Business Commons^™

The Value Of Fiduciary Duties: Evidence From En Bloc Sales In Singapore, Jianfeng Hu, Kelvin F. K. Low, Wei Zhang

Research Collection Lee Kong Chian School Of Business

This paper examines the impact of fiduciary duties on collective asset sales in the case of owners acting as delegates for other owners, thereby potentially inducing conflicts of interests. Our identification strategy exploits a unique legal shock in Singapore, which established fiduciary duties in those transactions in the real estate market known colloquially as en bloc sales. The imposition of fiduciary duties caused the price premium of units sold via en bloc sales to increase over units ineligible for en bloc sale, as well as over units that, although eligible for en bloc sale, are sold individually. In addition, this …

Generalist Ceos And Audit Pricing, Zhiming Ma, Rencheng Wang, Kaitang Zhou

Research Collection School Of Accountancy

We analyze the consequences of a firm hiring a generalist CEO in terms of the audit fees paid by the firm. We find that audit fees of clients with generalist CEOs are higher than those of clients with specialist CEOs. This relation is robust to considering managerial ability, other CEO characteristics, various fixed effects, instrumental variables, and change analyses. We further show that fee differences are larger for firms with weaker monitoring and higher corporate litigation risks. Through path analysis, we find that both client business risk and misreporting risk contribute to the fee difference. Finally, we find that auditors …

Marking To Market And Inefficient Investment Decisions, Clemens A. Otto, Paolo F. Volpin

Research Collection Lee Kong Chian School Of Business

We examine how mark-to-market accounting affects the investment decisions of managers with reputation concerns. Reporting the current market value of a firm’s assets can help mitigate agency problems because it provides outsiders (e.g., shareholders) with new information against which the management’s decisions can be evaluated. However, the fact that the assets’ market value is informative can also have a negative side effect: managers may shy away from investments that indicate conflicting private information and would damage their reputation. This effect can lead to inefficient investment decisions and make marking to market less desirable when market prices are more informative.

Conflict Between Controlling Family Owners And Minority Shareholders: Much Ado About Nothing, Geoffrey P. Martin Dr, Luis R. Gomez-Mejia Prof, Marianna Makri, Pascual Berrone

Geoffrey P Martin

Essays On Empirical Asset Pricing, Mu-Shu Yun

LSU Doctoral Dissertations

This work contains three essays on empirical pricing. In the first essay, I propose to re-examine the evidence on mutual fund managers' illiquidity and volatility timing ability by using a holdings-based approach, which is free from the artificial timing bias occurred in the traditional return-based timing method. Through testing the timing evidence by the holdings approach, I am able to know to what degree the results in the literature are biased by no-information reasons. In the second essay, I investigate mutual fund managers' skills from their reactions to the observable market condition, which is a relatively overlooked dimension in the …

The Dark Side Of Cross-Listing: A New Perspective From China, Walid Y. Busaba, Lin Guo, Tong Yu

Business Publications

An interesting phenomenon for Chinese firms that list their stock both in China and abroad is that the overwhelming majority had gone public, and listed, abroad first. We find that when these companies return to China to issue stock and list, they experience poorer post-issuance stock and operating performance in comparison to purely domestic issuers. Also, they raise more funds relative to their sales, leave less money on the table for investors, and incur lower direct flotation costs. Among returning firms, those which raise higher proceeds relative to sales experience poorer long-run stock performance and lower Tobin’s q post issuance. …

Corporate Governance And Stock Price Crash Risk: Evidence From Uk Panel Data, Valentina Tarkovska

Other resources

No abstract provided.

Ceo Pay Slice And Firm Value: Evidence From Uk Panel Data, Valentina Tarkovska

Other resources

No abstract provided.

Optimal Ceo Compensation With Search: Theory And Empirical Evidence, Melanie Cao, Rong Wang

Research Collection Lee Kong Chian School Of Business

We integrate an agency problem into search theory to study executive compensation in a market equilibrium. A CEO can choose to stay or quit and search after privately observing an idiosyncratic shock to the firm. The market equilibrium endogenizes CEOs’ and firms’ outside options and captures contracting externalities. We show that the optimal pay-to-performance ratio is less than one even when the CEO is risk neutral. Moreover, the equilibrium pay-to-performance sensitivity depends positively on a firm's idiosyncratic risk and negatively on the systematic risk. Our empirical tests using executive compensation data confirm these results.

The Agency Problem, Corporate Governance, And The Asymmetrical Behavior Of Selling, General, And Administrative Costs, Hai Lu, Hai Lu, Theodore Sougiannis

Research Collection School Of Accountancy

Selling, general, and administrative (SG&A) costs represent a significant proportion of thecosts of business operations. On average, the SG&A costs to total assets ratio is 27 percent,compared to the research and development (R&D) to total assets ratio of 3 percent(Banker, Huang, and Natarajan 2011). Due to the importance of SG&A costs, practitionerspay close attention to controlling SG&A spending. Understanding SG&A cost behaviorand the role of managers in adjusting the costs is thus important to researchers andpractitioners. Recent empirical research indicates that SG&A costs behave asymmetrically,that is, they increase more rapidly when demand increases than they decline when demanddecreases (Anderson, Banker, …

Essays On International Corporate Cash Holdings, Yonghong Jia

Wayne State University Dissertations

This dissertation is composed of two distinct chapters. The first chapter is concerned with the secular trends in corporate cash holdings and the determinants of the changing cash policies for seven industrialized countries--Australia, Canada, France, Germany, Japan, the US, and UK. In the first chapter, we document that a pronounced secular upward trend in cash holdings is almost systemic across sample countries over 1991-2008, with France exhibiting a modest rise and Japan a substantial decline. However, the driving forces underlying the cash pattern are not uniform across countries. While the evolution in firm characteristics necessitated elevated cash balances, the time-varying …

Determinants Of Corporate Cash Holdings, Yun Lai (William) Li

CMC Senior Theses

The paper explores the driving forces behind corporate cash holdings by analyzing past literature and extending this research to the behavior of firms after the 2008 recession. I look at the cash to assets and net debt to assets ratios from October 1980 to October 2011 to obtain an understanding of the past and current state of cash holdings. A comprehensive literature review is done on agency costs and transactional motives to give the reader an overview of the costs and benefits of holding cash. This provides the foundation for the precautionary motives for companies today to keep cash as …

Are Credit Unions In Ecuador Achieving Economies Of Scale?, Nick A. Marchio

Economics Honors Projects

This study tests the assertion that membership growth in credit unions is constrained by their unique structural features, such as their non-profit mission and member-based ownership. Although these features enhance inclusiveness, existing theory suggest that they work against efficiency when membership grows too diffuse. To address this issue, this study uses a model that takes into account existing theory on constrained-optimization in credit unions and theory on the adverse effects of diffuse ownership. Using data on 36 public credit unions in Ecuador, the empirical analysis finds evidence that credit unions can achieve economies of scale despite their problematic structural features. …