Pub Date : 2023-11-30DOI: 10.21315/aamjaf2023.19.2.2
N. Khan, H. Zada, Wing-Keung Wong
The discovery of the golden ratio and the development and the theory for the golden ratio in modern science have witnessed the use of the ratio across many fields, including business, economics and finance. However, the ratio has rarely been used in solving corporate problems, such as fundamental analysis and capital structure decisions. To bridge the gap in the literature, in this paper, we examine the role of the golden ratio in deciding the capital structure and its effect on the firm’s financial performance and market acceptance for the manufacturing and services sector listed on the Pakistan Stock Exchange for the period from 2010 to 2019. In our analysis, we find a significant association between the deviation from the capital structure and the variation of the firm’s financial performance and market acceptance by using the golden ratio. The empirical findings of this study suggest that the golden ratio is an efficient tool for measuring capital structure and is useful for firms to boost financial performance and market acceptance. In general, the findings in our paper suggest financial managers of both the manufacturing and services sectors use a 38.2% ratio of equity and 61.8% of debt at the capital structure level. To the best of our knowledge, no prior studies in the literature have examined the role of the golden ratio in deciding an optimal level of capital structure in Pakistan. Therefore, our paper has a significant contribution to the existing literature, and the empirical findings of the study are found strong and more evident for manufacturing than the services sector. Moreover, the findings in our paper also suggest managers in Pakistan apply the aforementioned percentage of debt and equity in capital structure level subject to performance measurement.
{"title":"Enhancing Financial Performance and Market Acceptance Through Golden Ratio-Based Capital Structure Decisions: An Empirical Investigation in the Manufacturing and Services Sectors","authors":"N. Khan, H. Zada, Wing-Keung Wong","doi":"10.21315/aamjaf2023.19.2.2","DOIUrl":"https://doi.org/10.21315/aamjaf2023.19.2.2","url":null,"abstract":"The discovery of the golden ratio and the development and the theory for the golden ratio in modern science have witnessed the use of the ratio across many fields, including business, economics and finance. However, the ratio has rarely been used in solving corporate problems, such as fundamental analysis and capital structure decisions. To bridge the gap in the literature, in this paper, we examine the role of the golden ratio in deciding the capital structure and its effect on the firm’s financial performance and market acceptance for the manufacturing and services sector listed on the Pakistan Stock Exchange for the period from 2010 to 2019. In our analysis, we find a significant association between the deviation from the capital structure and the variation of the firm’s financial performance and market acceptance by using the golden ratio. The empirical findings of this study suggest that the golden ratio is an efficient tool for measuring capital structure and is useful for firms to boost financial performance and market acceptance. In general, the findings in our paper suggest financial managers of both the manufacturing and services sectors use a 38.2% ratio of equity and 61.8% of debt at the capital structure level. To the best of our knowledge, no prior studies in the literature have examined the role of the golden ratio in deciding an optimal level of capital structure in Pakistan. Therefore, our paper has a significant contribution to the existing literature, and the empirical findings of the study are found strong and more evident for manufacturing than the services sector. Moreover, the findings in our paper also suggest managers in Pakistan apply the aforementioned percentage of debt and equity in capital structure level subject to performance measurement.","PeriodicalId":44370,"journal":{"name":"Asian Academy of Management Journal of Accounting and Finance","volume":null,"pages":null},"PeriodicalIF":0.9,"publicationDate":"2023-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139205599","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 : 2023-11-30DOI: 10.21315/aamjaf2023.19.2.6
W. Ismail, A. Ariff, K. A. Kamarudin, Nur Shaida Mohd Adnan
This paper examines the effect of the COVID-19 pandemic on financial reporting quality proxied by earnings conservatism and value relevance of accounting information. Our final sample consists of 10,510 firm-year observations from 29 countries with a balanced number of 5,255 observations for pandemic and pre-pandemic periods. The results show that during the pandemic, the financial statements of companies with a financial year end of 31 March 2020 have different qualities than those in the pre-pandemic period. Lower earnings conservatism is demonstrated in the pandemic period compared to the pre-pandemic period, supporting the argument that business tends to slow the recognition of bad news as the pandemic starts. The value relevance of accounting information declined in the pandemic period, primarily affected by the reduced value relevance of the book value of equity. The findings of this study can help investors evaluate the quality of accounting information and make smarter investment decisions, especially when most companies are in financial trouble.
{"title":"Financial Reporting Quality During COVID-19 Pandemic: International Evidence","authors":"W. Ismail, A. Ariff, K. A. Kamarudin, Nur Shaida Mohd Adnan","doi":"10.21315/aamjaf2023.19.2.6","DOIUrl":"https://doi.org/10.21315/aamjaf2023.19.2.6","url":null,"abstract":"This paper examines the effect of the COVID-19 pandemic on financial reporting quality proxied by earnings conservatism and value relevance of accounting information. Our final sample consists of 10,510 firm-year observations from 29 countries with a balanced number of 5,255 observations for pandemic and pre-pandemic periods. The results show that during the pandemic, the financial statements of companies with a financial year end of 31 March 2020 have different qualities than those in the pre-pandemic period. Lower earnings conservatism is demonstrated in the pandemic period compared to the pre-pandemic period, supporting the argument that business tends to slow the recognition of bad news as the pandemic starts. The value relevance of accounting information declined in the pandemic period, primarily affected by the reduced value relevance of the book value of equity. The findings of this study can help investors evaluate the quality of accounting information and make smarter investment decisions, especially when most companies are in financial trouble.","PeriodicalId":44370,"journal":{"name":"Asian Academy of Management Journal of Accounting and Finance","volume":null,"pages":null},"PeriodicalIF":0.9,"publicationDate":"2023-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139206274","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 : 2023-11-30DOI: 10.21315/aamjaf2023.19.2.10
Norhamiza Ishak, H. Shahar, Kamarun Nisham Taufil Mohd
This study investigates the effect of high-technology (high-tech) company acquisitions and GLIC ownership on shareholders’ value creation. Study samples for empirical analyses were carried out using the market-model event-study and multivariate analysis on studies published between 2011 and 2018. The findings indicate that; (i) The CAR for high-tech acquiring firms for the three-day event window (–1,1), five-day event window (–2, +2) and 11-day event window led to significant positive returns, with at least at 10% level, signifying that investors have a favourable reaction towards short-term high-tech acquisitions; (ii) The relationship between the GLICs’ Institutional Blockholders (BPSVGLIC) and executive director (FRACEXEC) was found to affect the abnormal returns significantly negatively at a minimum 5% significance level. These results provide two practical implications; firstly, investors gain abnormal returns from their investment in high-tech acquiring companies, and secondly, firms with greater ownership stakes in GLICs could experience value destruction.
{"title":"Government Ownership and Managers’ Role: Effect to Acquisition Return Among High-Technology Companies","authors":"Norhamiza Ishak, H. Shahar, Kamarun Nisham Taufil Mohd","doi":"10.21315/aamjaf2023.19.2.10","DOIUrl":"https://doi.org/10.21315/aamjaf2023.19.2.10","url":null,"abstract":"This study investigates the effect of high-technology (high-tech) company acquisitions and GLIC ownership on shareholders’ value creation. Study samples for empirical analyses were carried out using the market-model event-study and multivariate analysis on studies published between 2011 and 2018. The findings indicate that; (i) The CAR for high-tech acquiring firms for the three-day event window (–1,1), five-day event window (–2, +2) and 11-day event window led to significant positive returns, with at least at 10% level, signifying that investors have a favourable reaction towards short-term high-tech acquisitions; (ii) The relationship between the GLICs’ Institutional Blockholders (BPSVGLIC) and executive director (FRACEXEC) was found to affect the abnormal returns significantly negatively at a minimum 5% significance level. These results provide two practical implications; firstly, investors gain abnormal returns from their investment in high-tech acquiring companies, and secondly, firms with greater ownership stakes in GLICs could experience value destruction.","PeriodicalId":44370,"journal":{"name":"Asian Academy of Management Journal of Accounting and Finance","volume":null,"pages":null},"PeriodicalIF":0.9,"publicationDate":"2023-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139200670","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 : 2023-11-30DOI: 10.21315/aamjaf2023.19.2.3
Fatin Nur Hidayah Taib Khan, Nurhafiza Abd Kader Malim, Tajul Ariffin Masron, R. A. Rahim
Basel Committee on banking supervision (BCBS) has issued Basel which requires the banks to comply with the minimum capital requirement after the crisis. Nevertheless, whether the requirement imposes impact the banking sector which comprises a dual banking system, in a positive manner is still questionable. Given the higher capital costs from the strict capital requirements, banks are being forced to raise bank margins. This study investigates the effect of capital regulations on conventional and Islamic banks’ margins covering the ASEAN banking system from 2009 to 2017. The empirical analysis uses dynamic panel data frameworks to reveal several factors affecting bank margins. Overall, the results suggest that the total regulatory capital ratio helps reduce the margins of conventional banks but does not influence the margins of Islamic banks. As for the Tier-1 capital ratio, the variable increases the Islamic bank margins but does not significantly affect conventional bank margins. Based on the analysis results, regulators of conventional banks need to impose capital requirements as suggested by Basel III to reduce bank margins. Meanwhile, as for Islamic banks, the bank margins can be reduced if regulators can introduce a separate set of requirements tailored explicitly for Islamic banks.
{"title":"The Impact of Capital Regulations on Bank Margins of ASEAN Banking Sector","authors":"Fatin Nur Hidayah Taib Khan, Nurhafiza Abd Kader Malim, Tajul Ariffin Masron, R. A. Rahim","doi":"10.21315/aamjaf2023.19.2.3","DOIUrl":"https://doi.org/10.21315/aamjaf2023.19.2.3","url":null,"abstract":"Basel Committee on banking supervision (BCBS) has issued Basel which requires the banks to comply with the minimum capital requirement after the crisis. Nevertheless, whether the requirement imposes impact the banking sector which comprises a dual banking system, in a positive manner is still questionable. Given the higher capital costs from the strict capital requirements, banks are being forced to raise bank margins. This study investigates the effect of capital regulations on conventional and Islamic banks’ margins covering the ASEAN banking system from 2009 to 2017. The empirical analysis uses dynamic panel data frameworks to reveal several factors affecting bank margins. Overall, the results suggest that the total regulatory capital ratio helps reduce the margins of conventional banks but does not influence the margins of Islamic banks. As for the Tier-1 capital ratio, the variable increases the Islamic bank margins but does not significantly affect conventional bank margins. Based on the analysis results, regulators of conventional banks need to impose capital requirements as suggested by Basel III to reduce bank margins. Meanwhile, as for Islamic banks, the bank margins can be reduced if regulators can introduce a separate set of requirements tailored explicitly for Islamic banks.","PeriodicalId":44370,"journal":{"name":"Asian Academy of Management Journal of Accounting and Finance","volume":null,"pages":null},"PeriodicalIF":0.9,"publicationDate":"2023-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139206720","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 : 2023-11-30DOI: 10.21315/aamjaf2023.19.2.8
Suresh Kumar, Eliza Nor, Nik Hadiyan Nik Azman, Hyder Ali
In this study, a set of common factors of liquidity that had previously been recorded at the equity security level is examined for its effect on inter and intra-market liquidity variations in equity funds in emerging Asian markets. Cross-market liquidity co-movement between the fund’s portfolio and the market portfolio, which typically measures systematic liquidity risk and market integration, is the liquidity commonality for mutual funds. This research builds on Wang Jianxin’s study in 2013 by including market liquidity, return and volatility as common factors of liquidity, and the partial R2 of the common factors reveals each factor’s contribution. We find that emerging Asian countries share 24.14% of the intra-market liquidity commonality between funds and equity markets, and market liquidity is tied to such relationship. Emerging Asian region share 2.76% of inter-market liquidity commonality and regional market return and volatility majorly contribute to this liquidity commonality. The significance of domestic financial markets is evidenced by the wide disparity in liquidity commonality between domestic and regional markets.
{"title":"Commonality in Liquidity: Evidence from Emerging Asian Actively-Managed Equity Funds","authors":"Suresh Kumar, Eliza Nor, Nik Hadiyan Nik Azman, Hyder Ali","doi":"10.21315/aamjaf2023.19.2.8","DOIUrl":"https://doi.org/10.21315/aamjaf2023.19.2.8","url":null,"abstract":"In this study, a set of common factors of liquidity that had previously been recorded at the equity security level is examined for its effect on inter and intra-market liquidity variations in equity funds in emerging Asian markets. Cross-market liquidity co-movement between the fund’s portfolio and the market portfolio, which typically measures systematic liquidity risk and market integration, is the liquidity commonality for mutual funds. This research builds on Wang Jianxin’s study in 2013 by including market liquidity, return and volatility as common factors of liquidity, and the partial R2 of the common factors reveals each factor’s contribution. We find that emerging Asian countries share 24.14% of the intra-market liquidity commonality between funds and equity markets, and market liquidity is tied to such relationship. Emerging Asian region share 2.76% of inter-market liquidity commonality and regional market return and volatility majorly contribute to this liquidity commonality. The significance of domestic financial markets is evidenced by the wide disparity in liquidity commonality between domestic and regional markets.","PeriodicalId":44370,"journal":{"name":"Asian Academy of Management Journal of Accounting and Finance","volume":null,"pages":null},"PeriodicalIF":0.9,"publicationDate":"2023-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139207084","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 : 2023-11-30DOI: 10.21315/aamjaf2023.19.2.4
Jiaqi Da, A. Nassir, Andrew Tek Wei Saw, Hui Zhang, Wei Theng Lau
Investors are always chasing excess returns. To examine the three driving factors affecting China A-share excess returns, namely systematic risk, idiosyncratic risk and market sentiment, this study divided A-shares into non-dividend and dividend-paying groups based on the Dividend Paid for Common Shares in the notes of the financial report. In addition, this study used the Capital Asset Pricing model, Single-Index model, Arbitrage Pricing theory and Fama-French three- and five-factor model to analyse the three main driving factors. The Gibbons-Ross-Shanken test was used to test the model validity, and the optimal model for each group was extracted. Our findings show that after analysing the optimal models within each group, it becomes evident that systematic risk indeed exerts an influence on both dividend-paying and non-dividend companies. Nevertheless, when considering four specific systematic risks (inflation, exchange rates, crude oil and interest rates), this study’s findings establish that these risks do not significantly impact the stock returns of any company group across all time periods. As for idiosyncratic risks, firm size and book-to-market factors emerge as substantial influencers across all firms. Additionally, market sentiment significantly affects the stock performance of small-sized dividend-paying companies.
投资者总是在追逐超额收益。为了研究影响中国 A 股超额收益的三个驱动因素，即系统性风险、特异性风险和市场情绪，本研究根据财务报告附注中的普通股股利支付情况将 A 股分为不分红组和分红组。此外，本研究还使用了资本资产定价模型、单指数模型、套利定价理论和法玛-法式三因子和五因子模型来分析三大驱动因素。采用 Gibbons-Ross-Shanken 检验法检验模型的有效性，并提取了各组的最优模型。我们的研究结果表明，在对每组最优模型进行分析后，很明显系统性风险确实对派息公司和非派息公司都产生了影响。然而，当考虑到四种特定的系统性风险（通货膨胀、汇率、原油和利率）时，本研究的结果表明，这些风险在所有时间段内都不会对任何公司组别的股票回报率产生显著影响。至于特异性风险，公司规模和账面市值因素对所有公司都有重大影响。此外，市场情绪也会对小型分红公司的股票表现产生重大影响。
{"title":"Dividend and Excess Return in China","authors":"Jiaqi Da, A. Nassir, Andrew Tek Wei Saw, Hui Zhang, Wei Theng Lau","doi":"10.21315/aamjaf2023.19.2.4","DOIUrl":"https://doi.org/10.21315/aamjaf2023.19.2.4","url":null,"abstract":"Investors are always chasing excess returns. To examine the three driving factors affecting China A-share excess returns, namely systematic risk, idiosyncratic risk and market sentiment, this study divided A-shares into non-dividend and dividend-paying groups based on the Dividend Paid for Common Shares in the notes of the financial report. In addition, this study used the Capital Asset Pricing model, Single-Index model, Arbitrage Pricing theory and Fama-French three- and five-factor model to analyse the three main driving factors. The Gibbons-Ross-Shanken test was used to test the model validity, and the optimal model for each group was extracted. Our findings show that after analysing the optimal models within each group, it becomes evident that systematic risk indeed exerts an influence on both dividend-paying and non-dividend companies. Nevertheless, when considering four specific systematic risks (inflation, exchange rates, crude oil and interest rates), this study’s findings establish that these risks do not significantly impact the stock returns of any company group across all time periods. As for idiosyncratic risks, firm size and book-to-market factors emerge as substantial influencers across all firms. Additionally, market sentiment significantly affects the stock performance of small-sized dividend-paying companies.","PeriodicalId":44370,"journal":{"name":"Asian Academy of Management Journal of Accounting and Finance","volume":null,"pages":null},"PeriodicalIF":0.9,"publicationDate":"2023-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139200160","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 : 2023-11-30DOI: 10.21315/aamjaf2023.19.2.7
Shaojun Fan, Aikun Zhang
This article uses the financial data of China’s A-share listed companies from 2007 to 2020 and examines the impact of accounting information consistency on audit fees. The study finds that higher consistency is significantly associated with a firm’s lower audit fees after controlling for other factors. After the robustness test, the conclusion remains unchanged. The mechanism test finds that higher consistency reduces audit risks and thus reduces the company’s audit fees. Further research finds that the reducing effect of consistency on audit fees is significantly more apparent in companies with higher financial leverage. Overall, this article expands the research on the influencing factors of audit fees from the consistency perspective. The research conclusions have reference value for information users to use accounting information to supervise governance, improve the quality of financial statement disclosure, and reduce the company’s audit fees.
本文利用 2007 年至 2020 年中国 A 股上市公司的财务数据，研究了会计信息一致性对审计费用的影响。研究发现，在控制了其他因素后，较高的一致性与公司较低的审计费用显著相关。经过稳健性检验，结论保持不变。机理检验发现，较高的一致性可以降低审计风险，从而降低公司的审计费用。进一步的研究发现，一致性对审计费用的降低作用在财务杠杆较高的公司中更为明显。总体而言，本文从一致性角度拓展了审计费用影响因素的研究。研究结论对信息使用者利用会计信息监督公司治理、提高财务报表披露质量、降低公司审计费用具有参考价值。
{"title":"Accounting Information Consistency and Audit Fees: Evidence from China","authors":"Shaojun Fan, Aikun Zhang","doi":"10.21315/aamjaf2023.19.2.7","DOIUrl":"https://doi.org/10.21315/aamjaf2023.19.2.7","url":null,"abstract":"This article uses the financial data of China’s A-share listed companies from 2007 to 2020 and examines the impact of accounting information consistency on audit fees. The study finds that higher consistency is significantly associated with a firm’s lower audit fees after controlling for other factors. After the robustness test, the conclusion remains unchanged. The mechanism test finds that higher consistency reduces audit risks and thus reduces the company’s audit fees. Further research finds that the reducing effect of consistency on audit fees is significantly more apparent in companies with higher financial leverage. Overall, this article expands the research on the influencing factors of audit fees from the consistency perspective. The research conclusions have reference value for information users to use accounting information to supervise governance, improve the quality of financial statement disclosure, and reduce the company’s audit fees.","PeriodicalId":44370,"journal":{"name":"Asian Academy of Management Journal of Accounting and Finance","volume":null,"pages":null},"PeriodicalIF":0.9,"publicationDate":"2023-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139196683","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 : 2023-11-30DOI: 10.21315/aamjaf2023.19.2.9
Lin Lin, Ngou Teng Pun, Zhongda He
As early mover advantage and late mover advantage have been discussed for decades, the conditions for the best use of them are yet unclear. Using the U.S. merger data during 2000–2019, this study examines the entry-timing and the post-merger performance of 1,376 bidders in the merger waves recognised. We find that early movers have advantages with higher post-merger performance in a merger wave, while the effect of late mover advantage is not significant. Moreover, early mover advantage can only be implemented in competitive industries. Our analysis further provides the entry-timing strategies for large firms and small/mid enterprises, respectively. Our results indicate that late mover advantage can only be adopted in large companies, while small/mid firms should be followers, not early or late movers, in high concentration industries. Overall, our study sheds new light on the entry-timing in a merger wave with the consideration of different market concentration environment and different firm size.
{"title":"Industry Concentration, Firm Size and Entry-Timing in Merger Waves","authors":"Lin Lin, Ngou Teng Pun, Zhongda He","doi":"10.21315/aamjaf2023.19.2.9","DOIUrl":"https://doi.org/10.21315/aamjaf2023.19.2.9","url":null,"abstract":"As early mover advantage and late mover advantage have been discussed for decades, the conditions for the best use of them are yet unclear. Using the U.S. merger data during 2000–2019, this study examines the entry-timing and the post-merger performance of 1,376 bidders in the merger waves recognised. We find that early movers have advantages with higher post-merger performance in a merger wave, while the effect of late mover advantage is not significant. Moreover, early mover advantage can only be implemented in competitive industries. Our analysis further provides the entry-timing strategies for large firms and small/mid enterprises, respectively. Our results indicate that late mover advantage can only be adopted in large companies, while small/mid firms should be followers, not early or late movers, in high concentration industries. Overall, our study sheds new light on the entry-timing in a merger wave with the consideration of different market concentration environment and different firm size.","PeriodicalId":44370,"journal":{"name":"Asian Academy of Management Journal of Accounting and Finance","volume":null,"pages":null},"PeriodicalIF":0.9,"publicationDate":"2023-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139202591","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 : 2023-11-30DOI: 10.21315/aamjaf2023.19.2.5
Veronika S. Vinogradova
This paper extends the previous research on strategic transactions (M&A) and focuses on the analysis of the relationship between the pre-event performance of acquiring companies and value creation in strategic acquisitions for growth. It identifies the prerequisites of successful transactions and tests empirically how the key fundamental determinants of the acquiring companies influence investors’ reaction around the announcement and acquirers’ financial performance in the years after. The results of the analysis confirm that the intrinsic pre-event performance of the acquiring firm can significantly impact the outcome and profitability of strategic M&A.
{"title":"Patterns of Value Creation in Strategic Acquisitions for Growth","authors":"Veronika S. Vinogradova","doi":"10.21315/aamjaf2023.19.2.5","DOIUrl":"https://doi.org/10.21315/aamjaf2023.19.2.5","url":null,"abstract":"This paper extends the previous research on strategic transactions (M&A) and focuses on the analysis of the relationship between the pre-event performance of acquiring companies and value creation in strategic acquisitions for growth. It identifies the prerequisites of successful transactions and tests empirically how the key fundamental determinants of the acquiring companies influence investors’ reaction around the announcement and acquirers’ financial performance in the years after. The results of the analysis confirm that the intrinsic pre-event performance of the acquiring firm can significantly impact the outcome and profitability of strategic M&A.","PeriodicalId":44370,"journal":{"name":"Asian Academy of Management Journal of Accounting and Finance","volume":null,"pages":null},"PeriodicalIF":0.9,"publicationDate":"2023-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139206126","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 : 2023-06-22DOI: 10.21315/aamjaf2023.19.1.7
Dalia Ali, Mostafa Hemdan, Saif-Ur-Rehman, Faisal Khan
This article investigated the determinants of the firm’s earnings quality (FREQ) using panel data of Egyptian listed firms to address the concerns of endogeneity and heterogeneity. We found that CEO power dynamics negatively impact FREQ. Furthermore, corporate governance’s weakening or substitution role is investigated for the negative association between CEO power dynamics and FREQ. Our findings showed that board-independence significantly weakens the impacts of CEO- ownership and CEO-tenure on FREQ. In contrast, the results fail to support the weakening or substitution role of board-independence for the negative effects of CEO-duality and CEO-political connection on FREQ. Board gender diversity is not significantly associated with FREQ. However, we found that the presence of gender critical mass serves as a substitution mechanism for the negative association between CEO power dynamics and FREQ. Lastly, we observed strong robustness for our primary analysis through propensity matching scores and difference-in-different (DID) techniques. This study brings a novelty to existing research by exploring the negative consequences of CEO power dynamics. Furthermore, it provides an insight into the constraining or weakening of the role of corporate governance. The main findings of the current study are also robust to Modified Jones model (1995) reverse-causality, DID and propensity-matching techniques.
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