This paper aims to explore the quantile-specific short- and long-term effects of economic policy uncertainty (EPU) on the efficiency of the green bond market.
Design/methodology/approach
This study examines the long-term cointegration relationship and the short-term fluctuation relationship of EPU, WTI crude oil price (WTI) and European Union Allowances price (EUA) with the green bond market efficiency (GBE) using the quantile autoregressive distributed lag method. Additionally, the authors analyze the differences before and after the Covid-19 pandemic.
Findings
EPU has a significant positive impact on the GBE before the outbreak. However, during the crisis period, the impact of EPU and WTI was greatly weakened, whereas the impact of EUA was strengthened.
Practical implications
This paper demonstrates the dynamics of GBE and its influencing factors under different periods. The findings provide insights for market participants and policymakers to gain a clearer understanding of the green bond market.
Originality/value
This paper extends the study of green bonds by quantifying the GBE and elucidating the nonlinear relationship between efficiency and independent variables at different quantiles over different periods.
{"title":"The heterogeneous role of economic and financial uncertainty in green bond market efficiency","authors":"Ping Wei, Jingzi Zhou, Xiaohang Ren, Farhad Taghizadeh-Hesary","doi":"10.1108/raf-07-2023-0202","DOIUrl":"https://doi.org/10.1108/raf-07-2023-0202","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This paper aims to explore the quantile-specific short- and long-term effects of economic policy uncertainty (EPU) on the efficiency of the green bond market.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>This study examines the long-term cointegration relationship and the short-term fluctuation relationship of EPU, WTI crude oil price (WTI) and European Union Allowances price (EUA) with the green bond market efficiency (GBE) using the quantile autoregressive distributed lag method. Additionally, the authors analyze the differences before and after the Covid-19 pandemic.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>EPU has a significant positive impact on the GBE before the outbreak. However, during the crisis period, the impact of EPU and WTI was greatly weakened, whereas the impact of EUA was strengthened.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>This paper demonstrates the dynamics of GBE and its influencing factors under different periods. The findings provide insights for market participants and policymakers to gain a clearer understanding of the green bond market.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>This paper extends the study of green bonds by quantifying the GBE and elucidating the nonlinear relationship between efficiency and independent variables at different quantiles over different periods.</p><!--/ Abstract__block -->","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":"1 1","pages":""},"PeriodicalIF":2.4,"publicationDate":"2023-11-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138515807","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-11-20DOI: 10.1108/raf-12-2022-0358
Wael Mostafa, Rob Dixon
Purpose
Recent studies on the securities market’s differential pricing of earnings components have shown that cash flow from operations is more highly valued than total accruals and that moderate cash flow from operations has higher valuation than extreme total accruals. An interesting question that follows is whether these findings hold regarding the differential valuations of cash flow and current accruals. This study aims to extend prior research by addressing this issue in two ways. First, the authors examine the incremental information content of cash flow from operations beyond working capital from operations. Second, the authors assess the effect of extreme working capital from operations on the incremental information content of cash flow from operations. This study aims to extend prior research by addressing this issue in two ways.
Design/methodology/approach
This study adopts market-based accounting research to test its hypotheses and to achieve its objectives. Specifically, this study uses statistical associations between accounting data and stock returns to examine the incremental information content (value relevance) of cash flow and working capital from operations and the effect of extreme working capital from operations on the incremental information content of cash flow.
Findings
The results show that cash flow from operations is not more highly valued than current accruals (both being valued equivalently). However, moderate cash flow from operations has higher valuation than extreme current accruals (each is valued differently). Overall, these research findings indicate that cash flow becomes more important for valuation as accruals get “extreme”.
Practical implications
As accruals are unlikely to persist to be permanent across the years, these results can be interpreted as indicating that cash flow and accruals information are used jointly by investors, with one being more important than the other depending on the relative “extremeness” of each. Therefore, both are of value to the investor and both should be reported.
Originality/value
The paper contributes to the UK research on determining the preferred level of disaggregation of earnings components, i.e. operating cash flow, current accruals and non-current accruals. This would help investors to improve their investment and credit decisions.
{"title":"The relative valuation of cash flow and current accruals affected by their extremity","authors":"Wael Mostafa, Rob Dixon","doi":"10.1108/raf-12-2022-0358","DOIUrl":"https://doi.org/10.1108/raf-12-2022-0358","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>Recent studies on the securities market’s differential pricing of earnings components have shown that cash flow from operations is more highly valued than total accruals and that moderate cash flow from operations has higher valuation than extreme total accruals. An interesting question that follows is whether these findings hold regarding the differential valuations of cash flow and current accruals. This study aims to extend prior research by addressing this issue in two ways. First, the authors examine the incremental information content of cash flow from operations beyond working capital from operations. Second, the authors assess the effect of extreme working capital from operations on the incremental information content of cash flow from operations. This study aims to extend prior research by addressing this issue in two ways.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>This study adopts market-based accounting research to test its hypotheses and to achieve its objectives. Specifically, this study uses statistical associations between accounting data and stock returns to examine the incremental information content (value relevance) of cash flow and working capital from operations and the effect of extreme working capital from operations on the incremental information content of cash flow.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The results show that cash flow from operations is not more highly valued than current accruals (both being valued equivalently). However, moderate cash flow from operations has higher valuation than extreme current accruals (each is valued differently). Overall, these research findings indicate that cash flow becomes more important for valuation as accruals get “extreme”.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>As accruals are unlikely to persist to be permanent across the years, these results can be interpreted as indicating that cash flow and accruals information are used jointly by investors, with one being more important than the other depending on the relative “extremeness” of each. Therefore, both are of value to the investor and both should be reported.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>The paper contributes to the UK research on determining the preferred level of disaggregation of earnings components, i.e. operating cash flow, current accruals and non-current accruals. This would help investors to improve their investment and credit decisions.</p><!--/ Abstract__block -->","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":"44 1","pages":""},"PeriodicalIF":2.4,"publicationDate":"2023-11-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138515809","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Purpose This study aims to investigate the roles of intellectual capital efficiency and institutional ownership on cash holdings and their speed of adjustment. Design/methodology/approach Using a sample of 432 firm-year observations of tourism-listed companies, three measures of cash holdings are used as dependent variables and intellectual capital efficiency and institutional ownership as independent variables. The financial data is collected from the S&P Capital IQ database for the period 2015–2020. Two system-generalized methods of moment estimation are used for the robustness checks of the results. Findings The study provides evidence that an increase in intellectual capital efficiency in tourism firms results in lower cash holdings. The research findings also report that characteristics such as firm size, age and market-to-book value ratio are associated with cash holdings. Furthermore, institutional ownership in these firms did not affect the cash holdings. The results also confirm the existence of a target cash holding level to which the tourism firms attempt to converge. These results are robust to the alternative proxy of cash holding and endogeneity tests. Research limitations/implications The study uses intellectual capital efficiency measured by the model proposed by Pulic. Alternative measures of intellectual capital can be included in future studies. Future research can also investigate the impact on cash holdings before and during the pandemic for tourism companies. The study is limited to the impact of institutional ownership; thus, research can be extended to consider other types of ownership. Practical implications The findings of this study indicate that tourism companies should take into account the impact of intellectual capital efficiency on their cash holding decisions. The industry uses a specific financial management strategy in light of better efficiency and possibly values the opportunity cost of holding more cash. Additionally, regulators should re-examine the role of institutional ownership in tourism firms, as it was found to have no impact on cash holdings. The regulators may need to consider other factors, such as firm size and age, when developing policies and regulations to ensure that tourism firms have adequate cash holdings. Originality/value This study adds to the body of knowledge on the factors that influence cash management and ideal cash levels for the tourism industry. The examination of the effect of intellectual capital on cash holdings is a novel contribution, filling a gap in the existing literature. The findings on the speed of adjustment towards optimal cash holdings also provide support for the trade-off theory.
目的探讨智力资本效率和机构所有权对现金持有量及其调整速度的影响。设计/方法/方法采用432家旅游上市公司的年度观察样本，将现金持有量的三个指标作为因变量，将智力资本效率和机构所有权作为自变量。财务数据收集自s&p;P Capital IQ数据库2015-2020年期间。采用两种系统广义矩估计方法对结果进行鲁棒性检验。研究结果表明，旅游企业智力资本效率的提高会导致现金持有量的降低。研究结果还表明，公司规模、成立时间和市净率等特征与现金持有量有关。此外，这些公司的机构所有权并不影响现金持有量。研究结果也证实了目标现金持有量水平的存在，旅游公司试图向该目标现金持有量水平收敛。这些结果是稳健的替代代理现金持有和内生性检验。本研究使用public提出的模型衡量智力资本效率。在未来的研究中可以纳入智力资本的替代措施。未来的研究还可以调查大流行之前和期间对旅游公司现金持有量的影响。该研究仅限于机构所有权的影响;因此，研究可以扩展到考虑其他类型的所有权。研究结果表明，旅游企业应考虑智力资本效率对现金持有决策的影响。该行业采用特定的财务管理策略，以提高效率，并可能重视持有更多现金的机会成本。此外，监管机构应该重新审视机构所有权在旅游公司中的作用，因为它被发现对现金持有量没有影响。监管机构在制定政策和法规以确保旅游公司有足够的现金储备时，可能需要考虑其他因素，如公司规模和年龄。原创性/价值本研究增加了影响旅游业现金管理和理想现金水平的因素的知识体系。研究智力资本对现金持有的影响是一项新颖的贡献，填补了现有文献的空白。对最优现金持有量调整速度的研究结果也为权衡理论提供了支持。
{"title":"Intellectual capital efficiency, institutional ownership and cash holdings: a cross-country study","authors":"Tamanna Dalwai, Syeeda Shafiya Mohammadi, Elma Satrovic","doi":"10.1108/raf-01-2023-0015","DOIUrl":"https://doi.org/10.1108/raf-01-2023-0015","url":null,"abstract":"Purpose This study aims to investigate the roles of intellectual capital efficiency and institutional ownership on cash holdings and their speed of adjustment. Design/methodology/approach Using a sample of 432 firm-year observations of tourism-listed companies, three measures of cash holdings are used as dependent variables and intellectual capital efficiency and institutional ownership as independent variables. The financial data is collected from the S&P Capital IQ database for the period 2015–2020. Two system-generalized methods of moment estimation are used for the robustness checks of the results. Findings The study provides evidence that an increase in intellectual capital efficiency in tourism firms results in lower cash holdings. The research findings also report that characteristics such as firm size, age and market-to-book value ratio are associated with cash holdings. Furthermore, institutional ownership in these firms did not affect the cash holdings. The results also confirm the existence of a target cash holding level to which the tourism firms attempt to converge. These results are robust to the alternative proxy of cash holding and endogeneity tests. Research limitations/implications The study uses intellectual capital efficiency measured by the model proposed by Pulic. Alternative measures of intellectual capital can be included in future studies. Future research can also investigate the impact on cash holdings before and during the pandemic for tourism companies. The study is limited to the impact of institutional ownership; thus, research can be extended to consider other types of ownership. Practical implications The findings of this study indicate that tourism companies should take into account the impact of intellectual capital efficiency on their cash holding decisions. The industry uses a specific financial management strategy in light of better efficiency and possibly values the opportunity cost of holding more cash. Additionally, regulators should re-examine the role of institutional ownership in tourism firms, as it was found to have no impact on cash holdings. The regulators may need to consider other factors, such as firm size and age, when developing policies and regulations to ensure that tourism firms have adequate cash holdings. Originality/value This study adds to the body of knowledge on the factors that influence cash management and ideal cash levels for the tourism industry. The examination of the effect of intellectual capital on cash holdings is a novel contribution, filling a gap in the existing literature. The findings on the speed of adjustment towards optimal cash holdings also provide support for the trade-off theory.","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":"160 6","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-11-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135775424","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-10-13DOI: 10.1108/raf-09-2022-0244
João Silva, Lígia Febra, Magali Costa
Purpose This study aims to advance knowledge on the direct impact of the investor’s protection level on the stock market volatility, that is, whether investor’s protection is an important stock market volatility determinant. Design/methodology/approach A panel data was estimated using a sample of 48 countries, from 2006 to 2018, totalizing 31,808 observations. To measure stock market volatility and the investor protection level, a generalized autoregressive conditional heteroskedasticity model and the World Bank Doing Business investor protection index were used, respectively. Findings The results evidence that the protection of investors’ rights reduces the stock market volatility. This result indicates that a high level of investor protection, which is the result of a better quality of laws and policies in place that protect investor’s rights, promotes the country as a “safe haven.” Practical implications The relationship that the authors intend to analyze becomes important, given that investor protection will give outsiders guarantees on the materialization of their investments. This study contributes important knowledge for investors and for the establishment of government policies as a way of attracting investment. Originality/value Although there have been a few studies addressing this relationship, to the knowledge, none of them directly analyses the influence of investor protection on the stock market volatility.
{"title":"The impact of investor protection on stock market volatility","authors":"João Silva, Lígia Febra, Magali Costa","doi":"10.1108/raf-09-2022-0244","DOIUrl":"https://doi.org/10.1108/raf-09-2022-0244","url":null,"abstract":"Purpose This study aims to advance knowledge on the direct impact of the investor’s protection level on the stock market volatility, that is, whether investor’s protection is an important stock market volatility determinant. Design/methodology/approach A panel data was estimated using a sample of 48 countries, from 2006 to 2018, totalizing 31,808 observations. To measure stock market volatility and the investor protection level, a generalized autoregressive conditional heteroskedasticity model and the World Bank Doing Business investor protection index were used, respectively. Findings The results evidence that the protection of investors’ rights reduces the stock market volatility. This result indicates that a high level of investor protection, which is the result of a better quality of laws and policies in place that protect investor’s rights, promotes the country as a “safe haven.” Practical implications The relationship that the authors intend to analyze becomes important, given that investor protection will give outsiders guarantees on the materialization of their investments. This study contributes important knowledge for investors and for the establishment of government policies as a way of attracting investment. Originality/value Although there have been a few studies addressing this relationship, to the knowledge, none of them directly analyses the influence of investor protection on the stock market volatility.","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":"16 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-10-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135805061","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-10-11DOI: 10.1108/raf-01-2023-0020
Ali Uyar, Ali Meftah Gerged, Cemil Kuzey, Abdullah S. Karaman
Purpose This study aims to guide firms in emerging markets on whether corporate social responsibility (CSR) engagement facilitates their access to debt with the moderation of asset structure and firm performance. Considering the moderating effect analysis, this study explores the substitutive or complementary effect of these two contingencies on CSR-oriented firms in accessing debt financing. Design/methodology/approach Drawing on data collected for 16 emerging markets between 2008 and 2019, this study runs country–industry–year fixed-effects regression. Findings This study finds that CSR performance and reporting facilitate access to debt in emerging markets. However, CSR performance does not have an inverted U-shaped influence on firms’ access to debt financing. The moderation analysis of this study shows that asset tangibility has a negative moderating effect on the link between CSR engagements (i.e. both CSR performance and reporting) and access to debt, confirming a substitutive relationship between asset tangibility and CSR engagements in accessing debt. In contrast, firm performance is positively moderating the nexus between CSR engagement proxies and access to debt, which confirms a complementary type of relationship between firm performance and CSR engagements in accessing debt. Practical implications The empirical evidence of this study implies that creditors critically consider CSR engagements of firms in the loan-granting decision process. Similarly, the inverted U-shaped relationship between CSR and access to debt implies that there is an optimal level of CSR engagement creditors might consider in their decision. Likewise, the moderating effects analysis highlights that asset tangibility and firm performance are two conditions under which CSR performance and reporting are linked to access to debt. Originality/value Emerging countries are a different set of countries than developed ones; they have high growth rates and hence need financing, have a weaker institutional environment and have weaker stakeholder power. These particularities motivated the authors to conduct a separate study focusing on CSR and debt financing links drawing on a wide range of emerging countries. Thus, this study adds to the ongoing debate by examining the conditions under which CSR-oriented firms can access debt financing in emerging economies.
{"title":"Do CSR performance and reporting facilitate access to debt financing in emerging markets? The role of asset structure and firm performance","authors":"Ali Uyar, Ali Meftah Gerged, Cemil Kuzey, Abdullah S. Karaman","doi":"10.1108/raf-01-2023-0020","DOIUrl":"https://doi.org/10.1108/raf-01-2023-0020","url":null,"abstract":"Purpose This study aims to guide firms in emerging markets on whether corporate social responsibility (CSR) engagement facilitates their access to debt with the moderation of asset structure and firm performance. Considering the moderating effect analysis, this study explores the substitutive or complementary effect of these two contingencies on CSR-oriented firms in accessing debt financing. Design/methodology/approach Drawing on data collected for 16 emerging markets between 2008 and 2019, this study runs country–industry–year fixed-effects regression. Findings This study finds that CSR performance and reporting facilitate access to debt in emerging markets. However, CSR performance does not have an inverted U-shaped influence on firms’ access to debt financing. The moderation analysis of this study shows that asset tangibility has a negative moderating effect on the link between CSR engagements (i.e. both CSR performance and reporting) and access to debt, confirming a substitutive relationship between asset tangibility and CSR engagements in accessing debt. In contrast, firm performance is positively moderating the nexus between CSR engagement proxies and access to debt, which confirms a complementary type of relationship between firm performance and CSR engagements in accessing debt. Practical implications The empirical evidence of this study implies that creditors critically consider CSR engagements of firms in the loan-granting decision process. Similarly, the inverted U-shaped relationship between CSR and access to debt implies that there is an optimal level of CSR engagement creditors might consider in their decision. Likewise, the moderating effects analysis highlights that asset tangibility and firm performance are two conditions under which CSR performance and reporting are linked to access to debt. Originality/value Emerging countries are a different set of countries than developed ones; they have high growth rates and hence need financing, have a weaker institutional environment and have weaker stakeholder power. These particularities motivated the authors to conduct a separate study focusing on CSR and debt financing links drawing on a wide range of emerging countries. Thus, this study adds to the ongoing debate by examining the conditions under which CSR-oriented firms can access debt financing in emerging economies.","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-10-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136059084","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Objective - This study aims to prove whether the earnings quality of family businesses is better than non-family businesses to address two conflicting theories regarding the quality of family business earnings: agency theory and socioemotional wealth theory. Methodology/Technique –. This research uses a regression model to examine the influence of family business/non-family business characteristics on earnings quality. To obtain robust results, this research measures earnings quality using 5 measurement proxies, including measurements of available opportunities for earnings management, earnings management practices, earnings persistence, earnings restatement, and investor responsiveness to earnings quality. The screening sample was carried out on firms listed on the Indonesia Stock Exchange (IDX) for the period 2016–2020, resulting in 932 research observations. Findings - Overall, this research proves that FB earnings quality is better than NFB earnings quality. The results of this study extend the implementation of socioemotional wealth theory in explaining the characteristics of FB, in which the characteristics of FB and non-FB have an impact on earnings quality. Novelty - Financial statement analysts can utilize the results of this study in interpreting earnings quality based on the characteristics of FB and NFB. Type of Paper: Empirical JEL Classification: M41, M49. Keywords: Earnings Quality, Family Business (FB), Non-family Business (NFB), Socioemotional Wealth Theory Reference to this paper should be referred to as follows: Purba, G.K; Surya, A.N; Joshi, P.L; Tyagi, A. (2023). Is the Earnings Quality of Family Businesses Better Than Non-family Businesses?, Acc. Fin. Review, 8(2), 36 – 53. https://doi.org/10.35609/afr.2023.8.2(1)
{"title":"Is the Earnings Quality of Family Businesses Better Than Non-family Businesses?","authors":"Golrida Karyawati Purba, Audrey Natasha Surya, Prem Lal Joshi, Anshu Tyagi","doi":"10.35609/afr.2023.8.2(1)","DOIUrl":"https://doi.org/10.35609/afr.2023.8.2(1)","url":null,"abstract":"Objective - This study aims to prove whether the earnings quality of family businesses is better than non-family businesses to address two conflicting theories regarding the quality of family business earnings: agency theory and socioemotional wealth theory. Methodology/Technique –. This research uses a regression model to examine the influence of family business/non-family business characteristics on earnings quality. To obtain robust results, this research measures earnings quality using 5 measurement proxies, including measurements of available opportunities for earnings management, earnings management practices, earnings persistence, earnings restatement, and investor responsiveness to earnings quality. The screening sample was carried out on firms listed on the Indonesia Stock Exchange (IDX) for the period 2016–2020, resulting in 932 research observations. Findings - Overall, this research proves that FB earnings quality is better than NFB earnings quality. The results of this study extend the implementation of socioemotional wealth theory in explaining the characteristics of FB, in which the characteristics of FB and non-FB have an impact on earnings quality. Novelty - Financial statement analysts can utilize the results of this study in interpreting earnings quality based on the characteristics of FB and NFB. Type of Paper: Empirical JEL Classification: M41, M49. Keywords: Earnings Quality, Family Business (FB), Non-family Business (NFB), Socioemotional Wealth Theory Reference to this paper should be referred to as follows: Purba, G.K; Surya, A.N; Joshi, P.L; Tyagi, A. (2023). Is the Earnings Quality of Family Businesses Better Than Non-family Businesses?, Acc. Fin. Review, 8(2), 36 – 53. https://doi.org/10.35609/afr.2023.8.2(1)","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":"223 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135343796","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-09-13DOI: 10.1108/raf-05-2023-0153
Aymen Turki, Robert Rieg
Purpose Many observers believe that industry experience of entrepreneurs drives successful new entrepreneurial firms. However, whenever it comes to disruptive digital ventures such as Financial Technologies (Fintechs), the picture may be different due to the cross-industry nature of digital firms. The purpose of this study is to disentangle the impacts of finance, banking and information technology (IT) experiences of founders on performance of European Fintechs around venture capital (VC) investment. Design/methodology/approach Based on a data set of 105 Fintechs from European countries, including UK, which are involved in 201 VC rounds between 2006 and 2019, the authors adopt a Bayesian quantile approach to link founders’ experience with two performance measures that identify market success (return on sales) and investment outcome (return on equity). Findings The findings indicate that finance and IT-specific experiences seem to matter more often than banking experience and that the extent of their impact depends on level and metric of performance. More specifically, Fintechs in Europe and UK are more able to achieve market success with both finance and IT experiences of their founders, but that does not necessarily transform into higher returns for investors. Originality/value This study provides new evidence that not all aspects of industry experience matter for digital ventures, as they must fit to a certain firm, cycle and industry. For Fintech, as the name says, finance and IT experiences matter.
{"title":"On performance drivers of European Fintechs around venture capital: exploring the role of founders’ experience","authors":"Aymen Turki, Robert Rieg","doi":"10.1108/raf-05-2023-0153","DOIUrl":"https://doi.org/10.1108/raf-05-2023-0153","url":null,"abstract":"Purpose Many observers believe that industry experience of entrepreneurs drives successful new entrepreneurial firms. However, whenever it comes to disruptive digital ventures such as Financial Technologies (Fintechs), the picture may be different due to the cross-industry nature of digital firms. The purpose of this study is to disentangle the impacts of finance, banking and information technology (IT) experiences of founders on performance of European Fintechs around venture capital (VC) investment. Design/methodology/approach Based on a data set of 105 Fintechs from European countries, including UK, which are involved in 201 VC rounds between 2006 and 2019, the authors adopt a Bayesian quantile approach to link founders’ experience with two performance measures that identify market success (return on sales) and investment outcome (return on equity). Findings The findings indicate that finance and IT-specific experiences seem to matter more often than banking experience and that the extent of their impact depends on level and metric of performance. More specifically, Fintechs in Europe and UK are more able to achieve market success with both finance and IT experiences of their founders, but that does not necessarily transform into higher returns for investors. Originality/value This study provides new evidence that not all aspects of industry experience matter for digital ventures, as they must fit to a certain firm, cycle and industry. For Fintech, as the name says, finance and IT experiences matter.","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":"37 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135689139","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-09-05DOI: 10.1108/raf-03-2023-0073
Abir Hichri
Purpose This study aims to investigate the relationship between audit quality and value relevance and subsequently ascertain the moderating effect of business ethics on integrated reporting (IR)–value relevance. Design/methodology/approach This study applied linear regressions with panel data using the Thomson Reuters ASSET4 database from European countries to analyse data of 510 companies belonging to the environmental, social and governance (ESG) index between 2010 and 2022. Findings A significant positive relationship was found between audit quality and value relevance. The results also suggest that IR has significant explanatory power on value relevance, and that business ethics moderate the relationship between IR and value relevance in European ESG firms. Practical implications Managers will see IR, business ethics and audit as a business strategy with incremental market value. In this regard, this study tried to provide insights and managerial solutions for managers of international companies to improve their strategy by drawing on the social, moral and business ethics approach. This finding will improve the informational relevance for investment opportunities, thus resulting in improved business performance. Originality/value To the best of the author’s knowledge, this is the first study to investigate the moderating role of business ethics in the relationship between IR and value relevance. This paper fulfils a recognised need to study the influence of audit quality on investor decisions. Furthermore, the contribution of this study could be observed in the fact that the market value analysis differs between the contractual and the business ethics approaches. Also, including a moderating variable in the explanation and determination of value relevance remains somewhat underexplored.
{"title":"Audit quality, value relevance, integrated reporting and the moderating role of business ethics: evidence from European ESG firms","authors":"Abir Hichri","doi":"10.1108/raf-03-2023-0073","DOIUrl":"https://doi.org/10.1108/raf-03-2023-0073","url":null,"abstract":"\u0000Purpose\u0000This study aims to investigate the relationship between audit quality and value relevance and subsequently ascertain the moderating effect of business ethics on integrated reporting (IR)–value relevance.\u0000\u0000\u0000Design/methodology/approach\u0000This study applied linear regressions with panel data using the Thomson Reuters ASSET4 database from European countries to analyse data of 510 companies belonging to the environmental, social and governance (ESG) index between 2010 and 2022.\u0000\u0000\u0000Findings\u0000A significant positive relationship was found between audit quality and value relevance. The results also suggest that IR has significant explanatory power on value relevance, and that business ethics moderate the relationship between IR and value relevance in European ESG firms.\u0000\u0000\u0000Practical implications\u0000Managers will see IR, business ethics and audit as a business strategy with incremental market value. In this regard, this study tried to provide insights and managerial solutions for managers of international companies to improve their strategy by drawing on the social, moral and business ethics approach. This finding will improve the informational relevance for investment opportunities, thus resulting in improved business performance.\u0000\u0000\u0000Originality/value\u0000To the best of the author’s knowledge, this is the first study to investigate the moderating role of business ethics in the relationship between IR and value relevance. This paper fulfils a recognised need to study the influence of audit quality on investor decisions. Furthermore, the contribution of this study could be observed in the fact that the market value analysis differs between the contractual and the business ethics approaches. Also, including a moderating variable in the explanation and determination of value relevance remains somewhat underexplored.\u0000","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2023-09-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45227485","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-08-14DOI: 10.1108/raf-02-2023-0038
Gerasimos G. Rompotis, D. Balios
Purpose The purpose of this paper is to accentuate whether audit quality or other variables matter for the performance of companies in Greece. Design/methodology/approach This study examines the effect of audit quality on firm performance using data of 75 companies listed in the Athens Exchange in Greece and covering the period 2018–2021. Panel data analysis is applied. The independent variables are audit quality, the size of firms, their age, leverage, liquidity and efficiency ratios. Seven alternative measures of performance are used, including, among others, return on assets and return on equity. Stock returns and risks are used too. Findings The results provide evidence of a positive relationship between financial performance and audit quality. The opposite is the case for stock returns and risk. On the other explanatory variables, age has a clearly negative relationship with financial performance. The opposite is the case for liquidity and efficiency. The size factor also has some sort of a positive correlation with financial performance, whereas the opposite correlation concerns the leverage ratio. Originality/value To the best of the authors’ knowledge, this is the first study to examine the relationship between audit quality and firm performance with data from Greece.
{"title":"Audit quality, firm performance and risk: evidence from Greece","authors":"Gerasimos G. Rompotis, D. Balios","doi":"10.1108/raf-02-2023-0038","DOIUrl":"https://doi.org/10.1108/raf-02-2023-0038","url":null,"abstract":"\u0000Purpose\u0000The purpose of this paper is to accentuate whether audit quality or other variables matter for the performance of companies in Greece.\u0000\u0000\u0000Design/methodology/approach\u0000This study examines the effect of audit quality on firm performance using data of 75 companies listed in the Athens Exchange in Greece and covering the period 2018–2021. Panel data analysis is applied. The independent variables are audit quality, the size of firms, their age, leverage, liquidity and efficiency ratios. Seven alternative measures of performance are used, including, among others, return on assets and return on equity. Stock returns and risks are used too.\u0000\u0000\u0000Findings\u0000The results provide evidence of a positive relationship between financial performance and audit quality. The opposite is the case for stock returns and risk. On the other explanatory variables, age has a clearly negative relationship with financial performance. The opposite is the case for liquidity and efficiency. The size factor also has some sort of a positive correlation with financial performance, whereas the opposite correlation concerns the leverage ratio.\u0000\u0000\u0000Originality/value\u0000To the best of the authors’ knowledge, this is the first study to examine the relationship between audit quality and firm performance with data from Greece.\u0000","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2023-08-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43681557","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-08-10DOI: 10.1108/raf-03-2023-0069
A. Syed, H. Bawazir, Ibrahim Tawfeeq AlSidrah
Purpose The study aims to explore the relation between dividend policy of any company and its stock volatility. Design/methodology/approach Companies listed on six GCC stock markets are used in the analysis and the data ranges from 2006 to 2020. Fixed effect and random effect panel data analysis is used to explore the association between stock volatility and the dividend policies. Findings A significant negative relation is observed between dividend payout and stock volatility. Also, significant negative relation between stock volatility and equity is found, whereas insignificant positive relation is observed between asset growth and stock volatility. Research limitations/implications The data of all listed companies on six GCC markets were not available. Practical implications The question of raising dividend or maintaining at the current level is of utmost importance for the managers of any company before making any investment decisions. Also, the investors look at the dividend announcements as a sort of signal about the future prospect of the company. A stable or fluctuating dividends may be preferred by the investors that ultimately changes the stock price of any company. Social implications The relationship between dividend policy and the volatility of stock price is explored for emerging GCC markets which is the major significance of this paper which will have many social impacts on various stakeholders of any company including investors, regulators and employees, etc. Originality/value To the best of the authors’ knowledge, no study for GCC markets is done to establish a relation between stock volatility and the dividend policies which is needed by the academicians to further explore the behavior of these markets.
{"title":"Dividend policies and stock volatility-empirical evidence from Middle Eastern stock markets","authors":"A. Syed, H. Bawazir, Ibrahim Tawfeeq AlSidrah","doi":"10.1108/raf-03-2023-0069","DOIUrl":"https://doi.org/10.1108/raf-03-2023-0069","url":null,"abstract":"\u0000Purpose\u0000The study aims to explore the relation between dividend policy of any company and its stock volatility.\u0000\u0000\u0000Design/methodology/approach\u0000Companies listed on six GCC stock markets are used in the analysis and the data ranges from 2006 to 2020. Fixed effect and random effect panel data analysis is used to explore the association between stock volatility and the dividend policies.\u0000\u0000\u0000Findings\u0000A significant negative relation is observed between dividend payout and stock volatility. Also, significant negative relation between stock volatility and equity is found, whereas insignificant positive relation is observed between asset growth and stock volatility.\u0000\u0000\u0000Research limitations/implications\u0000The data of all listed companies on six GCC markets were not available.\u0000\u0000\u0000Practical implications\u0000The question of raising dividend or maintaining at the current level is of utmost importance for the managers of any company before making any investment decisions. Also, the investors look at the dividend announcements as a sort of signal about the future prospect of the company. A stable or fluctuating dividends may be preferred by the investors that ultimately changes the stock price of any company.\u0000\u0000\u0000Social implications\u0000The relationship between dividend policy and the volatility of stock price is explored for emerging GCC markets which is the major significance of this paper which will have many social impacts on various stakeholders of any company including investors, regulators and employees, etc.\u0000\u0000\u0000Originality/value\u0000To the best of the authors’ knowledge, no study for GCC markets is done to establish a relation between stock volatility and the dividend policies which is needed by the academicians to further explore the behavior of these markets.\u0000","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2023-08-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48658631","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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