Corporate Finance Commons^™

Pandemic Hope For Chapter 11 Financing, David A. Skeel Jr.

All Faculty Scholarship

One of the biggest surprises of the recent pandemic from a bankruptcy perspective has been the ready availability of financing. A variety of factors—such as an estimated $2.5 trillion in available funding at the outset of the crisis and the buoyant stock market—may have contributed. In this Essay, I focus on a less widely appreciated factor, a striking shift in the capital structure of many corporate debtors. Rather than borrowing from one group of lenders, debtors now often borrow from multiple groups of diverse lenders. Although the new capital structure complexity has downsides, it also could counteract a longstanding problem …

Hotel Industry Performance In 2020-2021 And The Jhfm Index, Atul Sheel

Journal of Hospitality Financial Management

No abstract provided.

Domestic Tourism In Poland: State, Development, And Prospects Before And During The Covid-19 Pandemic, Ewa BąK-Filipek, Katarzyna Podhorodecka

Journal of Hospitality Financial Management

The aim of the study was to show tourist movement in Poland and its importance in the tourism and national economy. The analysis of the results confirms a several-year trend of further increases in the number of arrivals for both foreigners and foreign tourists. In parallel to the positive trend in terms of the number of trips, unfortunately a decreasing trend is observed in the level of average spending of tourists and one-day visitors. Therefore, total revenue from inbound foreign tourism in 2019 (calculated in PLN) increased by 2.9% compared to its level from the previous year. Tourism, including foreign …

Cost Of Capital For Small Size Tourism Industry In Developing Countries: The Case Of Lodging Sector In Chile, Sergio Zuniga-Jara, Karla Soria-Barreto

Journal of Hospitality Financial Management

This paper provides a simplified approach toward estimating the cost of capital for a small company of the tourism sector. This is accomplished by dividing the hurdle rate into the return of the specific industry in a specific country, and a specific risk premium dependent on the size and age of the company/projects. We illustrate our proposal with investment estimations in lodging accommodations along the northern coast of Chile where tourism represents an important source of income and jobs. The estimations were validated through a survey carried out among entrepreneurs of the sector. The results suggest that our method is …

International Association Of Hospitality Financial Management Educators (IAhfme) Academic Member 2020 Total Annual Earnings, Raymond S. Schmidgall

Journal of Hospitality Financial Management

This study uses survey research to determine the 2020 annual earnings of hospitality financial man- agement educators. Forty-four percent of iAHFME members affiliated with educational institutions responded. Survey results show that for 2020, annual base salaries of iAHFME members ranged from $63,000 to $200,000. The lowest-paid member was an assistant professor and the highest-paid mem- ber, a full professor. Many respondents supplemented their base salaries by teaching during summer school or consulting or both. The total annual earnings of iAHFME members ranged from $76,000 to $245,000. Survey results also show that hospitality financial management educators appear to be more highly …

Pricing In The Hotel Industry Based On The Simultaneous Realization Of Cost Management And Service Quality Efficiency Using Tanaka Technique, Maysam Shafiee Roodposhti, Kiandokht Behrang, Habibollah Mirghafoori, Khadijeh Mehrjoo

Journal of Hospitality Financial Management

This research seeks to utilize a technique (Tanaka technique) in which, while focusing on quality improvement, costs will be managed and tourism organization and companies can benefit from var- ious incomes. The statistical population of this study was hotels in Isfahan and using the opinions of experts of this industry, five cost-effective quality indicators were achieved. This technique has eight steps and for data gathering, questionnaires and interviews were used. This study identifies the amount of deviation of the actual cost from the target cost for each of the indicators. The results showed that ancillary facilities, structural architecture, service, manpower …

The Impact Of The Eb-5 Program In The Hospitality Industry: Now And The Future, Francis A. Kwansa, Xiangmei Yang

Journal of Hospitality Financial Management

The Employment-Based Fifth Preference program (EB-5) is one of five categories of employment- based visas that provide permanent residency to foreign nationals in the United States. In return, foreign nationals interested in the program are required to make investments of $1 million in busi- nesses and create a minimum of ten jobs in the United States. Since its creation in 1990, the EB-5 pro- gram has had a significant economic impact in the United States through infusion of external capital into the economy and through the creation of thousands of jobs. The hospitality industry has been one of the popular …

Socially Responsible Corporate Customers, Rui Dai, Hao Liang, Lilian Ng

Research Collection Lee Kong Chian School Of Business

Corporate customers are an important stakeholder in global supply chains. We employ several unique international databases to test whether socially responsible corporate customers can infuse similar socially responsible business behavior in suppliers. Our findings suggest a unilateral effect on corporate social responsibility (CSR) only from customers to suppliers, an evidence further supported by exogenous variation in customers’ close-call CSR proposals and by product scandals. Customers exert influence on suppliers’ CSR through positive assortative matching and their decision-making process. Enhanced collaborative CSR efforts help improve operational efficiency and firm valuation of both customers and suppliers but increase only the customers’ future …

Major League Baseball’S Biggest Failure – The Competitive Balance Tax, Michaela T. Faunce

Haslam Scholars Projects

This paper seeks to discover if there exists a relationship between spending and a team making the playoffs in Major League Baseball in order to determine the strength of the Competitive Balance Tax as a deterrent. This research was done using historical data about opening day payrolls, win percentages, and playoff results from the years 2018-1988. For a better comparison, each year’s spending was adjusted to 2018 dollars using the years consumer price index. By using these time periods, time periods including a competitive balance tax and not including a competitive balance tax are included. The results indicate that there …

Mutual Fund Stewardship And The Empty Voting Problem, Jill E. Fisch

All Faculty Scholarship

When Roberta Karmel wrote the articles that are the subject of this symposium, she was skeptical of both the potential value of shareholder voting and the emerging involvement of institutional investors in corporate governance. In the ensuing years, both the increased role and engagement of institutional investors and the heightened importance of shareholder voting offer new reasons to take Professor Karmel’s concerns seriously. Institutional investors have taken on a broader range of issues ranging from diversity and political spending to climate change and human capital management, and their ability to influence corporate policy on these issues has become more significant. …

Board Composition, Board Diversity And Stock Performance, Chiyachantana N. Chiraphol, Siripen Pattanawihok, Pattarawan Prrasarnphanich

Research Collection Lee Kong Chian School Of Business

The study investigates the relationship between six board compositions and stock returns. The results indicate a significant association between various board compositions and stock returns. Specifically, board size and executive directors have a negative impact, whereas independent directors enhance stock returns. Busy directors positively impact the abnormal stock returns for the companies in the non-financial industry, which implies that busy directors who serve on more boards tend to be well connected. More importantly, the results indicate a significant positive relationship between board tenure and stock returns. Board service time is perceived as the board quality of knowledge and experience from …

Local Political Corruption And M&As, Chun Liu, Yang Chen, Shanmin Li, Liang Sun, Mengjie Yang

Research Collection School Of Accountancy

We examine the relation between local political corruption and firms' cross-province M&As using provincial-level data on corruption in China. The results show that firms in more corrupt regions are less likely to engage in cross-province M&As. Further analyses reveal that the effects of local corruption on the probability of cross-province M&As are stronger when corrupt officers have greater impeding benefits or lower impeding costs. Meanwhile, Both ex-ante intervention and ex post punishment are important channels through which corrupt officers hinder firms' cross province M&As. Moreover, informal institutions, such as social capital and informal networks can help to alleviate the negative …

The Profitability Of Warrant Issuers: An Empirical Investigation Of Single Stock And Index Warrants, Ichaya Wongnapakarn, Arnat Leemakdej, Chiyachantana N. Chiraphol, Pattarawan Prasarnphanich, Eakapat Manitkajornkit

Research Collection Lee Kong Chian School Of Business

This study examines the derivative warrant's profit of issuers compensated with the risk from issuing call and put derivative warrants because they have commitments in risk management and managing risk by hedging the underlying exposure. The average profit of issuers is a cumulative profit from the first trading day until the last trading day. Consistent with the imperfect competition for issuing put derivative warrants on single stock from different securities borrowing and lending advantages, the profit margin of a put warrant is higher than the call warrant. However, the profit margin from a put warrant is not necessarily higher than …

What Are The Four Traits Of Digitally Mature Organizations?, Clarence Goh, Gary Pan, Poh Sun Seow, Yuanto Kusnadi, Gek Choo Shirlena Tan

Research Collection School Of Accountancy

A study conducted by Deloitte Southeast Asia and the Singapore Management University said there are four traits that could identify digitally mature organisations based on how they manage the governance, risk, and compliance aspects of digital transformation.

A Bayesian Approach To Assessing The Risk Premium On Catastrophe Bond Derivatives At Issuance, Dickson K. Nkwantabisa

Doctoral Dissertations (DBA)

Catastrophe (CAT) bond pricing is a challenging task due to the uncertainty inherent in the incomplete market setting in which they operate as such various pricing approaches have been proposed. In this paper, we offer an alternative Bayesian methodology which is a natural approach in the context of uncertainty. Our Bayesian model is highly flexible and can be implemented under different model assumptions without losing generalization. We develop an entire Bayesian framework to model the two fundamental sources of risks in CAT bond pricing – catastrophe and interest rate risks. Using a Hierarchical Dirichlet Process model (Teh et al., 2006), …

Payout Policy, Managerial Perquisites, And Sticky Sg&A Costs, Deborah Smith

Business Faculty Publications

Background

Sticky SG&A costs provide a novel opportunity to investigate whether payout policy serves as a remedy for management overspending on perquisites that are embedded in SG&A expenses. Payout policy, especially under strong governance, may reduce overspending. Another possibility is that management may use sales declines opportunistically to repurchase shares when sales are expected to rebound.

Methods

Regression analysis is used to examine the effect of payout mechanisms (dividends, share repurchases, and combinations thereof) and shareholder rights (EIndex) to determine whether managerial overspending on perquisites is reduced through payout policy.

Results

The results indicate that dividends and share repurchases are …

The Cost Of Big Data: Evaluating The Effects Of The European Union’S General Data Protection Regulation, Kara Rebecca White

EURēCA: Exhibition of Undergraduate Research and Creative Achievement

In the 1990’s the World Wide Web was created, drastically changing the way we do business, communicate, and live our lives. Ten years later in the early 2000’s the dot com boom happened, and several years later, new technology giants emerged—like Amazon, Google, and Facebook. From this, we now face “big data” that promises to solve world problems, but has the potential to create turmoil and malfeasance. My research examines the impact of the General Data Protection Regulation (GDPR) enacted in the EU in 2016 on firm value using Tobin’s Q and CARs. Using regression analyses, I observe that Tobin’s …

Inside Brokers, Frank Weikai Li, Abhiroop Mukherjee, Rik Sen

Research Collection Lee Kong Chian School Of Business

We identify the broker each corporate insider trades through, and find that analysts and mutual fund managers affiliated with such “inside brokers” have a substantial information advantage on the insider’s firm. Affiliated analysts issue more accurate earnings forecasts, and affiliated mutual funds trade the insider’s stock more profitably than their peers, following insider trades through their brokerage. Notably, this advantage persists well after these insider trades are publicly disclosed. Our results challenge the prevalent perception that information asymmetry arising from insider trading is acute only before trade disclosure, and suggest that brokers facilitating these trades are in a position to …

Trust In Fair Value Accounting: Evidence From The Field, Clarence Goh, Chu Yeong Lim, Jeffery Ng, Gary Pan, Kevin Ow Yong

Research Collection School Of Accountancy

We survey stakeholders in the financial reporting process to examine trust in fair value accounting. Although respondents demonstrate high confidence in financial statements, they believe that fair value accounting decreases trust in financial reporting and that preparing fair value numbers is costly but beneficial. They also strongly believe in the Conceptual Framework underlying standard setting. Using multivariate regression analyses, we find that perceiving fair value accounting as beneficial is positively associated with trust in it, consistent with the theory of reasoned action that people engage in behavior (e.g., trust) based on expected positive outcomes of that behavior. We find that …

Corporate Social Responsibility And Financial Performance: Does Board Diversity Matter?, Ozgur Ozdemir, Murat Kizildag, Tarik Dogru, Ilhan Demirer

Journal of Global Business Insights

In this study, the moderating effect of board diversity on the complex relationship between corporate social responsibility (CSR) performance and financial performance is examined. The resource-based view of the firm and stakeholder theory are used as the theoretical foundation of the study. The hypotheses of the study are tested via fixed-effects regression using data for a sample of 1,234 firms and 5,102 firm-year observations for the period 2009–2013. The study finds evidence that CSR performance and financial performance are positively related, and the magnitude of this relationship is contingent on the level of board diversity. As corporate boardrooms become more …