Finance and Financial Management Commons^™

Tunneling As An Incentive For Earnings Management During The Ipo Process In China, Jiwei Wang, Joseph Aharony, Hongqi Yuan

Research Collection School Of Accountancy

Using a sample of 185 Chinese IPO firms listed on the Shanghai Stock Exchange during the period 1999-2001, we show that related-party (RP) sales of goods and services could be used opportunistically to manage earnings upwards in the pre-IPO period. We also provide evidence that such behavior may be motivated by the prospect of tunneling opportunities in the post-IPO period, i.e., exploiting economic resources from minority shareholders for the benefit of the parent company. We provide evidence of one such opportunistic tunneling tool: non-repayment by Chinese parent companies of net outstanding corporate loans made to them by their newly listed …

A Stakeholder Identity Orientation Approach To Corporate Social Performance In Family Firms, John B. Bingham, W. Gibb Dyer Jr., Isaac Smith, Gregory L. Adams

Faculty Publications

Extending the dialogue on corporate social performance (CSP) as descriptive stakeholder management (Clarkson, Acad Manage Rev 20:92, 1995), we examine differences in CSP activity between family and nonfamily firms. We argue that CSP activity can be explained by the firm’s identity orientation toward stakeholders (Brickson, Admin Sci Quart 50:576, 2005; Acad Manage Rev 32:864, 2007). Specifically, individualistic, relational, or collectivistic identity orientations can describe a firm’s level of CSP activity toward certain stakeholders. Family firms, we suggest, adopt a more relational orientation toward their stakeholders than nonfamily firms, and thus engage in higher levels of CSP. Further, we invoke collectivistic …

Sukuk Ijarah : Konsep Dan Amalannya Dalam Pasaran Modal Islam Di Malaysia., Muhammad Azizur Rahman Ramli

Student Works (2010-2019)

Sukuk Ijarah is one of the financial certificates known in the Islamic capital market. This financial certificate is established by taking into consideration two major factors, firstly, preserving the conventional way of investment which is permissible in Islam and, secondly, conforming to the shariah law, as a new financial instrument in the Islamic capital market. Sukuk and Bond are two different instruments in its financial structure. Sukuk eliminates in its structure the use of riba and gharar (uncertainty). Moreover, its financial structure is based on Islamic securitisation concept and exchange contract, such as ijarah, murabahah, bay‘ bithamin ajil and others. …

Kajian Aplikasi Akad Mudarabah Di Pt. Asuransi Takaful Umum Jakarta, Indonesia / Marhadi, Marhadi .

Student Works (2010-2019)

This disertation discourses the contract of mudarabah and its application in the general takaful at PT. Asuransi Takaful Umum Jakarta,Indonesia. The study focuses on the application, profit calculation and some relevant issues in general takaful product. The takaful company itself in form of annual report and also from interviews with the respective officers. It was found from the study that Asuransi Takaful Umum has appliced the mud}a>rabah contract in accordance with the shariah requirement which is to uphold justice, ensure mutual benefits and to avoid riba>, gharar ,maysir and dishonesty.

Peranan Perbankan Islam Dalam Pengembangan Industri Kecil Dan Sederhana Di Kota Pekanbaru, Riau: Analisis Terhadap Instrumen Murabahah., Masriadi -

Student Works (2010-2019)

Islamic banking in general defined as the conduct of banking operation in consonance with Islamic principles of mu‘amalat. The emergence of interest – free financial institutions especially in predominantly Muslim countries, has added a new dimension to economic models. This Islamic banks have organized financial intermedians including al-murabahah which operate in accordance with the principles Islamic transactions. This dissertation explains the rol and practice of Islamic banking in the financing of the small and medium enterprises in Kota Pekanbaru, Riau, Indonesia using the murabahah instrument. The research found that Islamic banks play the important role in the development of SME …

Peranan Bank Negara Malaysia (Bnm) Dalam Melaksanakan Dasar Kewangan : Analisis Dari Perspektif Ekonomi Islam., Mohd Rizal Abdul Ghani

Student Works (2010-2019)

Bank Negara Malaysia (BNM) is an institution responsible for implementing monetary policy in Malaysia. In this case, BNM has been playing six major roles in discharging this important responsibility. The roles are to define the main objective of its monetary policy, to build a proper monetary policy framework, to identify a set of suitable monetary policy instruments, to analyze the recent monetary and economic conditions, to regulate the cost and the size of credit and lastly to influence the direction of credit. This research discusses those roles and analyzes them from the view of the Islamic economic perspective in order …

Preventing State Budget Crises: Managing The Fiscal Volatility Problem, David Gamage

Articles by Maurer Faculty

Forty-nine of the U.S. states have balanced budget requirements, and every state acts as though bound by such constraints. These constraints create fiscal volatility - the states must either cut spending or raise taxes during economic downturns, while doing the opposite during upturns. This paper discusses how states should cope with fiscal volatility on both the levels of ordinary politics and of institutional-design policy. On the level of ordinary politics, the paper applies principles of risk allocation theory to conclude that states should primarily adjust the rates of broad-based taxes as their economies cycle, rather than fluctuating public spending. States …

Asset Allocation For Retirement: Simple Heuristics And Target-Date Funds, Steven D. Dolvin, William K. Templeton, William Rieber

Scholarship and Professional Work - Business

We examine common asset allocation strategies for retirement investing, considering both static and dynamic approaches, as well as those allocation policies used by leading target-date fund providers. We studied the average performance of each strategy over historical rolling periods (that is, bootstrapping), using actual annual returns starting in 1926. Then we applied the simulation method to review potential future results, as well as to provide additional insight into the structure and characteristics of each approach. We find that, over time, certain static approaches are essentially equivalent to dynamic strategies that reduce equity exposure through time. Further, we find that most …

Two Essays On Analyst Bias And Management Entrenchment, Bahar Ulupinar

LSU Doctoral Dissertations

This dissertation examines the interactions of corporate governance on analyst behavior. Analyst bias is well documented in the previous literature. However, the relationship between managerial entrenchment and analyst bias has not been explored. In my first essay, I hypothesize that while analysts strike a balance between personal reputation and revenue generation for their employers, entrenched managers of covered firms are more likely to induce analysts’ collaboration using management access and underwriting businesses. My hypothesis suggests that managerial entrenchment is a potential source of analyst bias. Consistent with my hypothesis, using the G-Index as a proxy for managerial entrenchment, I show …

Long-Term Earnings Growth Forecasts, Limited Attention, And Return Predictability, Zhi Da, Mitchell Craig Warachka

Research Collection Lee Kong Chian School Of Business

Long-term earnings expectations are critically important to stock price valuations. We identify relative optimism and relative pessimism in long-term analyst forecasts by comparing these forecasts with implied short-term earnings growth forecasts across rms within the same industry. Stocks with relatively optimistic and relatively pessimistic long-term analyst forecasts have negative and positive risk-adjusted returns, respectively. This return predictability depends critically on short-term forecasts since relative optimism and relative pessimism originate from the slow diffusion of information from short-term to long-term analyst forecasts. Our results indicate that market participants have limited attention regarding the long-term earnings implications of information.

Is Regime Switching In Stock Returns Important In Asset Allocations?, Jun Tu

Research Collection Lee Kong Chian School Of Business

The stock market displays regime switching between upturns and downturns. This paper provides a Bayesian framework for making portfolio decisions that takes this regime switching into account, together with asset pricing model uncertainty and parameter uncertainty. The findings reveal that the economic value of accounting for regimes is substantially independent of whether or not model and parameter uncertainties are incorporated: the certainty-equivalent losses associated with ignoring regime switching are generally above 2% per year, and can be as high as 10%. These results suggest that the more realistic regime switching model is fundamentally different from the commonly used single-state model, …

Essays On Corporate Governance, Tih Koon Tan

Electronic Theses and Dissertations

This dissertation is composed by two essays that explore corporate governance issues in S&P firms. The first essay examines changes in corporate governance after a firm gets added to the S&P 500 index? Using firms added from 1994 to 2007, this paper examines how governance mechanisms change for these firms. Specifically, I look at both the overall governance and details on how each mechanism changes. I find that governance improves after being added to the index. Controlling for firm size, leverage, prior firm performance, and growth opportunities, the market reacts positively to governance improvements as a whole. In addition, changes …

Two Essays On Bidding In Multi-Unit Common Value Auctions, Minjie Shao

Electronic Theses and Dissertations

This dissertation consists of two essays on the topic of bidding in multi-unit common value auction. Essay one examines the role of capacity constraint on the auction results and bidding behavior. We consider a general case where bidders are unconstrained, and a second setting where bidders are capacity constrained. We document downward sloping demand curves for individual bidders. Bidders shade their bids by submitting quantity-price pairs and spreading their bids. The winner's curse is strong in the unconstrained treatment, but we find no evidence of the winner's curse when bidding constraints are imposed. Unconstrained bidders shade bids significantly more and …

Higher Education And The 2007 Recession: Examining The Relationship Between State Agency Structure, Fiscal Support, And The State Fiscal Stabilization Fund, Christopher J. Crumrine

MPA/MPP/MPFM Capstone Projects

The United States public post-secondary education system varies in its reliance on state support. Some states have a historic predisposition to a private post-secondary education sector, while others have a tradition of strong public institutions. In all cases, public post-secondary relies on state revenue for their general operating and capital budgets. Effective operation in the current fiscal environment requires a clear understanding of different factors affecting a state’s funding level and the challenges presented in periods of slow economic growth.

Over the past six years, higher education, on average, saw positive growth in state support. However, impressive increases in support …

Comparative Analysis Of The Financial Performance Of Nonprofit Organizations: Focusing On The Franklin County Senior Activity Center, Shinwoo Lee

MPA/MPP/MPFM Capstone Projects

The Franklin County Senior Activity Center is a nonprofit organization founded in 1966 to provide services to help older residents lead independent lives. Cooperating with twelve board members, a staff of 24 people operates the Center and makes huge efforts to accomplish its mission. The mission of the Center is to contribute to and empower the quality of life of the aging citizens in Frankfort and Franklin County, Kentucky. The Center delivers various public services to them including opportunities for socialization, health promotion, benefit counseling, transportation service, home care service, recreation and exercise programs, adult day care, caregiver support, and …

A Study Of The Effects Of Budget-Balancing Practices And Fiscal Policies On State Fiscal Health, Candice Schultheis

MPA/MPP/MPFM Capstone Projects

During times of economic recessions, many states throughout the U.S. may experience budget pressures that impact their overall fiscal health. Kentucky, in particular, has been faced with structural budget imbalances, declining revenue receipts, and spending reductions. Although economic conditions greatly affect states’ abilities to maintain balanced budgets, other factors may contribute to the variation among states’ financial conditions. This study assesses the effect that budget-balancing strategies, processes, and policies have on states’ fiscal health, as measured by state fiscal peril scores reported by the Pew Center on the States and year-end budget balances as a percentage of expenditures estimated by …

Deposit Insurance Coverage, Ownership, And Banks' Risk-Taking In Emerging Markets, Apanard P. Angkinand, Clas Wihlborg

Business Faculty Articles and Research

We ask how deposit insurance systems and ownership of banks affect the degree of market discipline on banks' risk-taking. Market discipline is determined by the extent of explicit deposit insurance, as well as by the credibility of non-insurance of groups of depositors and other creditors. Furthermore, market discipline depends on the ownership structure of banks and the responsiveness of bank managers to market incentives. An expected U-shaped relationship between explicit deposit insurance coverage and banks' risk-taking is influenced by country specific institutional factors, including bank ownership. We analyze specifically how government ownership, foreign ownership and shareholder rights affect the disciplinary …

What's On The Menu? Included Versus Excluded Funds For Singapore's Central Provident Fund Investors, Seng Kee, Benedict Koh, Olivia S. Mitchell

Research Collection Lee Kong Chian School Of Business

As one of the oldest and largest national mandatory defined contribution pension systems, Singapore's Central Provident Fund (CPF) permits employees to invest their retirement accumulations in a variety of investment instruments rather than leaving them in a government-managed investment fund. Many plan participants avail themselves of this opportunity, selecting from a menu of more than 200 `included' funds that satisfy specific admission criteria set by the CPF Board. Nevertheless, many other funds are excluded from the list of eligible retirement system investments. This article shows that the `included/non-included' screening criteria have been effective, in that included fund managers earned higher …

Could Decision Trees Help Improve Farm Service Agency Lending Decisions?, Benjamin P. Foster, Jozef Zurada, Douglas K. Barney

Faculty and Staff Scholarship

This study examines whether a statistically derived decision tree could serve as a means to improve U.S.A. Farm Service Agency lending decisions. The study is a substantial extension and reanalysis of an earlier work by Barney, Graves and Johnson, (1999). Results indicate that a decision tree could be a valuable tool for Farm Service Agency employees in their lending decisions. The decision tree provides as good or better predictive accuracy than neural networks and logistic regression models at reasonable cutoff levels of Type II to Type I costs of lending. The decision tree also meets the transparency criteria for Farm …

Strategic Financial Management: Evidence From Seasoned Equity Offerings, Michael Barclay, Fangjian Fu, Clifford Smith

Research Collection Lee Kong Chian School Of Business

Extant theories of capital structure assume myopic financial managers. So they have hard time to explain the financing behavior of seasoned equity offering (SEO) firms. In contrast with the pecking order theory, SEO firms typically are financially healthy companies with significant cash balances, low leverage, and unused debt capacity. At odds with the tradeoff theory, SEOs often move firms away from, rather than closer to, their target leverage ratios. SEOs appear to be driven by capital needs associated with large investment projects rather than by market timing considerations. Firms issue debt following the SEO to finance investment further and to …