Business Commons^™

Does The Legal System Affect The Cost Of External Financing? Evidence From Ipo Underpricing Of Foreign Firms Listed In U.S. Stock Markets, Shaokang Wang, Jing Jiang

WCBT Faculty Publications

To study the effect of the legal system on the cost of external financing, we examine the degree of underpricing of the IPOs by foreign companies listed in U.S. We find that firms from highly corrupted countries have larger IPO underpricing. The quality of the home-country public law enforcement reduces the degree of IPO underpricing. In particular, the criminal sanction for violations of securities laws is the most significant factor in reducing underpricing. The evidence shows that even when a non-U.S. firm meets sophisticated U.S. regulations and goes public in a U.S. exchange, the degree of underpricing is still influenced …

Climate Change: A Call To Action, Kathy K. Dhanda

WCBT Faculty Publications

On Dec 15, 2018, in the town of Katowice, Poland, diplomats from 200 countries adopted a detailed set of rules to uphold and implement the Paris Agreement, the international treaty drafted by United Nations Framework Convention on Climate Change (UNFCCC) to reduce greenhouse gas emissions. This deal will require every country to track its emissions and climate policies by following a uniform set of standards. Furthermore, countries are to cut their emissions ahead of the next round of talks in 2020. Climate change is a complicated problem, one that will not be solved by national governments alone. A lot of …

Centers Of Excellence: Management Within Multinational Corporations, Thomas Coughlan, Gary Bernstein

WCBT Faculty Publications

As organizations expand geographically, and especially when expanding globally, they often find it necessary, or more effective, to develop Centers of Excellence (CoE). If properly structured these centers can reduce cost, improve efficiency, leverage organizational assets, and often improve levels of organizational innovation. This is the next installment in a series of articles started in the first issues of the JMI exploring these very challenging issues (Coughlan & Bernstein, 2015). In this installment the authors will specifically address issues surrounding leadership, integrated governance model, standardization, continuous improvement, business continuity, and managing through hard target metrics. This article assumes that the …

Characteristics And Performance Of Foreign Direct Investment In Retail Trade: The Case Of Japanese Firms, Jianping Liang, Jing'an Tang, Ben S. Liu

WCBT Faculty Publications

In the international business development, foreign direct investment (FDI) as a general phenomenon has been extensively studied, yet the understanding of particular characteristics of FDI in the retail industry remain limited. The success of international retail trade relies heavily on the understanding of consumers in the host countries. Therefore, this paper analyzed the characteristics and performance of foreign direct investment (FDI) in retail trade using the Japanese FDI data (JFDI) from 1986-2001 as a case. We found (1) an overall trend for JFDI to move from the developed countries to developing countries; (2) a modest correlation between subsidiary size and …

"Trapped Cash" In The Technology Sector: Accounting Disclosures Of Permanently Reinvested Foreign Earnings & Foreign Cash Levels, Russell P. Engel, Bridget M. Lyons

WCBT Faculty Publications

Permanently reinvested earnings in foreign subsidiaries and cash balances held outside the United States have increased dramatically in the technology sector over the past five years. These values, as well as related unrecognized deferred tax liabilities, are significant to investors, regulators and others. We examine disclosures of the largest technology firms over the 2007 to 2013 period and find that, as a group, the firms have increased the information provided but by fiscal 2013 only four of the ten firms disclosed both foreign held cash and an estimate of the unrecognized deferred tax liability related to permanently reinvested earnings.

Trapped Cash: When Is A Dollar Not Worth A Dollar?, Russell Engel, Bridget Lyons

WCBT Faculty Publications

During 2013 the concept of “trapped cash” garnered heightened attention as reports of Dell, Apple and other firms holding massive cash levels outside the US surfaced. So called “trapped cash” refers to cash and liquid investments held by subsidiaries located outside the United States. Firms with overseas subsidiaries located in jurisdictions where the tax rate is lower than the rates in the US can reduce taxes by attributing profits to foreign locales. But bringing the cash back to the US subjects the funds to the US corporate tax rate, less credit for foreign income taxes paid.

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The Value Of International Experiences For Business Students: Measuring Business Student Attitudes Toward Study Abroad, Sean Heffron, Peter A. Maresco

WCBT Faculty Publications

The value of an international experience—especially for students of business—continues to be an area of focus at colleges and universities. Students across all disciplines within the business curriculum: accounting, economics, finance, management, marketing, or sport management are expected by employers to possess knowledge of, and appreciation for, other cultures. Using as a backdrop two unique study abroad programs that immerse students into an intercultural business experience and have them interacting with—and learning from—the local residents as well, the survey research in this study measures student attitudes before and after they study abroad and it notes the changes that students report …

Corporate Revenue Miscalculations & The Impact On Stakeholders, Karen Cascini, Alan L. Delfavero, Ryan Bezner

WCBT Faculty Publications

Corporate earnings restatements are regarded as one of the most significant issues in accounting today. While there are various factors that can influence profitability, revenue is the key contributor to a business’ net income. During the 2000s, a multitude of domestic and multinational corporations faced significant issues with their revenue recognition practices. Although the investing public might regard any revenue restatement as laden with possible fraud, this is not always the case. Multinational firms face dual accounting systems, such as U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). Currently, similarities and differences between the accounting systems …

Corporate Revenue Miscalculations & The Impact On Stakeholders, Karen Cascini, Alan Delfavero, Ryan Bezner

WCBT Faculty Publications

Corporate earnings restatements are regarded as one of the most significant issues in accounting today. While there are various factors that can influence corporate earnings, revenue is the key contributor to a business’ net income. During the 2000s, a multitude of domestic and multinational corporations faced significant issues with their revenue recognition practices. Although the investing public might regard any revenue restatement as laden with possible fraud, this is not always the case. Multinational firms face dual accounting systems, such as U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). Consequently, similarities and differences among accounting systems, …

How First Mover Advantages And Agglomeration Economies Affect Foreign Entry Survival, Jing'an Tang, Ben S. Liu

WCBT Faculty Publications

While entry timing literatures suggest firms to enter a foreign market as pioneers to gain the first mover advantages, studies on entry locations recommend firms to enter a market where there is already a critical mass of their peers, i.e., to be late movers in order to benefit from the agglomeration effects. As two important dimensions of foreign entry strategy, entry timing and location literatures seem to offer opposite recommendations. To resolve this apparent paradox, this study builds a network-based foreign entry and performance model. We argue that these two dimensions of market entry are interdependent. Entry strategies that can …

‘Going Through The Mist’: Early Career Transitions Of Chinese Millennial Returnees, Emily T. Porschitz, Chun (Grace) Guo, José Alves

WCBT Faculty Publications

Over the past decade management practitioners have sought to understand the career expectations of the Millennial generation - those born between 1979 and 1994 (Myers and Sadaghiani, 2010) - who are rapidly becoming a dominant force in the global economy. As workers from the Baby Boomer generation move towards retirement, organization leaders are becoming more interested in understanding how to attract and retain millennial employees most effectively (Walmsley, 2007). A large body of research is devoted to uncovering the career expectations of millennial workers, so that practitioners can better understand them. Findings suggest Millennial have high expectations regarding career success …

Job Satisfaction Determinants: A Study Across 48 Nations, Jeanine K. Andreassi, Leanna Lawter, Martin Brockerhoff, Peter Rutigliano

WCBT Faculty Publications

This paper examines the drivers of job satisfaction across four cultural regions—Asia, Europe, North America, and Latin America. Using Hofstede’s theory, determinants were used to predict job satisfaction for each region and then compared to determine significant differences. Data was collected from a proprietary industry survey on employee work attitudes. The sample consisted of over 70,000 employees from 4 large multinational organizations. Data was analyzed using regression analysis and comparison testing across models. There are significant relationships between job characteristics and job satisfaction across all regions of the world, with a sense of achievement universally the most important driver. Although …

A Network Based Theory Of Foreign Market Entry Mode And Post-Entry Performance, Jing'an Tang, Ben S. Liu

WCBT Faculty Publications

Foreign market entry through equity investment has been extensively studied and various theoretical lenses have been used. Most previous research also focuses attention on either the entry mode selection decision or the topic of post-entry performance, but rarely both. We build on existing research by developing a model of foreign market entry and post-entry performance that uses network theory and organizational ecology to provide a fuller explanation of this complex and critical multinational enterprise strategic behaviour. Four pairs of total eight propositions were developed and justified based on extent literature and sound logical reasoning. By focusing on both entry mode …

A Transformational Change Program In It - The Case Of A Global Consumer Products Company, Barbara M. Tarasovich, Bridget Lyons

WCBT Faculty Publications

This paper presents a framework for development of a transformational change management program (Flamholtz and Randle, 2008) in an information technology (IT) organization of a global Fortune 200 consumer products company. The goal of the transformation was to build leading edge global IT service offerings, to internal and ultimately external customers. the program played a pivotal role in the company's "Path to Growth" Strategy. This strategy included very specific targets for sales, margins and earnings growth over a five year period. The case illustrates how a well conceived change program, integrated with an organization's overall strategic plan, is a competitive …

Financial Contagion And Market Liquidity: Evidence From The Asian Crisis, Shantaram P. Hegde, Rupendra Paliwal

WCBT Faculty Publications

Models of financial crisis and contagion predict that an economic crisis turns into a crisis of market liquidity in the presence of borrowing constraints, information asymmetry and risk aversion. Based on the firm-level data on a sample of exposed and unexposed US stocks to the Asian currency crisis, we find a significant increase (decrease) in the crisis period bid-ask spreads (depth) and their volatilities for both the groups. While our results underscore the imprints of flight to quality, we detect little causal patterns in liquidity innovations. An important implication of our findings, as evidenced by the recent crisis, is that …

Problem-Based Learning Leadership Development Program In A Multi-National Company, Stephen M. Brown, Petra Garnjost, Stefan Heilmann

WCBT Faculty Publications

This paper reports on the development and implementation of a team leadership training program in a multi-national company. The European Engineering Company (EEC Group) had grown and expanded into many countries in a relatively short time frame as a result of increased demand for the company's products and services in newly developing countries. The EEC Group and the training program had additional issues of culture and basic institutional knowledge. The paper reports on the program, the conceptual framework of the International Leadership Development Program (ILDP), results, and lessons learned. The authors advocate use of a Problem-based Learning (PBL) methodology to …

Monthly Seasonality In Emerging Market: Evidence From Bangladesh, Lutfur Rahman, Abu S. Amin

WCBT Faculty Publications

The presence of the seasonal anomaly in stock returns has been reported extensively in finance literature. This paper examines the presence of monthly anomaly in Dhaka Stock Exchange (DSE), the premier stock exchange of Bangladesh. Data used in the study include daily closing prices of DSE indices such as DSE all share prices index (DSI), DSE general index (DGEN) and DSE 20 index for a period of 01.01.2001-30.06.2010. Several hypotheses have been formulated; those hypotheses have been tested and dummy variable regression was used in the study. The result indicates that May and June returns are positive and statistically significant. …

“Choice Of Service, Choice Of Cost”- A Transformational Change Program In It - The Case Of A Global Consumer Products Company: Case Study, Barbara M. Tarasovich, Bridget Lyons

WCBT Faculty Publications

This paper presents a framework for development of a transformational change management program (Flamholtz and Randle, 2008) in an information technology (IT) organization of a global Fortune 200 consumer products company. The goal of the transformation was to build leading edge global IT service offerings, to internal and ultimately external customers. The program played a pivotal role in the company’s "Path to Growth" Strategy. This strategy included very specific targets for sales, margins and earnings growth over a five-year period. The case illustrates how a well conceived change program, integrated with an organization’s overall strategic plan, is a competitive advantage.

International Clustering And Foreign Subsidiary Performance, Jing'an Tang

WCBT Faculty Publications

The article discusses the development and testing of a network-based model of international clustering and foreign subsidiary performance in an attempt to determine how multinational companies (MNC) enter a foreign country to build their own foreign cluster. It focuses on the foreign peer network (FPN) to incorporate both the social and economic interactions within a cluster. An FPN is described as a set of social and economic relations among a group of foreign subsidiaries that are from the same home country and run same or similar businesses within a common geographic area in the host country. The initial condition of …

Fair Value Accounting: Affect On The Auditing Profession, Danny A. Pannese, Alan Delfavero

WCBT Faculty Publications

During this period of global markets, multinational corporations are demanding financial accounting standards with enhanced uniformity. In an effort to achieve this objective, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have been working together on the Convergence Project, aiming to develop accounting standards that closely correlate with international financial reporting standards. In September 2006 and February 2007, the FASB issued two key fair value accounting (FVA) standards which focused on providing guidelines for fair value measurement (through a classification hierarchy), expanding disclosure requirements, and also allowing business entities to increase FVA's application. However, the …

Workers' Migration And Remittances In Bangladesh, Khawaja Mamun, Hiranya K. Nath

WCBT Faculty Publications

Bangladesh has sent more than 6.7 million workers to over 140 countries during a period of more than three decades since the mid-1970s. Most of these workers temporarily migrated to work in Middle East and Southeast Asia. This mass movement of temporary migrant workers has, to some extent, eased unemployment pressures on the over-burdened labor market in this highly populated country. More importantly, the remittance transfers received from these migrant workers have reached a phenomenal level of over 10 billion US dollars in 2009, approximately 12 percent of GDP in Bangladesh. This paper analyzes the trends and various other aspects …

Globalization Of Entrepreneurship: Policy Considerations For Sme Development In Indonesia, Balbir B. Bhasin, Sivakumar Venkataramany

WCBT Faculty Publications

SMEs are of overwhelming importance to the young and growing economies of most Southeast Asian nations, including Indonesia. The country is a vast polyglot archipelago, struggling with poverty and unemployment, poor and inadequate infrastructure, rampant corruption, insufficient capital, and unequal distribution of resources. It has recently experienced fundamental changes in political governance, regional empowerment, and economic structures as a result of the Asian Financial Crisis, coupled with widespread social unrest which resulted in the ouster of the authoritarian regime of President Suharto. This paper evaluates the existing private sector development policy in Indonesia, which has been found to be both …

Proliferation Of Tail Risks And Policy Responses In The Eu Financial Markets, Lucjan Orlowski

WCBT Faculty Publications

This study draws attention to the proliferation of tail risks in financial markets prior to and during the course of the recent global financial crisis. It examines the level of tail risks in selected equity, interbank lending and foreign exchange markets in selected EU Member States in relation to the United States. The extent of tail risks is assessed by applying general error distribution (GED) parameterization in GARCH volatility tests of the examined variables. The empirical tests prove that tail risks were pronounced across all of the examined European financial markets throughout the crisis. They were also significant prior to …

The Impact Of Terrorism On Business, Michael D. Larobina, Richard L. Pate

WCBT Faculty Publications

Terrorism has in one form or another been a part of society throughout history. Since the September 11, 2001 attacks in New York, the world community has been more focused on terrorism than ever before in most recent modern history. Terrorism has impacted multiple levels of society across the world community. One of those levels is the business environment. A specific aim of terrorism is to disrupt and destroy ongoing businesses. Therefore, the ability of governments to disrupt and destroy terrorism is essential to the continued growth and expansion of the world economy. Terrorism will directly impact a country's ability …

Organizational Justice And Fairness In China: An Inductive Analysis Of The Meaning And Dimensions, Chun (Grace) Guo, Jane K. Giacobbe-Miller

WCBT Faculty Publications

Taking an inductive approach, we examined the meaning and dimensionality of the organizational justice construct in the People's Republic of China. By triangulating qualitative data from in-depth interviews and structured open-ended surveys, we found that organizational justice and organizational fairness were perceived as distinct constructs in a Chinese context.

The Eu Has Accepted Ias For Listed Companies: Will The U. S. Follow?, Karen Cascini, Anne Rich

WCBT Faculty Publications

International financial reporting standards (IFRS) issued by the International Accounting Standards Board (IASB), have become respected by many countries and regulatory agencies. The European Union (EU) has determined for most publicly held companies that IFRS promulgated by IASB meet the standards for cross-boarder listing. This paper will present a brief history of the development of international accounting standards and discuss the factors that led to the EU’s acceptance of them. The paper will then consider the case of the U.S. By examining the changes in the accounting environment in the U.S. and specifically looking at the role of the Securities …

Institutional Issues Impeding Progress Of The Free Trade Area Of The Americas Agreement (Ftaa), Sivakumar Venkataramany, Balbir B. Bhasin

WCBT Faculty Publications

For any bilateral or multilateral trade agreement to be effective, it is imperative that all participants derive maximum benefit. This paper examines the institutional issues facing the partners of the Free Trade of the Area of the Americas (FTAA), analyzes some of the current areas of conflict and suggests action to reduce tensions and promote harmony, cooperation and accommodation which is a necessity when multiple countries attempt to foster such an agreement.

American Index Put Options Early Exercise Premium Estimation, Ako Doffou

WCBT Faculty Publications

"This paper examines empirically the value of early exercise by testing the ability of two American put valuation models to predict the early exercise premium for the S&P 100 American put options. An accuracy test and a quality test are performed on (1) the MacMillan (1986) & Barone-Adesi and Whaley (1987) model, and (2) the Carr, Jarrow and Myneni(1992) model. The test results show that early exercise premium is significant regardless of moneyness. Moreover, consistent with the theory, the value of early exercise is significantly negatively related to moneyness and interest rates and significantly positively related to time to maturity …

Reflections On A Seminal Force In International Accounting, Karen Cascini

WCBT Faculty Publications

Accounting is a manifestation of several important environmental factors within a country, including economic, educational and political, and, as such, is evolutionary in accordance with those changing social structures. In today‟s ever expanding global economy, the understanding of international aspects of accounting is critical to understanding world events and the way in which they affect our lives. As new nations and new economic powers emerge, continually updated information, including accounting information, is an essential resource for linking an internal accounting system with worldwide systems. Because of the major impact that international accounting has had on countries‟ internal accounting systems, it …

Critical Success Factors For E-Commerce In Thailand: Cultural And Infrastructural Influences, Kittipong Laosethakul, William Boulton

WCBT Faculty Publications

The main purposes of this paper are to identify critical success factors (CSFs) for electronic commerce (e-commerce) in Thailand and explain the major influences behind these factors. Detailed case studies of nine e-commerce companies from different industries in Thailand were conducted. Results showed that social behavior and national culture, more specifically issues pertaining to trust and shopping behavior, were the major influences for the success of e-commerce in Thailand. The phenomenon could be partly explained by Hofstede’s cultural dimensions. Thailand’s infrastructure also played an important role in the success of its e-commerce development. The findings provide a framework to guide …