We examine whether institutions’ monitoring effectiveness varies with the number of stocks they hold as the largest institutional blockholder. We find that a larger holding number is associated with higher nonroutine CEO turnover-performance sensitivity, more frequent proxy voting against management, and higher returns around forced CEO turnover announcements and 13D filings. These results are particularly evident when institutions have multiple blockholdings in the same industry, when they have prior monitoring experience in their portfolio firms, or when their holding periods are longer. Our results suggest that information advantages from multiple blockholdings are important channels through which institutions perform effective monitoring.
{"title":"Are Institutional Investors with Multiple Blockholdings Effective Monitors?","authors":"Jun-Koo Kang, Juan Luo, H. Na","doi":"10.2139/ssrn.2024700","DOIUrl":"https://doi.org/10.2139/ssrn.2024700","url":null,"abstract":"We examine whether institutions’ monitoring effectiveness varies with the number of stocks they hold as the largest institutional blockholder. We find that a larger holding number is associated with higher nonroutine CEO turnover-performance sensitivity, more frequent proxy voting against management, and higher returns around forced CEO turnover announcements and 13D filings. These results are particularly evident when institutions have multiple blockholdings in the same industry, when they have prior monitoring experience in their portfolio firms, or when their holding periods are longer. Our results suggest that information advantages from multiple blockholdings are important channels through which institutions perform effective monitoring.","PeriodicalId":264671,"journal":{"name":"Nanyang Business School Research Paper Series","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128131192","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}
X. Chang, C. Shekhar, Lewis H. K. Tam, Jiaquan Yao
We examine the information role of financial advisors by focusing on mergers and acquisitions in which acquiring firms hire target firms’ ex-advisors. We document that by employing targets’ ex-advisors, acquirers pay lower takeover premiums and secure a larger proportion of merger synergies. The corresponding targets exhibit lower announcement returns and are less likely to be propositioned by competing bidders. These results indicate that acquirers take advantage of value-relevant information about targets through targets’ ex-advisors, and achieve bargaining advantages in deal negotiations. In contrast, we document no discernible value effects when targets hire acquirers’ ex-advisors, suggesting that the information role of acquirers’ ex-advisors hired by targets is weaker than that of targets’ ex-advisors hired by acquirers.
{"title":"The Information Role of Advisors in Mergers and Acquisitions: Evidence from Acquirers Hiring Targets’ Ex-Advisors","authors":"X. Chang, C. Shekhar, Lewis H. K. Tam, Jiaquan Yao","doi":"10.2139/ssrn.2779367","DOIUrl":"https://doi.org/10.2139/ssrn.2779367","url":null,"abstract":"We examine the information role of financial advisors by focusing on mergers and acquisitions in which acquiring firms hire target firms’ ex-advisors. We document that by employing targets’ ex-advisors, acquirers pay lower takeover premiums and secure a larger proportion of merger synergies. The corresponding targets exhibit lower announcement returns and are less likely to be propositioned by competing bidders. These results indicate that acquirers take advantage of value-relevant information about targets through targets’ ex-advisors, and achieve bargaining advantages in deal negotiations. In contrast, we document no discernible value effects when targets hire acquirers’ ex-advisors, suggesting that the information role of acquirers’ ex-advisors hired by targets is weaker than that of targets’ ex-advisors hired by acquirers.","PeriodicalId":264671,"journal":{"name":"Nanyang Business School Research Paper Series","volume":"26 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-03-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115656750","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}
Juthathip Audsabumrungrat, Sompong Pornupatham, H. Tan
In this study, we examine a setting where over-reliance on structured materiality guidance leads to less appropriate materiality assessments by auditors, and investigate whether a justification requirement in the absence of accountability mitigates this effect. Results from our experiment show that audit managers make less conservative and less appropriate planning materiality assessments in the presence of structured materiality guidance, but that this detrimental effect is mitigated by the need to justify their judgments. Our study on the joint effect of these two features extends current literature on materiality judgments and has implications for audit practice.
{"title":"Joint Impact of Materiality Guidance and Justification Requirement on Auditors’ Planning Materiality","authors":"Juthathip Audsabumrungrat, Sompong Pornupatham, H. Tan","doi":"10.2139/ssrn.2675704","DOIUrl":"https://doi.org/10.2139/ssrn.2675704","url":null,"abstract":"In this study, we examine a setting where over-reliance on structured materiality guidance leads to less appropriate materiality assessments by auditors, and investigate whether a justification requirement in the absence of accountability mitigates this effect. Results from our experiment show that audit managers make less conservative and less appropriate planning materiality assessments in the presence of structured materiality guidance, but that this detrimental effect is mitigated by the need to justify their judgments. Our study on the joint effect of these two features extends current literature on materiality judgments and has implications for audit practice.","PeriodicalId":264671,"journal":{"name":"Nanyang Business School Research Paper Series","volume":"14 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-10-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124340237","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}
There is yet any official guidance on the financial reporting of Bitcoin transaction from the standard setters as the crypto-currency become increasingly popular and tax accounting guidance begin to appear in 2014. Designed as a decentralized currency, Bitcoin will not become a reporting currency and will instead complement fiat money. We argue that the accounting principle of faithful representation requires interpreting the economic substance for financial reporting that varies with reporting entity: trading firms recognize Bitcoin like a foreign currency and measure the revenue, or expense, at the equivalent amount of the reporting currency; digital currency exchanges recognize Bitcoin as goods in line with tax accounting treatment. An Economica paper by Radford (1945) describing cigarette being used as commodity money in a POW camp has alluded to this economic basis. This paper applies accounting principle to a practical issue and contributes to the thinking process which may help standard setter issue an interpretation.
{"title":"Bitcoin: Its Economics for Financial Reporting","authors":"B. Tan, K. Low","doi":"10.2139/ssrn.2602126","DOIUrl":"https://doi.org/10.2139/ssrn.2602126","url":null,"abstract":"There is yet any official guidance on the financial reporting of Bitcoin transaction from the standard setters as the crypto-currency become increasingly popular and tax accounting guidance begin to appear in 2014. Designed as a decentralized currency, Bitcoin will not become a reporting currency and will instead complement fiat money. We argue that the accounting principle of faithful representation requires interpreting the economic substance for financial reporting that varies with reporting entity: trading firms recognize Bitcoin like a foreign currency and measure the revenue, or expense, at the equivalent amount of the reporting currency; digital currency exchanges recognize Bitcoin as goods in line with tax accounting treatment. An Economica paper by Radford (1945) describing cigarette being used as commodity money in a POW camp has alluded to this economic basis. This paper applies accounting principle to a practical issue and contributes to the thinking process which may help standard setter issue an interpretation.","PeriodicalId":264671,"journal":{"name":"Nanyang Business School Research Paper Series","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-05-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131697484","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}
X. Chang, C. Shekhar, Lewis H. K. Tam, Jiaquan Yao
This paper examines the impacts of M&A advisors’ industry expertise on firms’ choice of advisors in mergers and acquisitions. We show that an investment bank's expertise in merger parties’ industries increases its likelihood of being chosen as an advisor, especially when the acquisition is more complex, and when a firm in M&A has less information about the merger counterparty. However, due to the concerns about information leakage to industry rivals through M&A advisors, acquirers are reluctant to share advisors with rival firms in the same industry, and they are more likely to switch to new advisors if their former advisors have advisory relationship with their industry rivals. In addition, we document that advisors with more industry expertise earn higher advisory fees and increase the likelihood of deal completion.
{"title":"Industry Expertise, Information Leakage, and the Choice of M&A Advisors","authors":"X. Chang, C. Shekhar, Lewis H. K. Tam, Jiaquan Yao","doi":"10.2139/ssrn.1913001","DOIUrl":"https://doi.org/10.2139/ssrn.1913001","url":null,"abstract":"This paper examines the impacts of M&A advisors’ industry expertise on firms’ choice of advisors in mergers and acquisitions. We show that an investment bank's expertise in merger parties’ industries increases its likelihood of being chosen as an advisor, especially when the acquisition is more complex, and when a firm in M&A has less information about the merger counterparty. However, due to the concerns about information leakage to industry rivals through M&A advisors, acquirers are reluctant to share advisors with rival firms in the same industry, and they are more likely to switch to new advisors if their former advisors have advisory relationship with their industry rivals. In addition, we document that advisors with more industry expertise earn higher advisory fees and increase the likelihood of deal completion.","PeriodicalId":264671,"journal":{"name":"Nanyang Business School Research Paper Series","volume":"48 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124522411","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}
The existence of post earnings announcement drift (PEAD) depends strongly on whether stocks' prices are near (far from) their 52-week highs when positive (negative) earnings surprises arrive. We find that the coincidence of these two effects is what generates significant PEAD. Daily returns around current and future earnings announcements follow a similar pattern --- announcement returns are more muted for extreme positive (negative) surprises, the closer (farther) are prices to the 52-week high. In addition, subsequent announcement returns are greater for these firms, consistent with a correction of previous underreaction. This suggests that an important contributing factor to PEAD is investors anchoring their beliefs about fundamental value on the 52-week high, which restrains price reactions to earnings news.
{"title":"Anchoring, the 52-Week High and Post Earnings Announcement Drift","authors":"Thomas J. George, C. Hwang, Yuan Li","doi":"10.2139/ssrn.2391455","DOIUrl":"https://doi.org/10.2139/ssrn.2391455","url":null,"abstract":"The existence of post earnings announcement drift (PEAD) depends strongly on whether stocks' prices are near (far from) their 52-week highs when positive (negative) earnings surprises arrive. We find that the coincidence of these two effects is what generates significant PEAD. Daily returns around current and future earnings announcements follow a similar pattern --- announcement returns are more muted for extreme positive (negative) surprises, the closer (farther) are prices to the 52-week high. In addition, subsequent announcement returns are greater for these firms, consistent with a correction of previous underreaction. This suggests that an important contributing factor to PEAD is investors anchoring their beliefs about fundamental value on the 52-week high, which restrains price reactions to earnings news.","PeriodicalId":264671,"journal":{"name":"Nanyang Business School Research Paper Series","volume":"50 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115764222","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}
Morten Bennedsen, Joseph P. H. Fan, Ming Jian, Yin‐Hua Yeh
This paper analyzes the causes and consequences of founding family engagement in firm ownership and management. We hypothesize that families manage their firms because they are able to make contributions that non-family managers cannot provide. However, roadblocks arising from within the family, from markets, and from surrounding institutions challenge family ownership. We propose a new framework for organizing these assets and roadblocks, called the family business map; this framework is useful for categorizing the papers presented in this Special Issue. We support the predictions of the framework with evidence from Chinese family firm succession, and conclude that family firm organization is an adaptation to environmental opportunities and constraints. We end the paper with suggestions for future research.
{"title":"The Family Business Map: Framework, Selective Survey, and Evidence from Chinese Family Firm Succession","authors":"Morten Bennedsen, Joseph P. H. Fan, Ming Jian, Yin‐Hua Yeh","doi":"10.2139/ssrn.2501364","DOIUrl":"https://doi.org/10.2139/ssrn.2501364","url":null,"abstract":"This paper analyzes the causes and consequences of founding family engagement in firm ownership and management. We hypothesize that families manage their firms because they are able to make contributions that non-family managers cannot provide. However, roadblocks arising from within the family, from markets, and from surrounding institutions challenge family ownership. We propose a new framework for organizing these assets and roadblocks, called the family business map; this framework is useful for categorizing the papers presented in this Special Issue. We support the predictions of the framework with evidence from Chinese family firm succession, and conclude that family firm organization is an adaptation to environmental opportunities and constraints. We end the paper with suggestions for future research.","PeriodicalId":264671,"journal":{"name":"Nanyang Business School Research Paper Series","volume":"113 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-09-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125539184","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}
Studies exploring taxpayers’ awareness of their marginal income tax rates (MTRs) have been undertaken mainly in liberal democratic countries in Western Europe and North America where taxes on income are characterised by comparatively high rates and tax law complexity. This paper presents the findings of an exploratory study into taxpayers’ MTR perceptions in Singapore, a low-tax-rate jurisdiction with a comparatively simple income tax system. Generally, taxpayers in Singapore appear to be more MTR-conscious than their counterparts in Europe and North America, and a number of jurisdictional-specific factors are suggested as possible reasons for this. Overall, there was a (net) overestimation of MTRs attributable largely to a preponderance of lower-income taxpayers making relatively large overestimations. Consistent with the findings of earlier studies, there was substantial heterogeneity in MTR consciousness among taxpayers, with the accuracy of MTR perceptions found to be correlated with several socio-economic characteristics and tax-related circumstances of the taxpayers.
{"title":"An Exploratory Study into Marginal Tax Rate Consciousness in a Low-Complexity Low-Rate Income Tax Jurisdiction","authors":"E. Poh","doi":"10.2139/ssrn.2474928","DOIUrl":"https://doi.org/10.2139/ssrn.2474928","url":null,"abstract":"Studies exploring taxpayers’ awareness of their marginal income tax rates (MTRs) have been undertaken mainly in liberal democratic countries in Western Europe and North America where taxes on income are characterised by comparatively high rates and tax law complexity. This paper presents the findings of an exploratory study into taxpayers’ MTR perceptions in Singapore, a low-tax-rate jurisdiction with a comparatively simple income tax system. Generally, taxpayers in Singapore appear to be more MTR-conscious than their counterparts in Europe and North America, and a number of jurisdictional-specific factors are suggested as possible reasons for this. Overall, there was a (net) overestimation of MTRs attributable largely to a preponderance of lower-income taxpayers making relatively large overestimations. Consistent with the findings of earlier studies, there was substantial heterogeneity in MTR consciousness among taxpayers, with the accuracy of MTR perceptions found to be correlated with several socio-economic characteristics and tax-related circumstances of the taxpayers.","PeriodicalId":264671,"journal":{"name":"Nanyang Business School Research Paper Series","volume":"2015 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132732420","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}
The new normal in the regulatory environment of financial reporting is rapid changes in accounting standards with large philosophical and conceptual shifts in underlying principles. For example, in the realm of the International Financial Reporting Standards (IFRS), newly issued IFRS 9 Financial Instruments, IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 13 Fair Value Measurement have significant impacts on the future of financial reporting. Further, the exposure drafts on lease accounting and revenue recognition are likely to be released in the year 2014 that would change well-established accounting approaches. An accounting professor faces the tremendous challenge of equipping students to deal with the rapid change in accounting standards. This paper offers a project assignment that accounting professors teaching the Advanced Financial Accounting (AFA) course can use to instil in students the skills of analyzing and deconstructing the logical flow of an accounting standard. This project assignment has been rated on “quality and usefulness” by students as “most useful” at a very high score of 6.54 out of a perfect score of 7, which is 95th percentile in the university-wide ranking.
{"title":"Visual Representation of Accounting Standards","authors":"P. Tan, C. Lim","doi":"10.2139/SSRN.2571853","DOIUrl":"https://doi.org/10.2139/SSRN.2571853","url":null,"abstract":"The new normal in the regulatory environment of financial reporting is rapid changes in accounting standards with large philosophical and conceptual shifts in underlying principles. For example, in the realm of the International Financial Reporting Standards (IFRS), newly issued IFRS 9 Financial Instruments, IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 13 Fair Value Measurement have significant impacts on the future of financial reporting. Further, the exposure drafts on lease accounting and revenue recognition are likely to be released in the year 2014 that would change well-established accounting approaches. An accounting professor faces the tremendous challenge of equipping students to deal with the rapid change in accounting standards. This paper offers a project assignment that accounting professors teaching the Advanced Financial Accounting (AFA) course can use to instil in students the skills of analyzing and deconstructing the logical flow of an accounting standard. This project assignment has been rated on “quality and usefulness” by students as “most useful” at a very high score of 6.54 out of a perfect score of 7, which is 95th percentile in the university-wide ranking.","PeriodicalId":264671,"journal":{"name":"Nanyang Business School Research Paper Series","volume":"83 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-08-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124897499","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 : 2013-08-23DOI: 10.1017/S0022109015000472
Kee‐Hong Bae, Jun-Koo Kang, Jin Wang
We examine two competing views regarding the impact of competition among credit rating agencies on rating quality: the view that rating agencies do not sacrifice their reputation by inflating firm ratings, and the view that competition among rating agencies arising from the conflict of interest inherent in an “issuer pay†model creates pressure to inflate ratings. Using Fitch’s market share as a measure of competition among rating agencies and controlling for the endogeneity problem caused by unobservable industry effects, we find no relation between Fitch’s market share and ratings, suggesting that competition does not lead to rating inflation.
{"title":"Does Increased Competition Affect Credit Ratings? A Reexamination of the Effect of Fitch's Market Share on Credit Ratings in the Corporate Bond Market","authors":"Kee‐Hong Bae, Jun-Koo Kang, Jin Wang","doi":"10.1017/S0022109015000472","DOIUrl":"https://doi.org/10.1017/S0022109015000472","url":null,"abstract":"We examine two competing views regarding the impact of competition among credit rating agencies on rating quality: the view that rating agencies do not sacrifice their reputation by inflating firm ratings, and the view that competition among rating agencies arising from the conflict of interest inherent in an “issuer pay†model creates pressure to inflate ratings. Using Fitch’s market share as a measure of competition among rating agencies and controlling for the endogeneity problem caused by unobservable industry effects, we find no relation between Fitch’s market share and ratings, suggesting that competition does not lead to rating inflation.","PeriodicalId":264671,"journal":{"name":"Nanyang Business School Research Paper Series","volume":"189 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-08-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121730011","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}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：