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Purpose The purpose of this paper is to examine programs designed to support the commercial paper market during the financial crisis. Design/methodology/approach The paper analyzes the participants in the two programs to determine why domestic financial institutions chose one program over the other. Findings Domestic financial institutions chose the Temporary Liquidity Guarantee Program over the Commercial Paper Funding Facility (CPFF) while foreign financial institutions chose the CPFF. Practical implications The analysis is intended to support future policy debate on how to address a liquidity crisis in the money markets. Originality/value The authors are the first paper to examine the participants in these two programs. The value is the policy implications of this study.

PurposeThe purpose of this paper is to analyze papers that have been published in the Journal of European Real Estate Research since its inception in 2008.Design/methodology/approachThe author analyzes papers published from 2008 to 2019 in theJournal of European Real Estate Researchby authors’ country of affiliation, by country of study and by theme.FindingsTheJournal of European Real Estate Researchpublishes papers from scholars from an increasing number of countries, in particular in Central and Eastern Europe. Papers that provide a comparative analysis of countries constitute the largest category of contributions. The three most popular themes remain housing, valuation and investment/portfolio management. However, the dynamics of the three categories differ notably.Originality/valueThis paper provides for a clearer understanding of key dimensions of real estate research in Europe.

Purpose This paper participates in the debate on market efficiency and correct approach for asset pricing through a comprehensive review of literature in favor, as well as against the long held belief of market efficiency. The purpose of this paper is to understand emerging trends in behavioral finance and establish its future potential as a mainstream alternative theory of asset pricing. Design/methodology/approach The review and discussion of literature is mainly divided into three different sections that are –theories supporting efficient market hypothesis (EMH); studies providing evidences from the stock market on the failure of EMH and studies on behavioral finance, discussing separately investors’ behavioral biases keeping in mind their effect on stock prices; and providing empirical evidences on the effect of investor sentiment on stock prices. Findings The review of literature from both the point of views has helped in understanding the market efficiency issue and changing dynamics of asset pricing approach. This is achieved by highlighting the gaps in the concept of market efficiency and also suggesting how these gaps can be bridged with a superior approach such as behavioral finance. Through further discussion of emerging trends in behavioral finance, the paper also points out gaps and how these can be abridged, for behavioral finance to be accepted as a mainstream alternative approach to EMH. Originality/value This is an extensive and one of a kind study that discusses market efficiency through discussion of EMH and behavioral finance side by side. With the help of such a study, researchers can precisely understand the need and can focus on the future course of action to make behavioral finance a mainstream approach to asset pricing.

PurposeThis paper aims to show that when conducting a literature review, important papers can be identified by regressing citation counts on prior publications’ metadata.Design/methodology/approachThe method developed in this paper applies citation count regression analysis to identify important papers that may be overlooked when conducting literature reviews on subject areas with a large population of studies.FindingsThe developed method reduces a literature down to a small sample of important papers for further narrative analysis.Research limitations/implicationsAlthough the most widely used citation count database was used for research, there is a risk that a paper is not indexed; thus, it would be out of the scope of the literature.Practical implicationsThe developed method allows both preliminary selection of important papers for literature review, and robustness and completeness checks for already conducted narrative reviews.Originality/valueThis paper develops an automated search method for identification of important papers based on citation counts. This method allows for the reduction of big samples of research papers into smaller heterogenic subsamples. Like meta-analysis, this method is a quantitative technique that can enhance traditional narrative literature reviews.

Purpose To analyze the CFTC’s approach to regulating cryptocurrencies and blockchain technologies in light of their cross-border nature, limitations on the CFTC’s extraterritorial authority, and the CFTC’s prerogative to work cooperatively with foreign regulators. Design/methodology/approach Discusses the principles set forth in CFTC Chairman Christopher Giancarlo’s White Paper regarding cross-border swap regulation; analyzes the similar nature of cross-border issues arising from regulation of cryptocurrencies and blockchain technologies; examines regulations and guidance implemented by foreign authorities in the blockchain and cryptocurrency space; and assesses the limitations of the CFTC’s extraterritorial authority. Findings The principles set forth in Chairman Giancarlo’s White Paper regarding cross-border swap regulation apply equally to blockchain technologies and cryptocurrencies, and as such, the CFTC may wish to pursue an analogous approach to regulating cryptocurrencies and blockchain technologies. Practical implications The CFTC should exercise deference to and cooperate with foreign counterparts to regulate cryptocurrencies and blockchain technologies that traverse international borders, thereby avoiding overlapping and potentially conflicting regulation while fostering an innovative growth environment for emerging technologies. Originality/value In-depth analysis and insight from experienced professionals in the CFTC and cross-border investigations and enforcement space.

Purpose The purpose of this paper is to trace a legal evolution of the monitoring board and to reveal what brought the evolution and what is expected to emerge. The paper points to unique complementarities in Japanese corporate governance institutions and norms which will affect how the monitoring board performs its functions. Design/Methodology/Approach Analysis is based on texts on corporate governance legislations in Japan from the revision of Commercial Code in 1950 to the revision of Companies Act in 2014. Other sources include Tokyo Stock Exchange regulations, White Paper on Corporate Governance and other academic literatures on Japanese corporate governance. Findings Changes of non-legal institutions and norms in Japanese corporate governance necessitated legal reforms toward the monitoring board. Persisting institutions and norms, in particular lifetime employment, influences how the monitoring board performs its functions in Japan. Originality/Value This paper explains how the evolution of the monitoring board in Japan emerged and what will cause different expected functions of the monitoring board in Japan and other jurisdictions.

PurposeThis paper aims to investigate the impact that governance mechanisms have on European Union ‘banks income smoothing behavior.Design methodology/approachThe authors examine the impact that corporate governance mechanisms included in European Commissions’ proposals regarding the improvement of corporate governance mechanisms (Green Paper) have upon European Union banks’ accounting policy decisions regarding the level of loan loss provisions (LLPs). In addition, the authors examine whether banks’ capital structure operates as an effective internal corporate governance practice. The authors investigate the association between certain corporate governance characteristics and the level of LLPs for a sample of 98 banks from 23 European Union countries for the period of 2010-2013, in the aftermath of the 2008 financial crisis. To test the hypotheses, a multivariate regression model is run. Similar to previous research, the authors use ordinary least squares analysis to test the results.FindingsEmpirical findings provide evidence that there is a positive association between LLPs and accounting income, implying the existence of an income-smoothing pattern of provisions. In addition, the results suggest that banks managers’ decision to smooth income may differ with regard to the board structure, the level of leverage and the provision of disclosure for remuneration for chief executive officer.Originality/valueThe findings of this study contribute to the existing literature concerning banks’ income smoothing behavior. These findings can be useful to regulators, as the authors provide some evidence regarding the effectiveness of the European Union corporate governance framework.

Purpose This paper aims to analyze how political brinkmanship impacted Treasury yields during the debt ceiling debate in 2015. The results show that the resignation of the House Speaker John A. Boehner caused a significant decrease in Treasury bill yields of one- and three-month maturities. The authors robust analysis indicates that these lower yields have saved US taxpayers several billion dollars in extra tax expenses. This paper provides evidence that lack of political brinkmanship can be very advantageous for the taxpayers. This has considerable implications for lawmakers in this post-election year. Design/methodology/approach The authors examine the differences in yields between equal maturity short-term Treasury securities and commercial paper using t-tests, non-parametric tests and a robust regression model based on earlier empirical studies. Findings This study provides evidence indicating that between September 25, 2015, and up to October 30, 2015, relatively lower Treasury yields resulted from the lack of political brinkmanship, and this has saved the US taxpayers several billion dollars in interest expenses in 2015. Research limitations/implications The study showed that lower yields will result from a lack of political brinkmanship, and this resulted in savings of several billions of dollars in interest payments. Considering that both the White House and Congress will be controlled by the same political party, this gives lawmakers a unique opportunity to have less acrimonious debt ceiling debates. The limitation of the study is that it does not consider the impact on foreign exchange markets and other factors which could play a major role. Practical/implications Unlike earlier scenarios where default risk increased, followed by credit rating downgrades, there was a quiet confidence this time about a quick resolution. Markets were stable, and this allowed money market participants to invest more confidently even when an upcoming debt ceiling debate is on. Corporations that invested additional cash in money markets for short-term could do it more confidently at that time without fear of default or interest rate risk which could potentially harm the market value of their investments. Practical/implications It implies that there will be lower taxpayer costs because of debt ceilings and avoidance of shutdowns of the federal government. It also implies that there could be more confidence in the dollar. Originality/value Several earlier studies have examined Treasury default caused by political brinkmanship. This is the first study to examine an event where political brinkmanship appeared possible and then suddenly dissipated in a single day. Political brinkmanship is bad news because it increases taxpayer interest burden as seen from several of the studies above. Therefore, it should be considered good news if no disagreement is evident. This argument serves as our motivation for this paper. As an increase in the chances of default causes an increase in the yield of Treasury bills as earlier studies showed, a decrease in the chance of default caused Treasury bill yields to be that much lower based on the results of this study.

PurposeThis paper aims to find out the performance of the Grameen Banks of West Bengal after their merger.Design/methodology/approachThe objective of the paper is to measure the performance of Paschim Banga Gramin Bank (PBGB) and Bangiya Gramin Vikash Bank (BGVB) after their amalgamation, to compare the performance of PBGB and BGVB, using the key performance indicators and to analyze the future scope of these two banks. The factors that are considered for this study are number of branches (if these banks could reach maximum of the rural mass), number of staffs (if these banks generated employment after the merger), investments, deposits, composition of total funds (owned funds and borrowed funds), lending services, productivity per branch and per staff, etc. The study uses statistical tools to analyze the data.FindingsIt has been observed that there exists a significant difference in the “Branch Network” of PBGB and BGVB. A significant difference has been observed in the “Number of Staffs” of PBGB and BGVB. It has been found that there is a significant difference in the “three type of funds” of PBGB and BGVB. It has been found that there is a significant difference in the “Investments” of PBGB and BGVB. A significant difference has been observed in the “Deposits” of PBGB and BGVB. It has been found that there is a significant difference in the “Outstanding Loan” amount of PBGB and BGVB. It has been observed that there is a significant difference in the “Loan Issued” amount of PBGB and BGVB. It has been found that there is no significant difference in the Productivity “Per Branch” and “Per Employee” of PBGB and BGVB.Research limitations/implicationsThe study is based on the published/secondary data and is restricted to two Regional Rural Banks of West Bengal, the PBGB and the BGVB, for nine years, 2012–2020.Social implicationsThe paper will help the future researchers, to know the performance of the Grameen Banks for the study period; this will help them to carry on with the study in the future.Originality/valueThe work is original and never sent to anywhere else for publication.

Purpose For new ventures, access to entrepreneurship assistantship is the main source of growth and innovativeness. Accelerators, a growing provider of entrepreneurial resources, offer such assistantship. This study aims to identify several factors that might account for a startup’s acceptance of accelerator programs. Particularly, this paper examines the impact of a lead founder’s country of birth, gender and education on accelerator acceptance. Design/methodology/approach This study tests the framework with logit regression for a sample of 10,298 observations for startups in 166 countries over 2016–2018. Findings This study finds that entrepreneurs from developing countries are less likely to be accepted by accelerators than entrepreneurs from developed economies. Counterintuitively, this study also finds an advantage for female entrepreneurs in accelerator acceptance. Further, the results suggest a positive impact on education. Building on signaling theory, this paper argues and shows that accelerators do not evaluate applicants uniformly. Practical implications Our comparative study enhances business owners’ insight for application to entrepreneurial resources and has meaningful implications for women’s entrepreneurship. For policy-making purposes, this study offers more insight on economic development for entrepreneurs’ access to global resources. Originality/value Despite the extant literature demonstrating the benefits of accelerators, determinants of acceptance to these programs, particularly at the individual level, are underexplored. This is the first study that shows the rarely acknowledged link between a lead founder’s country of birth, gender and education level on accelerator acceptance. Here, this study extends entrepreneurship literature and shows some sources of variation in access to international accelerator programs.

Purpose The authors aim to examine the association between earnings and book values with stock prices in India during the IFRS convergence period because, in India, the literature is yet to investigate more about IFRS convergence and its impact on the financial reporting environment. Hence, the purpose of this study is to assess the influence of IFRS conversion on the value relevance of accounting information throughout the IFRS conversion period. Design/methodology/approach The current paper endeavors to investigate the earnings and book values affiliation with stock prices in India during the IFRS convergence period by employing a price valuation model (Ohlson’s Model). The study assembled a total of 3,440 firm-year observations from the National Stock Exchange in India over five years, which signifies the IFRS conversion period (2015–2019). Findings The research findings displayed that accounting information such as earnings, book value has value relevance throughout the IFRS enforcement period; however, the value relevance has been increasing for earnings and showing a descending association for book value. The significant explanatory power of earnings reveals that market participants give more weightage to earnings than book values. Overall, the findings of the study will facilitate improved decision making for both, capital market participants and regulators, by highlighting the key areas for improvement in the Indian capital market. Research limitations/implications This study also extends a discussion on the subject in those economies where regulations are weak and the market is imperfect with asymmetrical information. Practical implications The research outcome provides for empirical shreds of evidence regarding the value relevance of accounting information during IFRS enforcement in India, where IFRS is a recent emergence. Social implications This paper examines the value relevance of accounting information during IFRS convergence period in India which will felicitate improved decision making for both, market regulators and investors. Originality/value This research is the first factual documentation regarding value relevance of earnings and book value during the IFRS enforcement process in India with the most recent data and contributes to the limited study conducted in developing nations like India.

Purpose Homeownership provides shelter and is a vital component of wealth, and house purchase signifies a lifetime achievement for many households. For South Africa confronted with social and structural challenges, homeownership by the low and lower middle-income household is pivotal for its structural transformation process. In spite of these potential benefits, research on the affordable housing market in the context of South Africa is limited. This study aims to contribute to this knowledge gap by answering the question “do changes in household income per capita have a symmetric or asymmetric effect on affordable house prices?” Design/methodology/approach A survey of the international literature on house prices and income revealed that linear modelling that assumes symmetric reaction of macroeconomic variables dominates the empirical strategy. This linearity assumption is restrictive and fails to capture possible asymmetric dynamics inherent in the housing market. The authors address this empirical limitation by using asymmetric non-linear autoregressive distributed lag models that can test and detect the existence of asymmetry in both the long and short run using data from 1985Q1 to 2016Q3. Findings The results revealed the presence of an asymmetric long-run relationship between affordable house prices and household income per capita. The estimated asymmetric long-run coefficients of logIncome[+] and logIncome[−] are 1.080 and −4.354, respectively, implying that a 1% increase/decrease in household income per capita induces a 1.08% rise/4.35% decline in affordable house prices everything being equal. The positive increase in affordable house prices creates wealth, helps low and middle-income household climb the property ladder and can reduce inequality, which provides support for the country’s structural transformation process. Conversely, a decline in affordable house prices tends to reduce wealth and widen inequality. Practical implications This paper recommends both supply- and demand-side policies to support affordable housing development. Supply-side stimulants should include incentives to attract developers to affordable markets such as municipal serviced land and tax credit. Demand-side policy should focus on asset-based welfare policy; for example, the current Finance Linked Income Subsidy Programme (FLISP). Efficient management and coordination of the FLISP are essential to enhance the affordability of first-time buyers. Given the enormous size of the affordable property market, the practice of mortgage securitization by financial institutions should be monitored, as a persistent decline in income can trigger a systemic risk to the economy. Social implications The study results illustrate the importance of homeownership by low- and middle-income households and that the development of the affordable market segment can boost wealth creation and reduce residential segregation. This, in turn, provides support to the country’s structural transformation process. Originality/value The affordable housing market in South Africa is of strategic importance to the economy, accounting for 71.4% of all residential properties. Homeownership by low and lower middle-income households creates wealth, reduces wealth inequality and improves revenue collection for local governments. This paper contributes to the empirical literature by modelling the asymmetric behaviour of affordable house prices to changes in household income per capita and other macroeconomic fundamentals. Based on available evidence, this is the first attempt to examine the dynamic asymmetry between affordable house prices and household income per capita in South Africa.

Purpose Professionals and academics alike hold polarized opinions about Bitcoin’s purpose and its fundamental value. This paper aims to describe Bitcoin’s unique features that make it such an intriguing asset and proposes a new way to consider Bitcoin and its underlying value. Design/methodology/approach In this paper the author discusses Bitcoin’s defining features that make it a unique asset. The author argues that Bitcoin should not be considered as a single purpose asset only, but rather as a new digital financial asset serving several functions, at least partially. The author discusses the role of Bitcoin in the traditional financial system, contrasts Bitcoin to gold, considers the implications of the continuance of expansionary policies on Bitcoin and discusses the impact of the emergence of cryptocurrencies as a new asset class on public policies. Findings In addition to functioning as a means of payment (at least partially) and a diversification tool, part of Bitcoin’s value proposition stems from its worth as a short position on modern expansionary monetary policies. Indeed, Bitcoin’s value should rise if expansionary monetary policies are maintained, amounting to a tool to short these policies, which should be considered in future attempts to value Bitcoin. Originality/value The author adds a new layer to the ongoing thought process by arguing of a function played by Bitcoin unaccounted for thus far by the literature. Additionally, the author describes the features and mechanisms, allowing Bitcoin to play that role.

PurposeThis paper addresses the role of principles-based accounting standards as a potential mechanism for reducing firms' time delay of annual reporting disclosure while improving the timeliness of accounting information. The paper also contributes to the existing literature by addressing the mediating effects of the financial reporting complexity and the audit workload on the link between principles-based accounting standards and the time delay of annual reporting disclosure.Design/methodology/approachThe focus is placed on an unbalanced panel of 20,943 samples over the period of 2007–2017.FindingsThe results show that the more principles-based the accounting standards are, the lower the time delay of annual reporting disclosure is, and the timelier the disclosure of accounting information is. The relationship between the two is more significant especially in the first two months after the end of the fiscal year. The findings are all robust after controlling for a series of sensitivity checks and endogenous concerns. From the mediating effect results, the authors find that principles-based accounting standards decrease the financial reporting complexity and the audit workload which in turn can help lower time delay of annual reporting disclosure. In addition, the negative effect of principles-based accounting standards on the time delay of annual reporting disclosure is more significant in the case that the company has “good news” including with no losses and receiving the standard auditing opinions. The results confirm the law of “good news announces early, bad news announces late.” Furthermore, the moderating effect results show that the higher the economic policy uncertainty index and the legal environment index, the lower the benefit of principles-based accounting standards to the timeliness of annual reports. The results of the economic consequences of timeliness suggest that the timely disclosure of accounting reporting will bring greater market reaction and contain more information, and the information of companies that disclose annual reports timely are more transparent.Originality/valueThis paper studies the impact of accounting standards on the timeliness of annual report disclosure, which enriches the literature in the field of macro policies and micro-enterprise behaviors.

Purpose As more women are now being appointed to senior and top management positions and invited to sit on boards of directors, they are now directly participating in strategic company decision-making. As female directors have been found to provide new ideas, increase company competitiveness, efficiency and performance and bring a greater number of external resources to a company than male directors, this paper aims to put female directors as a variable into the data envelopment analysis (DEA) and statistical models to explore the effect of female directors on operating performances. The DEA first quantified and measured the company efficiencies, after which the statistical model analyzed the correlations between the variables to specifically identify the impact of female decision makers on the operating efficiencies in state-owned and private enterprises. Design/methodology/approach A novel two-stage, meta-hybrid dynamic DEA was developed to explore Chinese cultural media company efficiencies under optimal input and output resource allocations, after which Tobit Regression was applied to determine the effect of female executives on these efficiencies. Findings From 2012 to 2016, the overall efficiencies in Chinese state-owned cultural media enterprises were better than in the private cultural media enterprises. The overall technology gaps (TGs) in the state-owned cultural media enterprises were better than in the private cultural media enterprises. Originality/value Previous research has tended to focus on the causal relationships between female senior executives and business performances; however, there have been few studies on the relationships between female executives and company performance from an efficiency perspective (optimal resource allocation). This paper, therefore, is the first to develop a novel two-stage, meta-hybrid dynamic DEA to examine Chinese cultural media enterprise efficiencies, and the first to apply Tobit Regression to assess the effect of female executives on those efficiencies.

PurposeBased on the transaction cost theory, this paper aims to investigate the impact of cultural distance on international strategic alliance formation and its underlying mechanisms.Design/methodology/approachThis paper uses the investment of foreign firms in the Chinese Venture Capital market as an empirical background, Obtaining VC data from Zero2IPO Private Equity, CVsource Investment Database (2001–2015). This paper chooses the Logit regression method, according to Lind’s three-step method to test the inverted U-shaped relationship.FindingsThe empirical analysis of foreign venture capital firms invested in China revealed that there is an inverted U-shaped relationship between cultural distance and the possibility of international strategic alliances. This relationship is the result of two opposing mechanisms, which are the need and the feasibility of international strategic alliances. In addition, this study further examined the moderating effects of social embeddedness and social reputation, revealing the boundary effects on the complex relationship between cultural distance and possible international strategic alliance formation.Originality/valueThis study focuses on cultural difference, which is a key factor leading to a firm’s transaction costs. Based on the transaction cost theory, this paper investigates the impact of cultural distance on international strategic alliance formation and its underlying mechanisms.

PurposeThis paper aims to assess the fiscal sustainability in Egypt during the period 1990–2018 using deficit accounts (DA) approach. It also tries to investigate the possibility of applying generational accounts (GA) in Egypt as a new approach to assess fiscal sustainability.Design/methodology/approachThis paper tries to assess fiscal sustainability in Egypt during 1990–2018 using DA and GA approaches. DA approach includes primary deficit indicator, tax gap indicator, augmented Dickey-Fuller stationarity test for debt/GDP ratio and Johansen co-integration test between government revenues and expenditures. However, concerning the possibility of applying GA in Egypt, field study form was designed including specific questions to academic and executive economic experts to investigate if it is possible to apply GA in Egypt.FindingsThe empirical findings of the field study indicate that Egypt witnessed fiscal sustainability during the period 1990–2018 using DA. On the other hand, there are various obstacles, including administrative, technical, legal and political obstacles which hinder Egypt from applying GA to assess fiscal sustainability.Originality/valueTo the best of the authors' knowledge, this paper assesses fiscal sustainability in Egypt using DA for a longer and updated time series within 1990–2018. In addition, it is the first paper to examine the possibility of assessing fiscal sustainability using GA approach in Egypt.

PurposeThis study examines how specific micro-level macroeconomic indicators influence corporate performance volatility among US corporate bodies in the short run.Design/methodology/approachThe study employs error correction autoregressive distributed lagged (ARDL) model (ECM) to examine how micro-level variables influence volatility associated with corporate performance in the short run.FindingsThis paper finds that disaggregated or micro-level variables examined, tend to exhibit features that are not readily apparent from the aggregate variable from which such variables are derived. For instance, reported empirical estimate suggests that, growth in expenditures on services and nondurable goods tend to lower volatility associated with corporate performance, whereas government expenditures and expenditures on durable goods rather worsens volatility associated with corporate performance, all things being equal. Additionally, presented empirical estimates further provide evidence suggesting that macroeconomic uncertainty and inflation uncertainty significantly moderate or influence the extent to which disaggregated variables impact corporate performance volatility.Originality/valueCompared to related studies in the reviewed literature, this study rather examines volatility associated with corporate performance instead of the corporate performance indicator itself. Additionally, this paper also examines how disaggregated variable instead of aggregate variables impact such volatility. Finally, the moderating role of key macroeconomic conditions in such a relationship is also examined.

Purpose This paper aims to examine whether conditional conservatism is affected by chief financial officer (CFO) attributes as this issue is understudied in Malaysia. Given that CFOs have a direct responsibility for financial reporting, therefore, their individual attributes are important in influencing conservatism in financial reporting. Design/methodology/approach This study uses non-financial listed firms in the Main Market of Bursa Malaysia from the years 2016 until 2019. Findings The results show that CFOs’ attributes, namely, gender, age, education level and ethnicity, affect earnings conservatism. To test for robustness, the authors use difference-in-difference, propensity score-matching and unconditional conservatism, namely, market-to-book ratio and the authors find the results hold with an exception for age and education level. Further, the effect of these attributes is more profound in non-Big4 audited firms, suggesting that CFO attributes act as a substitute mechanism for lower audit quality. Originality/value This study complements existing studies by documenting the first evidence on the significant effects of CFOs’ attributes in influencing accounting conservatism in an emerging country, namely, Malaysia. This is the first paper, to the humble knowledge, that examines CFOs’ attributes on accounting conservatism in Malaysia.

Purpose This paper aims to evaluate the usefulness of two conceptual frameworks: levers of control (LOC) (Simons, 1995) and performance management systems (PMSs) (Ferreira and Otley, 2009) for studying PM practices using a case study. Design/methodology/approach A case study method is used whereby data are collected through semi-structured interviews, examination of the group’s annual reports and internal documents. Findings A key finding of this study is the use of a PMS at the case company which is formally structured and with objectives, mechanisms and processes designed beyond a mere “performance measurement system.” While the case analysis indicates that most of the key components of the two frameworks are featured in the company’s PMS design, the uses of Simons’ (1995) LOC, however, are not consistent with the notion of “balance” as advocated by the model. Research limitations/implications The evidence presented in this study is based on one large manufacturing company, and hence the findings cannot be generalized. Practical implications The findings of this study can be used in enriching the design of current proposed theoretical frameworks and also in encouraging management accounting researchers to continue the efforts of studying performance management (PM) practices. Originality/value A deeper understanding of PM practices using holistic frameworks has yet to receive more contested efforts from management accounting researchers. This paper attempts to contribute to this endeavor and fill in the gap in this area of research.

Purpose As an important part of the disclosure of listed companies' annual reports, MD&A will disclose some "bad news" about the company. The purpose of this paper is to study whether such "bad news" can reduce information asymmetry and alleviate the risk of stock price crash remains to be seen. Design/methodology/approach Based on the sample of A-share listed companies from 2007 to 2016, the authors examine whether the negative information in MD&A could reduce stock price crash risk. Findings It is found that the negative information in MD&A does not reduce future crash, which indicates that the negative information in MD&A does not alleviate the information asymmetry. Further, it is also found this is due to the low readability of negative information which leads to the negative information not successfully released into the market timely. Only highly readable negative information can alleviate information asymmetry and suppress crash risk. In addition, the authors also find in the companies with more investor surveys negative tone is negatively correlated with crash risk, which means that investor surveys could help investors interpret the negative information in MD&A and alleviate stock price crash risk. Practical implications The practical significance of this article: this paper suggests that investors should carefully identify the quality of negative information in MD&A and pay attention to other quality characteristics besides credibility. This paper suggests that the regulator should pay attention not only to whether to disclose and the amount of disclosure but also to the quality of information disclosure, such as readability, so as to restrict management's strategic behavior in information disclosure. Originality/value First, different from previous studies on the impact of information disclosure on crash risk, this paper directly explores the impact of information in MD&A on stock price crash risk from the perspective of negative information disclosure that management most want to hide. It supplements the literature on the impact of information disclosure on stock price crash risk. Second, this paper studies the interaction between information tone and readability and its impact on the risk of stock price crash. Some studies believe that the credibility of negative news is higher and investors' reaction may be stronger. However, this paper finds that the disclosure of negative information may not be absorbed by the market because of the low readability. Third, this paper finds that investor surveys can help information users to interpret negative information and alleviate the risk of stock price crash, which shows that information disclosure of different channels will complement each other and improve information efficiency. Therefore, it advocates different information disclosure channels which has important practical significance for improving market pricing efficiency and reducing investment decision-making risk.

PurposeThis paper aims to address the following research question: Is loan funding to female entrepreneurs in Egypt, Tunisia and Morocco affected by self-selection from borrowers or/and discrimination from lenders? This paper sheds light on empirical literature review, which displays mixed evidence.Design/methodology/approachThe authors use a pooled sample of 3,896 businesses in Egypt, Morocco and Tunisia drawn from the 2013 World Bank Enterprise Survey (WBES). Despite selection biases and overweighing, the sample provides descriptive statistics upon gender ownership and gender management (human capital characteristics and financial data). The authors design two regression logistic models with interaction to investigate loan demand and loan granting with respect to self-selection vs discrimination. Female management is disentangled from female ownership with respect to entrepreneurship.FindingsNeither self-selection nor discrimination affects female owners compared with their male counterparts, whereas female managers do self-select themselves. In as much as the WBES female subsample include several biases, the authors eventually emphasise the importance of the non-surveyed informal sector, which includes most (micro-)businesses, and loan funding provided by the microfinance industry to these female businesses. Microfinance fills the gap for working capital but not for fixed assets. The size of the business is a major factor explaining both self-selection and discrimination.Research limitations/implicationsFindings of this study have important policy implications for closing the gender gap in accessing finance. In addition to supply-side factors, demand-side factors should be addressed. Informality also needs to be addressed, as many micro and small enterprises owned or managed by women are informal entities without registration or/and social protection. One way to increase women's demand for financial services is to introduce financial products to meet their needs (e.g. social protection basic coverage). Governments can help develop these new products by strengthening the microfinance industry with a favourable regulatory and institutional framework. The authors also wonder about the extension of this study. Thus, a new cross-sectional analysis of the most recent surveys in the North African region would allow the authors to enlarge the overall sample and measure the evolution of the gender gap over time.Originality/valueSo far, funding female entrepreneurship remained little investigated in these North African countries. Several sampling biases in the WBES – small businesses underestimation and manufacturing industry overweighting, which have been overlooked so far, explain the absence of self-selection and discrimination. In contrast, size plays an important role. Hence, the focus on microenterprises (the informal sector) and the microfinance industry suggests indeed that female entrepreneurs operating in small businesses have to cope with both self-selection and discrimination.

Purpose The Islamic Capital Market (ICM) has witnessed tremendous growth over the years. One of the most interesting growth curves in the ICM instruments is that Islamic Real Estate Investment Trusts (I-REITs). The purpose in this paper is to highlight the concept of I-REIT and to presents a comparative analysis for Emirates I-REIT and Al-Salam I-REIT of UAE and Malaysia to find out the implications of the major differences between the two countries I-REITs. Design/methodology/approach This paper uses the data in the two I-REITs' financial reports from the years 2015 to 2019. A descriptive (Observational design) data analysis approach is used in comparing both I-REITs by focusing on five different variables that include: portfolio, governance, financial performance, Shariah compliance and risk management. Findings The findings offer evidence of key differences between the two countries regarding the I-REITs. The differences found in the implication for all variables that the paper presented, especially the size of the portfolio for each I-REIT along with the Shariah compliance and risk management, Al Salam “Malaysia” used more standard approach than UAE in which the SSB is responsible for setting the guidelines for Emirates REIT. Also, the risk management technique used by the two REITs differs from one another. Practical implications This research paper provides an insight for the capital market sectors as an initiative to improve and develop the ICM to play its important role in the economy. Originality/value This research paper is an initiative to compare and evaluate the implications of major differences between the I-REITs of the two countries only in the light of recent development in the ICM.

PurposeAfter the COVID-19 outbreak, the Federal Reserve has undertaken several monetary policies to alleviate the pandemic consequences on the stock markets leading to a misunderstanding on the cryptocurrency market response. This paper aims to evaluate the effects of the Federal Reserve monetary policy on the Islamic and conventional cryptocurrency dynamics during the COVID-19 pandemic. We, specifically, examine the associate bubbles and feedbacks effects.Design/methodology/approachThis paper developed a novel methodology that detects market bubbles using the statistical indicators defined by Psychological (PSY) tests. It also investigated the effect of the Federal Open Market Committee (FOMC) announcements on conventional and Islamic cryptocurrencies compatible with Islamic laws “Shari’ah” by using the event-driven regression.FindingsThe empirical results show that the FOMC announcements have a positive significant effect after one day of the event and a negative effect before two days of the announcement on the conventional cryptocurrency markets. However, the reaction of Islamic cryptocurrencies to these events is not significant except for Hello Gold after one day of the announcement. Besides, the Hello Gold and X8X cryptocurrencies present no bubbles during this period. However, Bitcoin and Ethereum markets have short-lived bubbles.Research limitations/implicationsThe main contribution of this study is the investigation of the response and vulnerability to pandemic shocks of a new category of cryptocurrencies backed by tangible assets. This work has practical implications as it provides new insights into trading opportunities and market reactions.Originality/valueTo our knowledge, this work is the first study that compares the response of Islamic and conventional cryptocurrency markets to FOMC announcements during the COVID-19 pandemic and examines the presence of bubbles in these markets. Besides, the originality of this work is derived from the novelty of the data employed and the method used (PSY tests) in this study.

Purpose This paper aims to study the main trends of scientific research in Islamic finance’s social aspects to clarify place, role and functions, especially in the context of increasing social problems. To achieve this goal, this paper focuses on the social component of Islamic finance, analyzes publications on social Islamic finance in the Web of Science database, covering the period from 1979 to 2020, specify the geographical localization of research networks, determines the most cited authors and their scientific position. Design/methodology/approach The authors have applied several literature review techniques, a bibliometric citation and co-citation analysis, a co-authorship analysis and a review of the most cited papers. The analyzes’ results allow us to offer five future questions in Islamic social finance, zakat and waqf, which have not been investigated before and could influence Islamic social finance and Islamic finance research. Findings The authors also derive and summarize five leading future research questions. Research limitations/implications This is a limitation of using only the Web of Science Core Collection database as the premier resource and the most trusted citation index for the world’s scientific and scholarly research. Further study might expand the types of analyzed units, include more keywords and include other databases, such as Scopus. Originality/value This paper can be considered as an inspirational one to future researchers and policymakers in Islamic social finance.

PurposeThis paper investigates the effect of economic policy uncertainty on value of cash before and after the global financial crisis.Design/methodology/approachWe investigate the relationship between economic policy uncertainty and value of excess cash based on the valuation model of Fama and French (1998). Baker et al. (2016) news-based index (BBD index) is employed to calculate measures of economic policy uncertainty. Our research sample includes 103,474 observations from 11,000 firms across 19 countries over the period 2004–2016.FindingsWe find that economic policy uncertainty is negatively “positively” related to value of cash in the pre-crisis “post-crisis” period. Moreover, we also document that the positive effect of economic policy uncertainty in the post-crisis period is stronger in financially constrained firms.Originality/valueWhile prior studies find a relationship between economic policy uncertainty and cash levels or the effect of firm-level uncertainty on value of cash, this paper shows how economic policy uncertainty as an institutional environment factor affects value of cash. Moreover, it documents that economic policy uncertainty has opposite effects on value of cash before and after the global financial crisis.

Purpose With the Green Deal and Sustainable Finance Taxonomy, the European Union is driving forward its ambition for a modern, resource-efficient and competitive economy. For this reason, this paper contributes to the ongoing discussion by examining how overall corporate social performance (CSP) and the respective environmental, social and governance (ESG) pillar performance affects corporate financial performance (CFP). In addition, this study aims to present novel insights by testing a theoretically derived CSP over-investment theory empirically for the German market. Design/methodology/approach The final sample includes firms listed on the German Prime Standard (DAX30, MDAX and TecDAX) from 2015 to 2019. The study includes a correlation and regression analysis using fixed effects on 363 firm-year observations to investigate the CSP-CFP relationship. This paper applies accounting and market-based CFP measures and uses Thomson Reuters (TR) ESG scores to measure CSP. Findings Overall CSP, social pillar and governance pillar performance improve CFP for firms listed on the German Prime Standard. However, the study provides evidence for a value-destroying effect of CSP over-investment in the social pillar. Research limitations/implications The implications of the study are ambiguous. First, firms can improve CFP when doing good, i.e. increase CSP. Second, however, CSP is a concept of decreasing marginal benefits. Consequently, managers can respond to increasing pressure from investors to be “sustainable” with the argument of CSP over-investment. Policymakers must consider materiality as a potential explanation for the over-investment phenomena when framing sustainable development programs, i.e. the EU Green Deal and regulations such as the Directive 2014/95/EU and the Regulation EU 2020/852. Moreover, the study sensitizes society that sustainability efforts do not exclusively affect CFP positively. Originality/value The paper contributes to CSP literature by revisiting the CSP-CFP relationship and debuting a CSP over-investment hypothesis on the German market. The results are highly relevant for practitioners, policymakers and society, as the study provides an empirical framework to evaluate CSP properly and reveals the importance of materiality in stakeholder management.

Purpose The purpose of this paper is to examine the moderating effect of corporate governance on the impact of earnings management on dividend policy. Design/methodology/approach In this paper, the authors selected French non-financial companies listed on the CAC All Tradable index during the 2008–2015 period. Feasible generalized least square regression method is used to estimate the econometric models. Findings The empirical results allowed the authors to confirm and/or reject certain hypotheses. First, the ownership concentration seems to positively moderate the impact of earnings management on dividend policy. Another conclusion that the authors have been able to draw is that the effect of earnings management on dividend policy is more favorable in the case of firms with a small director’s board. Practical implications Our results have shown that French firms run earnings to inform the market that they can distribute dividends. Therefore, we recommend that the various partners of the firm pay more attention to the governance mechanisms of these types of companies and, in particular, in countries where foreign investors suffer from weak legal protection (Easterbrook, 1984; Gomes, 2000; La Porta et al., 2000 and Athari et al., 2016). In fact, standardization bodies, the Ministry of Finance, external auditors and stock exchange organizer must focus on sophisticated governance mechanisms to ensure better quality of financial reporting. Originality/value To our knowledge, no other research has examined whether the impact of earnings management on dividend policy varies significantly with the moderating effect of certain governance mechanisms in France.

Purpose This paper aims to study the determinants of the sovereign debt ratings provided by the 3 main rating agencies for 32 European countries. It verifies the clusters of countries existing for each of the agencies, considering regional bias, and then analyzes whether the determinants were different before and after the global financial crisis. It also aims to explain how the determinants are taken into account for rich and developing countries, using a sample for the period between 2001 and 2008 and the period between 2009 and 2016. Design/methodology/approach To this purpose, this paper performs panel data estimation using an ordered Probit approach. Findings This method shows that for developing countries after the crisis, the relevant explanatory variables are the unemployment rate and the presence in the Eurozone. For rich countries, the inflation rate is pivotal after the crisis period. Originality/value This paper is the first to use a clustering methodology within sovereign debt rating literature, grouping the countries into cohesive clusters according to their sovereign debt ratings along with the proposed time frame. Moreover, it explains, which countries belong to strong or weak groups, according to the rating agencies under discussion; and, in these groups, it identifies the sovereign rating determinants.

Purpose Financial internationalization is of particular importance to emerging country firms. Its significance arises from the impact of institutional void and related agency problems (common to emerging markets) on the internationalization path of these firms. Building on concepts from international finance, agency theory and institutional theory, this paper aims to examine the main aspects of financial internationalization by emerging country multinationals, namely, cross-listing, foreign ownership and foreign independent directors. Design/methodology/approach This paper follows a multiple case study approach which is a good fit for the exploratory nature of this research. The interest is to examine the context-driven financial internationalization of each case firm and replicate the firm-level information to find a common strategy. Findings The findings suggest that financial internationalization by emerging country multinationals starts mainly as these firms plan to enter advanced country markets. It is a dynamic process that entails interaction between financial internationalization and real internationalization, as well as among different aspects of financial internationalization. Cross-listing comprises the first stage of the process. Then, foreign ownership, particularly foreign institutional investments, would increase gradually in response to advances in financial and factor markets. Recruiting foreign independent directors seems to be adopted last, possibly out of fear of losing control of strategic decisions. Originality/value This paper presents a unique perspective that delineates different stages of the process of financial internationalization by emerging country multinationals. This complements the efforts to explain the distinct path of internationalization followed by these firms and supplements scarce literature by including emerging multinationals from India where the matter has not yet attracted proper attention.

Purpose The purpose of this study is to investigate how compensation committee structure or characteristic impacts say on pay (SOP) voting dissent and the impact of SOP dissent on chief executive officer (CEO) turnover. Design/methodology/approach The authors use corporate governance and SOP data to test the relationships amongst variables. Additional analysis is performed using one-to-one propensity-score matched samples. Findings The authors find that firm-years with at least a female member present on the compensation committee are associated with lower SOP dissent. The authors find mixed results of the impact of SOP dissent on CEO turnover. Practical implications This paper suggests that diversity on the compensation committee, particularly the presence of at least a female member on the committee, serves as an important determinant of SOP voting outcome in the USA. The paper provides policymakers and practitioners with insights into factors influencing SOP voting outcomes and implications of SOP dissent for firms. Originality/value The findings of this paper contribute to the corporate governance literature by enhancing the understanding of the role of the compensation committee as it relates to SOP dissent and effect of SOP dissent on CEO turnover.

Purpose This study aims to examine the impact of financial inclusion on per capita gross domestic product (GDP) at varying degrees of financial inclusion for a sample of 76 developing countries between 2011 and 2017. To evaluate the heterogeneous impact, this paper constructs the multi-dimension index of financial inclusion to classify sample countries into two sub-samples in terms of the value of FIID, taking account of three dimensions of financial inclusion: access, usage and availability. Design/methodology/approach This study attempts to identify the presence of reverse causality and long-run relationship between financial inclusion and economic growth by using the Granger causality test (Wald test) and three alternative panel cointegration tests (Kao Test, Pedroni Test, Westerlund Test) respectively. Because of the existence of the bi-directional causality between financial inclusion and per capita GDP, this study uses a fixed effect instrumental variable model with lagged dependent variable to get unbiased estimators from the panel regressions for sample countries. Findings This paper finds a strong positive impact of financial inclusion on per capita GDP growth in sample developing countries, controlling for labor market structure, financial institutions’ efficacy, infrastructural and governance issues. This study suggests that economic growth will be high in developing economies with a higher level of financial inclusion; however, the positive impact for two sub-samples countries (low and medium level of inclusion and high level of inclusion) are heterogeneous. The estimated result explains that a 1% increase in the financial inclusion index leads to a 0.0153% point increase in the per capita GDP for the countries with a low and medium level of financial inclusion, while this positive impact is significantly higher, 0.0794% point for countries with the high level of financial inclusion. This study also suggests that the higher concentration in the financial market by few agents and the lower level of governance may have an adverse impact on economic growth for the economies with a low and medium level of financial inclusion. Originality/value This study is an original study that contributes to the research gap by explaining the heterogeneous impact of financial inclusion on economic growth at varying degrees of inclusion in the two sub-sample countries. Moreover, this study posits greater appeal as it explores the issue using the sample of only developing economies.

Purpose This paper aims to examine the relationship between global value chains (GVCs) and domestic value-added content (DVA) in a panel of 58 countries for the period 2005–2015. Design/methodology/approach First, the authors quantify the refined measures of GVC linkages by using the Borin and Mancini (2019) decomposition technique. Second, the authors apply the feasible generalised least squares method to test the relationship between GVCs and DVA empirically. Findings First, the authors find that GVC links are crucial to the enhancement of DVA. Second, a study at the sectoral level reveals that GVC links in the primary sector raise DVA whilst reducing DVA in the services sector. Third, the authors find that only upstream activities enhance value-added content. Fourth, the authors note the augmenting role played by national policies in mediating the gains associated with GVCs. Finally, the authors note that the outcomes associated with GVCs are consistent when the sample of countries is divided into groups based on income. Practical implications The results lead us to urge policymakers to promote greater integration of business activities into GVCs to reap their benefits. Originality/value This paper contributes to the research on the impact of GVCs on DVA by emphasising the significance of the types of GVC activities and policies that improve DVA.

Purpose This paper aims to develop a holistic understanding of the state of implementation of the Basel III regulation in India. It offers essential insights related to its impact on the macroeconomy, non-performing assets, capital flows and modifications required for the Indian banking sector. Another central aspect of this study is the identification of challenges faced by bankers in implementing Basel III in India. Design/methodology/approach A survey was conducted with the help of a well-structured close-ended questionnaire. It was based on six themes identified after a comprehensive review of the literature. Seven experts validated the construction of the questionnaire. A total of 18 responses (42.8%) were received. Findings The findings substantiate the importance of Basel III regulations. Although high costs and roadblocks are involved in its implementation, yet, the benefits are notable. Banking experts sense the necessity to modify the Tier 1 ratio, risk-weights and ratings. It is felt that credit ratings will impact the capital and investment flows received by India. Research limitations/implications The number of responses limits the ability to conduct several statistical tests. Practical implications The findings support the industry’s view that Basel III focuses more on industrialized countries and that many emerging countries lack the technology and infrastructure to implement it. Originality/value Since the implementation of Basel, the norm is a continuous process; the findings provide vital insights to regulators and academicians focusing on the Indian banking sector about its current state to aid in developing a future roadmap. This paper delivers important values as follows: a holistic view of banking experts on Basel III in India, required modifications, its impact and future scope of research in this area.

PurposeThe paper aims to measure the magnitude of the event-induced return anomaly around bonus issue announcement days in Turkey for recent years. Also, by describing the information content of these announcements with the current data, the study tries to find out the factors that cause return anomaly in Borsa Istanbul when firm boards release the bonus issue decision.Design/methodology/approachThe paper conducts event study methodology for detecting market anomaly around bonus issue announcements. For the pairwise comparison purpose, t-test and one-way ANOVA methods are applied to examine if abnormal returns vary according to the information content of the announcements.FindingsAnnouncement returns for bonus issues from internal resources outperform the issues that are distributed from last year's net income as bonus shares. Findings indicate different return behaviour among internal resources sub-groups. Findings also suggest that investors in Turkey welcome larger-sized issues, while cumulated returns for the initial offers significantly differ from the latter issues.Research limitations/implicationsFindings are limited to the Turkish equity market. Also, the Public Disclosure Platform of Turkey, which is the main data source of the study, does not provide bonus issue announcements before 2010. Therefore, the previous year's data cannot be included in the analysis.Originality/valueThis paper is novel in terms of considering the main resources of the bonus issue in detail to measure the announcement's impact on stock returns.

Purpose The current paper aims to understand whether fair value accounting (FVA) affects analysts’ loan approval decisions and default risk judgments. Design/methodology/approach This study focusses on three issues: unrealized gain or loss resulting from FV measurement recognized in other comprehensive income (OCI), recognition of assets at FV or historical cost and the disclosure or non-disclosure of the FV of collateral assets. It uses an experiment carried out with a sample of 29 CFA analysts. Findings The results show that all three issues have a significant effect on analysts’ judgment and decision-making in processing FV estimates. Originality/value The paper extends knowledge on how financial analysts perceive FV estimates and disclosure and may help the accounting standard boards assess the challenges facing analysts when they apply professional judgments in interpreting FV measurements and disclosures. Moreover, it offers fresh views to the debate on the decision usefulness of FVA, particularly relevant in the post-implementation review of IFRS 13.

PurposeThis paper uniquely aims to triangulate the effects of the COVID-19 pandemic, government financial intervention (GFI) policies and power distance (PD) culture on returns of equity indices during the COVID-19 epidemic in the world's equity markets.Design/methodology/approachThe research employs panel data regression analysis using 1,937 observations from 19 developed and 42 developing countries. The data employed contain daily registered COVID-19 cases, global equity market index prices, financial intervention policies introduced by governments and Hofstede's cultural dimension measure of PD.FindingsThe authors find that investors certainly react negatively to the number of confirmed COVID-19 cases reported, that GFI policies indeed reinforce investors' expectations of policymakers' dedication to stabilize the economy during the COVID-19 pandemic and that equity investors in high PD cultures overreact to GFI news, resulting in more positive stock returns. The authors discover a difference between developed and developing countries in terms of the effect of GFI policies and PD on equity returns.Research limitations/implicationsResults suggest that investors react negatively to the daily registered COVID-19 cases. The authors find that financial intervention policies introduced by governments reinforce investors' outlooks of policymakers' commitment to stabilize local stock markets during the coronavirus pandemic. The results confirm that equity market investors in PD cultures overreact to financial intervention news, thus resulting in more positive stock returns.Practical implicationsThe paper provides three original contributions. First, it helps us to understand the single effect of the COVID-19 and financial intervention policies introduced by governments on returns of the global equity market. Second, it examines the possibility of a two-way joint effect between the COVID-19 and financial intervention policies introduced by governments and the COVID-19 and differences in countries characterized by a PD culture concerning stock market returns. Third, it investigates the possibility of a three-way interaction effect between the COVID-19 contagion, financial intervention policies introduced by governments and culture on returns of equity markets.Originality/valueThe authors' findings are valuable to researchers, investors and policymakers. Culture and finance scholars can now observe the role of Brown et al.'s (1988) uncertain-information hypothesis with reference to the effect of the COVID-19 and financial interventions policies introduced by governments on returns of equity markets. This is because the authors' findings underline that since investors' uncertainty declines with daily registered numbers of COVID-19 cases, the introduction of GFI policies function as a neutralizing device to re-establish investors' expectations to equilibrium. Consequently, stock market returns follow a random walk that is free from the negative effect of the COVID-19. The authors' work is likely to advise equity investors and portfolio managers about the extent to which major exogenous economic events such the outbreak of global diseases, financial interventions policies introduced by governments and differences in countries' PD culture can individually and jointly influence the return of the world's equity markets. Investors and portfolio managers can employ the authors' results as a guideline to adjust their investment strategy based on their investment decision strategy during global pandemics. Policymakers aiming to introduce financial intervention policies to stabilize their stock market returns during global pandemics can benefit from our results. They can observe the full effect of such policies during the current COVID-19, and subsequently be better prepared to choose the most effective form of financial intervention policies when the next pandemic strikes, hopefully never.

PurposeThe purpose of this paper is to examine and explain the complex interrelationships which influence the performance of politically connected firms to create value for their providers of finance and other stakeholders. In doing so, it examines the interrelationships between efficiency and delivering on corporate performance of a firm with political ties.Design/methodology/approachThe authors gathered the literature from the Scopus website. They reviewed the literature of 58 manuscripts about the efficiency and performance of politically connected firms.FindingsThe research finds that the better quality of efficiency of politically connected firms is positively related to the corporate performance of politically connected firms. The authors’ theoretical findings corroborate the political theory, agency theory, stakeholder theory, resource dependency theory and stewardship theory. These theories prove that political connections have an impact on firm performance as a politician reinforces the efficacy. To better understand the effect of political connections on solid performance due to efficiency, this study classifies various efficiencies and links them with political ties.Research limitations/implicationsSeveral avenues of research are suggested to examine further the interrelationships identified.Practical implicationsThe authors’ conceptual findings are valuable for institutional investors, policymakers and stakeholders. To sum up, all theoretical shreds of evidence prove that politically connected firms can enhance performance via efficiency.Originality/valueThe paper conceptualizes the efficiency and performance interrelationships of politically connected firms. The extant literature comparison allows an assessment of the extent to which different efficiency contexts lead to differences in performance.

Purpose The purpose of this study is to examine the net effect of golf courses’ proximity on home sale prices in Kern County, California. Design/methodology/approach A spatial Durbin error model is used with sales price data for 1,693 homes sold in Kern County in the third quarter of 2018. This paper compares 90 different spatial econometric models using Bayesian techniques to produce posterior model probabilities which guided model selection and the number of neighbors to use. Findings The results show that significant spatial dependence exists in home values in Kern County. Point estimates indicate that homes abutting golf courses are valued at less than those which are not. This study also finds that the farther away from golf courses the average home is, the higher its value. Originality/value This study contributes to the existing literature in three dimensions. First, this paper analyzes whether proximity to golf courses impacts home values in Kern County where a study of this nature has not been conducted. Second, the analysis uses transaction data for 2018 which was a period when the sport’s popularity was fading and golf courses closing. Third, Bayesian model comparison techniques are used to select the appropriate model.

PurposeDrawing on three theoretical frameworks, this paper aims to examine the effects of state-owned enterprises (SOEs) and the interaction between SOEs and prior acquisition experience of Chinese domestic and cross-border acquirers.Design/methodology/approachUsing a sample of 4,116 firms consisting of 3,939 domestic mergers and acquisitions (M&As) and 177 cross-border M&As over the period 2004–2017, this study adopts both accounting- and market-based performance measures, namely, return on assets, return on equity and buy-and-hold abnormal return to analyse the effects of SOEs and the interaction between SOEs and prior acquisition experience on acquirers’ performance.FindingsFirst, this paper finds SOEs to exert a positive influence on acquirer performance, contrary to agency theory but in line with the resource-based view. However, the positive relationship between SOEs and performance appears more pronounced for domestic M&A compared to cross-border M&As. Second, this study also finds prior acquisition experience and the combined effect of SOE and prior acquisition experience to have a positive and significant bearing on performance.Research limitations/implicationsThe limitation of this study is the lack of cross-border M&A data with all the relevant information compared to domestic M&A. Thus, the cross-border M&A sample appears lower compared to the domestic M&A sample.Practical implicationsThe results imply that the moderating role of prior acquisition experience on the relationship between SOEs and performance appears to be crucial for cross-border M&A performance compared to domestic M&A.Originality/valueThe findings of this study show SOEs increase performance, contrary to the widely held view based on agency theory that SOEs are inefficient.

PurposeSuccessors' unwillingness to participate in the family business is known to impede intergenerational succession. However, little is known about why those considered eligible, do not choose to become the next chief executive officer (CEO). The authors investigate why some eligible successors withdraw from the succession process while others remain involved. The purpose of this paper is to build theory for which the authors made use of purposive sampling techniques that complied with certain criteria.Design/methodology/approachThe authors use an inductive, exploratory multi-case study design and investigate six Australian food manufacturers.FindingsThis paper's analysis reveals that successors' decisions are driven by dimensions: pursued outcome and reciprocity. Eligible successors withdrawing from succession are concerned about personal financial sustainability and the business' growth potential; this is accompanied by negative exchanges with the incumbent.Research limitations/implicationsThe authors studied a limited number of organizations and these were mainly managed by owner/founders. In this type of organization, successors have been widely exposed to the business and its struggles from an early age. Differences can be present in businesses managed by later generations whose emotional investment, therefore, socio-emotional needs might be different from the cohort being investigated. Second, the authors' aim in carrying out this study was to build theory for which we made use of purposive sampling techniques that complied with certain criteria. Further studies aiming at generalizable results would shed light on the usefulness of the typology and whether other rules apply to the incumbent–successor relationship while ascertaining how the exchanges contribute to the successor's decision to remain or withdraw from the family business.Practical implicationsThis study reveals the crucial nature of the incumbent in the succession process. Their role is not limited to how they interact with the successor but how deeply incumbents manage to understand and monitor the successor's motivations and concerns. Incumbents aiming at retaining eligible successors need to thoroughly understand successors' motivations for agreeing to become the next CEO.Originality/valueThis paper is one of the first to investigate successor withdrawal post training. The authors' methodology includes the responses of non-family senior managers to provide an objective view on the family dynamics.

Purpose This study aims to examine the association between predictive accounting downside risk measures and changes in credit spreads. Building upon the earnings downside risk (EDR) measure developed in prior literature, this paper introduces cash flow downside risk (CFDR). Design/methodology/approach This study modifies an existing empirical framework (root lower partial moment) to calculate CFDR and applies it to a sample of firms between 2002 and 2013 for which credit default swap data are available. Findings After validating the measure, this study identifies a positive association between CFDR and changes in credit spreads. This paper further shows the association between CFDR and credit spread changes is stronger than that between EDR and credit spread changes. Financial stability moderates the relationship between CFDR and credit spreads. Originality/value This study proposes a novel measure of accounting downside risk, CFDR and demonstrates a negative association between this measure and future cash flow and a positive association between this measure and future credit spreads.

PurposeThis paper is focused on determining the asymmetric effects of exchange rate on money demand function in Nigeria.Design/methodology/approachIt employs the empirical model of Baumol–Tobin. Baumol (1952), which was founded on the opportunity and transaction cost of holding money. Monetary aggregates, M1, M2 and M3, are used for the real money balances based on the nonlinear Autoregressive Distributed Lag bound testing procedure.FindingsThe results indicate that the positive and negative partial sum of exchange rate changes differ in magnitude and size, supporting the hypothesis of asymmetric effects of exchange rate changes on the demand for money in Nigeria.Originality/valueThis is the first paper to consider the new broad money aggregate (M3).

Purpose This paper aims to study the impact of liquidity risk and transaction costs on stock pricing in Iran, a closed market operating under a financial embargo and compare the results with those of an important neighboring market, namely, Turkey. Design/methodology/approach This study follows Liu et al. (2016) and incorporates liquidity risk and transaction costs into the traditional consumption-based asset-pricing model (CCAPM) from 2009 to 2017. Effective transaction costs are estimated a la Hasbrouck (2009) and liquidity risk according to eight different criteria. Findings According to the results, both liquidity risk and transaction costs are higher in Iran, possibly due to the financial embargo. Thus, relative to Turkey, this paper should expect a higher increase in the CCAPM pricing performance in Iran when accounting for these two variables. The results are in line with this expectation and indicate that adjusting the CCAPM significantly increases its pricing performance in both countries, but relatively more in Iran. Originality/value This study compares liquidity risk and transaction costs in an economy under the extreme case of a financial embargo to an open yet in other important aspects similar economy from the same region.

Purpose The purpose of this paper is to examine the relation “diversification-risk-performance” for Islamic and conventional banks in different financial stress levels. Also, it aims to investigate the impact of the structure of board directors, macroeconomic variables and banking specific factors on banking diversification. Design/methodology/approach The authors use generalized least squares regressions to examine the impact of banking specific, macroeconomic and governance variables on investment diversification of 66 Islamic and conventional banks during the period from 2006 to 2018. In addition, this study uses panel threshold regressions to study the impact of banks’ profitability and risks on investment diversification in different financial stress levels. Findings The findings show liquidity risk, performance, credit risk and capitalization ratio are significantly related to investment diversification of Islamic banks. On the other hand, liquidity and credit risks, capital to total assets ratio and size have a significant influence on investment diversification of conventional banks. In addition, the diversification strategy of Islamic banks is less sensitive to macroeconomic indicators. As regards to governance variables, the results suggest that the board size, the executive directors and the foreign directors have significant impact on the investment diversification in Islamic banks. On the other hand, chief executive officer duality and foreign directors affect significantly the investment diversification of conventional banks. This study also found that financial stress enables us to develop a better understanding of the relation “performance-risks and diversification.” Practical implications It is expected that the findings of this paper can be used by Islamic and conventional banks in Gulf Cooperation Council (GCC) region that seek to manage the diversification strategy by reducing risk-taking and maximizing profitability. This study suggests that bank managers should consider the level of financial stress during the development of diversification strategy. It provides a better understanding for bank managers about the effect of bank specific and macroeconomics factors as well as governance variables on diversification. Originality/value This study focuses on providing an extension of the existing literature by studying the impact of financial stress indices on the relation between banks’ risk-performance and investment diversification for Islamic and conventional banks in the GCC region.

PurposeThe aim of this paper is to analyse the relationship between public debt, corporate debt service costs and private capital formation in South Africa.Design/methodology/approachTo capture the long-run characteristic of investment, the study adopts the Fully Modified Ordinary Least Squares approach and tests for cointegration using Hansen (1992)'s Parameter Instability test.FindingsWe find that private capital formation increases in domestic debt and decreases in external debt during the pre-crisis period. However, during the period post the Global Financial Crisis, we find evidence of domestic public debt crowding out private capital formation, whereas external debt crowds-in capital formation. Debt service costs are found to reduce investment due to the effect of the debt overhang throughout the period under analysis.Research limitations/implicationsThe paper has important implications for macroeconomic policy. In particular, there is need for deleveraging and allocation of a higher proportion of debt to public infrastructure expenditure which has complementary effects on private investment.Practical implicationsDebt overhang signal that South African firms could be over-leveraged, which hinders future growth prospects. Firms that face high levels of debt should consider debt restructuring.Originality/valueEmpirical studies undertaken to explore this relationship have yielded contradicting results suggesting that the relationship between public debt and private investment is heterogeneous depending on a given economy or prevailing macroeconomic environment. In particular, existing research does not provide evidence on whether recent increases in public debt in South Africa have led to crowding-in or crowding-out of private investment. This paper therefore contributes to empirical literature on the impact of public debt on private investment within a small open economy.

PurposeThis paper aims to assess the quality of interest rate forecasts for the money markets in Argentina, Brazil, Chile, Mexico and Venezuela for the period between 2001 and 2019. Future interest rate trends are of key significance for many business-related decisions. Thus, reliable interest rate forecasts are essential, for example, for banks that make profits by carrying out maturity transformations.Design/methodology/approachThe data that we analyze were collected by Consensus Economics through a monthly survey with over 120 renowned economists and were published between 2001 and 2019 in the journal Latin American Consensus Forecasts. The authors use the Diebold-Mariano test, the sign accuracy test, the TOTA coefficient and the unbiasedness test to determine the precision and biasedness of the forecasts.FindingsThe research reveals that the forecasting work carried out in Brazil, Chile and Mexico is remarkably successful. The quality of forecasts from Argentina and Venezuela, on the other hand, is significantly poorer.Originality/valueOver 50 studies have already been published with regard to the accuracy of interest rate forecasts, emphasizing the importance of the topic. However, interest rate forecasts for Latin American money markets have hardly been considered thus far. The paper closes this research gap. Overall, the analyzed database amounts to a total of 209 forecast time series with 28,451 individual interest rate forecasts. This study is thus far more comprehensive than all previous studies.

Purpose Broker-dealer leverage volatility increases during booms and crisis periods, but its impact on stock prices is relatively unexplored. This paper aims to investigate whether broker-dealer leverage volatility is a key driver for stock prices. Design/methodology/approach This paper collects the US quarterly data of broker-dealer book leverage and three leading stock market indicators (S&P 500, DJIA and Nasdaq) for the period of 1967–2018. The research uses a multivariate GARCH-in-mean VAR to examine the impact of leverage volatility on each of the stock market indicators. A split-sample analysis (pre-1990 and post-1990) has also been performed to show the robustness of the result. Findings The research finds that broker-dealer leverage volatility does not have any significant impact on stock prices. Originality/value Broker-dealers are important financial intermediaries, and there is a huge literature exploring the relationship between their leverage and asset prices. But, the relationship between broker-dealer leverage volatility and asset prices is not explored yet. This study fills the gap and provides the first evidence that broker-dealer leverage volatility does not play any major role in the theory of stock pricing. The research proposes that the stock holding decisions of the investors should depend only on the first moment of leverage and not on the second moment of leverage. The study concludes that high broker-dealer leverage volatility is not a sinister signal for the US stock market.

Purpose The purpose of this paper is to investigate the effect of Shariah compliance status on corporate cash holding decision. Design/methodology/approach This study applies ordinary least square and generalized method of moments regression models for a sample of 178 Malaysian listed firms over the period 2008–2017. Findings The results show that Shariah compliance has positive impact on the level of cash reserves of firms. It is also found that Shariah-compliant (SC) firms quickly adjust their level of cash holdings toward a target level than non–Shariah-compliant (NSC) firms. These results can be explained by the restrictions imposed by Shariah rules on firms to sustain their compliance status. Further, the results reveal that SC firms are likely to hold more cash out of their cash flows. This is the expected result, as the firms operating within the ambit of Shariah rulings and regulations face external financing constraints. Practical implications This study has important implications for managers, policymakers and regulators. For managers, the study is an important reference to understand and design cash management policies by considering restrictions imposed by Shariah regulations. In particular, managers should pay more attention to periods of credit crunch and weak economic conditions in which SC firms may be exposed to greater bankruptcy risks. For policymakers and regulators, this study may be useful in assessing the effect of the restrictions imposed by Shariah law on firm’s cash holding decision. Therefore, in an effort to increase the supply of external financing available to SC firms, policymakers should encourage the issuing of Islamic financial products. Originality/value This paper focuses on SC firms where financial constraints are bound to be more stringent than for NSC firms. It explores the implications of relevant Islamic principles on corporate cash holdings.

Purpose This paper aims to examine the effect of the corporate ethical approach on the cost of equity capital. This study is conducted on a large international sample on behalf of the world’s most engaged firms from an ethical point of view in 2015. Design/methodology/approach The multivariate linear regression model is used to meet the purpose of this study and research hypotheses are also examined using a sample of 80 of most ethical firms in the world during the year 2015. Moreover, three variables (i.e. business ethics, corporate social responsibility and executive compensation based on the achievement of sustainable development goals) are used to reflect the corporate ethical approach and the implied cost of equity capital is used for estimating the cost of equity. In this regard, equity cost estimation is the most appropriate approach to test the effect of business ethics on the cost of financing firms. Findings Based on a sample of 80 firms emerging as the world’s most ethical firms in 2015, the results revealed that firms with better ethics scores are significantly associated with a reduced cost of equity capital. This paper also demonstrates that the executive incentive pays that are based on the objectives of sustainable development are able to explain different outcomes regarding the relation between corporate ethical behaviors and the cost of equity. These findings support arguments in the literature that firms with socially responsible practices have a higher valuation and lower risk. Originality/value This study provides implications for global regulators and policymakers when setting social reporting standards, suggesting that corporate ethical engagement reduces the cost of equity capital by decreasing the information asymmetry and thereby reducing the firms’ risk. Therefore, the findings may be informative to international managers and investors when considering the effect of business ethics on the firm’s ex-ante cost of equity. In this perspective, the voluntary disclosure of information makes it possible to mitigate the problems of asymmetry of information and conflict of interest between the firm and its main providers of capital, which could reduce the cost of equity.