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Full-Text Articles in Business
Does Social Capital Mitigate Managerial Self-Dealing? Evidence From Insider Trading, Kiat Bee Jimmy Lee, Jimmy Lee, Sang Hyun Park
Does Social Capital Mitigate Managerial Self-Dealing? Evidence From Insider Trading, Kiat Bee Jimmy Lee, Jimmy Lee, Sang Hyun Park
Research Collection School Of Accountancy
In this study, we examine whether the social capital surrounding the firm’s corporate headquarters mitigates managerial self-dealing in the form of opportunistic insider trading. We find strong evidence that the level of social capital in the region surrounding the firm’s headquarters is negatively and significantly associated with insider trading profitability. We also find that the negative association between social capital and insider trading profitability is more pronounced when governance is weaker and corporate opacity is higher, instances where insiders have greater opportunities to trade on their private information. Further analyses on the potential mechanisms suggest that the negative association is …
Cfo Gaps: Determinants And Impact On The Corporate Information Environment, Xia Chen, Na Li, An-Ping Lin
Cfo Gaps: Determinants And Impact On The Corporate Information Environment, Xia Chen, Na Li, An-Ping Lin
Research Collection School Of Accountancy
A CFO gap arises when the CFO position is left vacant for a period between the departure of the old CFO and the appointment of a new CFO. We find that CFO gaps are fairly common; over the sample period 2004–2016, approximately one-third of CFO turnovers are associated with a CFO gap, lasting on average two quarters and two months. CFO gaps are more likely for firms that face more labor market search frictions and with financial reporting and performance issues, and are less likely for firms with succession plans and with greater growth opportunities. While CFO gaps are not …
Does Increased Board Independence Reduce Earnings Management? Evidence From Recent Regulatory Reforms, Qiang Cheng, Xia Chen, Xin Wang
Does Increased Board Independence Reduce Earnings Management? Evidence From Recent Regulatory Reforms, Qiang Cheng, Xia Chen, Xin Wang
Research Collection School Of Accountancy
In this paper, we examine whether recent regulatory reforms requiring majority board independence are effective in reducing earnings management. Firms that did not have a majority of independent directors prior to the reforms (referred to as non-compliance firms) are required to increase their board independence. We find that overall, compared to the other firms, noncompliance firms do not experience a significant decrease in the extent of earnings management from prior to the reforms to afterwards. However, we find that non-compliance firms with low information acquisition cost experience a significant reduction in earnings management compared with the other firms. The results …
Does Increased Board Independence Reduce Earnings Management? Evidence From The Recent Regulatory Reform, Xia Chen, Qiang Cheng, Xin Wang
Does Increased Board Independence Reduce Earnings Management? Evidence From The Recent Regulatory Reform, Xia Chen, Qiang Cheng, Xin Wang
Research Collection School Of Accountancy
We examine whether recent regulatory reforms requiring majority board independence reduce the extent of earnings management. Firms that did not have a majority of independent directors before the reforms (referred to as noncompliant firms) are required to increase their board independence. We find that, while noncompliant firms on average do not experience a significant decrease in earnings management after the reforms compared to other firms, noncompliant firms with low information acquisition cost experience a significant reduction in earnings management. The results are similar when we examine audit committee independence and when we use alternative proxies for information acquisition cost and …
Managerial Ownership And Firms' Information Environment, Soongsoo Han, Tony Kang, Gerald Lobo
Managerial Ownership And Firms' Information Environment, Soongsoo Han, Tony Kang, Gerald Lobo
Research Collection School Of Accountancy
We examine the relation between managerial stock ownership and the firm’s information environment. We focus on three dimensions of the information environment: total, public, and private information precision (Barron, Kim, Lim and Stevens 1998). Our results suggest that firms’ total and public information precision are positively related to managerial ownership. In contrast, there is no clear pattern in private information precision across different levels of managerial ownership. We also observe that managerial ownership has a greater impact on the firm’s public information environment after the implementation of Regulation Fair Disclosure, suggesting that the regulation was effective in improving the firms’ …
Managerial Ownership And Firms' Information Environment, Soongsoo Han, Tony Kang, Gerald Lobo
Managerial Ownership And Firms' Information Environment, Soongsoo Han, Tony Kang, Gerald Lobo
Research Collection School Of Accountancy
We examine the relation between managerial stock ownership and the firm’s information environment. We focus on three dimensions of the information environment: total, public, and private information precision (Barron, Kim, Lim and Stevens 1998). Our results suggest that firms’ total and public information precision are positively related to managerial ownership. In contrast, there is no clear pattern in private information precision across different levels of managerial ownership. We also observe that managerial ownership has a greater impact on the firm’s public information environment after the implementation of Regulation Fair Disclosure, suggesting that the regulation was effective in improving the firms’ …