Business Commons^™

An Economic Analysis Of The Earnings Of Industrial Accountants., Kenneth Rosenzweig, Elizabeth Gustafson, Lawrence Hadley

Kenneth Y. Rosenzweig

This paper explores hypothesized determinants of accountants' earnings using a conventional Mincer earnings function. Findings indicate that the CPA credential, MBA degree, and years of work experience increase earnings. Also presented is a more detailed analysis of the earnings gap between accountants employed in traditional accounting positions and those in finance-related positions.

Attitudes Of Students And Accounting Practitioners Concerning The Ethical Acceptability Of Earnings Management, Marilyn Fischer, Kenneth Rosenzweig

Kenneth Y. Rosenzweig

There are many ways that accountants and managers can influence the reported accounting results of their organizational units. When such influence is directed at changing the amount of reported earnings, it is known as earnings management. The purpose of this paper is to present the results of surveys of undergraduate students, MBA students, and practicing accountants concerning their attitudes on the ethical acceptability of earnings management. Analysis of the survey results reveals how the attitudes of the three groups differ and what variables are associated with these differences. Based on the analysis, the authors suggest changes in accounting education curriculum …

Outside Director-Shareholder Agency Conflicts: Evidence From Bank Consolidation, James Tompkins, Robert Hendershott

James Tompkins

Purpose – Takeovers create a potential conflict of interest between target shareholders and directors. While mergers generally create value for the target shareholders, their directors will typically lose their board seats and likely face a financial loss or loss of prestige. The purpose of this paper is to examine evidence to support or refute that directors may act in their own best interests at the expense of shareholders. Design/methodology/approach – The authors reason that if directors act in their own best interests, then acquiring firms will seek targets with older board members who are closer to director retirement and are …

Institutional Investing When Shareholders Are Not Supreme, Christopher Geczy, Jessica Jeffers, David Musto, Anne Tucker

Anne Tucker

Institutional investors, with trillions in assets under management, hold increasingly important stakes in public companies and fund individual retirement for many Americans, making institutional investors’ behaviors and preferences paramount determinants of capital allocations and the economy. In this paper, we examine high fiduciary duty institutions' (HFDIs') response to decreased profit maximization pressure as measured by the effect of constituency statutes on HFDI investment. We ask this question, in part, to anticipate HFDIs’ response to alternative purpose firms, like benefit corporations. Only with access to institutional investors’ capital can alternative purpose firms gain economic significance to rival the purely for-profit corporation. …

Governance-Default Risk Relationship And The Demand For Intermediated And Non-Intermediated Debt, Husam Aldamen, Keith Duncan, Safdar Khan

Safdar Khan

This paper explores the impact of corporate governance on the demand for intermediated debt (asset finance, bank debt, non-bank private debt) and non-intermediated debt (public debt) in the Australian debt market. Relative to other countries the Australian debt market is characterised by higher proportions of intermediatedor private debt with a lower inherent level of information asymmetry in that private lenders have greater access to financial information (Gray, Koh & Tong 2009). Our firm level, cross-sectional evidence suggests that higher corporate governance impacts demand for debt via the mitigation of default risk. However, this relationship is not uniform across all debt …

Transaction Size And Effective Spread: An Informational Relationship, Thomas Henker, Robert Kohn, Yuewen Xia, David Feldman

Thomas Henker

The relationship between quantity traded and transaction costs has been one of the main focuses among financial scholars and practitioners. The purpose of this thesis is to investigate the informational relationship between these variables.Following insights and results of Milgrom (1981), Feldman (2004), and Feldman and Winer (2004), we use New York Stock Exchange (NYSE) data and kernel estimation methods to construct the distribution of one variable conditional on the other. Then, we study the information in these conditional distributions: the extent to which they are ordered by first order stochastic dominance (FOSD) and by the monotone likelihood ratio property (MLRP).

The Vanishing Abnormal Returns Of Momentum Strategies And ‘Front-Running’ Momentum Strategies, Julia Henker, Thomas Henker, Robert Huynh, Martin Martens

Thomas Henker

We find variations in returns from momentum strategies. Unlike most studies, we form portfolios one week prior to the end of month, called ‘front-running’ momentum portfolios. As expected, due to the effects of institutional momentum trading, our ‘front-running’ portfolios generate returns of similar magnitude but lower volatility than month-end strategies. We also show that the previously documented large-firm momentum effect is sensitive to the strategy examined, and is attributable to the abnormal returns of large NASDAQ stocks. Moreover, momentum strategies did not earn significant returns during our sample period, an indication that momentum is not an unambiguously persistent anomaly.

Names, Trains, And Corporate Deals: Why Public Transit Shouldn't Sell Naming Rights, Frank Pasquale

Frank A. Pasquale

No abstract provided.

Exogenous Or Endogenous Money Supply: Evidence From Australia, Zatul Badarudin, Ahmed Khalid, Mohamed Ariff

Ahmed Khalid

This paper investigates the nature of money supply in Australia over two separate monetary policy regimes: monetary and inflation targeting. The post-Keynesian theory on endogenous money was tested with the aim of investigating whether endogenous money supply, if it did exist, followed the accomodationist, structuralist or liquidity preference viewpoints. Data used are quarterly series from 1977 to 2007 and we used vector error-correction model for long-run and short-run causality tests. We found that money supply is endogenous in Australia even when the central bank targeted monetary aggregates during the period 1977 to 1993.

Governance-Default Risk Relationship And The Demand For Intermediated And Non-Intermediated Debt, Husam Aldamen, Keith Duncan, Safdar Khan

Keith Duncan

This paper explores the impact of corporate governance on the demand for intermediated debt (asset finance, bank debt, non-bank private debt) and non-intermediated debt (public debt) in the Australian debt market. Relative to other countries the Australian debt market is characterised by higher proportions of intermediatedor private debt with a lower inherent level of information asymmetry in that private lenders have greater access to financial information (Gray, Koh & Tong 2009). Our firm level, cross-sectional evidence suggests that higher corporate governance impacts demand for debt via the mitigation of default risk. However, this relationship is not uniform across all debt …

Corporate Governance And Access To Interest Bearing Debt, Husam Aldamen, Keith Duncan

Keith Duncan

Purpose – The purpose of this paper is to extend the growing body of literature on the impact of corporate governance on debt contracting by examining if better governance is associated with access to interest bearing debt. The paper aims to explore whether no-debt companies have governance structures that are qualitatively different to debt companies within a market with a distinct corporate finance structure, such as Australia.

Design/methodology/approach – The analysis is portioned into two stages. The first stage focuses on univariate analysis which includes descriptive statistics and analysis of variance (ANOVA). The second stage introduces multivariate analysis, in the …

Institutionalization Of Software Product Line: An Empirical Investigation Of Key Organizational Factors, Faheem Ahmed, Luiz Capretz, Shahbaz Sheikh

Luiz Fernando Capretz

A good fit between the person and the organization is essential in a better organizational performance. This is even more crucial in case of institutionalization of a software product line practice within an organization. Employees’ participation, organizational behavior and management contemplation play a vital role in successfully institutionalizing software product lines in a company. Organizational dimension has been weighted as one of the critical dimensions in software product line theory and practice. A comprehensive empirical investigation to study the impact of some organizational factors on the performance of software product line practice is presented in this work. This is the …

The Impact Of Internet-Based Services On Credit Unions: A Propensity Score Matching Approach, Elisabeta Pana, Sascha Vitzthum, David Willis

Elisabeta Pana

Credit unions focus their profit and capital management on the tradeoff between providing immediate financial benefits to members and augmenting their institutional well-being through capital accumulation. In this study, we investigate the changes in benefits to credit union members via the interest-rate spread around the adoptions of internet-based services for the period of 2000–2009. Using the propensity score matching method, we show that adopters offer a less favorable interest-rate spread to their members than non-adopters. However, we find evidence that early adopters have a lower degree of market power in dealing with their members than late adopters and offer interest-rate …

Fundamentals Of Investments: Valuation And Management, Steven Dolvin, Bradford Jordan, Thomas Miller

Steven D. Dolvin

Gfc: Origin, Consequence And Cost, Mohamed Ariff, Ahmed Khalid

Ahmed Khalid

No abstract provided.

Women’S Decision Making: A Contextual Assessment, Safdar Khan

Safdar Khan

No abstract provided.

Momentum Trading In Sector Etfs, Steven Dolvin, Jill Kirby

Steven D. Dolvin

If markets were efficient, then strategies based on past price behavior would be essentially worthless. However, many traders follow investment plans that are designed to exploit momentum, particularly across sectors. This article examines one common, related trading rule: “There’s Always a Bull Market Somewhere.” Under this approach, investors buy (sell) past 12-month winners (losers). Prior studies find a positive abnormal return in the subsequent 12-month period following implementation of this strategy; however, no study examines the impact of such rules on the short-term trading patterns (returns and volume) of related securities. This article fills this gap, finding that ETFs representing …

Firm Value And Investment Policy Around Stock For Stock Mergers, Adel Bino, Elisabeta Pana

Elisabeta Pana

We study a sample of publicly traded firms that expand by acquiring other firms in pure, stock-for-stock mergers. After these mergers, we find that the diversification premium decreases for the acquiring firm due to having added a target firm trading at a discount. Furthermore, the acquiring firm experiences a decrease in investment opportunities and a decrease in leverage. This is an effect confined only to non-diversifying mergers. Our results indicate that the acquirer’s investment efficiency at the firm level remains unchanged after the merger.

The Impact Of Bank Mergers On Liquidity Creation, Elisabeta Pana, Jin Park, Tim Query

Elisabeta Pana

Using 189 commercial bank mergers between 1997 and 2004, we document a positive impact of the merger activity on bank liquidity creation. Consistent with the deposit insurance hypothesis, we find that banks with higher levels of deposit insurance create higher levels of liquidity around mergers. Furthermore, we document that the level of equity capital explains the change in liquidity creation around mergers for the sample of large acquirers. We show that for the sample of small acquirers there is a negative relationship between the level of economic growth and changes in liquidity creation around mergers.

Underpricing, Overhang, And The Cost Of Going Public To Preexisting Shareholders, Steven Dolvin, Bradford Jordan

Steven D. Dolvin

IPO underpricing has been extensively studied; however, its impact on the wealth of preexisting shareholders has not been closely examined. We address the question of whether or not periods of high underpricing adversely affect preexisting shareholders. We find that high levels of underpricing are associated with increased share retention, which effectively offsets much of the potential cost. Overall, we find that the percentage of shareholder wealth lost is surprisingly stable over time, unlike underpricing itself. We also find that many factors known to be related to underpricing are not significant determinants of the cost of going public to preexisting owners.

Corporate Governance, Transparency And Performance Of Malaysian Companies, Mohd Che Haat, H. Raaman, Sakthi Mahenthiran

Sakthi Mahenthiran

The paper aims to examine the effect of good corporate governance practices on corporate transparency and performance Malaysian listed companies.

Commercial Real Estate Concentrations: Evidence On The Survival Of Small Banks, Elisabeta Pana

Elisabeta Pana

This study examines the survival of small banks with commercial real estate concentrations over the 2006-2009 period. Using data on 4646 banks, I document that commercial real estate loan concentrations increase the hazard of disappearance. The analysis of bank-specific factors reveals that bank capitalization, liquidity, and asset quality play a significant role on bank survival. I also find evidence that small banks in the Pacific Southwest and South Atlantic regions are less likely to survive as separate entities.

S&P Etfs: Arbitrage Opportunities And Market Forecasting, Steven Dolvin

Steven D. Dolvin

The article examines the pricing differences between two S&P 500 ETFs (ticker symbols SPY and IVV) and the underlying stock index. The author finds that, on average, both ETFs trade at a premium relative to the S&P 500; however, the level of the daily premium (and, on occasion, discount) varies between the two securities, which creates the opportunity for arbitrage. Since the passage of Regulation NMS in mid-2005, the pricing differences, as expected, have declined, implying that any current/future arbitrage opportunity will be confined to periods of high market volatility, such as 2008. Beyond issues related to arbitrage, the author …

Daily Stock Returns: Momentum, Reversal, Or Both, Steven Dolvin, Mark Pyles

Steven D. Dolvin

Aftermarket Performance, Gross Spread, Lead Underwriter, And Price Revision, Steven Dolvin

Steven D. Dolvin

No abstract available. The author has four entries in this volume. Note: Link is to the catalog entry in WorldCat's catalog. Please see your local librarian for assistance in borrowing this item via interlibrary loan.

Poison Pill Redemption: Evidence From The Commercial Banking Industry, Elisabeta Pana

Elisabeta Pana

No abstract provided.

The Effect Of Resale Constraints On Abnormal Returns Of Borrowers In Syndicated Loans, Steven Dolvin, Mark Pyles, Perry Woodside

Steven D. Dolvin

The Impact Of Bank Venture Capital On Initial Public Offerings, Steven Dolvin, Donald Mullineaux, Mark Pyles

Steven D. Dolvin

Under Cover Of Science: American Legal-Economic Theory And The Quest For Objectivity, James Hackney Jr.

James R. Hackney Jr.

No abstract provided.

Inflation Monitor, Muhammad Arby, Fida Hussain, Safdar Khan

Safdar Khan

Extract:
Although inflationary pressures persisted in the economy for the second year in a row, the headline inflation fell to 7.6 percent year-on-year in June 2006 that was 1 percentage point less than inflation in corresponding month last year.1 The inflation containment was more visible in the last six months of FY06 as compared to first six months (Jul 05 to Dec 05): the average CPI inflation during the first half of the year was 8.4 percent which declined to 7.4 percent in the second half primarily due to fall in food inflation. Inflation measured by sensitive price indicator also …