Business Commons^™

Climate Challenges: Central Banks In The Hot Seat – Rethinking Monetary Policy And Educational Activity, Łukasz Kurowski

Journal of Banking and Financial Economics

Global warming poses many challenges for all economic entities. The two main challenges facing all countries are climate change mitigation and adaptation. Central banks also face difficult tasks in this context. The difficulty stems from the impact of climate change on all sectors of the economy. Central banking has to deal with the new challenges created by climate change for monetary policy, macroprudential policy, but also climate education. The aim of the article is to verify to what extent climate change is considered in the central bank’s main objective – monetary policy. Therefore, the article examines the frequency with which …

Informativeness Of Key Audit Matters: Evidence From China, Beng Wee Goh, Kiat Bee Jimmy Lee, Dan Li, Muzhi Wang

Research Collection School Of Accountancy

This study examines whether the key audit matters (KAMs) disclosed in expanded audit reports as a part of recent regulatory reforms are informative for investors in an emerging economy setting. Using the recent adoption of expanded audit reports for firms listed exclusively in Mainland China, we find robust evidence that the abnormal trading volume and earnings response coefficients (ERCs) are higher and that stock price synchronicity is lower during the postadoption than preadoption period. In additional tests, we find evidence that KAMs are more informative for non-state-owned enterprises (non-SOEs), smaller firms, and firms with a smaller analyst following. Finally, we …

Unexpected Defaults: The Role Of Information Opacity, Aytekin Ertan, Yun Je Lee, Regina Wittenberg-Moerman

Research Collection School Of Accountancy

Bond defaults are undesirable yet natural outcomes of risky investments. What is also crucial but hitherto underexplored is the unexpectedness of defaults. We develop a parsimonious measure of default unexpectedness and highlight its economic importance by demonstrating that unexpected defaults are associated with unfavorable recovery outcomes and adverse price changes in peer firm bonds. We then examine how default unexpectedness relates to information opacity. We find that firms with opaque financial reporting and weak voluntary disclosure experience more unexpected defaults. Defaults also occur more unexpectedly when the external information environment is opaque—when rating agencies disagree on a firm’s credit risk …

Assessing And Mitigating The Impact Of Geopolitical Risk Uncertainty On The Indian Financial Sector: A Policy Perspective, Satish Kumar, Amar Rao

Bulletin of Monetary Economics and Banking

The study explores the impact of geopolitical risk uncertainty on the Indian financial sector, focusing on bonds, banking, currency, and the equity markets. It uses a quantile vector autoregression (QVAR) approach to examine shock transmission under different market conditions. Results show that geopolitical risks significantly influence the Indian financial sector, with varying levels of shock transmission across different market conditions. The currency and banking sectors show heightened sensitivity during periods of increased uncertainty. The findings suggest the need for effective monitoring systems and comprehensive risk management strategies to mitigate the adverse effects of geopolitical risks.

Can Financialisation Counteract Banking Exclusion? A Study On The Example Of The European Union Member States, Tomasz Florczak, Marika Ziemba

Journal of Banking and Financial Economics

The purpose of the article is to assess the relationship between financialization and banking exclusion. The research hypothesis that financialization contributes to the reduction of financial exclusion was also verified. The research was based on an analysis of the variables describing financialization and banking exclusion of 27 European Union countries in the 2014–2021 period. The zero-unitarization method and Pearson’s correlation coefficient were used. The results of the study indicate that a high degree of financialization is found in Croatia, Greece, Cyprus and Portugal. In contrast, the level of banking exclusion is the highest in Finland, Sweden, the Netherlands and Latvia. …

Consumers’ Financial Literacy In Poland - The Research And The Resulting Conclusions, Andrzej Bień, Łukasz Gębski

Journal of Banking and Financial Economics

Background & Purpose of the article: The research paper raises important issues in the field of consumer financial literacy in Poland. The authors note that efforts made in financial education are not fully effective and the number of wrong decisions made by consumers is high. The study led to two interesting observations: high self-assessment of knowledge is not confirmed in practice. The mistakes made do not result solely from the lack of knowledge of consumers. They are very often a result of their personality and a way of perceiving reality.

Methods: The authors compared Polish and foreign research results in …

Board Gender Diversity And Its Impact On Financial Performance And Risk-Taking: A Study Of Listed North American Companies, Ambrose Houphouet

Doctoral Dissertations (DBA)

In today's globalized world, gender diversity is increasingly recognized as vital for companies, yet women remain underrepresented in leadership positions. The lack of representation of women in leadership roles and their possible impact on business performance have led to a greater awareness of gender diversity on corporate boards in recent years. However, men dominate in some fields and the representation of women in decision-making levels is very low and it is unclear whether gender diversity brings any benefits to the company in terms of financial performance and risktaking. Therefore, the study examines the impact of gender diversity on financial performance …

Contractual Remedies In Mergers: Lessons From Crispo V. Musk, Dhruv Aggarwal, Albert H. Choi, Geeyoung Min

Law & Economics Working Papers

The Delaware Chancery Court recently restricted a merger target's ability to recover damages on behalf of its shareholders from a breaching buyer. This paper investigates the impact of the decision. First, we present a theoretical analysis to generate empirical predictions. Second, we show that the decision led to a decrease in the firm value of targets in mergers governed by Delaware law. Third, we hand-collect relevant provisions from merger agreements and find that the agreements governed by Delaware law increasingly include target-friendly non-price terms after the decision. We also present evidence suggesting deal price responds to the inclusion of novel …

Do Fundamental Financial Ratios Affect The Company's Stock Price? Indonesia Evidence, Arumega Zarefar, Armadani Armadani

Jurnal Akuntansi dan Keuangan Indonesia

The objectives of this research aims to examine the effect of corporate fundamental financial ratios on stock prices and to examine whether firm age determine stock prices in the perspective of signaling theory. Here Generalized Least Squares (GLS) approach was used as the main analysis technique, and Ordinary Least Squares (OLS) was incorporated for the robustness test. The research was conducted on companies listed on the Indonesia Stock Exchange during the 2014-2020 period. This study finds that return on assets, solvency ratio, and Tobin's Q positively affect stock prices, that cash ratio has a negative effect on stock prices, and …

Can Corporate Sustainability Performance (Csp) Overcome Indonesia's Corporate Debt Problems?, Johnson Ferry Febrian, Nora Sri Hendriyeni

Jurnal Akuntansi dan Keuangan Indonesia

Based on IMF publications (2022), Indonesian companies have a risky debt level that may cause bankruptcy, so companies are required to make leverage adjustments to return the debt to its optimal level. In recent years, corporate sustainability performance (CSP) practices have been proven to improve performance and overcome financial problems such as debt by integrating sustainability aspects into business processes. Based on stakeholder theory and trade-off theory, this study aims to examine the effect of CSP on leverage adjustment and the role of competitive advantage, equity mispricing, profitability, and firm size in moderating this relationship. This study used a sample …

Beyond The Number: Tone Analysis In Annual Reports, Ani Wilujeng Suryani, Dinda Tustika Apta Fauz

Jurnal Akuntansi dan Keuangan Indonesia

In making decisions, stakeholders utilize not only quantitative information but also qualitative information, such as annual reports. However, annual reports in narrative form are often used to exaggerate company performance data. One aspect that influences stakeholders’ decision is tone. This study aims to examine the impact of positive tone disclosure in management analysis reports and discussions on company value. This study was conducted on 166 financial and property companies listed on the IDX. Management analysis and discussion reports were categorized according to their tone. Using linguistic inquiry and word count software (LIWC-22), the procedure yielded more precise and consistent analysis. …

2024 Nebraska Agricultural Custom Rates With Statewide Survey Summary, Glennis Mcclure

Cornhusker Economics

The 2024 University of Nebraska-Lincoln Custom Rates Survey indicates that rate increases are the norm since the latest survey was completed in 2022. Table 1 provides a summary and percentage change for several common custom operations from 2022 to 2024. Custom field operations such as drilling and planting show increases in 2024 from seven to twenty-seven percent and harvesting rates for various crops indicate state average rate increases from fourteen to twenty-three percent, with the irrigated corn harvest now at $47.84 per acre for the state average. Other custom services, such as spraying for weed control using a self-propelled sprayer, …

When Do Corporate Good Deeds Become A Burden? The Role Of Corporate Social Responsibility Following Negative Events, Changhyun Kim, Yoonseok Zang, Heli Wang, Kate Niu

Research Collection School Of Accountancy

This study investigates the differential roles of corporate social responsibility (CSR) in the context of negative events. By categorizing CSR and negative events by their respective stakeholder groups, primary and secondary stakeholders, we theorize and test differential impacts of CSR and their interaction effects with different types of negative events. We propose that, while CSR toward secondary stakeholders offers the monotonous risk-tempering effect, CSR toward primary stakeholders has heterogeneous effects when facing negative events. Specifically, the effect of CSR toward primary stakeholders varies with the type of negative events. When negative events are associated with secondary stakeholders in the domain …

The Impact Of Renewable Energy Adoption On State-Level Housing Market Prices, Hernan Checchi

Doctoral Dissertations (DBA)

Renewable energy continues to gain popularity amongst businesses and residents due to the growing concerns on climate change, government regulations and the overall need for a more sustainable energy system. Renewable energy has surged in popularity due to declining costs, and the growing awareness of the need for renewable energy to combat ongoing climate issues. The transition to renewable energy sources such as solar and geothermal power is expected to have a significant impact on various aspects of the economy including the housing market. This research aims to explore the relationship between renewable energy adoption and housing prices in the …

Economic Policy Uncertainty And The Uncovered Interest Rate Parity Of Exchange Rate Determination, Yanyan Freitag

Doctoral Dissertations (DBA)

I argue that the Uncovered Interest Rate Parity (UIRP) relationship depends on the Economic Policy Uncertainty zones (EPU). The UIRP-EPU relationship is state-dependent, non-linear, and asymmetric. Using the monthly data for the sample period January 1999 to December 2023, I test the relationship between changes in the U.S. Dollar in the Euro exchange rate and the spread between the yields on the 10-year U.S. Treasury Note vs. the euro area 10-year convergence bond. The relationship is tested at three different zones or ‘levels’ of the EPU for the U.S. The low, intermediate, and high EPU zones are determined by employing …

The Effect Of Pcaob Inspections On Corporate Innovation: Evidence From Deficiencies About The Valuation Of Intangibles, Jungbae Kim

Research Collection School Of Accountancy

I examine the economic consequences on corporate innovation when PCAOB inspections cite auditors for insufficient procedures in auditing the valuation of intangibles. I find that the clients of deficient auditors recognize larger and timelier impairments of intangibles, suggesting that affected auditors increase scrutiny about the valuation of intangibles in subsequent audits. This effect obtains only for valuation-related deficiencies and is salient for the clients of auditors who receive such deficiencies repeatedly. I also document real effects that the clients of deficient auditors exhibit less use of external mergers and acquisitions—which yield recognizable intangibles whose valuation is subject to increased auditor …

An Investigation On The Effects Of Fund Manager’S Narcissism On Fund Performance, Ning Zhou

Dissertations and Theses Collection (Open Access)

As the capital market continues to expand, the benefits of securities investment funds have become increasingly prominent. However, for investors, selecting the right investment fund from numerous options can be more challenging than directly choosing stocks. The process of seeking investment opportunities also involves selecting the right fund manager, a step often underestimated by investors. Research in behavioral finance indicates that fund managers tend to exhibit irrational decision behavior under immense pressure and uncertain investment outcomes. Narcissism as a psychological trait may influence fund managers’ decision-making behavior. This study, through questionnaires and empirical analysis, examines the narcissistic traits of Chinese …

To Protect Or To Hide: An Investigation On Corporate Redacted Disclosure Motives Under New Fast Act Regulation, Yan Ma, Qian Mao, Nan Hu

Research Collection School Of Computing and Information Systems

China adopted amendments allowing companies to redact filings without prior approval in 2016. Leveraging this change as a quasi-nature experiment, we explore whether managers utilize redacted information to withhold bad information in the more lenient regulatory environment. Our investigation uncovers a significant shift in managerial behavior: Since 2016, managers incline to employ redactions to obscure negative news rather than safeguarding proprietary data. Furthermore, we find that the poorer firm performance and a higher cost of equity are associated with the redacted disclosures after 2016, suggesting that investors perceive an increase in firm-specific risk attributed to withholding bad news through redactions.

Correlation Between Interest Rates And Bank Mergers, Maren Egging

Honors Theses

This paper examines the relation between macroeconomic factors and bank mergers and acquisitions from 1995 to 2022. I build upon the work of Etsy et al. (1994) to determine an updated analysis of how interest rates and stock market returns may influence merger activity in the banking segment. Using a dataset of 1,153 large bank mergers, I perform correlation analyses to draw three main conclusions. Firstly, bank mergers demonstrate weaker correlations with key macroeconomic variables than industrial mergers. Secondly, I observe material differences from the work of Etsy et al. with what appears to be significant changes in underlying relations. …

2024 Private Capital Markets Report, Craig R. Everett

Pepperdine Private Capital Markets Report

The Pepperdine private cost of capital survey was originally launched in 2007 and is the first comprehensive and simultaneous investigation of the major private capital market segments. This year’s survey specifically examined the behavior of senior lenders, asset-based lenders, mezzanine funds, private equity groups, venture capital firms, angel investors, privately-held businesses, investment bankers, business brokers, limited partners, and business appraisers. The Pepperdine survey investigated, for each private capital market segment, the important benchmarks that must be met in order to qualify for capital, how much capital is typically accessible, what the required returns are for extending capital in today’s economic …

Huic Purchasing Group Llc. Business Plan, Grant Hull

Honors Theses

This business plan investigates the feasibility and best strategy to start a dental group purchasing company in the market today. Methods used consisted of interviewing industry professionals (Dentists, suppliers, and executives in a similar market), and market research through public information and trends. The 70 total interviews not only helped verify market projections and social trends, but also verified potential client willingness to join and verified a position in the market. Through this study it was concluded that: There is limited competition in the dental Group Purchasing Organization (GPO) space; to enter the market in a cost-effective way it is …

Financial Assessment Of Executive Decision-Making And Risk Management: A Case Study Of Autozone, Carolina Hollis

Honors Theses

This area of investigation pertains to the business organizational structure, executive summary, and risk management decisions of AutoZone within the 2022-2023 fiscal year. This analysis was performed by examining previous financial records, the yearly 10-K report, and various research databases regarding the financial performance of retail auto part companies. Many different sources were used to gather information about AutoZone. AutoZone has an intricate financial system that maintains the going concern by addressing current issues within the financial world to combat problems they could face in the future. These risk factors include inflation, interest rates, energy prices, political climates, and supply …

Impact Of Esg Ratings On Company Stock Price Returns, Benjamin Mccormick

Honors College Theses

ESG, Environmental, Social, Governance, is a new business philosophy that asserts that businesses have a duty to the environment, their communities, and to act legally and ethically. ESG rating agencies are built around grading public companies on their fulfillment of these objectives. Critics of ESG cite that ESG dilutes the primary purpose of business, to create value for shareholders. This paper uses regression analysis to test whether these perspectives are mutually exclusive. With stock returns as the dependent variable and ESG ratings as the dependent variable of interest, this paper finds a slight correlation between lower returns and companies in …

A 360-Degree Approach To Accounting, Kaleel Salloum Iii

Honors Theses

This thesis consists of one year of research related to the modern day accounting and financial industry. There are numerous topics that are covered, with the first four sections being related to one company’s financial statements and operating conditions. Each of these sections includes their own abstract that outlines the scope of the research. The remaining parts of the thesis are topics, events, and industries related to modern day accounting. This research was completed and submitted to the faculty of The University of Mississippi in partial fulfillment of the requirements of the Sally McDonnell Barksdale Honors College.

A Financial Valuation Of Comcast (Cmcsa), Lucas Marcinkowski

Honors Thesis

The current valuation of the global entertainment and media industry revenue is $2.32 trillion. When investing in the entertainment and media industry, individuals think of the fame and glamorous side of the entertainment industry. However, the industry is fiercely competitive and continuously evolving. Through examining the historical financial statement of the publicly traded media and technology conglomerate Comcast, as well as its competitors, I forecasted the future financial valuation of Comcast utilizing the Discounted Free Cash Flow and Public Comparable Firm Multiples models. This analysis examines the effects of the pandemic and other economic conditions on the entertainment and media …

Accounting And Finance Internship Thesis, Peyton Fair

Finance Undergraduate Honors Theses

During the summer of 2023, I had the opportunity to intern for ten weeks at Walmart Inc. in the Accounting and Finance Development Program (AFDP). The AFDP internship provides participants with hands-on training and experience in various areas of accounting and finance within Walmart. Participants work in various business areas across Walmart US, Walmart International, Sam's Club, and Walmart Inc.

In the summer of 2023, there were 38 AFDP interns representing 18 different universities. The AFDP internship provides opportunities for interns to attend networking events, interact with executives, and receive feedback on their performance through evaluations. This program aims to …

Financial Literacy And Ipo Underpricing, Xiaoran Jia, Kiridaran G. Kanagaretnam, Chee Yeow Lim, Gerald J. Lobo

Research Collection School Of Accountancy

Using an international sample of IPO firms and two country-level measures of financial literacy, we find strong evidence that financial literacy is negatively associated with IPO underpricing. In cross-sectional analyses, we find that the effect of financial literacy in reducing IPO underpricing is more pronounced when the information environment is less transparent. Employing path analysis, we document that information friction, firm transparency, and stock market participation are mechanisms that mediate this relationship. Our study contributes to and extends the literature by providing strong evidence that citizens' financial literacy has an important and consistent influence on IPO underpricing.

The Governance Of Director Compensation, Lily Fang, Sterling Huang

Research Collection School Of Accountancy

The average total compensation of directors in U.S.-listed companies was $342,030 in 2020, 5.06 times the median household income. Directors set their own pay, giving rise to potential self-dealing. We argue and document that in the presence of self-dealing, external mechanisms such as legal standards act as effective means of governance. Following a landmark Delaware court ruling that subjected director pay to a more stringent legal standard, Delaware-incorporated firms reduced director compensation relative to non-Delaware firms and experienced positive and non-transient stock price reactions. Our results indicate that proper governance of director compensation enhances firm value.

Industry Peer Information And The Equity Valuation Accuracy Of Firms Emerging From Chapter 11, Bingxu Fang, Sasan Saiy

Research Collection School Of Accountancy

Valuation plays a central role in determining Chapter 11 reorganization outcomes. However, obtaining accurate valuation estimates of reorganized firms is challenging because of limited firm-specific market-based information and the oft-conflicting incentives of claimholders. We examine the role of industry peer information in reducing misvaluations and its implications for unintended interclaimant wealth transfers and postreorganization performance. First, we find that the availability of relevant industry peer information is negatively associated with equity valuation errors for firms emerging from Chapter 11. Cross-sectional results suggest that the relation between industry peer information and valuation errors varies substantially with debtors’ information environment and case …

Moving Forward: Automating A Walmart Executive View From Existing Manual Financial Systems, Alexandra Rosen

Finance Undergraduate Honors Theses

Walmart, the largest retail giant globally, is a company that needs no introduction. Headquartered in Bentonville, Arkansas, it has become synonymous with retail innovation and efficiency. Last summer, I had the unique opportunity to immerse myself in Walmart’s culture and the world of finance and accounting through Walmart's Accounting and Finance Development Program (AFDP) internship. This analysis examines my summer in the program and applies my experience to the importance of in-person office work.