bluuebunny/crossref_metadata_2025 huggingface dataset:
Duality of roles and corporate governance in Greece
Authors: Lazarides Themistokles
Published: December 2016

Duality of the role of President of the Board of Directors (BoD) and CEO has been regarded as a good practice of corporate governance. These two roles are the ones with the most power an authority within the corporation. The paper depicts the formulating factors of duality of roles in Greece. Literature has linked duality with performance, organizational stability, ownership concentration and balance of power and control within the firm. The paper, using a Probit regression analysis, examines whether these relationships are valid in Greece. Statistical – econometric analysis has shown that financial performance is not related with concentration of power and control. The same conclusion is can be drawn for ownership concentration. There is a trend of change but this trend hasn’t the same dynamic or driving factors as the ones that are reported by Kirkbride and Letza (2002) and Muth and Donaldson (1998). The hypothesis posed by Heracleous (2001) and Baliga, 6oyer and Rao (1996) are more likely to be true in the case of Greece. Overall, duality in Greece is affected by the historical development of the firm, its organizational scheme and even more by the balance of power and control within the firm.
The effect of corporate social responsibility disclosures on share prices in Japan and the UK
Authors: Bowerman Suzanne , Sharma Umesh
Published: December 2016

This paper investigates whether corporate social responsibility disclosure (CSRD) is associated with firms’ market values in order to assess whether CSRD provides incremental value relevant information to investors. A modified Ohlson (1995) model is used, which is a widely accepted equity valuation model in accounting research. The findings suggest that investors in the UK consider CSRD information in the total information set they use for their investment decision-making, whereas Japanese investors do not appear to find that CSRD provides incremental information over and above financial information to assist in their valuations of firms. These findings have implications for investors and regulators, specifically around the control and governance of firms.
Understanding the multigenerational workforce: are the generations significantly different or similar?
Authors: Nnambooze Beatrice Elizabeth , Parumasur Sanjana Brijball
Published: December 2016

The paper assesses how the generations differ, if they in fact do, and the impact of their biographical profiles, in terms of six critical factors that define the organisational context. These organisational dimensions include extrinsic values/rewards, an interesting and motivating work environment, a flexible and efficient work environment, workplace fun, learning and diversity and, constant growth and advancement in the workplace. The population comprises of all staff in a local municipal department consisting of 300 employees from which a sample of 93 employees was drawn using cluster sampling. Data was collected using a self-developed questionnaire and analysed using both descriptive and inferential statistics. The psychometric properties (validity and reliability) of the questionnaires were statistically determined using Factor Analysis and Cronbach’s Coefficient Alpha respectively. The results of the study reflect that generational differences exist in terms of an interesting and motivating work environment, a flexibile and efficient work environment and, opportunities for learning and diversity. Furthermore, between the generations, biographical impacts also exist relating to gender, position, tenure and education in terms of the organisational dimensions except for workplace fun where no significant biographical differences were noted amongst the generations, implying that all generations irrespective of biographical profiles crave for workplace fun. Hence, the generations are significantly different in some respects and similar in others. Based on the results of the study, recommendations are made to ensure that generational differences are effectively accommodated to ensure optimal cohesion amongst the various generations and the skillful integration of their strengths that will optimise the realisation of organisational goals.
Corporate governance practices in Europe: A descriptive study.
Authors: Metushi Eldi , Di Vito Jackie , Fradeani Andrea
Published: December 2016

Our study examines corporate governance practices in Europe according to the best practice guidelines of 17 countries. We particularly focus on the independence criteria of Board members. Doing so, we wish to understand how these best practices are enforced in the actual corporate governance guidelines in each country. To better define the independence criteria, which is very different among European countries, we develop our own measure of independence, taking into account the strictest criteria of independence recommended in the corporate governance codes of the studied countries. Then, we gather firm-level statistics on a sample of 463 European firms to understand whether the best practice guidelines are actually enforced by these firms. Hence, we contribute to the existent literature by presenting descriptive statistics on the compliance of European firms to their national guidelines. Our findings show that most European firms tend to comply with their local best practice guidelines of corporate governance. We also document a high compliance of our European sample-firm with the Anglo - Saxon best practices of corporate governance.
Why do companies pay dividends?: A comment
Authors: Dewasiri Narayanage Jayantha , Weerakoon Banda Y.K.
Published: December 2016

This study reviews one of the unresolved research puzzles in corporate finance; why do companies pay dividends? In this context, a qualitative study dealing with content analysis is carried out based on the theoretical and empirical research. After critically reviewing 407 research articles in dividend policy, 50 empirical studies were taken as the sample based on the relevancy to the research puzzle. The content analysis has provided some significant insights and stylized facts with regard to the corporate dividend policy. However the previous research studies were fundamentally flawed in their design based on quantitative approaches in order to elucidate a behavioural explanation. As a result, most of the study findings cannot be relied upon to see consistency with the theories in question. Despite years of theoretical and empirical evidences, the findings show that the dividend puzzle is still remaining as unresolved research phenomenon in corporate finance due to lack of unanimity among the researchers over the explanations. This study provides the reader an all-embracing understanding on the theories and empirical explanations over the dividend puzzle. It is imperative for the researchers to focus on all empirical and theoretical explanations in a single study and test them simultaneously in a triangular approach in order to have a single consensus over this puzzle. Thus, developing a new paradigm or models to deal with the dividend puzzle is suggested, until then the deduction of various theories in different studies are inconclusive and inconsistent
The influence of diversity on boards on profitability: an overview across Iberian non-financial listed companies
Authors: Lopes Ilídio Tomás , Ferraz Duarte Pitta , Martins Maria Manuela
Published: December 2016

In modern economies, the corporate governance principles have been understood as drivers that mitigate the risk derived from the existing gap between managerial practices and ownership structure. This research contributes to the literature review, analyzing the relationship between the board characteristics, audit firms, and a set of indicators taken as proxies of performance. Based on a dataset of 124 non-financial companies, a linear model was regressed. We found that some characteristics of board of directors significantly influence the companies’ performance. These new insights can also provide new guidelines for policy makers towards the establishment of new common rules and principles that accurately grant the efficiency of corporate governance mechanisms and ensure the desired international comparability.
The ownership structure effect on firm performance in South Africa
Authors: Mugobo Virimai Victor , Mutize Misheck , Aspeling Jonathan
Published: December 2016

This research investigates the effect of corporate governance through ownership structures; ownership concentration, managerial ownership and government ownership on firm performance. A multiple regression analysis was employed on sample data collected over ten years from 2001-2010 from 80 South African companies to test the magnitude of their influence to company performance as measured by return on assets (ROA). This study found a positive and significant correlation between ownership concentration, government ownership and firm performance. Results also showed a negative relationship between insider ownership and firm performance. To this account, the research concludes that managerial ownership is a single factor that significantly weighs down company performance. In validating the significance of the performance determinance model, evidence shows that companies that maintain the recommended King Report shareholding structure have an average to above average performance. Hence, corporate governance is a critical catalyst for company performance.
On the causal link between financial development and economic growth: Case of Jordan
Authors: AbuAl-Foul Bassam M. , Genc Ismail , Darayseh Musa
Published: December 2016

This paper empirically examines the causal relation between financial development and economic growth in the case of Jordan for the period 1965 to 2004. That is, the paper attempts to provide answers to the following questions: a) Does financial development promotes economic growth? Or b) Does economic growth promotes financial development? Using Toda and Yamamoto (1995) Granger-no-causality model, the results reveal that there is a uni-directional Granger causality from economic growth to financial development (as defined by log (DC/GDP)).
Audit outcomes and the level of service delivery within local government municipalities in South Africa
Authors: Aadnesgaard Victoria , Willows Gizelle
Published: December 2016

The South African Government evaluates municipalities on how well Integrated Development Plan in terms of service delivery are met. This study aims to examine whether a positive correlation exists between the service deliveries of district municipalities across six indicators: water provision, sanitation, weekly refuse removal, electricity, housing, and economic development; and the audit outcomes of each municipality. The purpose is to establish whether good governance leads to effective service delivery as well as to establish an accountability mechanism for which municipalities can be measured against. The result was a moderate correlation between audit outcomes and service delivery. In terms of establishing an accountability framework, this paper concludes that an examination of audit outcomes and service provision together would be beneficial.
Results based costing (RBC) system: questioning the unit of analysis in ABC
Authors: Alsharari Nizar M.
Published: December 2016

This paper aims to introduce Results Based Costing (RBC) System as an alternative accounting tool by questioning the unit of analysis in ABC. By focusing on ‘Results’ instead of ‘Activities’, it investigates its manifest and underlying agendas as a newly innovative idea, with a view to determining its degree of cost management focus and Results Based Management (RBM). Adoption of ABC in different countries especially developed countries has not fulfilled early expectations. Its influence on organizational performance, depending upon how successful performance is defined, has not been evident (see Langfield-Smith 2008). The study thus uses historical and website analysis methodologies for investigating innovative diffusion philosophies related to ABC practices and discourse. These are examined through the theoretical lenses of institutional logics theories. It thus distinguishes between institutional logics and situated logics, and their variances. ABC implementation can be characterized as an encounter between the ABC’s inscribed institutional logic and the situated institutional logic that is embedded in the existing practices in a given organization. The paper moves on to consider the surrounding emergence of RBM approach and then introduces RBC as new accounting tool along with its developments, its processes, intentions and claimed advantages. RBC’s dominant agenda are overhead cost reduction, cost management, performance management and results orientation. Accounting research into the management accounting system and its processes is much needed. This has been largely neglected in favor of management accounting change and innovative diffusion literature. In a world dominated by IT industries, RBC system as a center of organizational and accounting management merits greater attention by researchers. Practitioners in this way can better design and implement systems that build on past knowledge and learning. This study thus presents itself as a first study about RBC currently available in the accounting and management research literatures. It also represents one of the very few referred studies of the Results Based Accounting in the accounting research literature globally.
Corporate governance in the airline industry - evidence from the Asia-Pacific region
Authors: Scrimgeour Frank , Stevenson Rikkie , Duppati Geeta
Published: December 2016

Globally airline performance has been variable with poor performance undermining the confidence of travelers, investors, Governments and other stakeholders. Airline corporate governance is a key determinant of airline performance. However, the relationships between governance and performance is complicated by the diversity of governance arrangements surrounding airlines. This study utilizes the four level model of Scrimgeour and Duppati (2014) to analyze the strengths and weaknesses of airline governance in the Asia Pacific region. Data from firm performance and firm behavior are analyzed for a 14-year period given governance and business choices occur at all stages of the business cycle and governance decisions have impact over multiple periods. Improving trust in the airline industry requires attention to all four levels of governance in a manner consistent with national and international business contexts
Oil prices changes and volatility in sector stock returns: Evidence from Australia, New Zealand, China, Germany and Norway
Authors: Duppati Geeta , Zhu Mengying
Published: December 2016

The paper examines the exposure of sectoral stock returns to oil price changes in Australia, China, Germany, New Zealand and Norway over the period 2000-2015 using weekly data drawn from DataStream. The issue of volatility has important implications for the theory of finance and as is well-known accurate volatility forecasts are important in a variety of settings including option and other derivatives pricing, portfolio and risk management (e.g. in the calculation of hedge ratios and Value-at-Risk measures), and trading strategies (David and Ruiz, 2009).
This study adopts GARCH and EGARCH to understand the relationship between the returns and volatility. The findings using GARCH (EGARCH) models suggests that in the case of Germany eight (nine) out of ten sectors returns can be explained by the volatility of past oil price in Germany, while in the case of Australia, six (seven) out of ten sector returns are sensitive to the oil price changes with the exception of Industrials, Consumer Goods, Health care and Utilities. While in China and New Zealand five sectors are found sensitive to oil price changes and three sectors in Norway, namely Oil & Gas, Consumer Services and Financials. Secondly, this paper also investigated the exposure of the stock returns to oil price changes using market index data as a proxy using GARCH or EGARCH model. The results indicated that the stock returns are sensitive to the oil price changes and have leverage effects for all the five countries. Further, the findings also suggests that sector with more constituents is likely to have leverage effects and vice versa. The results have implications to market participants to make informed decisions about a better portfolio diversification for minimizing risk and adding value to the stocks.
Governance and risk interdependencies among family owned firms
Authors: Geeta Ramanathan , Prasanna Krishna
Published: December 2016

The paper examines the role and impact of corporate governance mechanisms upon the operating risks of Indian listed firms. The recent global financial crisis was primarily attributed to excess risk–taking. This turmoil in the financial markets had a widespread effect on all industries and raised pertinent questions on the effectiveness of firm level governance practices. Impact of corporate governance practices, vide a constructed board governance index, has been examined on the risk taking behaviour of firms. Utilising a sample of 377 firms with yearly data for 6 years from 2006 to 2012, 2262 firm year observations have been analysed. Results confirm that firms with good corporate governance practices are effective in constraining excess risk taking. An instrumental variable approach is adopted to control for endogeneity, which also supports and substantiates the results.
On ASEAN capital market and industry integration: A review.
Authors: Do Hung Quang , Bhatti M. Ishaq , Kónya László
Published: December 2016

Due to the benefits of investment diversification across markets and industries, and the increasing importance of ASEAN capital markets, this paper attempts to review recent studies on capital market integration and investment implications in six selected ASEAN countries. Several methodologies including VAR, GARCH, Copula and DCC, Bayesian approach, CAPM and factor models have been examined in this research. Most of the existing studies consider the capital market integration and its investment implications at a country level, whereas this paper attempts to extend the analysis to the industry level of integration. It also reviews the uses of a VARMA-MGARCH-asymmetric BEKK models to investigate the integration at industry levels in recommending investment diversification. The findings of this paper may provide guidance to academia, investors and policy makers on asset diversification.
Corporate ownership patterns in developing countries
Authors: Lemma Tesfaye T. , Negash Minga
Published: December 2016

This paper examines the effect of firm-, industry-, and country-level factors on corporate ownership pattern within the context of six African countries. Based on theory, we develop multi-dimensional models and examine data pertaining to 377 non-financial firms across a time period of 15 years using a battery of econometric procedures. In the sample countries, ownership concentration and/or block shareholding increases with firm level debt maturity structure, industry regulation, and perceived level of corruption in a country and its real GDP per capita. We also find ownership concentration and/or block shareholding decreases with firm level basic capital structure, firm size, and orientation of the financial system of a country. Our findings signify the role that information asymmetries, agency conflicts, and institutional pressures play in the determination of corporate ownership patterns in developing countries. The findings have practical implications for the investment community in assessing ownership patterns of companies listed in developing countries. Furthermore, the results spark insights that are potentially useful to enhance corporate governance institutions in developing countries.
Accounting disclosure of social responsibility by listed companies in Saudi stock market.
Authors: Ahmed Atef Mohamed
Published: December 2016

Purpose: this study aims to explore accounting disclosure through analysis financial and executives’ mangers, and external auditors’ Perceptions concerning disclosures of social responsibility practices inside listed companies in Saudi Stock Market. Design/Methodology/approach: The current study adopted quantitative approach to explore accounting disclosure of social responsibility for Saudi’ registered companies in the light of Global Reporting Initiatives (GRI) to fill the current gap in social responsibility and sustainable development topic inside Saudi’ environment. Findings: According to the statistical results the researcher reached to the following results: First, Saudi’ companies used standalone reports separate from their annual reports for their accounting disclosure of social responsibility& sustainable development disclosure. Second, Saudi’ companies design their social responsibility & sustainable development reports to suit with the requirements of GRI. Third, there are significant differences between commitment of Saudi’ companies concerning their disclosure of social responsibility & sustainable development practices according to their industry sectors, occupational position, and their work experience. In contrast, there are no significant differences between respondents’ perceptions according to their academic qualifications. Originality/Value: The current study provides a contribution to the prior studies in social responsibility and sustainable development issue through examine the disclosure level of social responsibility in companies registered in Saudi Stock Market. As well as, to examine the respondents’ Perceptions regarding the variance level between companies’ commitment concerning their disclosures of social responsibility & sustainable development practices according to their differences in industry sectors.
Quantity versus quality: the value relevance of CSR disclosure of Saudi companies
Authors: Alotaibi Khaleed Omair , Hussainey Khaled
Published: December 2016

We offer a novel contribution by examining the impact of Corporate Social Responsibility (CSR) disclosure quantity and quality on firm value. We use a sample of 171 non-financial firms listed in the Saudi stock market for the period 2013-2014. We complement and extend the work of Hasseldine, Salama and Toms (2005) by measuring the quantity and quality of CSR disclosure and examining their impact on firm value. To measure CSR disclosure quality, we following Beest el al (2009) and capture all qualitative attributes of information quality as defined in the conceptual framework of the IASB (2010 a). We use a CSR disclosure index to measure the quantity of disclosure.
Our analysis shows a positive association between CSR disclosure quality and quantity and market capitalisation. However, we did not find the same results when we use either Tobin’s Q or Return on Assets (ROA) as proxies for firm value. This suggests that both CSR disclosure quantity and quality have the same impact on firm value. However, the significance of this impact depends on whether the authors use market capitalisation, Tobin’s Q or ROA.
How much do CEOs influence risk attitudes in a firm’s internationalization? Exploring Chinese mining SOES and NSOES
Authors: Ren Monica
Published: December 2016

This paper provides an insight into comprehending Chinese firms’ strategic behaviour on risks in outward foreign direct investment (OFDI). Qualitative case studies, based on eight Chinese mining state-owned and non-state-owned enterprises (SOEs and NSOEs). The findings suggest that: (a) the characteristics of CEOs (Chief Executive Officers) of both SOEs and NSOEs significantly influenced the firms’ internationalization risk attitudes; (b) the tenure of CEOs led to SOEs’ periodical and NSOEs’ perennial risk attitudes; (c) CEOs’ personalities and tenure tend to drive the directions of risk attitudes, while CEOs’ experiences and remuneration were linked with risk intensities. These results support the upper echelons theory, suggesting that in understanding different ownership types of Chinese firms’ internationalization risk attitudes, CEOs’ characteristics should be investigated.
Factors affecting entrepreneur’s development in Oman
Authors: Mohammed Shariq , Uddin Mohammed Ahmar , Ahmad Moinuddin
Published: December 2016

The objective of this paper is to examine the factors affecting the choice of entrepreneurship among the university going students for starting their own business, their awareness about the schemes promoted by the government of Oman for entrepreneurship. The schemes by the government of Oman for promoting entrepreneurship.
The data for the study is obtained from primary source with the use of well structured and pre-tested questionnaires, which were distributed among 150 students of different colleges of Dhofar University, Salalah, and Sultanate of Oman.
The factor analysis using principal component extraction method with Varimax rotation has extracted 5 factors which explained 63.74 percent of the variance.
The agency of employment and unemployment in Nigeria: issue and challenges.
Authors: Afolabi Adeoye Amuda
Published: December 2016

Unemployment has become more alarming within the past decade as Nigerian higher institution of learning produced a large number of University and College graduate for few jobs. The gravity of this situation resulted to the formation of the National Directorate of Employment (NDE) with the mandate to articulate programmes that will help combat mass unemployment in Nigeria. This paper examines the performance of the agency as well as assesses the trend in the unemployment rate at pre and post establishment of NDE in Nigeria. Data were collected through survey questionnaire and from National Bureau of Statistics. We find that many unemployed graduate does not have the opportunity to participate in the NDE programme, insufficient funds, political interference, corruption and lack of access to loan are among the key factor militating against the success of the programme. We recommends that State government in Nigeria should to contribute in solving unemployment in Nigeria and Federal Government should support the NDE programme in term of financial and politician should stop interferes with the activities of NDE.
Disposition effect and investor underreaction to information
Authors: Bouattour Mondher , Benkraiem Ramzi , Miloudi Anthony
Published: December 2016

The purpose of this paper is to explain the underreaction of investors to information. In order to study the adjustment of prices to a fundamental value, we implement experimental markets with fluctuating fundamental values. The experimental design employed involves two treatments differentiated according to the information disclosed to the participants. The results show an underreaction to a change in the fundamental value. This underreaction is greatest when most of the subjects are facing a paper loss. This suggests that the disposition effect has a strong impact on price formation. Once most of the subjects are in a paper gain situation, the underreaction is at its lowest level when they receive good news. Thus, underreaction to information is influenced by paper gains and losses.
Business growth and social media: An organisational issue
Authors: Rabie Claudette , Cant Michael Colin , Machado Ricardo
Published: December 2016

The landscape of marketing has changed considerably over the last decade, with traditional print and broadcast media being expanded and largely replaced by social media platforms. The increasing development of marketing platforms have a large effect on the success and growth of organisations especially within the tourism and hospitality industry, as more travellers are utilising social media as a means of communication and information. The purpose of this research study was therefore to investigate the current use of social media among star-graded accommodation establishments operating in the Western Cape Province of South Africa. A web-based self-administered questionnaire was distributed to star-graded accommodation establishments, who were registered by the Tourism Grading Council of South Africa (TGCSA). A total of 361 useable responses were received. The findings mainly revealed that social media are used in accommodation establishments but that they are still learning how to fully and successfully implement social media platforms in their area of business
Credit risk: from a systematic literature review to future directions
Authors: Barboza Flavio , Kimura Herbert , Sobreiro Vinicius A. , Basso Leonardo Fernando Cruz
Published: December 2016

More than 3000 papers on risk management have been published since 2000. Although research on risk management is moving towards filling knowledge gaps, the large number of papers has a negative side. Young researchers have difficulty in constructing a concise and comprehensive basis of knowledge that allows new gaps to be found instead of addressing issues already resolved. Bearing this in mind, the aim of this paper is to present a systematic literature review on credit risk for academic papers. To meet this objective, the main studies on credit risk were classified and coded, and a citation-based approach was used to determine their relevance and contributions to the state of the art. This identified some gaps and research recommendations.
The financing methods for small and medium companies: comparison between Italy and Germany
Authors: Rossi Matteo , Giacosa Elisa , Mazzoleni Alberto
Published: December 2016

The aim of this paperis to identify the appropriate financing methods for Small and Medium-sized Enterprises (SMEs) - with particular reference to alternative instruments to the banking ones- by comparing Italian and German companies. Based on a sample of Italian and German SMEs and thanks to a quantitative method, the research methodology was developed by the following logical steps: i) illustration of the informative matrix used, thanks to which it’s possible to identify different types of financing instruments (also those alternative to the banking ones) the most suitable for the analyzed companies; ii) adoption of the informative matrix to the sample of Italian and German companies; iii) comparison Italy-Germany. Several differences emerged between Italian and German small and medium-sized companies, regarding the most suitable suggested financing forms. The degree of effectiveness of the financing instruments alternative to the debt appears influenced by the analysed space-time context. With reference to Italy, the effectiveness of these instruments is rather modest. With reference to Germany, it occurs the opposite scenario. The originality of the paper is linked to the current profound changes in both economic and normative terms. The research tries to lead companies to change their financial culture, also considering financial instruments alternative to the bank debt particularly suitable for small and medium-sized enterprises.
Do firms’ leverage deviations affect overconfident CEOs’ acquisition decisions?
Authors: Chai Qingfu , Vortelinos Dimitrios , Zhao Huainan
Published: December 2016

In this paper, we examine how an overconfident manager makes an acquisition decision based on whether or not her/his firm is excessively deviated from the target capital structure. In specially, we find that when her firm is overleveraged, overconfident CEO’s are likely to merge relatively smaller firms. Conditional on making acquisitions, overconfident CEOs are less likely to use stock to finance the acquisition, contrary to previous capital structure literature. Furthermore, when her firm is overleveraged, the overconfident CEO is likely to make value enhancing acquisition, since the market reaction, the average 3-day as well as 5-day cumulative abnormal return of the deal announcement, is significantly positive. Overall, our study improves the understanding of the interdependence between capital structure and investment decisions in the present of a managerial behavioural bias. And our study also shows that over-leverage may mitigate the unfavorable effects of managerial overconfidence traits.
The impact of corporate governance on market capitalization: evidence from Bahrain bourse
Authors: Al Mubarak Muneer Mohamed Saeed , Mousa Hamdan Allam Mohammed
Published: December 2016

Our study is based on the “Agency Theory”, as it interprets the relationship between corporate governance and market capitalization of firms listed in Bahrain Bourse (BB). Longitudinal data is used in this study from 36 listed firms in Bahrain Bourse during the period of 2009-2013. A set of econometric methods, including the fixed effects method, is used to overcome different measurement problems of such relationship. The study findings include a set of results that are related to effect of ownership structure and board of directors’ characteristics on market capitalization of firms. Based on these findings, a set of recommendations, along with study limitations and future research, are put forward.
Stakeholder influence on earnings management: Ethical considerations and potential avenues
Authors: Loy Thomas
Published: December 2016

Financial reports are a major bonding agent in (prospective) firm-stakeholder relationships. Therefore, earnings management might induce stakeholders to accept terms of trade which they would have not, knowing the true situation. The issue becomes even more complicated and potentially conflict-laden if some stakeholders would possess the ability to influence firms’ earnings management behavior and exploit this at the expense of others. Four generalizable avenues of potential stakeholder influence are presented.
The relation of auditor tenure to audit quality: Empirical evidence from the German audit market
Authors: Krauß Patrick , Zülch Henning
Published: December 2016

This study investigates whether and how the length of an auditor-client relationship affects audit quality. Using a sample of 1,071 firm observations of large listed companies for the sample period of 2005 to 2011, the study is one of the first to empirically analyze this auditing issue for the German audit market. The empirical results demonstrate that neither short term nor long term audit firm tenure seems to be a significant factor with regard to audit quality in Germany. In the wake of the ongoing discussion in the European Union regarding the optimal audit tenure length for the quality of the conducted statutory audits, our findings do not support the idea of a mandatory audit firm rotation rule.
Loss recognition timeliness in Brazilian banks: The influence of state ownership
Authors: Brito Giovani Antonio Silva , Coelho Antonio Carlos , Lopes Alexsandro Broedel
Published: December 2016

This paper investigates the effect of state ownership on the conditional conservatism of financial reports of Brazilian banks. State controlled banks in Brazil face additional monitoring from government authorities and managers risk litigation as individuals with potential effects on their personal wealth. Thus we hypothesize that state ownership would have a positive marginal effect on conditional conservatism in this institutional environment. Using a times series conditional conservatism model our results confirm our expectations and show that state ownership has a positive effect on the conditional conservatism of earnings in Brazil. Using a logit model we also corroborate this effect after controlling for the effect of unconditional conservatism and earnings smoothing.
Risk assessment and control
Authors: Peddada Kameswari
Published: December 2016

“No pains! No gains!” No enterprise can run without some risk exposure. The outcome of risk exposure may be negative or occasionally positive. Losses from a negative outcome may be mild and acceptable or huge and unacceptable, leading to closure and serious effects on society and the nation. Good risk management with identification, assessment and control of risks faced is part of good management. Planning against risk at enterprise/company, national and international levels are required. Some such exposures may do no harm, but present new business opportunities. The present study involves an extensive review of available literature on risk management. A reputed textile company has been selected for case-study of performance in terms of risk management.
A new paradigm of modern central banking
Authors: Szunke Aleksandra
Published: December 2016

The changes in the modern monetary policy, which took place at the beginning of the twenty-first century, in response to the global financial crisis led to the transformation of the place and the role of central banks. The strategic aim of the central monetary institutions has become preventing financial instability. So far, central banks have defined financial stability as a public good, which took care independently of other monetary purposes (Pyka, 2010). Unconventional monetary policy resulted in changes the global central banking. The aim of the study is to identify a new paradigm of the role and place of the central bank in the financial system and its new responsibilities, aimed at countering financial instability.
Default bias or no default bias? evidence from decisions regarding occupational pension fund enrollment in Italy
Authors: Lippi Andrea
Published: December 2016

If forced to choose a supplementary pension fund, people will decide not to decide, accepting decisions made for them by others (default bias), reaching a status quo position. This study analyses whether the status quo position achieved via the default option in Italian occupational pension funds is later changed over the period studied (2007-2011), and the factors influencing any change.
Loss distribution approach for operational risk capital modelling under Basel II: Combining different data sources for risk estimation
Authors: Shevchenko Pavel , Peters Gareth
Published: December 2016

The management of operational risk in the banking industry has undergone significant changes over the last decade due to substantial changes in operational risk environment. Globalization, deregulation, the use of complex financial products and changes in information technology have resulted in exposure to new risks very different from market and credit risks. In response, Basel Committee for banking Supervision has developed a regulatory framework, referred to as Basel II, that introduced operational risk category and corresponding capital requirements. Over the past five years, major banks in most parts of the world have received accreditation under the Basel II Advanced Measurement Approach (AMA) by adopting the loss distribution approach (LDA) despite there being a number of unresolved methodological challenges in its implementation. Different approaches and methods are still under hot debate. In this paper, we review methods proposed in the literature for combining different data sources (internal data, external data and scenario analysis) which is one of the regulatory requirement for AMA.
Incentives – Effectiveness and efficiency
Authors: Hinderlich Björn
Published: December 2016

This paper covers the question if and how incentive schemes work evaluated by their impact on company performance (market capitalization and profit before tax). Based on a unique data set for German executive directors of DAX companies it can be proved that neither short (STI) nor long term incentives (LTI) plans necessarily support the company success. It rather depends on the efficiency of each plan, i. e. on its design. Special attention has to be paid on target setting. Short term focused objectives often miss their targets, whereas long term oriented objectives significantly support the company success. To solve the prisoner’s dilemma between employers and employees by a quasi-endless game, additional measures may be helpful, such as share ownership guidelines.
The paradoxical genesis of too-big-to-fail
Authors: Umlauft Thomas
Published: December 2016

At least since the Global Financial Crisis of 2007-2009, the problem of too-big-to-fail (TBTF) has received widespread attention. The research conducted in this context has, however, generally focused on the econometric aspect and the contribution of the TBTF doctrine to the financial crisis of 2007-2009, while the economic historical approach has been confined to tracing the doctrine to its first appearance. This paper attempts to fill this gap in the academic literature by offering an explanation for why, as opposed to how, the TBTF doctrine has developed. This paper identifies the US population’s distrust and at times hostility against the prospect of concentration of power in large financial institutions as the causal factor leading to the TBTF phenomenon. The resulting socially non-optimal regulation favoured a fragmented and fragile banking system based on small unit banks at the cost of more diversified branch banks. The Great Depression impressively highlighted the deep structural flaws of the US banking system. At the same time, however, it caused a shift in the public opinion, which had generally been opposed to deposit insurance, and thereby aligned the public interest with that of small banks, which would profit most from deposit insurance. The newly acquired public and political support enabled weak unit banks to lobby successfully against reforming the banking structure and instead for the adaption of federal deposit insurance. However, the Federal Deposit Insurance Corporation (FDIC) only addressed the symptoms of the weak banking industry but not its causes. Moreover, the strongly biased FDIC policies have generally favoured creditors at large banks, which ultimately led to the TBTF doctrine which, in turn, provided banks with a non-technical incentive to grow in size in order to gain TBTF protection. Initially aimed at preserving the US financial landscape based on small unit banks, the FDIC as the main conduit for TBTF rescues thus became the main driver for big bank corporate welfare. Deposit insurance gave rise to TBTF and, at the same time, put small banks deemed “too-small-to-safe” at a competitive disadvantage, further accelerating the trend towards increasingly large and complex banks.
Labor regulation and corporate governance: A comparative overview
Authors: Damiani Mirella
Published: December 2016

The literature aimed at exploring labor regulation and cross-country comparisons has left partly unexplored two major points: the first concerns potential complementarities or substitutions between patterns of shareholder protection and labour regulation. The second point concerns the role of a comprehensive set of labour rules which contemplates not only employment-unemployment provisions and payoff rights, but also rules and institutional devices which influence employee investments in human capital and have the effect of tying the fortunes of the employee together with those of the firm. The paper offers a critical overview of some selected studies that have started at considering labour institutions for their influence on the ‘balance’ of power inside the firm, between owners, management, and employees.
The obligation to contract in British law
Authors: Klappstein Verena
Published: December 2016

Nowadays the obligation to contract is rarely looked upon. Without reason though, because it is neither outdated nor inoperable. Based on three common law doctrines the obligation to contract goes back to the Middle Ages. It has not lost its relevance, as it can still be found in modern statutory law, such as in the electricity and mail sector. What is more, it is a fundamental institution with a great impact. The analysis showed that the five chosen forms of obligations to contract bear analogical requirements but very similar rationales and economic consequences. It sets impaired market power right and it overstrikes irrational behaviour of market participants. As overall achievement it aligns the range of property, freedom of contract and freedom of competition.
Foreign direct investment and economic growth: A theoretical framework
Authors: Mahembe Edmore , Odhiambo Nicholas M
Published: December 2016

The relationship between FDI and economic growth has attracted considerable attention over the years. Despite the important role played by FDI in economic growth, a number of policy-makers have not fully understood the theoretical linkage between FDI and economic growth. The aim of this paper, therefore, is to review the theoretical literature on the relationship between FDI and economic growth in a stylized fashion. The theoretical literature reviewed in this study show that FDI is a key contributor to the economic growth of the host country. FDI affects economic growth through two broad channels: (i) FDI can encourage the adoption of new technologies in the production process through technological spillovers; and (ii) FDI may stimulate knowledge transfers, both in terms of labour training and skill acquisition, and also by introducing alternative management practices and better organisational arrangements.
Spiritual intelligence leadership lessons from the Tanakh: A narrative inquiry
Authors: Mashingaidze Sivave
Published: December 2016

The purpose of this article was a narrative inquiry of spiritual intelligence leadership lessons from the Tanakh. Spiritual intelligence skills and traits were discussed which are: Honesty and integrity; Purpose; Kindness and compassion; Humility; Communication; Performance management; Team development; Courage; Justice and fairness and finally Leadership development. The findings were that spiritual intelligence from the Tanakh was a contributor to the winning of many wars and projects by these ancient biblical leaders and acted as a touchstone for lessons today. The article concluded that it is unspoken truism that religiosity and spirituality were important in influencing leaders’ intelligence. A recommendation was given for corporates to adopt intelligent skills from the Bible since even greatest scientists as cited in the article got knowledge from the Tanakh.
The performance of exchange rate regimes in three SADC countries: An overview
Authors: Iyke Bernard , Odhiambo Nicholas M.
Published: December 2016

This paper provides an overview of the real exchange rate and economic growth dynamics in three low-income Southern African countries, namely: the Democratic Republic of Congo (DRC), Malawi and Mozambique. Specifically, the paper investigates the nature of exchange rate regimes and the impact that they have on economic growth, as well as the movement of real exchange rates and real GDP from 1970—2010 in these countries. The paper identifies the following trends: Fixed exchange regimes were pursued from the 1960s until the late 1980s and early 1990s in these countries, which were growth-repressing; the countries pursued floating and managed-floating regimes from the 1990s to date, resulting in moderate-to-rapid economic growth. We conclude that liberalised exchange rates, which lead to undervalued currencies in these Southern African countries, were growth-enhancing.
Understanding banking regulatory and market framework in South Africa including the perceived strength, weaknesses, opportunities and threats
Authors: Moloi Tankiso
Published: December 2016

Following the global financial crisis of 2007, the manner in which banks conduct their business became the subject of interest to authorities. In South Africa, most analysts argued that the financial system was insulated by the prudent regulatory system. This paper reviewed the banking regulation and market framework applicable in the South African context. In reviewing regulation and banking market framework, it was found that the principal legal instrument which seeks to achieve credibility, stability and economic growth, is the Banks Act, No. 94 of 1990 (the Banks Act). Considering the applicable regulation, the paper concluded that South Africa has a developed and well regulated banking system which compares favourably with regulatory environment applied by the developed countries. It was, however; cautioned that further regulation such as the recently announced ‘Twin Peaks’ approach to financial regulation could result in unintended consequences, such as driving a larger share of activity into the shadow banking sector.