Journal of Corporate Accounting and Finance最新文献

This study explores how federal procurement contracts influence shareholder value, revealing a consistent positive correlation between the size of the initial award and investor reactions. We uncover a significant impact of the contract's Sweetheart Index on investor responses, with no-bid (sole source) contracts, defense contracts, service contracts, and contracts exempt from cost or price reporting requirements attracting stronger investor interest. Notably, we observe significant information leakage around award announcements that affects investor behavior. Through difference-in-difference analysis, our findings show that long-term defense contracts lead to a greater increase in return on equity compared to other large government contracts, as assessed against a matched sample of firms. Additionally, our study highlights that contracts in industries with high concentration and those involving unique goods and services tend to be more lucrative, providing critical insights for investors and policymakers engaged in federal procurement strategies.

Literature in accounting, economics, and corporate finance explores how top corporate executives’ personal traits and psychological biases affect firm decisions. This study focuses on one specific dimension of CEO personality: overconfidence and examines how CEO overconfidence influences corporate tax strategies. Overconfident executives tend to expect good outcomes due to optimistic bias or overestimation of their ability to bring about success. Therefore, they tend to overestimate the returns on investment projects and overinvest. We postulate that overconfident CEOs are inclined to seek risky tax planning activities to generate additional cash streams to make up for those projects not producing as much cash flow as originally expected. We find our three measures of overconfidence to be positively correlated with the book-tax difference (BTD). Our main overconfidence measure, proxied by CEOs delaying exercising their stock options, is negatively correlated with the cash effective tax rate (CETR), consistent with our prediction that overconfident CEOs exhibit more tax aggressiveness to preserve cash. Additionally, we test whether corporate governance affects corporate tax strategies and show that overconfident CEOs continue to have a negative effect on cash-effective tax rates regardless of the strength of board governance.

By exploring the relationship between stock price crash risk and the frequency of cybersecurity disclosures in financial reports, we present evidence that cybersecurity disclosure does matter because its frequency increases stock price crash risk. We analyze the association between cybersecurity disclosure and stock price crash risk from the perspective of two different theoretical lenses: information asymmetry and investor sentiment. We perform textual analysis on the Chinese A-shares public companies’ cybersecurity disclosure in financial reports during 2017–2022. We find that the more cybersecurity disclosures in financial reports, the higher the stock price crash risk. Further findings reveal that the effect of the frequency of cybersecurity disclosure on stock price crash risk is more significant in non-Big-4 audit companies and companies with lower analyst coverage. These findings imply that the market presents the clear idea that cybersecurity disclosure's negative impact to stock price crashes would be greater than the positive impact under the current settings of the volunteer disclosure policies.

This study investigates the non-monotonic relationship between bank size and market value in the emerging economies of the Middle East and North Africa (MENA) region, with a focus on comparing Islamic and conventional banks. The analysis uses fixed-effects panel techniques, supported by random-effects, pooled OLS, and Hausman–Taylor methods for robustness, based on a sample of 161 publicly listed banks across 17 MENA countries from 2009 to 2022. The findings show that bank size positively influences market value initially, indicating economies of scale, but larger sizes lead to diminishing returns, reflecting a non-monotonic relationship. This pattern is more evident for conventional banks, while the results for Islamic banks are less conclusive, suggesting the need for further investigation. Islamic banks seem to benefit less from economies of scale, possibly due to unique operational and governance challenges. This study fills a gap in the literature on the size-market value relationship in emerging markets, offering insights into how local conditions and regulations shape bank performance. It also provides a novel comparison between Islamic and conventional banks, enhancing understanding of sector-specific dynamics. By challenging the linear assumptions of prior research, the study highlights the complex non-linear effects of bank size, emphasizing the role of agency conflicts and regulatory oversight in managing systemic risks. The research contributes to both empirical and theoretical discussions on banking scale management and agency theory in emerging market contexts.

We examine whether fair value (FV) deficiencies highlighted in Public Company Accounting Oversight Board (PCAOB) inspection reports improve perceptions of the reporting quality of FV investment assets. Qualitative studies illustrate that subjective and complex estimates pose unique challenges to audit improvement. Using a market-based measure of financial reporting quality (i.e., implied asset-specific betas), we find a positive association between the intensity of FV-deficient reports and perceived reporting quality of level 2 (but not level 3) FV investment assets and show that the association is stronger when audit office FV expertise is high. Consistent with improvements in disclosures, after a FV-deficient report, we find FV footnotes become relatively more readable and include less cautionary language as level 2 holdings increase. Overall, our evidence suggests investors value PCAOB inspections regarding level 2 FV assets.

In the evolving landscape of sustainable investing, with unprecedented market attention on environmental, social, and governance (ESG) information, our study delves into the relationship between a firm's ESG ratings and the philanthropic behavior of its chief executive officer (CEO), particularly in terms of charitable stock donations. Examining US firms and utilizing comprehensive ESG data from Refinitiv, we find that ESG-rated firm CEOs engage in greater personal stock donation activity as compared to their non-ESG counterparts. They also appear to time donations in a less self-serving manner. When we isolate ESG firms, we find CEOs of the strongest ESG performers exhibit no self-interested timing behavior. Our study contributes to the sparse literature on CEO charitable behavior, shedding light on the potential alignment between ESG performance at the firm level and genuine, altruistic giving at the CEO level. Such alignment provides valuable insight for investors, policymakers, nonprofit organizations, and researchers interested in the intersection of sustainable investing and executive action.

This paper investigates how intellectual capital (IC) and financialization mediate the relationship between ownership structure (OS) and the financial performance (FP) of manufacturing companies listed on the Iranian stock exchange from 2016 to 2022. OS is analyzed through three variables: institutional ownership (IO), ownership concentration (OC), and managerial ownership (MO). IC and financialization are considered as mediating variables, with firms’ FP as the dependent variable. This research was conducted due to a sample of 112 listed companies and employs artial least squares structural equation modeling (PLS-SEM) for data evaluation. The results reveal that both IO and OC positively impact FP, whereas MO negatively affects FP. Furthermore, IC and financialization mediate the relationships between OC and MO with FP. However, these mediating factors do not affect the relationship between IO and FP.

This study investigates the interplay between carbon emissions (COEM), earnings quality (EQ), and CEOs’ pay within non-financial European firms. The study's results indicate a strong adverse correlation between COEM and EQ. Importantly, the influence of executive compensation on this correlation is adverse, particularly within firms that have adopted Say-on-Pay (SOP) system. The Paris Agreement (PA) serves as a driver for sustainability, influencing the dynamics of EQ. This research offers original perspectives on the link between COEM and EQ, along with the moderating impact of executive compensation. Additionally, it sheds light on the potential effects of SOP regulations and global sustainability initiatives on a company's environmentally responsible practices and the quality of accounting numbers.