Finance and Financial Management Commons^™

Narrowing The Gap Of Financial Fraud Detection In Corporations, Solomon Aborbie

Walden Dissertations and Doctoral Studies

Business leaders remain exposed to financial and accounting fraud as well as loss of profitability, despite the dictates of the SOX Act of 2002. The most challenging aspect of corporate management is the unexpected nature of an emerging, existing, or an inherent financial risk. Guided by the evolution of fraud theory, this exploratory case study's purpose was to identify and explore the financial management strategies that corporate financial managers need to adequately protect investors. Twenty participants from a population group of corporate auditors of Fortune 1000 corporations within 70 miles of Columbus, Ohio provided input for this study. Data from …

Factoring As A Financing Alternative For African Small And Medium-Sized Enterprises, Robert Lumbuye Tomusange

Walden Dissertations and Doctoral Studies

Small and medium-sized enterprises (SMEs) are the main drivers of economic growth and employment. African SMEs are constrained by a lack of access to finance. In line with the pecking order theory, capital-constrained SMEs are expected to seek external finance. However, due to credit rationing, African SMEs have limited success raising finance. Factoring could enable African SMEs to gain access to finance, as underwriters mainly place the risk on the receivables as opposed to the firm itself. Despite its benefits, factoring has not taken root in sub-Saharan Africa. The purpose of this phenomenological study was to explore the obstacles and …

Does Microfinance Fill The Funding Gap For Microentrepreneurs? A Conceptual Analysis Of Entrepreneurship Seeding In Impoverished Nations, James C. Brau, Sunshine N. Cardell, Warner P. Woodworth

Faculty Publications

We address the role microfinance institutions (MFIs) play in funding entrepreneurial ventures and present a distinction between the types of entrepreneurs that seek MFI and traditional venture funding. We argue that microfinance can serve successfully as s eed financing for microentrepreneurs in under developed economies around the world. By comparing bootstrapping and private equity seed financing in developed economies to microfinance seed financing in impoverished economies, we show that the different ent repreneurial characteristics in the two economies have similar funding gaps but are solved with different sources of funding.

The Quixotic Quest For Fairness: The Sec's Role In The Rise Of High Frequency Trading, Jan Traflet, William R. Gruver

Faculty Journal Articles

This paper examines the complex factors facilitating the rise of high frequency trading (HFT) from a historical perspective. Over the course of several decades, various stock market regulations and reforms, championed by the Securities and Exchange Commission (SEC), created room for HFT to develop and flourish. While advancements in technology initially may appear to be the primary cause of HFT, in fact, HFT could not exist (or at least, not to the extent it does today) if certain rules and older ways of doing business on the exchanges were still in place, and if other regulations did not support its …

Revisiting Compensating Wage Differentials: The Evidence From Employer-Provided Health Insurance, Dan Qu

Business Review

This paper uses 1996 and 2001 Survey of Income and Program Participation to examine the evidence for compensating wage differentials associated with employer-provided health insurance (EHI) in the United States. The results provide no evidence of a tradeoff between wages and EHI coverage. On the other hand, the results do suggest that employees who work in states with income taxes are more likely to receive EHI than those in states without income taxes. Fixed effects, first differencing and instrumental variable estimation are used to address the potential ability bias and endogeneity problems in wage models with EHI as an independent …

Three Essays On Remittances, Institutions, And Economic Development, Durga Gautam

Graduate Theses, Dissertations, and Problem Reports (ETD)

Does the inflow of remittances affect the quality of institutions in the recipient countries? This question is important because economists have stressed that good economic institutions, particularly those in the public sector, are instrumental for economic development and growth. The literature on remittances, however, does not document a thorough analysis and compelling evidence of the relationship between these private financial transfers and institutional quality. Unlike other kinds of international capital flows, remittances inflows are not mediated by the government of recipient countries. Remittances are not taxed directly and so are not a source of revenue for the government. Then a …

Asset Allocation In The Chinese Stock Market: The Role Of Return Predictability, Jian Chen, Fuwei Jiang, Jun Tu

Research Collection Lee Kong Chian School Of Business

In this article the authors investigate asset allocation in the Chinese stock market from the perspective of incorporating return predictability. Based on a host of return predictors, they find significant out-of-sample return predictability in the Chinese stock market. They then examine the performance of active portfolio strategies—such as aggregate market timing as well as industry, size, and value-rotation strategies—designed to profitably exploit return predictability. Strong evidence is found by the authors that these portfolio strategies incorporating return predictability can deliver superior performance—up to 600 basis points per annum and almost double the Sharpe ratios—compared with the passive buy-and-hold benchmarks that …

Development Of A Fuzzy Linear Programming Model For Allocation Of Inoperability In Economic Sectors Due To Loss Of Natural Resource Inputs, Raymond R. Tan, Kathleen B. Aviso, Michael Angelo B. Promentilla, Krista Danielle S. Yu, Joost R. Santos

DLSU Business & Economics Review

The inoperability input-output model (IIM) has recently been proposed as an extension of conventional input-output analysis for assessing the vulnerability of interdependent infrastructures to various perturbations, such as natural disasters, industrial accidents, and deliberate attacks. The IIM framework makes use of a dimensionless risk metric called inoperability, which quantifies the degree of failure of a system on a scale ranging from 0 (normal state) to 1 (total failure). This inoperability is then assumed to propagate through any given industrial network after being induced by initial demand or supply-side perturbations. This work presents a fuzzy linear programming (FLP) model to allocate …

A Conceptual Framework For Estimating The Impact Of Climatic Uncertainty And Shocks On Land Use, Food Production, And Poverty In The Philippines, Caesar Cororaton, Arlene Inocencio, Anna Bella Siriban-Manalang, Marites Tiongco

DLSU Business & Economics Review

Wide variations in climatic conditions from prolonged dry season to frequent occurrence of super typhoons have significant impact on the Philippines, especially on rural poor households which depend heavily on agriculture and food production for subsistence and income. This paper provides a research framework that can be used to understand the dynamics between climate change and agriculture. The framework incorporates the effects of climate change on agricultural productivity, as well as the effects of agricultural activities and land use on climate change through the emission of greenhouse gasses. The framework uses three simulation models to analyse the impact of climate …

Does Financial Cooperation Agreement Influence The Real Economy?: A Gmm Panel Data Approach On Asean+3 Countries, Md. Saifur Rahman, Mohamed Aslam, Wee-Yeap Lau, Farihana Shahari

DLSU Business & Economics Review

This study aims to investigate the influences and contributions of financial integration on real sectors in ASEAN+3 economies. It employs General Methods of Moment (GMM) technique and uses the proxies of financial integration and real economy from 1990 to 2012. The findings show that financial integration on real economy has positive effect, such as increasing government spending, reducing unemployment, and so forth. The finding has great implications for the regional economies. It is recommended that the policy makers improve the financial integration in order to develop the real economy.

Determinants Of Investor’S Subscription Level Of Ipos: Evidence From Indian Capital Market In Post Mandatory Ipo Grading Regime, Souvik Banerjee, K.T. Rangamani

DLSU Business & Economics Review

This research paper determines the factors that influence investor’s appetite for Graded Initial Public Offerings(IPOs) between 2007 and 2013, in the context of Indian capital market. Company specific factors related to pre-issue financial position, corporate governance, and post issue promoter holding, firm age at the time of the issue, reputation of the lead manager of the issue, reputation of the credit rating agency, IPO Grade, and also market sentiment related factors like change in the money supply, Foreign Institutional Investor’s (FII) inflow, Price to Earnings (PE) ratio of the market, and market return, are considered. Out of these factors, FII …

Evaluating Banking Agents: A Case Of Brazilian Banking Correspondents, Tania Pereira Christopoulos, Lauro Emilio Gonzales Frias, Tomás Costa De Azevedo Marques

DLSU Business & Economics Review

Financial institutions play an important role in the development of any country’s economy, but there is still an enormous gap between supply and demand of financial services that meet the needs of the poor. Hence, it is important to analyze the role of the traditional financial system in the expansion of proper financial services, and their accessibility to the poor. Within inclusive finance, the most promising topic seems to be branchless banking. One major example of branchless banking is the case of banking correspondents (BC) in Brazil. In order to deepen the comprehension of the subject, this article will present …

Initiating Women Empowerment And Youth Development Through Involvement In Non- Formal Education In Three Selected Parishes: An Action Research On Poverty Alleviation, Divina M. Edralin, Maria Victoria P. Tibon, Florenz C. Tugas

DLSU Business & Economics Review

This article elaborates on an action research undertaken by three researchers from a business school of a leading university in the Philippines on the contribution of non-formal education programs in poverty alleviation, aimed to initiate women empowerment and youth development among selected women and youth in the parishes they belong to. Non-formal education programs such as home-based livelihood program, parenting for women, leadership, character building, values clarification, and priority setting for women and youth were administered as a way to reduce the selected parishioners’ vulnerabilities arising from poverty. Using outcome mapping as a project cycle management tool, changed behaviours, attitudes, …

Dine In Or Out: Understanding The Budgeting And Eating Out Behavior Of De La Salle University Students, Ma. Luisa C. Delayco, Hazel T. Biana

DLSU Business & Economics Review

The preparation and consumption of one’s food is governed by choices, attitudes, behavior, and beliefs. In De La Salle University, a school surrounded by a variety of restaurants, students make these food choices every day. Understanding how these food decisions are made is noteworthy, as this paper seeks to comprehend the students’ budgeting and eating out behavior through the use of Fishbein and Ajzen’s Theory of Reasoned Action. The underlying variables of the budgeting and eating out behavior of students are used to explain the pattern of correlations within a set of observed variables. Through an administered survey and data …

A Quantitative Study Of Multilayered Market Systems And Small And Medium-Sized Enterprises, Mukhail Hamza

Walden Dissertations and Doctoral Studies

Small and medium-sized enterprises (SMEs) account for approximately 50% of the world's gross domestic product. However, these economic agents suffer from inadequate access to liquid funds to finance their operations. The liquidity gap has led to early bankruptcy and liquidation, stagnant growth and development, and fewer employment opportunities. The problem under study was the effect of funding limitations on SMEs' business operations and growth. The purpose was to examine the impact of multilayered capital systems as alternative funding for SME growth. This study was informed by Gilbrat's law and the theory of financial exclusion. The research questions addressed the use …

Examining The Relationship Between Selected Ratios And Market Capitalization Of An Ipo, Michael Wayne Donaldson

Walden Dissertations and Doctoral Studies

This study examined the relationship between return on equity (ROE) and return on assets (ROA), the business sector, and long-term performance of new firms 5 years after the initial public offer (IPO) date. IPOs have a high rate of delisting from stock exchanges, and understanding possible predictors of long-term performance will benefit business owners and investors. The purpose of this study was to determine if ROE and ROA are predictors of long-term performance of IPOs on U.S. stock exchanges. The research question examined whether there is a statically significant relationship between the ROE, ROA, business sector, and market capitalization of …

Consumer Reactions To Diminishing Retirement Funds: A Financial Crisis By-Product, Erika J. Eason

Walden Dissertations and Doctoral Studies

The shift to defined contribution plans from defined benefit plans have left future retirees concerned about having the necessary funds to retire. The purpose of this phenomenological study was to explore how investment behaviors have changed due to losses in retirement accounts because of the global financial crisis of 2008. Building upon the conceptual framework of attribution theory and risk perception theory, this study explored what might encourage future retirees to use the stock market for retirement. A purposeful sample of 20 Hampton Roads, Virginia residents who held retirement accounts prior to the financial crisis of 2008 consented to interviews …

Payroll Fraud: Effects Of Ghost Names On The Government Wage Bill In Ghana, Gilbert Nyaledzigbor

Walden Dissertations and Doctoral Studies

Policy makers believe that there are ghost workers, persons who do not work yet receive salaries, on Ghana's public sector payroll. However, little is known about the factors that create opportunities for ghost workers. The purpose of this quasi-experimental study was to extend Cressy's conceptualization of the fraud triangle theory to test the applicability of Reinikka and Svennson's graft estimation model by using nonprobability quota sampling to select 85 heads of public agencies for participation in a cross-sectional survey. The research questions focused on the relationship between size of government agency, the estimated number of opportunities for ghost workers, and …

Correlations Between Corporate Governance, Financial Performance, And Market Value, Mohamed Saleh Darweesh

Walden Dissertations and Doctoral Studies

Corporate governance can play a significant role in financial market stability and economic development. Corporate governance scholars have provided controversial results with respect to the relationships between corporate governance and both corporate financial performance and market value. Based on agency theory and institutional theory, the purpose of this correlational study was to investigate the relationship between corporate governance mechanisms, financial performance, and market value in Kingdom of Saudi Arabia's 116 firms from 2010 to 2014. Financial performance was measured by return on assets and return on equity, while market value was measured by Tobin's q. Corporate governance mechanisms involved in …

Entry-Level Health Care Services Employee Motivation And Performance, Alecia Brooks

Walden Dissertations and Doctoral Studies

Healthcare administrators have regarded employee motivation and performance as significant factors because of the challenges with employee disengagement, which may decrease patient satisfaction and profitability for healthcare organizations. The number of available jobs within healthcare continues to increase at a high rate, while the total hires within the healthcare industry decreased from 2.9% in December 2014 to 2.7% in January 2015. Motivation in the workplace is a continuous concern for organizational leaders, more specifically for the health care industry. Based on Vroom's expectancy theory, the purpose of this single-case study was to explore the motivational strategies healthcare organizations' leaders could …

Valuation, Pricing, And Performance Of Initial Public Offerings On The Ghana Stock Exchange, Mohammed Sani Abdulai

Walden Dissertations and Doctoral Studies

In recent years, the initial public offerings (IPOs) on the Ghana Stock Exchange (GSE) witnessed some level of undersubscriptions. The purpose of this research was to investigate the extent to which valuation, pricing, and performance of prior IPOs listed on the GSE contributed to this state of undersubscriptions. The research was informed by the valuation and pricing framework of Roosenboom. The research questions addressed whether IPOs on the GSE were under/overpriced and whether the projected and pre-issue financials were free from forecasting errors and earnings management. A cross-sectional, explanatory research design was employed to examine a dataset of 30 sampled …

Breastfeeding In The Philippine Workplace: What’S Wrong With The Right?, Emily Sanchez Salcedo

DLSU Business & Economics Review

There are four main differences between the Philippine and American statutes that promote breastfeeding. First, the Philippine law provides that lactation breaks should be compensated while the American law explicitly stated that employers are under no such obligation. Second, the Philippine law provides for “culturally appropriate lactation care and services” whereas majority of American states exempt breastfeeding from public indecency laws. Third, the Philippine law makes a conclusive statement that breastfeeding “enhances mother-infant relationship”. The American law wisely left such matter to individual realization. Fourth, the Philippine law puts the right of a mother to breastfeed on equal footing with …

Three Essays On Default Risk In Capital Markets, Laleh Samarbakhsh

Theses and Dissertations (Comprehensive)

This dissertation comprises three essays on default risk in capital markets exploring (a) failure risk of hedge funds, (b) pricing in equity option markets, and (c) relationship between option and credit default swap markets, respectively, with a particular focus on the recent financial crisis.

The first essay “The role of Excess Leverage in Hedge Funds Failure” investigates the role of financial leverage, including the use of margins and derivatives, in the hedge funds failure during the 2008 financial crisis. Motivated by failure of the two Bear Sterns hedge funds, this paper examines why some hedge funds failed during and after …

Can Strategic Risk Management Contribute To Enterprise Risk Management? A Strategic Management Perspective, Phil Bromiley, Devaki Rau, Michael K. Mcshane

Finance Faculty Publications

Within the discipline of enterprise risk management (ERM), strategic risk management (SRM) has become a subject of increasing interest to practitioners and academics. To our knowledge, the term “strategic risk management” first appeared in the management literature in 1985 and 1986 (Jammine, 1985; Figenbaum & Thomas, 1986) and in the academic finance literature in 1990 (Rawls and Smithson, 1990), although early usage of the term did not clearly relate to later conceptions. The phrase has been in use even longer than ERM (Bromiley, McShane, Nair, and Rustambekov, 2014). Even with this longevity, the meaning of the term remains unclear, with …

Idiosyncratic Risk And Earnings Noncommonality, Kenneth Yung, Qian Sun, Hamid Rahman

Finance Faculty Publications

The seminal Campbell et al. (2001) paper showing that idiosyncratic risk has increased considerably in recent years has spawned a large number of articles to explain the phenomenon. In this paper, we propose growing earnings noncommonality as a possible source of the increasing idiosyncratic volatility. The empirical results of this research validate this proposition. Our conclusions stand the test of several robustness checks which show that market power and innovativeness previously considered in literature as sources of increased idiosyncratic volatility are not significant in the presence of earnings noncommonality. The findings of this research will be useful for analysts and …

The Effect Of Providing Peer Information On Retirement Savings Decisions, John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian, Katherine L. Milkman

Faculty Publications

Using a field experiment in a 401(k) plan, we measure the effect of disseminating information about peer behavior on savings. Low-saving employees received simplified plan enrollment or contribution increase forms. A randomized subset of forms stated the fraction of age-matched coworkers participating in the plan or age-matched participants contributing at least 6% of pay to the plan. We document an oppositional reaction: the presence of peer information decreased the savings of nonparticipants who were ineligible for 401(k) automatic enrollment, and higher observed peer savings rates also decreased savings. Discouragement from upward social comparisons seems to drive this reaction.

The Impact Of Hyped Ipo's On The Market, Elias Escobedo

Honors Program Theses

Increasingly, finance researchers are including irrationality into their understanding of the stock market, including emotions (Tetlock, 2007) or misunderstanding of available information (Huberman & Regev, 2007). The popularity of the recent Alibaba IPO demonstrates that investors can get excited.1 Is excitement an important determinant of the behavior of stock market investors? Empirical evidence suggests that investors “herd” into similar stocks (Wermers, 1999) and may experience common feelings of optimism and pessimism (Tetlock, 2007). If investor’s emotions correlate, what about excitement? Can the excitement for a particular stock spill over into the excitement of other stocks?

To analyze the impact excitement …

Patents, Innovation, And Performance Of Venture Capital-Backed Ipos, Jerry X. Cao, Fuwei Jiang, Jay R Ritter

Research Collection Lee Kong Chian School Of Business

We study the predictive power of patents on the long-run performance of venture capital (VC)-backed initial public offerings (IPOs). We show that VC-backed IPOs that have at least one patent at the time of the IPO substantially outperform other VC-backed IPOs, with 3-year buy-and-hold market-adjusted returns of -7.1% vs. -23.3%. On average, VC-backed IPOs without patents perform similarly to non-VC-backed IPOs. We also report that VC-backed IPOs from 1981-1998 outperformed other IPOs, but the pattern has reversed for IPOs from 1999-2006. Although a smaller proportion of non-VC-backed IPOs possess patents, those with patents also outperform those without patents.

Establishing Hr Professionals' Influence And Credibility: Lessons From The Capital Markets And Investment Banking Sector, Paul Aldrich, Graham Dietz, Timothy Adrian Robert Clark, P.Eter Hamilton

Research Collection Lee Kong Chian School Of Business

Through two separate studies involving 47 interviews inside 22 institutions in the capital markets and investment banking sector, we explore the levels of influence and sources of credibility for senior HR professionals, and examine the challenges they face in establishing credibility. We compare these findings against previous research, which has identified several determinants of HR's influence and credibility. Our findings confirm that HR's modest influence is contingent on the predispositions and convictions of key stakeholders, notably the CEO, but also depends on the decision being taken. We find that the basis for senior HR professionals' credibility is more individual than …

Limited Attention, Marital Events, And Hedge Funds, Yan Lu, Sugata Ray, Melvyn Teo

Research Collection Lee Kong Chian School Of Business

We explore the impact of limited attention on investment performance by analyzing the returns of hedge fund managers who are distracted by personal events such as marriage and divorce. We find that marriages and divorces are associated with significantly lower fund alpha, during the six-month period surrounding the event and for up to two years after the event. Relative to the pre-event window, fund alpha falls by an annualized 8.50 percent during a marriage and 7.39 percent during a divorce. Busy fund managers who manage larger funds and engage in high tempo investment strategies are more affected by marriage. Fund …