Corporate Finance Commons^™

The Role Of Convex Equity Incentives In Managers’ Forecasting Decisions, Young Jun Cho, David Tsui, Holly I. Yang

Research Collection School Of Accountancy

Prior literature suggests that voluntary disclosures of forward-looking information tend to lead to capital market benefits, but these disclosures may also result in negative capital market consequences if subsequent performance falls below expectations. We, therefore, hypothesize that convex equity incentives, which reward managers for stock price gains while limiting their exposure to losses, should promote greater voluntary forward-looking disclosure. Consistent with our hypothesis, we find a significantly positive association between equity incentive convexity and forecast issuance and frequency. We also find that the positive association is more pronounced for firms with higher sales volatility and managers with shorter tenure, in …

Business Combinations Under Common Control (Part 2), Pearl Hock-Neo Tan, Chu Yeong Lim, Tracey Chunqi Zhang

Research Collection School Of Accountancy

In Part 1 of the article, published in the March issue of this IS Chartered Accountant Journal, we explained the conditions for a BCUCC and the two methods of accounting for BCUCC. We also explained how accounting standards need to address the gap in accounting for the BCUCC from the receiving entity’s perspective. In this Part 2 of the article, we propose a contextual approach in determining the accounting method on BCUCC for the receiving entity (that is, the entity which receives control of the transferred entity from another group entity). We propose that a BCUCC that has commercial substance …

Will Vcs Invest At A Distance During And After A Crisis? Evidence From The 2008 Financial Crisis, Samuel Wilson, Christopher Willis, Jing Zhang

College of Business (Strome) Posters

We will explore how large-scale exogenous crises impact venture capital firms’ investment scope decisions during and after a crisis. We will analyze a population of 11,564 funding rounds announced between 2005Q1 until 2012Q4 in the US. Analysis shows that the 2008 Financial Crisis caused a short-term change in the geographical areas where VCs invest, and after the crisis firms tend to look further afield to locate viable investment targets. This study will contribute to entrepreneurial finance research by offering theoretical and empirical insights on how major crises affect venture capital investment and entrepreneurial activities.

Generalist Ceos And Audit Pricing, Zhiming Ma, Rencheng Wang, Kaitang Zhou

Research Collection School Of Accountancy

We analyze the consequences of a firm hiring a generalist CEO in terms of the audit fees paid by the firm. We find that audit fees of clients with generalist CEOs are higher than those of clients with specialist CEOs. This relation is robust to considering managerial ability, other CEO characteristics, various fixed effects, instrumental variables, and change analyses. We further show that fee differences are larger for firms with weaker monitoring and higher corporate litigation risks. Through path analysis, we find that both client business risk and misreporting risk contribute to the fee difference. Finally, we find that auditors …

Corporate Social Responsibility, Corporate Governance, And Banking Performance In The Cemac Region, Divine Fondem

Doctoral Dissertations and Projects

This researcher examined the effect of corporate governance (CG) and corporate social responsibility (CSR) on banking performance in the Central African Economic and Monetary Community (CEMAC) region. The data was obtained from the Worldwide Governance and the World Bank sovereign database from 2003 to 2018. This study employs the z-score to proxy the CSR factors such as labor force participation rate, population density, and renewable energy. The results reveal that the fixed effects model is superior to the pooled ordinary least square (OLS) and the random-effects model. The findings show that CSR has a significantly positive relationship, while CG has …

The Benefits Of A More Physically Active Workforce In The Corporate World, Dillon M. Billingham-Hemminger, Jacob D. Locke

Senior Theses

With the ever-expanding knowledge of the benefits of physical activity and good general health for all aspects of our lives, it should be quite surprising that activity levels are declining at accelerating rates. After taking a deeper look into the probable cause for this phenomenon, it becomes clearer that the increasing pressures of workplace culture are leading to more sedentary lifestyles.

This paper looks at the benefits of physical activity on people and on corporations, specifically workplace disease prevention and wellness programs, to see if there exists a mutualistic relationship between the two. For people, physical activity was consistently found …

Value Creation By Private Equity Firms: A Resource-Based View, Kei Pang

Dissertations

Despite the growing importance of the private equity (PE) industry in the United States, it is unclear how PE firms create value. This study contributes to the PE literature and strategic management research by examining PE firm resources and competencies that drive the success of equity-backed management buyout deals. Specifically, my work proposes a framework to describe the key value creation drivers and sub-drivers that position PE firms for success in all four stages of the PE value chain: Fund Raising, Deal Sourcing, Governing/Managing, and Exiting. I utilize Porter’s (1985) value chain analysis (VCA) and the resource-based view (RBV) to …

Corporate Governance And Firm Value: Evidence From Lodging Companies, Serban Bakay Ergene, Erdinc Karadeniz

Journal of Global Business Insights

This study examined the relationships and interactions between corporate governance and firm values of lodging companies with different characteristics. The companies were analyzed separately using a classification and regression tree (CRT) analysis. The analysis results did not show a direct relationship between value and governance, yet that does not mean there is no relationship between them. When the companies’ governance scores were similar, corporate governance showed no distinguishing variable on firm value but is a hygiene factor. The analysis also found negative relationships between value and size. This may be important in preventing companies from becoming cumbersome. Also, positive relationships …

Corporate In-House Tax Departments, Xia Chen, Qiang Cheng, Travis Chow, Yanju Liu

Research Collection School Of Accountancy

In-house human capital tax investment is a significant input to a firm's tax decisions. Yet, due to the lack of data on corporate in-house tax departments, there is little empirical evidence on how tax departments are associated with tax planning and compliance outcomes. We expect the size of tax departments to be positively associated with the effectiveness of tax planning and compliance. Using hand-collected data on the number of corporate tax employees in S&P 1500 firms over the 2009–2014 period, we find that firms with larger tax departments are associated with lower and less volatile cash effective tax rates. Furthermore, …

Business Combinations Under Common Control (Part 1), Pearl Hock-Neo Tan, Chu Yeong Lim, Tracey Chunqi Zhang

Research Collection School Of Accountancy

In a business combination under common control (BCUCC) the same party (or parties) ultimately controls the combining entities both before and after the business combination and this control is not transitory. BCUCC is not governed by any International Financial Reporting Standard (IFRS) issued by the International Accounting Standards Board (IASB). The IASB is undertaking a research project in response to stakeholder feedback of the diversity in accounting practice and released a Discussion Paper (DP) in November 2020 that sets out the Board’s preliminary views on reporting requirements. Our paper contributes to the discussion by proposing a contextual approach in determining …

Investment Decisions And Trading Behavior Of Institutional And Retail Investors, Antonia Kirilova

Dissertations and Theses Collection (Open Access)

This dissertation consists of three studies in the areas of empirical asset pricing, market microstructure, and behavioral finance. I study the trading behavior and portfolio choices of institutions and retail investors in the equity and derivatives markets. Examining the ways in which different market participants make investment decisions allows us to understand their role in shaping financial market dynamics. This is important in order to know how to structure markets for enhanced market efficiency, and to protect less sophisticated investors through better policies and regulations. Although there is a considerable amount of literature disputing the ability of retail investors and …

Seasoned Equity Offerings And Corporate Financial Management, Michael J. Barclay, Fangjian Fu, Clifford W. Smith

Research Collection Lee Kong Chian School Of Business

We assume executives managing corporate financial policy consider the firm's current and target leverage, investment plans, anticipated cash flows, and consequences of alternative sequences of financing transactions, operating within efficient markets. Our analysis yields time-series and cross-sectional predictions for management of investment spending and leverage; use of maturity, priority, and convertibility covenants; and management of dividends, share repurchases, cash balances, and credit lines. Our evidence from 8608 SEOs covering 1970–2015 is consistent with implications of our theory, helps to resolve an array of issues in corporate finance, and offers a step toward a more unified analysis of rational corporate financial …

Mitigating Financial Fraud Risk With Data Analytics, Clarence Goh, Gary Pan

Research Collection School Of Accountancy

The risks associated with financial fraud that modern CFOs face today is particularly high. The same report examined Accounting and Auditing Enforcement Releases (AAERs) issued by the Securities and Exchange Commission (SEC) in the US from 2014 to 2019 and found that while the SEC frequently charged the person directly responsible for perpetuating the financial fraud, the CFO was among the most commonly charged employees. Data analytics techniques can play an important role in mitigating the risk of financial fraud for CFOs.

Examining The Phenomenon Of Rounding In Analysts’ Eps Forecasts: Evidence From Singapore, Clarence Goh

Research Collection School Of Accountancy

Prior studies have documented the phenomenon of rounding of analysts' earnings per share (EPS) forecasts in the USA. From the outset, it is unclear if analysts following Singapore firms also similarly engage in the rounding of their EPS forecasts. This study aims to investigate the extent to which analysts engage in rounding of EPS forecasts of firms listed on the Singapore Exchange.

Gambling With Debt: The English Premier League, Edward Robinson

Undergraduate Economic Review

This paper aims to investigate the impact of debt on financial performance in the English Premier League from the 2000/01 season to the 2017/18 season. Panel model estimations concluded debt has a significant inverse relationship with financial performance. This relationship may potentially be stronger in larger clubs and could be present through human capital investment’s significant direct relationship with financial performance. This further emphasised usages of intangible assets as a player human capital investment indicator, rather than using wage costs like previous studies. Furthermore, filling a gap regarding how capital structures may be used to impact financial performance within’ football.

Supply Chain Finance: Techniques, Benefits, And Trends, Hamid Ghofrani

Major Papers

This major research paper surveys the various aspects of supply chain finance, a recent sphere of working capital management techniques, and its importance for managing small, medium, and large-sized businesses. Globalism and elimination of trade obstacles have encouraged managers to reassess their capital investment priorities. The transition of managements' focus from manufacturing, stocking, and distribution to establishing and preserving a network of multiple partners entails adopting more trust-based and inclusive financing techniques. Moreover, the technological and managerial breakthroughs have reduced the inefficiency in the supply chain's physical flow, justifying taking a similar approach to financial flow within a supply chain. …

Effect Of Information Technology Capital: Technology Infrastructure, Database, Software, And Brainware Toward Optimize The Use Of Information Technology (Case Study : Uin Sunan Ampel Of Surabaya), Rismawati Br Sitepu, Ilham M.Said, Tanti Handriana, Praptini Yulianti

Library Philosophy and Practice (e-journal)

This research was conducted to determine the extent of the influence of technology infrastructure costs, software costs, database costs and brainware costs to increase the information technology budget of the Sunan Ampel State Islamic University in Surabaya and efficient use of the budget. The purpose of this study is to prove that there is a positive and significant influence of technology infrastructure costs, software costs, database costs and brainware costs to increase information technology budgets by using validity and reliability tests and classic tests such as the Normality test, Multicollinearity test, autocorrelation test, Heteroskedasticity test , and Linearity test. This …

El Papel De Las Fintech En La Inclusión Financiera, Fuente De Financiamiento De Pymes Colombianas., Laura Daniela Montaño Gómez, Daniela Martinez Díaz

Negocios y Relaciones Internacionales

El presente trabajo analiza las Fintech como herramienta de inclusión financiera mediante el servicio de financiamiento a las pymes colombianas, se evidencia que la inclusión financiera es uno de los retos que las pymes deben afrontar en Colombia; específicamente, en el acceso al financiamiento por parte de las entidades financieras. Dicho esto, cabe resaltar que, si bien se ha venido desarrollando y consolidando un avance de la tecnología en el sector financiero, en esta ocasión, las empresas cuentan con nuevas fuentes de financiación alternas mediante servicios financieros facilitados a través de las más recientes tecnologías financieras, como es el caso …

Competition In Economic Theory And The Skew In U.S. Corporate Wealth Creation, Marc H. Pentacoff

Electronic Theses and Dissertations

Historical studies of U.S. capital markets show a dramatic skew in the distribution of corporate wealth. This thesis investigates the evolution of economic thought related to realistic models of competition, seeking to find the most suitable theory of competition to explain this skew in U.S. corporate wealth creation. The incorporation of realistic elements into the static theories of competition leads to theoretical difficulties in the early 20th century. Another line of thought developed non-equilibrium dynamic models of competition, culminating in Schumpeter. In Schumpeter, firms seek to manage the uncertainty f rom rapid change induced by innovation and increasing returns by …

The Hotelling Valuation Principle: Does User Cost And Reserve Differentials Improve Validity?, Brian K. Hicks

Electronic Theses and Dissertations

The Hotelling Valuation Principal (HVP) implies that the value per unit of an in-ground exhaustible natural resource is equal to the current price less the cost of production. The assumptions required for this principle include a certain and homogenous reserve stock, unconstrained extraction, and constant costs. Extensive research has empirically investigated the HVP. This paper expands the HVP framework and relaxes the theory’s assumptions to account for reserve differentials. The results show that the original net price model is more closely aligned with developed reserve value, than total reserve value. In addition, this paper develops two- and three-factor net price …