Business Commons^™

Cross-Country Differences In The Effect Of Political Connections On Stock Price Informativeness, Yuanto Kusnadi, Bin Srinidhi

Research Collection School Of Accountancy

Using aninternational sample of firms from 28 countries, we document that there existsa negative relationship between political connections and the informativenessof stock price, as measured by idiosyncratic volatility (IV). This finding isrobust to alternative regression specifications, sub-samples analyses, andconcerns related to endogeneity. A more detailed analysis shows that out of thedifferent types of possible connections, the connectedness of the owners is theprimary driver of this result. Further, the negative association is onlysignificant for firms in countries characterized by low institutional quality(i.e. corrupted countries, countries with low access to external equitymarkets, and countries with low media penetration). There is no evidence …

On The Fintech Revolution: Interpreting The Forces Of Innovation, Disruption And Transformation In Financial Services, Peter Gomber, Robert J. Kauffman, Chris Parker, Bruce W. Weber

Research Collection School Of Computing and Information Systems

Firms in the financial services industry have been faced with the dramatic and relatively recentemergence of new technology innovations, and process disruptions. The industry as a whole, and many newfintech start-ups are looking for new pathways to successful business models, the creation of enhanced customerexperience, and new approaches that result in services transformation. Industry and academic observers believethis to be more of a revolution than a set of less impactful changes, with financial services as a whole due formajor improvements in efficiency, in customer centricity and informedness. The long-standing dominance ofleading firms that are not able to figure out how …

Acquiring Organizational Capital, Peixin Li, Frank Weikai Li, Baolian Wang, Zilong Zhang

Research Collection Lee Kong Chian School Of Business

Organizational capital is the accumulation and use of private information to enhance economic efficiency for a firm. Theory has argued that organizational capital is typically embodied in employees and the organizational structure, and is hard to transfer across organizations. In this paper, we study whether organizational capital is transferable across firms via mergers. The evidence shows that acquirers gain more from acquiring firms with higher organizational capital and acquirers are also willing to pay a higher premium for higher organizational capital targets. The evidence suggests that acquiring higher organizational capital targets creates synergies which are shared between acquirers and targets.

U.S. Firms On Foreign (Tax) Holidays, Travis K. Chow, Jeffrey L. Hoopes, Edward L. Maydew

Research Collection School Of Accountancy

We undertake the first large-sample analysis of foreign tax holiday participation by U.S. firms. Tax holidays are temporary reductions of tax granted by governments, usually contingent on the firm making new operational investments in the country. We predict and find that firms are more likely to participate in foreign tax holidays if they are highly capital-intensive and have highly profitable foreign operations, and less likely to participate in foreign tax holidays if they are capital constrained and if the firm is headed by a short-term focused CEO. While foreign tax holidays reduce taxes on foreign income, we also find that …

Teaching Internal Control Using A Student-Generated Video Project, Poh Sun Seow, Gary Pan

Research Collection School Of Accountancy

Educators consider the video learning approach an effective method to deliver educational content as compared to the traditional method of books and written materials. This paper presents a project that involves student-generated videos to learn internal control in an undergraduate accounting information systems course. We believe that this video learning approach is an engaging way for students to be self-directed learners in learning internal control and complements the written materials in the textbook. The survey results show that most of the respondents viewed the learning experience of the video project positively. The results also indicate that the video project helps …

Rationale Behind State Aid Control Over Tax Incentives, Diheng Xu

Research Collection School Of Accountancy

EU State aid draws international attention recent years due to its application to fiscal measures granted by Member States to multinational enterprises. It has triggered discussions on the reasonableness of applying State aid law to tax measures. This article aims to explore the fundamental rationale behind EU State aid and its application to tax incentives. By going back to basics, this article contributes to a clearer picture on reasons for the State aid control over tax incentives. Governments tend to use fiscal State aid measures to achieve policy goals and tax incentives could realize the goals since they do bring …

Benefits Of Relationship Banking: Evidence From Consumer Credit Markets, Sumit Agarwal, Souphala Chomsisengphet, Chunlin Liu, Changcheng Song, Nicholas S. Souleles

Research Collection Lee Kong Chian School Of Business

Using a unique panel dataset that contains comprehensive information about the relationships between a large bank and its credit card customers, we show that relationship accounts exhibit lower probabilities of default and attrition, and have higher utilization rates, than non-relationship accounts. Dynamic information about changes in the behavior of a customer's other accounts at the same bank helps predict the behavior of the credit card account over time. These results imply that relationship banking offers significant potential benefits to banks: information the lender has at its disposal can be used to mitigate credit risk on the credit card account.

Reward-Based Crowdfunding Success: Decomposition Of The Project, Product Category, Entrepreneur, And Location Effects, C. S. Richard Chan, Haemin Dennis Park, Pamkaj Patel, David Gomulya

Research Collection Lee Kong Chian School Of Business

We assess the relative importance of project, product category, entrepreneur, and location effects on reward-based crowdfunding success. Applying variance decomposition analysis to a sample of 98,336 crowdfunding projects launched between May 2009 and May 2014 on the Kickstarter platform, we find that agency factors, specifically the project and entrepreneur effects, explain the highest relative variance (over 80% of total variance) across three crowdfunding success outcomes – pledge amount, number of backers, and funding success. Structural factors, specifically product category and location effects, have lower but still significant effects. Our study extends prior variance decomposition studies in strategy and entrepreneurship research …

The Wider Impact Of A National Cryptocurrency, Dennis Ng, Paul Griffin

Research Collection Lee Kong Chian School Of Business

This study looks at the impact of a national cryptocurrency on the payment landscape in the midst of the rise of globalpublic cryptocurrencies and interest from central banks in a possible national cryptocurrency. The impacts are analysed for consumers, merchants, banks,payment providers, international money transfer operators and central banks.The study analyses the pros and cons for each player with an overall impactranking. There is a particular emphasis on central banks as they hold key regulatory oversight for economic and financial matters affecting a country.Whilst finding that there is an overall benefit, there are also significant risks. A sandbox approach is …

Innovation And Small Business Success, Anirban Mukherjee, Hannah H. Chang

Research Collection Lee Kong Chian School Of Business

This article seeks to discuss three fundamental questions relating to innovation: What is innovation? What makes it important for small businesses? How can small businesses innovate?

Is Sell-Side Research More Valuable In Bad Times?, Roger Loh, René M. Stulz

Research Collection Lee Kong Chian School Of Business

Because uncertainty is high in bad times, investors find it harder to assess firm prospects and, hence, should value analyst output more. However, higher uncertainty makes analysts’ tasks harder so it is unclear if analyst output is more valuable in bad times. We find that, in bad times, analyst revisions have a larger stock-price impact, earnings forecast errors per unit of uncertainty fall, reports are more frequent and longer, and the impact of analyst output increases more for harder-to-value firms. These results are consistent with analysts working harder and investors relying more on analysts in bad times.

The Competitive Landscape Of High-Frequency Trading Firms, Ekkehart Boehmer, Dan Li, Gideon Saar

Research Collection Lee Kong Chian School Of Business

We examine product differentiation in the high-frequency trading (HFT) industry, where the “products” are secretive proprietary trading strategies. We demonstrate how principal component analysis can be used to detect underlying strategies that are common to multiple HFT firms, and show that there are three product categories with distinct attributes. We study how HFT competition in each product category impacts the market environment, presenting evidence that indicates how it influences the short-horizon volatility of stocks as well as the viability of trading venues.

Can Being Overconfident Make You A Better Leader?, Kenny Phua, T. Mandy Tham, Chi Shen Wei

Research Collection Lee Kong Chian School Of Business

When Apple CEO Steve Jobs approached AT&T about partnering on a new kind of mobile phone — a touchscreen computer that would fit in your pocket — Apple had no expertise in the mobile market. Yet AT&T executives quickly came to believe so strongly in Job’s vision that they skipped internal process protocols to land the deal. Randall Stephenson, then CEO of AT&T, famously said, “I told people you weren’t betting on a device. You were betting on Steve Jobs.” Apple went on to secure massive commitments from AT&T’s suppliers, who spent hundreds of millions to build factories for iPhone-specific …

Temporal Trajectories Of Enacted Complexity In Creative Project Teams, Kenneth T. Goh, Brian T. Pentland

Research Collection Lee Kong Chian School Of Business

With technologies to capture fine-grained measures of behavior now more ubiquitous, organizational researchers are now able to consider networks of actions performed by multiple actors as a unit of analysis. We apply the action network construct as a measure of enacted complexity. Because previous conceptualizations of complexity viewed the construct as a descriptive organizational property, capturing this property over time was a non-issue. But given the emergent nature of enacted complexity, questions about how complexity unfolds over time become meaningful. This paper thus examines how enacted complexity unfolds over time by investigating the temporal trajectory of actors and actions. We …

Addressing Social Needs Through Remote Based Design Thinking, Hoe-Chin Goi, Wee Liang Tan, Yuki Hara, Shuichi Takao

Research Collection Lee Kong Chian School Of Business

With ageing as the coming and increasing phenomenon in Japan, there is a need for innovative solutions for seniors to lead active lives in their residing communities. Little research has been conducted on the use of design thinking as a means to develop social innovations, especially with the designers not being present on-site from a distance. This paper reports the study on the effectiveness of employing a remote based design thinking in a university course with the goal for participants to develop social innovations that elderly, as stakeholders, would be engage to adopt and implement. The study involved two cohorts …

Latin America: Management Education’S Growth And Future Pathways, Gabriela Alvarodo, Howard Thomas, Lynne Thomas, Alexander Wilson

Research Collection Lee Kong Chian School Of Business

The book Latin America: Management Education’s Growth and Future Pathways [Emerald, UK] follows a past, present and future perspective on the growth of management education in the region. In this article for Global Focus we highlight some of the key findings from our study of its evolution and look at current issues facing the continent.

Optimal Stackelberg Strategies For Financing A Supply Chain Through Online Peer-To-Peer Lending, Guang-Xin Gao, Zhi-Ping Fan, Xin Fang, Yun Fong Lim

Research Collection Lee Kong Chian School Of Business

In recent years, supply chain finance (SCF) through online peer-to-peer (P2P) lending platforms has gained its popularity. We study an SCF system with a manufacturer selling a product to a retailer that faces uncertain demand over a single period. We assume that either the retailer or the manufacturer faces a capital constraint and must borrow capital through an online P2P lending platform. The platform determines a service rate for the loan, the manufacturer sets a wholesale price for the product, and the retailer chooses its order quantity for the product. We identify optimal Stackelberg strategies of the participants in the …

Towards Easy Comparison Of Local Businesses Using Online Reviews, Yong Wang, Hammad Haleem, Conglei Shi, Yanhong Wu, Xun Zhao, Siwei Fu, Huamin Qu

Research Collection School Of Computing and Information Systems

With the rapid development of e-commerce, there is an increasing number of online review websites, such as Yelp, to help customers make better purchase decisions. Viewing online reviews, including the rating score and text comments by other customers, and conducting a comparison between different businesses are the key to making an optimal decision. However, due to the massive amount of online reviews, the potential difference of user rating standards, and the significant variance of review time, length, details and quality, it is difficult for customers to achieve a quick and comprehensive comparison. In this paper, we present E-Comp, a carefully-designed …

A Proposal For A Decentralized Liquidity Savings Mechanism With Side Payments, Adam Fugal, Rodney Garratt, Zhiling Guo, Dave Hudson

Research Collection School Of Computing and Information Systems

In most countries, the central bank provides the medium to physically settle the smallest payments (cash) and the means to electronically settle the largest payments, which typically are wholesale payments between banks. For the latter purpose the central bank usually operates a system through which banks can settle payments in central bank money. Historically, interbank payments were settled via (end of day) netting systems, but as volumes and values increased central banks became worried about the risks inherent in deferred net settlement systems, so most central banks opted for the implementation of a Real Time Gross Settlement (RTGS) system. With …

Optimization Of A Cyclic Express Subway Service, Hai Wang, Jiangang Jin, Jingfeng Yang

Research Collection School Of Computing and Information Systems

With rapid population growth and increasing demand for urban mobility, metropolitan areas such as Singapore, Tokyo, and Shanghai are increasingly dependent on public transport systems. Various strategies are proposed to improve the service quality and capacity of bus and subway systems. Express trains-i.e., trains that skip certain stations-are commonly used, because they can travel at higher speeds, potentially reduce travel time, and serve more passengers. In this paper, we study cyclic express subway service (CESS), in which express trains provide routine transport service with cyclic (periodic) station-skip patterns that can be used in daily service. We propose an exact Mixed …

Reserved Optimisation: Handling Incident Priorities In Emergency Response Systems, Muralidhar Konda, Supriyo Ghosh, Pradeep Varakantham

Research Collection School Of Computing and Information Systems

Emergency (medical, fire or criminal) Management Systems(EMSs) are crucial for ensuring public safety and security. Typically in many cities, less than 20% of the cases received by EMSs belong to the extremely serious category and require immediate help. Rest of the incidents typically are less serious and thereby allow more flexibility in response time. Therefore, for efficient management of EMS requests, several EMSs now categorise an incoming emergency request into apriority level based on well studied “triaging” methods. Leading research on optimising emergency response has either focussed on data-driven models for settings with homogenous incidents or on generic heuristics (that …

Does Mandatory Rotation Of Audit Partners Improve Audit Quality?, Singapore Management University

Perspectives@SMU

A study in China by CUHK Business School shows that the mandatory rotation of audit partners can enhance audit quality

Audit plays a significant role in the capital market. High-quality audit reduces the risks of inaccurate information, increases the transparency of the audited entities and thus facilitates financing and investment.

Manufacturing For Success And Change, Singapore Management University

Perspectives@SMU

Capturing value upstream via IP, or downstream via application is key for manufacturers looking to survive when low-cost labour dries up

According to a 2017 McKinsey & Co. report, 10,000 Chinese firms operate in Africa, with one-third of them manufacturing companies. Many are midsize manufacturers without the critical mass to take on the big boys, and so decide to capitalise on Africa’s lower labour costs as those in China creep ever higher.

Zalora: Growing With E-Commerce, Singapore Management University

Perspectives@SMU

Asia’s fastest-growing online fashion retailer recalibrates its mobile strategy

According to research by Forrester, one-fourth of global retail sales in 2022 will take place online, and it will be in Asia-Pacific. Of that, 80 percent of that will happen on mobile devices, reflecting a well-acknowledge trend of all things going mobile.

Option Listing And Information Asymmetry, Jianfeng Hu

Research Collection Lee Kong Chian School Of Business

Option listing increases informed and uninformed trading by 12.4% and 23.9%, respectively, in the US between 2001 and 2010, hence reducing relative information risk. We establish the causal effects using control stocks with similar propensities of listing and a quasi-natural experiment using option listing standards. The benefits are more prominent for stocks with active options trading and opaque stocks. The reduction of information risk is larger for good news than bad news, and the stock price response to earnings surprise weakens after listing. The results suggest that options improve the overall market information environment beyond substitutional effects to stock trading.

Of Tailwinds And Headwinds, Philip Charles Zerrillo

Asian Management Insights

Long-time readers of these pages are more than familiar with disruption, and the current shift in the world’s economic and political tectonic plates is assuming even greater interest for many of us.

Ai: Augmentation, More So Than Automation, Steven M. Miller

Asian Management Insights

The take-up of Artificial Intelligence (AI)-enabled systems in organisations is expanding rapidly. Integrating AI-enabled automation with people into workplace processes and societal systems is a complex and evolving challenge. The articles takes a managerial perspective on how firms can effectively deploy human minds and intelligent machines in the workplace.

Talent Magnets: Three Dimensions Of A Great Place To Work, Chandrasekhar Sripada

Asian Management Insights

Three dimensions of a great place to work.

Asia: Embracing Disruption Confidently With Farsighted Policies And Progressive Ideas, Amit Gupta

Asian Management Insights

Farsighted policies and progressive ideas will stand Asia in good stead as it embraces disruption with confi dence.

Data Or Decisions: Designing Business Intelligence And Analytics Function, Eric Sandosham

Asian Management Insights

On designing a successful business intelligence and analytics function.