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Full-Text Articles in Finance and Financial Management

Tunneling As An Incentive For Earnings Management During The Ipo Process In China, Jiwei Wang, Joseph Aharony, Hongqi Yuan Jan 2010

Tunneling As An Incentive For Earnings Management During The Ipo Process In China, Jiwei Wang, Joseph Aharony, Hongqi Yuan

Research Collection School Of Accountancy

Using a sample of 185 Chinese IPO firms listed on the Shanghai Stock Exchange during the period 1999-2001, we show that related-party (RP) sales of goods and services could be used opportunistically to manage earnings upwards in the pre-IPO period. We also provide evidence that such behavior may be motivated by the prospect of tunneling opportunities in the post-IPO period, i.e., exploiting economic resources from minority shareholders for the benefit of the parent company. We provide evidence of one such opportunistic tunneling tool: non-repayment by Chinese parent companies of net outstanding corporate loans made to them by their newly listed …

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Comparative Analysis Of The Financial Performance Of Nonprofit Organizations: Focusing On The Franklin County Senior Activity Center, Shinwoo Lee Jan 2010

Comparative Analysis Of The Financial Performance Of Nonprofit Organizations: Focusing On The Franklin County Senior Activity Center, Shinwoo Lee

MPA/MPP/MPFM Capstone Projects

The Franklin County Senior Activity Center is a nonprofit organization founded in 1966 to provide services to help older residents lead independent lives. Cooperating with twelve board members, a staff of 24 people operates the Center and makes huge efforts to accomplish its mission. The mission of the Center is to contribute to and empower the quality of life of the aging citizens in Frankfort and Franklin County, Kentucky. The Center delivers various public services to them including opportunities for socialization, health promotion, benefit counseling, transportation service, home care service, recreation and exercise programs, adult day care, caregiver support, and …

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A Study Of The Effects Of Budget-Balancing Practices And Fiscal Policies On State Fiscal Health, Candice Schultheis Jan 2010

A Study Of The Effects Of Budget-Balancing Practices And Fiscal Policies On State Fiscal Health, Candice Schultheis

MPA/MPP/MPFM Capstone Projects

During times of economic recessions, many states throughout the U.S. may experience budget pressures that impact their overall fiscal health. Kentucky, in particular, has been faced with structural budget imbalances, declining revenue receipts, and spending reductions. Although economic conditions greatly affect states’ abilities to maintain balanced budgets, other factors may contribute to the variation among states’ financial conditions. This study assesses the effect that budget-balancing strategies, processes, and policies have on states’ fiscal health, as measured by state fiscal peril scores reported by the Pew Center on the States and year-end budget balances as a percentage of expenditures estimated by …

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Deposit Insurance Coverage, Ownership, And Banks' Risk-Taking In Emerging Markets, Apanard P. Angkinand, Clas Wihlborg Jan 2010

Deposit Insurance Coverage, Ownership, And Banks' Risk-Taking In Emerging Markets, Apanard P. Angkinand, Clas Wihlborg

Business Faculty Articles and Research

We ask how deposit insurance systems and ownership of banks affect the degree of market discipline on banks' risk-taking. Market discipline is determined by the extent of explicit deposit insurance, as well as by the credibility of non-insurance of groups of depositors and other creditors. Furthermore, market discipline depends on the ownership structure of banks and the responsiveness of bank managers to market incentives. An expected U-shaped relationship between explicit deposit insurance coverage and banks' risk-taking is influenced by country specific institutional factors, including bank ownership. We analyze specifically how government ownership, foreign ownership and shareholder rights affect the disciplinary …

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The Determinants Of Trade Credit Extension And The Problem Of Late Payment In The Malaysian Manufacturing Sector., Teh Chee Ghee Jan 2010

The Determinants Of Trade Credit Extension And The Problem Of Late Payment In The Malaysian Manufacturing Sector., Teh Chee Ghee

Student Works (2010-2019)

This study investigates the determinants of trade credit extension and the association between late payment from trade debtors and profitability in the Malaysian manufacturing sector. It is based on exploratory data analysis and ordinary least squares (OLS) regressions on a crosssectional sample of 383 and 287 public-listed manufacturing companies, respectively, using audited financial statements for the financial year ending 2007/2008.Investment in accounts receivables is even higher than in inventories in the Malaysian manufacturing sector. Contrary to previous studies, this study finds that large companies,manufacturers with higher liquidity and with higher collateral assets extend less trade credit, indicating that the listed …

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Why Does The Law Of One Price Fail? An Experiment On Index Mutual Funds, James J. Choi, Xavier Gabaix, David Laibson, Brigitte C. Madrian Jan 2010

Why Does The Law Of One Price Fail? An Experiment On Index Mutual Funds, James J. Choi, Xavier Gabaix, David Laibson, Brigitte C. Madrian

Faculty Publications

Experimental subjects review four S&P 500 index fund prospectuses and then allocate $10,000 across those funds. We randomly select subjects to be paid for their subsequent portfolio performance. Subjects cannot access any non-portfolio services such as financial advice from their selected funds. Nevertheless, they overwhelmingly fail to minimize their index fund fees. When we make fund fees salient and transparent, subjects’ portfolios shift towards lower-fee index funds, but over 80% still do not invest all of their money in the lowest-fee fund. When funds’ annualized returns since inception are made salient, portfolios shift towards index funds with higher returns since …

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Executive Compensation And The Maturity Structure Of Corporate Debt, Paul Brockman, Xiumin Martin, Emre Unlu Jan 2010

Executive Compensation And The Maturity Structure Of Corporate Debt, Paul Brockman, Xiumin Martin, Emre Unlu

Department of Finance: Faculty Publications

Executive compensation influences managerial risk preferences through executives’ portfolio sensitivities to changes in stock prices (delta) and stock return volatility (vega). Large deltas discourage managerial risk-taking, while large vegas encourage risk-taking. Theory suggests that short-maturity debt mitigates agency costs of debt by constraining managerial risk preferences. We posit and find evidence of a negative (positive) relation between CEO portfolio deltas (vegas) and short-maturity debt. We also find that shortmaturity debt mitigates the influence of vega- and delta-related incentives on bond yields. Overall, our empirical evidence shows that short-term debt mitigates agency costs of debt arising from compensation risk.

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Pemakaian Maqasid Al-Shari'ah Dalam Produk Takaful Keluarga Di Etiqa Takaful Berhad., Che Ismail Che Othaman Jan 2010

Pemakaian Maqasid Al-Shari'ah Dalam Produk Takaful Keluarga Di Etiqa Takaful Berhad., Che Ismail Che Othaman

Student Works (2010-2019)

Takaful is one of the financial instruments that has its own importance. It is the fundamental to Islamic insurance and its existence is as an alternative to the present conventional insurance in the conventional world of banking and finance. Al-Takaful which is based on al-mudarabah, at-tabarru’ and al-wakalah is very supportive towards syara’ in facing the conventional insurance which contains the element of gharar, usury and gambling element. The existence of takaful has aroused various issues, among them is to what extend is the application of maqasid al-shari‘ah in all of the products offered either in Family Takaful or General …

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Risk Modelling In Finance, Dave Allen Jan 2010

Risk Modelling In Finance, Dave Allen

ECU Research Week

Examines the measurement of risk in finance and the shortcomings of the various approaches to this measurement.

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The Desire To Acquire And Ipo Long-Run Underperformance, James C. Brau, Robert B. Couch, Ninon K. Sutton Jan 2010

The Desire To Acquire And Ipo Long-Run Underperformance, James C. Brau, Robert B. Couch, Ninon K. Sutton

Faculty Publications

We analyze a sample of 4,795 IPOs that went public between 1985 and 2003 to determine the impact of acquisition activity on long-run stock performance. After controlling for relevant factors, we find that IPOs that acquire within a year of going public significantly underperform for three-year holding periods following the first year, whereas non-acquiring IPOs do not significantly underperform over this time frame. In addition, firms that wait for more than a year after the IPO to become an acquirer do not underperform. Our event- and calendar-time results suggest that the acquisition activity of newly public firms plays a previously …

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Dual-Track Versus Single-Track Sell-Outs: An Empirical Analysis Of Competing Harvest Strategies, James C. Brau, Ninon K. Sutton, Nile W. Hatch Jan 2010

Dual-Track Versus Single-Track Sell-Outs: An Empirical Analysis Of Competing Harvest Strategies, James C. Brau, Ninon K. Sutton, Nile W. Hatch

Faculty Publications

We investigate two non-traditional harvest strategies for selling a privately-held company. Dual-track private firms file for an IPO while also courting acquirers. These firms withdraw the IPO to be taken over. Dual-track public firms complete an IPO and are taken over shortly thereafter. Examining 679 takeovers from 1995–2004, we find private dual-track sell-outs earn a 22–26% higher premium and dual-track public sell-outs earn an 18–21% higher premium than single-track sell-outs. Larger, VC-backed, prestigious underwritten, and bubble-year firms have a higher propensity to take the dual-track path. The implication is that entrepreneurs may increase their harvest value by using a dual-track …

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Regulatory Reform And Convergence In Banking: The Case Of China, James C. Brau, Drew Dahl, Hongjing Zhang, Mingming Zhou Jan 2010

Regulatory Reform And Convergence In Banking: The Case Of China, James C. Brau, Drew Dahl, Hongjing Zhang, Mingming Zhou

Faculty Publications

We examine the effect of regulatory reform on the asset allocation and capitalization of Chinese banks, 2002 to 2007, a period following China’s entry into the World Trade Organization (WTO). Our empirical evidence rejects the hypothesis that banks in the Big Four, majority state, majority private, and majority foreign categories have common targeted levels of loans and capital in relation to assets. With respect to rates of adjustment towards those targets, our evidence is mixed. Domestic banks exhibit convergence in behavior toward each other but remain distinct from majority foreign banks. Overall, our findings provide evidence that, while the structure …

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Do Analyst Earnings Beta Explain Growth Anomaly?, Sophie Phuong Thanh Doan Jan 2010

Do Analyst Earnings Beta Explain Growth Anomaly?, Sophie Phuong Thanh Doan

Dissertations and Theses Collection (Open Access)

Using a measure of cashflow risk derived from analyst forecasts, I find that cashflow risk offers a partial explanation for the value – growth anomaly. In particular, the lowest asset growth portfolio has a higher earnings beta than the highest asset growth portfolio. Approximately cashflow risk measured by earnings beta carries a significant positive risk premium of 1.24% with a t-value of 3.51.

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Auditor Choice, Audit Fees And Internal Governance In Family Firms, Shaohua He Jan 2010

Auditor Choice, Audit Fees And Internal Governance In Family Firms, Shaohua He

Lingnan Theses

I study the role of auditing in mitigating agency concerns in family firms. Family firms face less severe agency problems due to the separation of ownership and control (Type 1) but more severe agency problems between controlling and noncontrolling shareholders (Type 2). As family firms make up a large part of most free enterprise economies it is important to examine these two agency problems with respect to auditor choice and audit effort. I find that family firms are more likely to choose a specialist auditor than nonfamily firms, consistent with the argument that family firms need to signal their non-expropriating …

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Is The Special Purpose Vehicles Act Responsible For The Decline In Npl Ratios?, Stephanie L. Chan, Andrew Adrian Y. Pua Jan 2010

Is The Special Purpose Vehicles Act Responsible For The Decline In Npl Ratios?, Stephanie L. Chan, Andrew Adrian Y. Pua

DLSU Business & Economics Review

This study aimed to determine if the SPV Act was actually responsible for the marked decline in NPL ratios this past four years. Using aggregated data for the entire Philippine Banking System, segregated according to type of bank, results suggest that the SPV Act was not responsible for the decline in the NPL ratios but may be attributed to a downward trend in the loan to asset ratio where values are getting closer to the interval for which NPL ratios are at a minimum, economic sluggishness as measured by deviations from the long run trend of macroeconomic variables, and seasonal …

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A Comparative Analysis Of The Entrepreneurial Styles Of Second, Third, And Fourth Generation Overseas Chinese And Filipinos In The Philippines, Gerley Q. Po Jan 2010

A Comparative Analysis Of The Entrepreneurial Styles Of Second, Third, And Fourth Generation Overseas Chinese And Filipinos In The Philippines, Gerley Q. Po

DLSU Business & Economics Review

This study used the multiple case study research approach and presents a comparative analysis of the similarities and differences in entrepreneurship styles among second, third and fourth generation overseas Chinese and Filipinos in the Philippines. Specifically, it aimed to compare the entrepreneurs’ entrepreneurial characteristics, leadership styles, and value orientation. The results indicate that the two groups are heterogeneous even though they operate business in the same country. However, slowly, the influence of Filipino culture is seen in the fourth generation overseas Chinese. The study hopes to provide new generation of entrepreneurs insights on entrepreneurial styles that need to change to …

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Human Resource Management Practices: Drivers For Stimulating Corporate Entrepreneurship In Large Companies In The Philippines, Divina M. Edralin Jan 2010

Human Resource Management Practices: Drivers For Stimulating Corporate Entrepreneurship In Large Companies In The Philippines, Divina M. Edralin

DLSU Business & Economics Review

Leading companies in the Philippines have realized that nurturing an entrepreneurial culture through the implementation of various strategic human resource management (HRM) practices will enhance their firm’s ability to gain competitive advantage and achieve superior performance. This study attempted to determine the degree to which various HRM practices stimulate corporate entrepreneurship and which HRM function is the most significant driver of corporate entrepreneurship (CE) in large companies in the Philippines. Findings reveal that the companies are extensively implementing different practices related to HRM functions that cultivate CE. Employee relations, training and development, and recruitment and selection HRM functions are found …

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Nigeria’S Debt Overhang (1960-2005): A Critical Revisit, Solomon A. Adebola Jan 2010

Nigeria’S Debt Overhang (1960-2005): A Critical Revisit, Solomon A. Adebola

DLSU Business & Economics Review

A general global trend up to the 1980’s has been for nations to rely substantially on external loans and aids for economic sustenance and technological development. This is particularly true for less developed countries (LDC). Unfortunately for these LDCs, their debts have gone beyond the countries’ capacity to repay. The debts have, for many such developing countries, been on a perpetual geometrical increase. Such countries have ended up with a debt overhang, with its detrimental impacts on the countries’ economic growth and social development. This research note gives a treatise on the theoretical framework of a debt overhang, and a …

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Exploratory Market Survey Of Tuba In Tacloban City, Arturo Pacho Jan 2010

Exploratory Market Survey Of Tuba In Tacloban City, Arturo Pacho

DLSU Business & Economics Review

This research note explores the market condition of tuba in Tacloban City in the Philippines. It examined the market viability of tuba as a source of income for small retailers as well as coconut farmers. To determine whether there is any commercial value to tuba, and to what extent, a survey was made on the type of tuba sold, the price it is sold for, the quantity sold, the age of tuba, and the source of tuba. This report provides basic information as to the commercial value of tuba to small store retailers in the city.

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Why Do Firms Go Public?, James C. Brau Jan 2010

Why Do Firms Go Public?, James C. Brau

Faculty Publications

Why entrepreneurs choose to conduct an IPO has received relatively little attention when compared to other IPO topics such as initial underpricing and the long-run performance of IPOs. In this chapter, I summarize, analyze, and expand the current discussion on why firms go public. I begin by discussing the theoretical underpinnings and testable hypotheses offered thus far in the academic literature. I then discuss the empirical evidence for (and against) each of these potential explanations after presenting the intuition behind them. I focus on two types of empirical research: a) large-sample publicly-available financial and stock data and b) proprietary surveydata. …

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Micro-Ipos: An Analysis Of The Small Corporate Offering Registration (Scor) Procedure With National Data, James C. Brau, Gardner Gee Jan 2010

Micro-Ipos: An Analysis Of The Small Corporate Offering Registration (Scor) Procedure With National Data, James C. Brau, Gardner Gee

Faculty Publications

In this study we examine every Small Corporate Offering Registration available from the United States. Using 339 micro-IPOs from 33 states, we find support for the relevance of (1) offering marketing mechanisms and expenses; (2) geographic characteristics; (3) offering characteristics; (4) ownership and governance characteristics; (5) business characteristics; (6) firm marketing mechanisms; and (7) signaling factors.

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Kajian Aplikasi Akad Mudarabah Di Pt. Asuransi Takaful Umum Jakarta, Indonesia., Marhadi . Jan 2010

Kajian Aplikasi Akad Mudarabah Di Pt. Asuransi Takaful Umum Jakarta, Indonesia., Marhadi .

Student Works (2010-2019)

This disertation discourses the contract of mudarabah and its application in the general takaful at PT. Asuransi Takaful Umum Jakarta,Indonesia. The study focuses on the application, profit calculation and some relevant issues in general takaful product. The takaful company itself in form of annual report and also from interviews with the respective officers. It was found from the study that Asuransi Takaful Umum has appliced the mud}a>rabah contract in accordance with the shariah requirement which is to uphold justice, ensure mutual benefits and to avoid riba>, gharar ,maysir and dishonesty.

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Could Decision Trees Help Improve Farm Service Agency Lending Decisions?, Benjamin P. Foster, Jozef Zurada, Douglas K. Barney Jan 2010

Could Decision Trees Help Improve Farm Service Agency Lending Decisions?, Benjamin P. Foster, Jozef Zurada, Douglas K. Barney

Faculty and Staff Scholarship

This study examines whether a statistically derived decision tree could serve as a means to improve U.S.A. Farm Service Agency lending decisions. The study is a substantial extension and reanalysis of an earlier work by Barney, Graves and Johnson, (1999). Results indicate that a decision tree could be a valuable tool for Farm Service Agency employees in their lending decisions. The decision tree provides as good or better predictive accuracy than neural networks and logistic regression models at reasonable cutoff levels of Type II to Type I costs of lending. The decision tree also meets the transparency criteria for Farm …

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Financial Management Practices: Associations With Financial Well-Being And Risky Investment Among Families In Malaysia., Husniyah Abd. Rahim Jan 2010

Financial Management Practices: Associations With Financial Well-Being And Risky Investment Among Families In Malaysia., Husniyah Abd. Rahim

Student Works (2010-2019)

Financial management practices predicting good financial well-being and participation in risky assets among families were identified in this study. It also seeks to find out other factors predicting financial well-being and participation in risky assets. Associations of time horizon with risk preference, and risk preference with financial management practices, differences in financial management practices among the main ethnicities in Malaysia and among families residing in urban and rural areas were also determined. The moderating roles of self-worth between financial management practices and financial well-being of families, and between financial management practices and risky investment by families were explored. Quota sampling …

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Changing Careers -- Six Options For Becoming A Cpa, Elizabeth V, Grace, T. G. Black Jan 2010

Changing Careers -- Six Options For Becoming A Cpa, Elizabeth V, Grace, T. G. Black

Faculty Publications

No abstract provided.

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Analysis Of The Relation Of Corn And Soybeans Futures And Etf Prices., Stoyu Ivanov Jan 2010

Analysis Of The Relation Of Corn And Soybeans Futures And Etf Prices., Stoyu Ivanov

Faculty Publications

In this study I examine the relation between corn and soybeans exchange traded funds and their respective futures contracts. Considering that the exchange traded funds for these commodities track an index based on a basket of the futures instruments a natural link exists between exchange traded funds and futures contracts. This is the first study, to the best of my knowledge, to examine this relation by using cointegration methodology and provide a Vector Error Correction Model of the relation between these two prices.

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The Regulation Of Consumer Financial Products: An Introductory Essay With Four Case Studies, John Y. Campbell, Howell E. Jackson, Brigitte C. Madrian, Peter Tufano Jan 2010

The Regulation Of Consumer Financial Products: An Introductory Essay With Four Case Studies, John Y. Campbell, Howell E. Jackson, Brigitte C. Madrian, Peter Tufano

Faculty Publications

The recent financial crisis has led many to question how well businesses deliver consumer financial services and how well regulatory institutions address problems in consumer financial markets. In response, the Obama administration proposed a new agency to oversee consumer financial services, and the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act embraced the Administration’s proposal by creating the Bureau of Consumer Financial Protection. Other regulatory reforms have been advanced, and in some cases adopted, in recent years, at both the federal and state level. In this paper, we provide an overview of consumer financial markets, detailing the purposes …

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Discretionary Deletions From The S&P 500 Index: Evidence On Forecasted And Realized Earnings., Stoyu Ivanov Jan 2010

Discretionary Deletions From The S&P 500 Index: Evidence On Forecasted And Realized Earnings., Stoyu Ivanov

Faculty Publications

The literature in the area of index changes finds evidence that index changes are information free events. However, Denis, McConnell, Ovtchinnikov and Yu (2003) find evidence contrary to this theory. This study extends the work of Denis, McConnell, Ovtchinnikov and Yu (2003) in an attempt to complete the assessment of the information hypothesis of index changes. Denis, McConnell, Ovtchinnikov and Yu (2003) address only index additions and do not examine index deletions in their study. Our contribution is in filling this void in the literature by examining forecasted and realized earnings of firms discretionary deleted from the S&P 500 index …

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Esops And Corporate Officers' Compensation., Stoyu Ivanov Jan 2010

Esops And Corporate Officers' Compensation., Stoyu Ivanov

Faculty Publications

In the literature two major hypotheses have been developed for Employee Stock Ownership Plans used as a takeover defense, the management entrenchment and shareholder interest hypotheses, with the existing research not finding conclusive evidence for either one. In this paper we provide evidence that the entrenchmenthypothesis is not supported by finding that Employee Stock Ownership Plan firms pay less to their managers than non-Employee Stock Ownership Plan firms. If managers were truly entrenched they would have been able to expropriate wealth from the existing shareholders, which appears not to be the case for Employee Stock Ownership Plan firms.

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The Regulation Of Consumer Financial Products: An Introductory Essay With A Case Study On Payday Lending, John Y. Campbell, Howell E. Jackson, Brigitte C. Madrian, Peter Tufano Jan 2010

The Regulation Of Consumer Financial Products: An Introductory Essay With A Case Study On Payday Lending, John Y. Campbell, Howell E. Jackson, Brigitte C. Madrian, Peter Tufano

Faculty Publications

The recent financial crisis has led many to question how well businesses deliver consumer financial services and how well regulatory institutions address problems in consumer financial markets. In response, the Obama administration has proposed creating a new Consumer Financial Protection Agency. Other regulatory reforms have been advanced, and in some cases adopted, in recent years, at both the federal and state level. In this paper, we provide an overview of consumer financial markets, detailing the purposes they serve, the extent to which they suffer from market failures or other deficiencies, and how they are currently regulated. To illustrate our analytical …

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