Finance and Financial Management Commons^™

Analysts’ Eps Forecast Revisions After Repurchase Announcements, Meng Huang

Theses and Dissertations--Accountancy

Analysts’ earnings per share (EPS) forecasts are one of the most widely used indicators of firm performance by market participants and firm executives. There are two components in EPS forecasts, but prior literature almost invariably focuses on the net income component (numerator) and ignores the shares outstanding component (denominator). Changes in shares outstanding mechanically alter EPS forecasts due to a changed denominator. These mechanical changes in EPS forecasts, however, do not reflect a firm’s real performance. Therefore, it is important to understand analysts’ share adjustment behaviors in order to better interpret analysts’ EPS revisions after share changing events. This paper …

A Pedagogical Model For Teaching Data Analytics In An Introductory Information Systems Python Course, Heber C. Brau, James C. Brau, Mark Keith

Faculty Publications

In this paper we answer the call of Sheppard (2012) and Brunner & Kim (2016) and present a model for teaching data analytics in an introductory information systems class using the Python programming language. The pedagogy follows an active-learning strategy in which students are assumed to have no statistical or Python programming training prior to class. The learning outcomes include: 1) Data: write code to import and manipulate data; 2) Visualization: write code to generate useful and theoretically sound data visualizations; 3) Feature Engineering: write code to generate, condense, or recombine variables (i.e., "features") of any type (numeric, categorical, ordinal, …

Budget Habits Of College Students: An Empirical Analysis Of Expectations And Realizations, James C. Brau, Marshall Ringwood, Jessica West

Faculty Publications

Using a sample of more than 500 college students from a large, private university, this study seeks to analyze spending expectations of students, their realized habits, and the dispersion between the two. We first ask the students to project what they think their monthly budget will be throughout the semester. We then ask them to track their expenses for three months. The students do the same for income they receive. The students then report their actual spending habits and answer various questions related to their demography, family, and life experience. We use simple univariate correlation methods to explain factors that …

Which Early Withdrawal Penalty Attracts The Most Deposits To A Commitment Savings Account?, John Beshears, James J. Choi, Christopher Harris, David Laibson, Brigitte C. Madrian, Jung Sakong

Faculty Publications

Previous research has shown that some people voluntarily use commitment contracts that restrict their own choice sets. We study how people divide money between two accounts: a liquid account that permits unrestricted withdrawals and a commitment account that is randomly assigned in a between-subject design to have either a 10% earlywithdrawal penalty, or a 20% early withdrawal penalty, or not to allowearlywithdrawals at all (i.e., an infinite penalty).When the liquid account and the commitment account pay the same interest rate, higher early-withdrawal penalties attract more commitment account deposits. This pattern is predicted by the hypothesis that some participants are partially- …

Financial Costs Of Judicial Inexperience: Evidence From Corporate Bankruptcies, Benjamin Iverson, Joshua Madsen, Wei Wang, Qiping Xu

Faculty Publications

Exploiting the random assignment of judges to corporate bankruptcy filings, we estimate financial costs of judicial inexperience. Despite new judges’ prior legal experience, formal education, and rigorous hiring process, their public Chapter 11 cases spend 19% more time in bankruptcy, realize 31% higher legal and professional fees, and 21% lower creditor recovery rates. Examining possible mechanisms, we find that new judges take longer to rule on motions and cases assigned to these judges file more plans of reorganization. Conservative estimates suggest that minor policy adjustments could increase creditor recoveries by approximately $16.8 billion for the public firms in our sample.

Overselling Winners And Losers: How Mutual Fund Managers' Trading Behavior Affects Asset Prices, Li An, Bronson Argyle

Faculty Publications

We link a seemingly biased trading behavior to equilibrium asset prices. U.S. equity mutual fund managers tend to sell both their big winners and big losers. This selling pressure pushes down current prices and leads to higher future returns; aggregating across funds, we find that securities for which investors have large unrealized gains and losses outperform in the subsequent month. Funds with larger turnover, shorter holding period, and higher expense ratios, are significantly more likely to manifest this trading pattern, and unrealized profits from such funds have stronger return predictability. This cross-sectional return predictability is difficult to reconcile with alternative …

Corporate Social Responsibility And Investment Efficiency: Evidence From An Emerging Asian Market, Ming-Te Lee

DLSU Business & Economics Review

The purpose of this paper is to test opposing views of the relationship between corporate social responsibility (CSR) and investment efficiency in a major Asian emerging stock market. The empirical results show that CSR significantly mitigates investment inefficiency among Taiwanese firms. This finding is consistent with the notion that socially responsible Taiwanese firms have fewer agency problems and lower information asymmetry, thus reducing investment inefficiency. The empirical results also show that CSR has a more pronounced effect in mitigating investment inefficiency for Taiwanese firms with more effective corporate governance. In particular, due to the mandatory preparation of CSR reporting, CSR …

Corporate Social Responsibility And Earnings Management: Evidence From Controversial And Non-Controversial Sectors In Asia, Eugene Burgos Mutuc, Jen-Sin Lee, Fu-Sheng Tsai

DLSU Business & Economics Review

In this study, we investigate the impact of corporate social responsibility (CSR) on earnings management through discretionary accruals and real-activities decisions, in light of the increasing attention and engagement of firms from different sectors. This study contemplates on non-financial Asian firms from controversial and non-controversial sectors with 889 and 3,017 firm-year observations from 2011 to 2017. The findings reveal that Asian firms likely use a mix of accrual-based earnings management (AEM) and real-activities earnings management (REM) as a strategy to manipulate reported earnings. In terms of sector classifications, managers from controversial sectors exhibit higher opportunistic behavior than managers from non-controversial …

The Effects Of External Stakeholder Pressure On Csr Disclosure: Evidence From Indonesia, Anisa Ramadhini Trianaputri, Desi Adhariani, Chaerul D. Djakman

DLSU Business & Economics Review

This study examines the effect of external stakeholder pressure on the extent of social and environmental disclosure or corporate social responsibility (CSR) disclosure. Several studies have examined the impact of internal stakeholder pressure (e.g., ownership or board of directors’ structure) and corporate characteristics on CSR disclosure, but there has been little attention focused on the role of external stakeholders. Therefore, this research seeks to examine the influence on the extent of CSR disclosure by four external stakeholder groups: customer, creditor, auditor, and media. A total of 327 annual reports produced by 109 manufacturing companies listed on the Indonesia Stock Exchange …

On Extreme Perception Bias, Emerico Habacon Aguilar, Klarizze Martin Puzon, Imelda Revilla Molina

DLSU Business & Economics Review

This note investigates perception bias: To what extent do individual opinions confound reality? We estimated the relative gap between self-declared estimates and real data. With a sample of respondents from Laguna, Philippines, we asked about the prevalence of diabetes and smartphone usage. We observed a trend of judgment miscalibration. Responses exhibit significant deviation from facts; for example, inaccuracies can go as high as seven times the real value. Especially for estimates on smartphone ownership, bootstrapped quantile regression models showed that perception bias is associated with age.

Japanese And Filipino College Students As Consumers: Does Country Of Origin Affect Their Purchase Intent?, Luz Suplico Jeong, Reynaldo Bautista Jr., Takanori Osaki

DLSU Business & Economics Review

The marketing literature shows that consumers evaluate and buy products based on the country of origin. The impact of the country of origin (COO) on consumers, especially college students who influence demand in global markets, is becoming increasingly important due to advances in information technology. There are studies that show that COO can directly affect purchase intent without mediator variables. However, this study shows that COO does not have a direct effect on purchase intent. COO can only affect the purchase intent of Japanese and Filipino consumers if perceived product quality is used as a mediator variable. In the case …

Sale-Leaseback Transactions: Price Premiums And Market Efficiency, C. F. Sirmans, Barrett A. Slade

Faculty Publications

Sale-leaseback transactions are ubiquitous in real estate markets in the United States with annual volume estimated to be greater than $7 billion. However, there is no evidence concerning the price impact of such transactional arrangements. Using a data set of sale-leaseback transactions, this study examines the price impact on commercial property transactions across seven markets. The findings reveal that transactions structured as saleleasebacks occur at significantly higher prices than market transactions. In addition, after accounting for income differentials, buyers and sellers are appropriately pricing the transactions resulting in no undue advantage to either party, that is, the expected price premium …

Sizing Up Corporate Restructuring In The Covid Crisis, Robin Greenwood, Benjamin Iverson, David Thesmar

Faculty Publications

In the wake of the COVID-19 pandemic, the financial and legal system will need to deal with a surge of financial distress in the business sector. Some firms will be able to survive, while others will face bankruptcy and thus need to be liquidated or reorganized. Many surviving firms will need to be downsized or acquired. In normal times, this triage is supported by the court system, banks, and financial markets. The goal of this paper is to size up the coming surge of financial distress, list the challenges it presents in the current environment, and analyze potential policy solutions. …

Collaborative Regulatory Development In The Mobile Money Sector: A Case Study In Sri Lanka, Suwandaarachchi Chaminda Methsiri

Student Works (2020-2029)

Providing financial services for the unbanked has been challenging, mainly due to relatively high operational costs and the difficulty of reaching remote areas. Mobile money has brought bank-like facilities to the unbanked communities, through its low-cost operations and widespread agent network, thus making them financially included. Regulatory response and support are essential for this advancement, where they necessitate significant changes to the current regulatory practices. This task is difficult for regulators due to their limited technical knowledge and resources in the field of financial technologies. Regulators collaborate with industry to overcome these challenges. However, studies on such collaborations are scarce. …

Initial Public Offerings And Pricing Anomalies, Hon Wei Leow

Student Works (2020-2029)

Initial Public Offering (IPO) is a form of fundraising through the stock market of which has evolved as an essential platform to study the performance of newly issued shares. In the case of an emerging market like Malaysia, the pricing anomalies that measure the performance of initial return and flipping activity of IPO remain an interesting subject. During the period of Global Financial Crisis (GFC) in 2008-09, it is believed that the market sentiment will affect the initial return of new IPO and oversubscription will be negative, and hence firms will be unwilling to do the new listing on the …

Determinants Of Defense Expenditure In South Korea, So Yeon Lee

Student Works (2020-2029)

This research pointed out the importance of defense spending as an „economic means‟ for national security in South Korea while due to the aftermath of US-China trade war, the threats and tension between North Korea and other neighboring countries such as China have become much more severe. In this context, an empirical study was conducted to investigate the factors determining national defense expenditure with secondary data from 1960 to 2018. The domestic factors namely economic growth, arms trade, the threat of North Korea and the Republic of Korea (ROK)-United States (US) defense alliance were established as those explanatory variables. The …

Rethinking The Regulatory Sandbox For Financial Innovation: An Assessment Of The Uk And Singapore, Christopher Chen

Research Collection Yong Pung How School Of Law

After the UK launched the first regulatory sandbox regime in 2016, the approach was quickly transplanted to numerous other countries as a means of promoting innovation, improving competition and enhancing financial inclusion. However, it remains unclear whether the approach can effectively achieve the relevant policy goals and thus justify the differential regulatory treatment. This chapter provides a broad overview of the regulatory sandbox regime and examines its potential benefits and problems. The chapter then provides some empirical evidence by analyzing the sandboxes awarded in the UK and Singapore between 2016 and 2018 with the aim of identifying what the businesses …

Communication Of Fiduciary Risk For Workplace Retirement Plans, George Blount

Walden Dissertations and Doctoral Studies

More than 100 new 401(k) plan complaints were filed between 2016-2017, the highest two-year total since 2008-2009. Plan sponsors of retirement plans face personal financial liability for the risks associated with litigation focusing on their fiduciary responsibility. Grounded in the behavioral governance framework, the purpose of this qualitative case study was to explore the communication of risk for workplace retirement plans. The participants comprised 10 business leaders who are fiduciaries responsible for their company’s retirement plan with a national geographic footprint. Data were collected from semistructured interviews. Thematic analysis was used to analyze the data. Themes of benchmarking, the efficacy …

Relationship Between Csr Reporting, Csr Indices, And Financial Performance Of Hardware And Software Organizations, Cesar Castellanos

Walden Dissertations and Doctoral Studies

Organizational leaders around the world spend millions of dollars on ineffective corporate social responsibility (CSR) programs and CSR reporting strategies. Understanding the relationship between CSR reporting, CSR indices (CSRi), and financial performance is necessary to minimize unnecessary expenditures among organizational leaders. The purpose of this quantitative correlational study, grounded in Frederick’s CSR theory and Freeman’s stakeholder theory, was to examine the relationship between CSR reporting, CSRi, and financial performance of hardware and software organizations. Data were collected from the Security Exchange Commission and the official websites of 25 hardware and software organizations that were part of Fortune 500 between the …

Financial Advisory Firms’ Strategies For Diversifying And Growing Clients’ Portfolio, Gerald Lee House

Walden Dissertations and Doctoral Studies

Abstract

Less than half of all U.S. households have some form of retirement assets. Advisors who fail to use alternative investment strategies may not accumulate enough retirement assets for their clients. Grounded in Markowitz's modern portfolio theory, the purpose of this qualitative multiple case study was to explore alternative investment strategies financial advisors use to enhance the growth and diversification of their clients' retirement assets. Data were collected from semistructured interviews and company documents from 4

financial advisors in Georgia and South Carolina who had successfully incorporated alternative investments in their clients' retirement portfolios. Thematic analysis was used to analyze …

Relationship Of Organizational Structure And Capital Structure On Financial Performance Of Banks, Adam Kakande

Walden Dissertations and Doctoral Studies

Poor financial performance is a challenge for policy makers, industry regulators, investors, bankers, and business leaders. Understanding the relationship between organizational structure, capital structure, and financial performance is vital for business leaders to promote their long-term survival. Grounded in agency cost theory, the purpose of this quantitative correlational study was to examine the relationship between organizational structure, capital structure, and financial performance of new commercial banks in Uganda to promote their long-term survival. Archived data were analyzed using 60 bank-quarter observations of 5 Ugandan commercial banks closed within 5 years after opening, restructuring, merging, or undergoing an acquisition by another …

Financial Illiteracy Of Nigerian Immigrant Entrepreneurs In Houston, Adewole M. Omogunsoye

Walden Dissertations and Doctoral Studies

Financial literacy is an essential determinant of entrepreneurial success as it helps entrepreneurs to access credit and make rational financial decisions. However, financial literacy remains low especially among immigrant communities, who form the bulk of the low-income earners in the United States. The purpose of this qualitative exploratory case study was to explore the financial literacy of Nigerian immigrant entrepreneurs living in Houston, Texas, in order to sustain growth in their business by successfully using the U.S credit system. The research question for the study examined the actions Nigerian immigrant entrepreneurs in Houston need to take to be financially literate …

Examining Liquidity, Growth Strategy, Capital Structure, And Earnings Growth, Steven R. Posey

Walden Dissertations and Doctoral Studies

Many businesses experience financial deterioration after a growth period. Business leaders of firms with market capitalization value between $50 million and $300 million, known as microcap companies, might have an incomplete understanding of growth drivers. Grounded in the firm growth theory, the purpose of this quantitative, correlational study was to examine the relationship between liquidity, growth strategy, capital structure, and earnings growth. The population consisted of the more than 1,400 constituent firms from the 2019 Russell Microcap Index. Archival data from the Securities and Exchange Commission EDGAR database were collected, organized, and analyzed for 119 randomly selected firms. Multiple regression …

Differences In Financial Literacy Across Generations, Audra R. Sherwood

Walden Dissertations and Doctoral Studies

The United States federal government allocates $670 million annually towards financial literacy despite the fact 73 million adults are struggling financially, and over 65% of Americans are financially illiterate and unable to manage their finances. The specific management problem addressed in this study was the awareness of the differences in financial literacy between Millennials and Generation Xers who have and have not taken personal finance courses in high school in the United States. The purpose of this quantitative, nonexperimental, causal-comparative study was to test the self-efficacy theory and goal-setting theory in determining the differences between the two generational groups of …

Knowledge Management Assets Available To Mid-Level Managers During A Merger, Joy Nwulari Emole

Walden Dissertations and Doctoral Studies

The failure rate of mergers in the United States is high at over 70%. One of the contributing factors to merger failure is mid-level managers do not have sufficient strategies for knowledge management. The purpose of this qualitative descriptive phenomenological study was to understand the merger-related knowledge management assets used by mid-level managers in the retention of employees at recently merged medium-size information technology firms in California from 2014 to 2019. The conceptual framework was Nonaka and Takeuchi’s 4 modes of knowledge conversion: socialization, externalization, internalization, and combination. Twelve mid-level managers working in California were recruited from LinkedIn to participate …

Workforce Agility Strategies For Improving The Success Rate Of Change Initiatives, Marvia Herfah Evangelist-Roach

Walden Dissertations and Doctoral Studies

Failure to implement change initiatives is a direct result of low employee resilience and adaptability. Successful agility strategies are important to financial business leaders to remain competitive in financial markets. Grounded in the dynamic capabilities theory, the purpose of this qualitative multiple case study was to explore workforce agility strategies used by financial business leaders to improve the success rate of change initiatives. The participants were 4 financial business leaders in Jamaica who successfully improved the success rate of change initiatives. Data were collected from semistructured interviews, organizational strategic plans, annual reports, and change management plans. Four themes emerged through …

Financial Management Strategies For Sustaining Small Entertainment Businesses, Michael Nana Nitto

Walden Dissertations and Doctoral Studies

Lack of effective financial management control strategies results in many small business entertainment owners (SBEOs) failing within their first 5 years of operations. Without strategies to develop and maintain adequate financial management controls, SBEOs may lose market share and potentially go bankrupt, which would result in the loss of jobs and income for employees. Grounded in the mental budgeting theory, the purpose of this qualitative multiple case study was to explore financial management strategies successful SBEOs use to improve productivity and profitability to sustain business operations beyond 5 years. The participants comprised 4 successful SBEOs in Northern Virginia who effectively …

Parents’ Perceptions Of Financial Technology To Support Financial Socialization And Literacy Levels, Patricia M. Page

Walden Dissertations and Doctoral Studies

The current generation of emerging adults are ill-equipped to navigate the evolving financial landscape, which can further exacerbate socioeconomic inequality. Extant research rooted in Gudmunson and Danes’ family financial socialization theory and Brown et al.’s situated cognition theory, which served as the conceptual framework for this study, acknowledged the long-standing influence of parents and authentic learning opportunities on child(ren)’s financial literacy and well-being. This study’s research questions explored parents’ experience with, and perceptions of, a family-managed virtual bank and prepaid debit card service designed for children ages Pre-K through college. The basic qualitative approach and semistructured interviews provided context to …

Cash Conversion Cycle Strategies To Avoid Business Failure, Brian Savino

Walden Dissertations and Doctoral Studies

At the end of 2018, the leading 2,000 U.S. and European companies had more than $2.5 trillion of cash unnecessarily tied up in working capital. The efficient management of working capital will lead to more cash invested in profitable projects leading to long term stability. This research will benefit chief financial officers (CFO) looking for strategies to manage working capital, which leads to higher profits and will help CFOs better manage economic downturns. Using the resource dependence theory as the conceptual framework, the purpose of this qualitative multiple case study was to explore cash conversion cycle (CCC) strategies used by …

Enterprise Resource Planning Implementation In Higher Education: Cost Containment Strategies, Tysha K. Tolefree

Walden Dissertations and Doctoral Studies

Lack of effective cost containment strategies to support enterprise resource planning (ERP) system implementations within higher education institutions (HEIs) result in budget overruns 50% of the time. Grounded in Gartner’s IT cost containment techniques, the purpose of this qualitative multiple case study was to explore strategies HEI project directors use to support a successful ERP implementation on time and within budget. The participants comprised 5 project directors and managers from HEIs and another public organization in the state of Washington. Data were collected from semistructured interviews, archival data, and organization documents. Thematic analysis was used to analyze the data, and …