Business Commons^™

The Basel Iii Net Stable Funding Ratio And Bank Net Interest Margins, Michael R. King

Business Publications

The Net Stable Funding Ratio (NSFR) is a new Basel III liquidity requirement designed to limit funding risk arising from maturity mismatches between bank assets and liabilities. This study explains the NSFR and estimates this ratio for banks in 15 countries. Banks below the ratio need to increase stable sources of funding and to reduce assets requiring funding. The most costeffective strategies to meet the NSFR are to increase holdings of higher-rated securities and to extend the maturity of wholesale funding. These changes reduce net interest margins by 70 to 88 basis points on average, or around 40% of their …

Valuation Studies? Our Collective Two Cents, Hans Kjellberg, Alexandre Mallard, Diane-Laure Arjaliès, Patrick Aspers, Stefan Beljean, Alexandra Bidet, Alberto Corsin, Emmanuel Didier, Marion Fourcade, Susi Geiger, Klaus Hoeyer, Michèle Lamont, Donald Mackenzie, Bill Maurer, Jan Mouritsen, Ebba Sjögren, Kjell Tryggestad, François Vatin, Steve Woolgar

Business Publications

This article presents the results of a poll made among the members of the editorial and advisory boards of Valuation Studies. The purpose is to overview the topic that is the remit of the new journal. The poll focused on three questions:

1. Why is the study of valuation topical?

2. What specific issues related to valuation are the most pressing ones to explore? 3. What sites and methods would be interesting for studying valuation?

The answers to these questions provided by sixteen board members form the basis of the article. Based on these answers, it identifies a number of …

The Use Of Management Control Systems To Formulate And Implement Csr Strategy: A Levers Of Control Perspective, Diane-Laure Arjaliès, Julia Mundy

Business Publications

Little is known about the role of management control systems (MCS) in managing the strategic processes that underpin Corporate Social Responsibility (CSR). To enhance our understanding of this phenomenon, this study employs Simons’ (1995) levers of control framework to explore how organizations leverage MCS in different ways in order to drive strategic renewal and trigger organizational change while simultaneously supporting society’s broader sustainability agenda. Drawing on data gathered from France’s largest listed companies – members of the CAC 40 – we provide insights into the structures and processes that companies employ to design, implement and monitor their CSR strategy. In …

The Effect Of Voluntary Disclosure On Firm Risk And Firm Value: Evidence From Management Earnings Forecasts, Stephen R. Foerster, Stephen G. Sapp, Yaqi Shi

Business Publications

This study investigates whether the voluntary disclosure of management earnings forecasts influences investors’ assessment of firm risk and firm value. We find a significant negative relationship between the issuance of management earnings forecasts and a variety of measures of firm risk (idiosyncratic risk, stock return volatility, beta, and bid-ask spreads), with more frequent, more precise and more accurate earnings forecasts further decreasing firm risk. Our results therefore suggest that information quality is an important determinant of both diversifiable risk and nondiversifiable systematic risk. We also demonstrate that management earnings forecasts are positively associated with firm value as captured by Tobin’s …

The Effect Of Alternative Business Model Representation Techniques On Business And Audit Risk Assessment, J. Efrim Boritz, Kun Huo

Business Publications

We investigate the effects of business model representation techniques, specifically format and presence of causal linkages, on business risk and audit risk assessment. We conduct an experiment involving auditing students with previous audit work experience as participants and business model information based on an existing public company. Participants given business model representation in either diagrammatical or tabular format make more accurate risk assessments than those given the same information in a free-form narrative format. Contrary to our prediction, overall performance in diagram and table conditions does not differ statistically. The inclusion of causal linkages in the business model representation has …