties of analysts’ forecasts in China’s unique corporate setting.

Design/methodology/approach

Multiple regression models were used to examine the influence of ownership structure mechanisms on analysts’ forecast properties for listed Chinese firms during the period 2008-2012.

Findings

The paper finds that analysts’ forecast accuracy is higher for listed firms with high levels of foreign ownership and managerial ownership. However, the complex pyramidal ownership structure could make corporate information less transparent and then increase the complexity of forecasting; hence, it results in less precise analysts’ forecasts. Interestingly, the relationship between state ownership and analysts’ forecast properties appears to be non-linear (an inverted U-shape), and the inflection point at which the relationship becomes negative occurs at state ownership over 45 per cent.

Originality/value

To the best of the author’s knowledge, this paper is the first to investigate the influence of ownership structure mechanisms on the properties of analysts’ forecasts in an emerging market, and the findings provide some insight on how the properties of analysts’ forecast might be shaped by certain ownership and control features in the context of concentrated state ownership and complex pyramidal ownership structure.

Details

Corporate Governance: The International Journal of Business in Society, vol. 16 no. 1
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 21 December 2022

Shallu Batra, Mohit Saini, Mahender Yadav and Vaibhav Aggarwal

This study aims to conduct a comprehensive bibliometric analysis to determine the intellectual structure of cross-listing studies and suggests a road map for future research in…

Abstract

Purpose

This study aims to conduct a comprehensive bibliometric analysis to determine the intellectual structure of cross-listing studies and suggests a road map for future research in this field.

Design/methodology/approach

A step-by-step procedure was carried out. With the help of a defined search string, 580 articles from reputed journals have been retrieved from the Scopus database. Bibliographic coupling and keyword analysis were executed to understand the current research scenario and future research directions in this research field. In addition, R Studio combined with VOSviewer was employed to analyse and visualise the data.

Findings

The results provide a deeper insight into publication trends, most prolific countries, institutions and journals in the area of cross-listing. The highest collaboration was observed between the authors in the USA and Canada. Moreover, the results contradict Bradford's and Lotka's laws. A thorough review of the literature identifies five clusters in this domain. Finally, keyword analysis offers a future road map in cross-listing research.

Originality/value

Researchers have shown greater interest in cross-listing topics over the past decades. Even though the research volume on this subject is increasing, the current retrospective is still insufficient. To the best of the authors' knowledge, this study is the first to provide valuable insights to practitioners, academicians, and prospective researchers about the intellectual structure of cross-listing and also offers future avenues in this research field through bibliometric analysis.

Article
Publication date: 2 May 2017

Mohamed Chakib Kolsi

The purpose of this paper is to identify the factors affecting firm voluntary disclosure policy adopted by a sample of 25 UAE companies listed on the Abu Dhabi Securities Exchange…

1118

Abstract

Purpose

The purpose of this paper is to identify the factors affecting firm voluntary disclosure policy adopted by a sample of 25 UAE companies listed on the Abu Dhabi Securities Exchange (ADX) for the period 2010-2014.

Design/methodology/approach

The author computes a weighted disclosure index (Botosan, 1997) for three-factor voluntary disclosure items and uses a multivariate regression analysis between disclosure index and a set of explanatory variables identified by previous research. The author also controls for endogeneity problem and uses panel data estimation.

Findings

It has been found that listing history, governmental sector, firm profitability and foreign listing positively affect the level of voluntary disclosure adopted by ADX listed companies. By contrast, the percentage of shares owned by block holders and industrial sector negatively affect the level of voluntary disclosure by ADX listed companies. Finally, the board and firm size, managers’ stock options and the leverage ratio do not have any impact on the level of voluntary disclosure adopted by ADX firms. The results remain unchanged to additional sensitivity checks.

Research limitations/implications

The research presents some limitations: first, the author does not take into account all voluntary disclosure items such as human resources and environmental data disclosed by ADX listed firms. Second, other voluntary disclosure determinants remain unexplored for UAE firms such as culture and tax incentives in the light of the new tax rules including corporate tax and value-added tax.

Practical implications

The study has many implications: first, it can help investors in their decision making and lead to fair allocation of resources. Second, it gives helpful directives to UAE accounting authorities to enhance the quality of financial reporting in the light of the New Commercial Company Law 2015 for mandatory adoption of IFRS by all listed companies. The paper also presents helpful directives for tax authorities planning for both company and value-added taxes. It also sheds light on factors driving corporate social responsibility disclosures as a crucial component of voluntary disclosure policy

Originality/value

The paper explores the new determinants of voluntary disclosure such as foreign listing, governmental status and block holding for an emerging relatively unexplored stock market: ADX.

Details

Journal of Accounting in Emerging Economies, vol. 7 no. 2
Type: Research Article
ISSN: 2042-1168

Keywords

Book part
Publication date: 4 July 2019

Tarek Eldomiaty, Rasha Hammam, Yasmeen Said and Alaa Safwat

This chapter offers an empirical examination of the impact of World Governance indicators (WGIs) on stock market development. The understanding is based on the premise of…

Abstract

This chapter offers an empirical examination of the impact of World Governance indicators (WGIs) on stock market development. The understanding is based on the premise of institutional economics that strong institutional governance, in terms of laws and regulations, results in positive developments in financial institutions.

The data which covers the years 1996–2016, include all world countries where a stock market operates. The authors use standard statistical tools that include Johansen co-integration test, linearity, normality tests, and regression analysis, together with discriminant analysis as a robustness check.

The empirical findings show that (a) a negative association exists between Voice and Accountability and stock market development, (b) a positive association exists between each of Political Stability, Government Effectiveness, Regulatory Quality, Rule of Law and Control of Corruption, and stock market development for most World’s regions stock markets, (c) both Voice and Accountability and Political Stability indicators are the major influential indicators for the stock market development across world stock markets.

This chapter offers quantitative evidence about the benefits of strong institutional governance to stock market development. In addition, the chapter offers significant guidelines to policymakers regarding the institutional factors that can be enhanced to promote stock market development.

1 – 10 of over 26000