Business Commons^™

How Fintech Startups Succeed In Financial Inclusion To Bank The Unbanked, Miguel Soriano

Asian Management Insights

In the drive to bank the unbanked, digital technology may succeed where others could only dream.

Transformation: The New Normal For Next-Gen Family Businesses, Annie Koh

Asian Management Insights

Transformation is the new normal for next-gen family businesses.

Japan: How Abenomics Is Impacting Business, Odd Per Brekk

Asian Management Insights

How Abenomics is impacting business.

Debt Heterogeneity And Covenants, Yun Lou, Clemens A. Otto

Research Collection School Of Accountancy

Coordination failure among owners of heterogeneous debt types increases distress costs. Covenants reduce expected distress costs by lowering the probability of liquidity shortages, increasing liquidation values, and incentivizing creditor monitoring. We predict and find that new debt contracts include more covenants when borrowers' existing debt structures are more heterogeneous. Our findings suggest that covenants are not only used to address creditor-shareholder conflicts but also to reduce the expected costs of coordination failure among creditors. Further, our results indicate a dynamic component missing from static debt structure models: Debt heterogeneity entails additional covenants (i.e., constraints) when raising future debt.

From Digital Traces To Marketing Insights: Recovering Consumer Preferences For Digital Entertainment Services And Online Shopping, Ai Phuong Hoang

Dissertations and Theses Collection (Open Access)

IT innovations disrupt traditional business models and challenge conventional thinking. Thus, industry incumbents face fierce competition from start-ups with new business models and new ways of engaging customers. Digital entertainment goods and personalized services have become a lucrative market, which has undergone a transformation enabled by seamless Internet connections. Meanwhile, social networks and other online platforms have brought people and business even closer.

Effects Of Team-Skills Guidance On Accounting Students With Lone Wolf Tendencies, Jean Lin Seow, Premila Gowri-Shankar

Research Collection School Of Accountancy

We investigate whether short-term in-class team-skills guidance impacts the perceptions of accounting students with lone wolf tendencies on team work, and peer evaluation systems adopted in team work. We find that students with greater lone wolf tendencies see fewer benefits from engaging in team work, believing this to result in a poorer learning experience and poorer team performance outcomes. They are also less flexible in thought and feel more incompetent working in teams, preferring to rely on self and to work on their own. Unlike students with lesser lone wolf tendencies, they are also less comfortable with peer evaluation systems, …

Are Disclosed Auditor Materiality Thresholds Informative Of Firms’ Earnings Quality? – Evidence From The Revised Isa 700 Audit Report, Beng Wee Goh, Kiat Bee Jimmy Lee, Na Li, Dan Li

Research Collection School Of Accountancy

Under the Financial ReportingCouncil’s presumption that mandating new disclosure requirement in the auditreport would provide information useful to investors, we examine whether theauditor disclosed materiality threshold is associated with the firm’s earningsquality. We document that a lower threshold of materiality level is associatedwith a higher earnings quality, as measured by lower discretionary accruals,higher accruals quality, and less earnings smoothing. We also find someevidence that the negative association between auditor disclosed materialitythreshold and earnings quality is more pronounced when the auditor is moreindependent, when management’s incentive to manage earnings is higher, and whenthere is lower information uncertainty. Overall, our results are …

How Does Tax Avoidance Affect Transparency?, Congcong Li, Mark Ma, Tom Omer, Kunpeng Sun

Research Collection School Of Accountancy

This study examines how tax avoidance affects corporate transparency. Using a large sample ofU.S. firms from 1995 to 2016, we find a significant non-linear effect of tax avoidance ontransparency. That is, when a firm’s tax avoidance is low, an increase in tax avoidance improvestransparency; however, when a firm’s tax avoidance is high, an increase in tax avoidance decreasestransparency. These results are robust to using alternative measures of transparency and taxavoidance and in several additional tests. Overall, the findings suggest that the effect of taxavoidance on transparency depends on the aggressiveness of firms’ tax avoidance behavior. Ourstudy contributes to the literature …

Response Distortion On Personality Tests In Applicants: Comparing High-Stakes To Low-Stakes Medical Settings, Jeromy Anglim, Stefan Bozic, Jonathon Little, Filip Lievens

Research Collection Lee Kong Chian School Of Business

The current study examined the degree to which applicants applying for medical internships distort their responses to personality tests and assessed whether this response distortion led to reduced predictive validity. The applicant sample (n = 530) completed the NEO Personality Inventory whilst applying for one of 60 positions as first-year post-graduate medical interns. Predictive validity was assessed using university grades, averaged over the entire medical degree. Applicant responses for the Big Five (i.e., neuroticism, extraversion, openness, conscientiousness, and agreeableness) and 30 facets of personality were compared to a range of normative samples where personality was measured in standard research settings …

Capm-Based Company (Mis)Valuations, Olivier Dessaint, Jacques Olivier, Clemens A. Otto, David Thesmar

Research Collection Lee Kong Chian School Of Business

There is a discrepancy between CAPM-implied and realized returns. Using the CAPM in capital budgeting -- as recommended in finance textbooks -- should thus have valuation effects. For instance, low beta projects should be valued more by CAPM-using managers than by the market. This paper empirically tests this hypothesis using publicly announced M&A decisions and shows that takeovers of lower beta targets are accompanied by lower cumulative abnormal returns for the bidders. Specifically, our estimates imply an average net loss to bidders corresponding to 12% of the average deal value and exceeding USD 10 billion per year in aggregate.

What Types Of Publicly Listed Firms Evade Taxes? Evidence From China, Travis K. Chow, Bin Ke, Hongqi Yuan, Yao Zhang

Research Collection School Of Accountancy

Using the mandatory disclosure of detected corporate tax evasion cases in China, we examine the types of publicly listed firms that evade taxes. We use a bivariate probit model to account for the partial observability of tax evasion. Our regression results are different from those using the reduced form probit model that ignores the partial observability of tax evasion. Our results are also different from those of prior research on the determinants of corporate tax avoidance using the effective tax rate (ETR) as a proxy for tax avoidance, suggesting that ETR may not be a good proxy for aggressive tax …

International New Ventures: Revisiting The Influences Behind The ‘Born-Global’ Firm, Terence P. C. Fan, Phillip Phan

Research Collection Lee Kong Chian School Of Business

There is a small but theoretically important literature on 'born-globals' or international new venture firms that positions itself in contrast to the more established sequential international entry literature. In this paper we examine the pattern of entry into international markets for a set of international new ventures and show that they need not be a distinct breed of firms, as previous research has portrayed. Absent a specific technological advantage, the decision for a new venture to internationalize at inception is influenced by the size of its home market and by its production capacity, as well as by cultural and economic …

Mandates Of Dishonesty: The Psychological And Social Costs Of Mandated Attitude Expression, Marko Pitesa, Zen Goh, Stefan Thau

Research Collection Lee Kong Chian School Of Business

This paper explains and tests empirically why people employed in product promotion are less willing to trust others. Product promotion is a prototypical setting in which employees are mandated to express attitudes that are often not fully sincere. On the basis of social projection theory, we predicted that organizational agents mandated to express insincere attitudes project their self-perceived dishonesty onto others and thus become more distrustful. An initial large-scale, multi-country field study found that individuals employed in jobs requiring product promotion were less trusting than individuals employed in other jobs—particularly jobs in which honesty is highly expected. We then conducted …

Advice Giving: A Subtle Pathway To Power, Michael Schaerer, Leigh Tost, Li Huang, Francesca Gino, Rick Larrick

Research Collection Lee Kong Chian School Of Business

We propose that interpersonal behaviors can activate feelings of power, and we examine this idea in the context of advice giving. Specifically, we show a) that advice giving is an interpersonal behavior that enhances individuals’ sense of power and b) that those who seek power are motivated to engage in advice giving. Four studies, including two experiments (n=290, n=188), an organization-based field study (n=94), and a negotiation simulation (n=124) demonstrate that giving advice enhances the advisor’s sense of power because it gives the advisor perceived influence over others’ actions. Two of our studies further demonstrate that people with a high …

Unpacking Public Sentiment Toward The Government: How Citizens’ Perceptions Of Government Communication Strategies Impact Public Engagement, Cynicism, And Communication Behaviors In South Korea, Soojin Kim, Arunima Krishna

Research Collection Lee Kong Chian School Of Business

In this study, we explore the relationship between two types of public sentiment toward the government (i.e., public engagement and cynicism) on publics’ information transmission behaviors, i.e., megaphoning, about the government. In doing so, we unpack how citizens’ perceptions of the communication strategy adopted by the government, as well perceived authenticity of the government’s communication impact their sentiments toward the government. An online survey was conducted in South Korea (N = 1112) to understand these relationships. The results revealed that perceived use of bridging strategy by the government is associated with public engagement, and perceived use of the buffering strategy …

Are Bond Ratings Informative? Evidence From Regulatory Regime Changes, Louis H. Ederington, Jeremy Goh, Yen Teik Lee, Lisa Yang

Research Collection Lee Kong Chian School Of Business

The recent Dodd-Frank Act (Section 939B) enacted in 2010 repeals credit rating agencies’ (CRAs) exemption from Regulation Fair Disclosure. We test whether CRAs continue to provide new information to the market after the repeal. We find that the significant pre-repeal stock price responses to rating changes disappear after the regime change. Bond price reactions however remain significant. These results are even more significant at the investment-speculative boundary. Our evidence suggests that CRAs serve as a conduit for transmitting private information before the repeal. It also shows that regulatory constraint is a channel by which credit ratings affect cost of financing.

The Differential Effects Of Ceo Narcissism And Hubris On Corporate Social Responsibility, Yi Tang, Daniel Z. Mack, Guoli Chen

Research Collection Lee Kong Chian School Of Business

While prior studies have predominantly shown that CEO narcissism and hubris exhibit similar effects on various strategic decisions and outcomes, this study aims to explore the mechanisms underlying how narcissistic vs. hubristic CEOs affect their firms differently. Specifically, we investigate how peer influence moderates the CEO narcissism/hubris – CSR relationships. With a sample of S&P 1500 firms for 2003–2010, we find that the positive relationship between CEO narcissism and CSR is strengthened (weakened) when board-interlocked peer firms invest less (more) intensively in CSR than a CEO’s own firm; the negative relationship between CEO hubris and CSR is strengthened when peer …

Competing On Speed, Emiliano Sebastian Pagnotta, Thomas Philippon

Research Collection Lee Kong Chian School Of Business

We analyze trading speed and fragmentation in asset markets. In our model, trading venues make technological investments and compete for investors who choose where and how much to trade. Faster venues charge higher fees and attract speed-sensitive investors. Competition among venues increases investor participation, trading volume, and allocative efficiency, but entry and fragmentation can be excessive, and speeds are generically inefficient. Regulations that protect transaction prices (e.g., Securities and Exchange Commission trade-through rule) lead to greater fragmentation. Our model sheds light on the experience of European and U.S. markets since the implementation of Markets in Financial Instruments Directive and Regulation …

Director Tenure Diversity And Board Monitoring Effectiveness, Na Li, Aida Sijamic Wahid

Research Collection School Of Economics

This study examines the impact of director tenure diversity on board effectiveness. We find that tenure-diverse boards exhibit significantly higher CEO performance-turnover sensitivity and that firms with tenure-diverse audit committees are less likely to experience accounting restatements. Furthermore, we document that tenure-diverse compensation committees also award less excess compensation and are less likely to overcompensate. Even though tenure-diverse boards seem to exhibit superior monitoring performance, there is limited evidence that their firms exhibit superior financial performance. The findings suggest that recent calls for board renewal, to the extent that it would increase tenure diversity rather than just decrease average board …

Fixing The Future, Singapore Management University

Perspectives@SMU

Silicon Valley’s business model has wreaked havoc on the world. Human agency will be crucial to save it

The World Wide Web, when it exploded into mainstream culture in the mid-1990’s, promised to democratise information and level a playing field that had become tilted towards the rich and elite. When the United States Congress enacted the 1996 Communications Decency Act to regulate pornographic material on the internet, activist John Perry Barlow wrote A Declaration of the Independence of Cyberspace, urging governments to “leave us alone” in a realm where “anyone, anywhere may express his or her beliefs, no matter …

Towards A Cashless Society, Singapore Management University

Perspectives@SMU

Infrastructure, settlement, and the ‘last mile’ likely to keep cash in vogue (and your pockets)

In the December 2017 Red Book statistic report by the Bank for International Settlements (BIS), it was noted that “the number of cashless transactions seems to have at least doubled over the last 10 years across all countries”. Countries like Singapore, Australia, and the Netherlands lead the way with over 400 cashless transactions a year per person – more than double from 10 years ago – while China has gone from single digits to nearly 30 in five years.

Why Smart Firms Are Out And Proud About Lgbt Expats, Singapore Management University

Perspectives@SMU

Retaining talent is a bottom-line issue as well as duty of care

Talent shortages are pressing international businesses to re-evaluate how they tackle employee mobility as globalisation grows.

Digital Banking: Overcoming Barriers To Entry, Alan Megargel

Dissertations and Theses Collection

This dissertation examines digital banking from the perspective of two types of industry participants; non-bank FinTech alternative [substitute] financial service providers whom are intent on disrupting the market, and [incumbent] traditional banks whom are urgently pursing digital strategies in order to counteract the FinTech threat. This study is motivated by five main research questions: (1) Are FinTech firms disrupting traditional banks, and if so, what are the modes of disruption? (2) Do tradition banks view FinTech firms as a threat, and if so, what are they doing about it? (3) What are the various digital banking strategies, and how are …

Purposeful Building Of Social Capital And The Adoption Of Essential Tools And Technologies In Impoverished Communities In The Philippines, Chon Phung Lim

Dissertations and Theses Collection

Despite its popularity and a wide range of applications, social capital is a contested concept. There is also no agreement on whether social capital responds well to external interventions. Many scholars found no or, at most, mixed impacts that social capital can be purposefully developed. However, Burt and Ranchi (2007) and Janicik and Larrick (2005) provided compelling evidence that simple network training can significantly improve participants’ ability to see gaps in their network and develop social capital.

The manifestations of social capital are context-dependent and complex, and rarely map into a single discipline or methodology (Jones and Woolcock, 2007). Hence, …

Identifying The Competencies Of Middle Managers Leading Successful Strategy Implementation, Zafar Abdulmajid Momin

Dissertations and Theses Collection (Open Access)

How does one successfully implement strategy? Persistent and alarmingly high failure rates of strategy implementation still prevail due to the myriad variables and complexities associated with execution, the brunt of which typically falls to middle management. Unfortunately, most organizations do not exercise sufficient rigor in the process and criteria to select the right middle managers for executing strategy, despite middle managers having a substantial impact on outcomes. Business leaders lack the necessary tools and frameworks for competency assessment to support their decision-making. This research seeks to provide evidence that selection of the right middle managers is more likely to lead …

When You Don’T Have An Alternative In A Negotiation, Try Imagining One, Michael Schaerer, Martin Schweinsberg, Roderick I. Swaab

Research Collection Lee Kong Chian School Of Business

Conventional wisdom suggests that negotiators need alternatives to succeed. Alternatives give negotiators the confidence to negotiate offers more ambitiously, to push for more optimal outcomes, and to walk away from the table when needed. But negotiators often have no alternative at all. For example, a recent survey by GMAC suggests that the average MBA graduate only has a single job offer to choose from, suggesting that many MBAs have to negotiate their job offer without an alternative to fall back on.

Assessing Personality Dynamics In Personnel Selection, Joanna Sosnowska, Joeri Hofmans, Filip Lievens

Research Collection Lee Kong Chian School Of Business

Recently, there have been repeated calls in the literature for an integrative approach to personality, in which both between- and within-person fluctuations are simultaneously considered. Although the integrative approach to personality offers a compelling extension of the traditional trait approach, one of the major challenges is its applicability in applied settings. In the present chapter, we address this challenge for the domain of personnel selection, showing that an integrative approach to personality assessment in selection settings is possible through careful consideration of available theories and selection methods. By explaining and delineating how existing concepts can be used and how existing …

Stamp Duty Issues In Singapore Corporate Practice, Vincent Ooi

Research Collection Yong Pung How School Of Law

A new dimension to the determination and computation of stamp duties payable in corporate transactions has been introduced due to the Additional Conveyance Duties (“ACD”) Regime. For companies with significant residential property holdings, liability to pay ACD potentially extends to all transactions involving the issuance, transfer or cancellation of equity interests. This paper considers the impact of ACD on several common corporate transactions in Singapore, addressing the risks practitioners may face in being blindsided by potential tax liabilities. Besides highlighting potential pitfalls, this paper explores the use of advance rulings and preferring debt financing over equity financing for tax optimisation.

The Role Of Urban Mobility In Retail Business Survival, Krittika D'Silva, Kasthuri Jayarajah, Anastasios Noulas, Cecilia Mascolo, Archan Misra

Research Collection School Of Computing and Information Systems

Economic and urban planning agencies have strong interest in tackling the hard problem of predicting the odds of survival of individual retail businesses. In this work, we tap urban mobility data available both from a location-based intelligence platform, Foursquare, and from public transportation agencies, and investigate whether mobility-derived features can help foretell the failure of such retail businesses, over a 6 month horizon, across 10 distinct cities spanning the globe. We hypothesise that the survival of such a retail outlet is correlated with not only venue-specific characteristics but also broader neighbourhood-level effects. Through careful statistical analysis of Foursquare and taxi …

Examining Fifteen Years Of Ethics Research In The Journal Of Accountancy: 2002 To 2016, Clarence Goh

Research Collection School Of Accountancy

In the past fifteen years, ethics has come under the spotlight in the accounting profession. In this study, I examine ethics research in accounting by looking at publications in the Journal of Accountancy, a leading professional journal in accounting, over the period from 2002 to 2016. I found that 32 out of 4,851 (0.66%) articles published in the journal were ethics-focused. Further, I observed spikes in the percentage of ethics-focused articles in the years 2003 and 2009/2010, following key events such as the passing of SOX and the global financial crisis. I also perform content analysis of the ethics-focused articles …