Pub Date : 2021-12-28DOI: 10.1080/16081625.2021.2020668
M. Shah, Zuoping Xiao, Abdullah Abdullah, Shakir Quresh, Mushtaq Ahmad, Muqeet Ahmad
ABSTRACT This study examines the moderating effect of judicial efficiency and creditor rights on the relationship between internal pyramid structure and leverage. The results suggest that the effect of the vertical and horizontal pyramid structures on leverage is positive and significant. We find that the impact of the pyramid’s vertical structure on leverage is more substantial than that of the horizontal structure. The results also reveal that judicial efficiency and creditor rights weaken the association between a complex ownership structure and leverage.
{"title":"Complex ownership, contract enforcement, creditor rights, and leverage","authors":"M. Shah, Zuoping Xiao, Abdullah Abdullah, Shakir Quresh, Mushtaq Ahmad, Muqeet Ahmad","doi":"10.1080/16081625.2021.2020668","DOIUrl":"https://doi.org/10.1080/16081625.2021.2020668","url":null,"abstract":"ABSTRACT This study examines the moderating effect of judicial efficiency and creditor rights on the relationship between internal pyramid structure and leverage. The results suggest that the effect of the vertical and horizontal pyramid structures on leverage is positive and significant. We find that the impact of the pyramid’s vertical structure on leverage is more substantial than that of the horizontal structure. The results also reveal that judicial efficiency and creditor rights weaken the association between a complex ownership structure and leverage.","PeriodicalId":45890,"journal":{"name":"Asia-Pacific Journal of Accounting & Economics","volume":"54 1","pages":"780 - 803"},"PeriodicalIF":1.1,"publicationDate":"2021-12-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83295983","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-12-28DOI: 10.1080/16081625.2021.2020670
Tzu-Ching Weng, H. Chi, Huanzhi Li
ABSTRACT This study examines the association between family succession and audit pricing. Auditors are interested in the successor’s capability, and they are incentivized to include this information in their audit pricing. A unique manually gathered dataset from China shows higher audit fees paid by second-generation family firms. However, compared with top-tier auditors, non-top-tier auditors charge lower audit fees to retain their engagement with family successors. Furthermore, auditors are more sensitive to successors’ personality characteristics, such as overseas education, business-related bachelor’s degree, business career experience, political connections, and succession age.
{"title":"Auditors’ response to family succession: evidence from China","authors":"Tzu-Ching Weng, H. Chi, Huanzhi Li","doi":"10.1080/16081625.2021.2020670","DOIUrl":"https://doi.org/10.1080/16081625.2021.2020670","url":null,"abstract":"ABSTRACT This study examines the association between family succession and audit pricing. Auditors are interested in the successor’s capability, and they are incentivized to include this information in their audit pricing. A unique manually gathered dataset from China shows higher audit fees paid by second-generation family firms. However, compared with top-tier auditors, non-top-tier auditors charge lower audit fees to retain their engagement with family successors. Furthermore, auditors are more sensitive to successors’ personality characteristics, such as overseas education, business-related bachelor’s degree, business career experience, political connections, and succession age.","PeriodicalId":45890,"journal":{"name":"Asia-Pacific Journal of Accounting & Economics","volume":"20 1","pages":"247 - 265"},"PeriodicalIF":1.1,"publicationDate":"2021-12-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74082460","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-12-27DOI: 10.1080/16081625.2021.2020666
Jian Cao, B. Lin, Gennaro Bernile, Wei Shu
ABSTRACT Using a survey of corporate insiders from 1,148 Chinese listed firms, this paper examines the direct effects of compliance with mandated Internal Control over Financial Reporting (ICFR) disclosure. In contrast with their U.S. counterparts, vast majorities of respondents recognize compliance benefits and perceive these benefits to outweigh the costs. However, the degree to which the firm is susceptible to market forces is a major determinant of the effects of compliance. The paper shows the evidence which supports the idea that the effectiveness of mandated ICFR disclosure depends crucially on the broader market and institutional environment in which firms operate.
{"title":"The economic effects of mandated ICFR disclosure in China: an insider perspective","authors":"Jian Cao, B. Lin, Gennaro Bernile, Wei Shu","doi":"10.1080/16081625.2021.2020666","DOIUrl":"https://doi.org/10.1080/16081625.2021.2020666","url":null,"abstract":"ABSTRACT Using a survey of corporate insiders from 1,148 Chinese listed firms, this paper examines the direct effects of compliance with mandated Internal Control over Financial Reporting (ICFR) disclosure. In contrast with their U.S. counterparts, vast majorities of respondents recognize compliance benefits and perceive these benefits to outweigh the costs. However, the degree to which the firm is susceptible to market forces is a major determinant of the effects of compliance. The paper shows the evidence which supports the idea that the effectiveness of mandated ICFR disclosure depends crucially on the broader market and institutional environment in which firms operate.","PeriodicalId":45890,"journal":{"name":"Asia-Pacific Journal of Accounting & Economics","volume":"10 1","pages":"707 - 725"},"PeriodicalIF":1.1,"publicationDate":"2021-12-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84642655","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-12-20DOI: 10.1080/16081625.2021.2012702
Wang Jie, Wanwan Wanwan, Qinghe Yang
ABSTRACT This study investigates the impact of regional cultural diversity on corporate philanthropy. We find that regional cultural diversity is negatively associated with corporate philanthropy. The mechanism analyses show that relationship between regional cultural diversity and corporate philanthropy is more pronounced in firms with lower CEO empathy and media coverage, indicating that regional cultural diversity reduces corporate philanthropy by affecting altruistic motive and reputational motive of firms. In addition, the relationship between regional cultural diversity and corporate philanthropy is more pronounced in regions with lower social trust.
{"title":"Regional cultural diversity and corporate philanthropy: evidence from Chinese dialects","authors":"Wang Jie, Wanwan Wanwan, Qinghe Yang","doi":"10.1080/16081625.2021.2012702","DOIUrl":"https://doi.org/10.1080/16081625.2021.2012702","url":null,"abstract":"ABSTRACT This study investigates the impact of regional cultural diversity on corporate philanthropy. We find that regional cultural diversity is negatively associated with corporate philanthropy. The mechanism analyses show that relationship between regional cultural diversity and corporate philanthropy is more pronounced in firms with lower CEO empathy and media coverage, indicating that regional cultural diversity reduces corporate philanthropy by affecting altruistic motive and reputational motive of firms. In addition, the relationship between regional cultural diversity and corporate philanthropy is more pronounced in regions with lower social trust.","PeriodicalId":45890,"journal":{"name":"Asia-Pacific Journal of Accounting & Economics","volume":"61 1","pages":"690 - 706"},"PeriodicalIF":1.1,"publicationDate":"2021-12-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76106285","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-12-20DOI: 10.1080/16081625.2021.2007407
Yong Du, X. Sui, Wei Wei, Jun Du
ABSTRACT We use the China’s economic policy uncertainty (EPU) index constructed by Baker et al. (2016)to explore the relationship between EPU and stock price crash risk. We find that the increasing of EPU will significantly increase stock price crash risk. After analyzing the mechanism of the relationship between them, we find that economic policy affects stock price crash risk mainly by influencing information asymmetry. More specifically, small enterprises, non-state-owned enterprises, and enterprises in regions with developed economies and high levels of marketization are more sensitive to EPU and are more affected by EPU in terms of stock price crash risk. We also put forward policy implications from both the government and business perspectives.
{"title":"Economic policy uncertainty and stock price crash risk","authors":"Yong Du, X. Sui, Wei Wei, Jun Du","doi":"10.1080/16081625.2021.2007407","DOIUrl":"https://doi.org/10.1080/16081625.2021.2007407","url":null,"abstract":"ABSTRACT We use the China’s economic policy uncertainty (EPU) index constructed by Baker et al. (2016)to explore the relationship between EPU and stock price crash risk. We find that the increasing of EPU will significantly increase stock price crash risk. After analyzing the mechanism of the relationship between them, we find that economic policy affects stock price crash risk mainly by influencing information asymmetry. More specifically, small enterprises, non-state-owned enterprises, and enterprises in regions with developed economies and high levels of marketization are more sensitive to EPU and are more affected by EPU in terms of stock price crash risk. We also put forward policy implications from both the government and business perspectives.","PeriodicalId":45890,"journal":{"name":"Asia-Pacific Journal of Accounting & Economics","volume":"9 1","pages":"667 - 689"},"PeriodicalIF":1.1,"publicationDate":"2021-12-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84306928","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-12-14DOI: 10.1080/16081625.2021.2012703
Hiroyuki Taguchi, Abdukodirov Amirjon
ABSTRACT This paper evaluates the export values of manufactured goods for the Central Asian countries using a gravity trade model and investigates the roles of institutional qualities in manufacturing exports based on the World Governance Indicators. The findings of this study are summarized as follows. With Kazakhstan being a benchmark country, the remaining four Central Asian countries have downward deviations in manufacturing exports and institutional qualities. Then, the institutional qualities such as control of corruption, government effectiveness and rule of law are identified to be the major factors to explain the differences in the manufacturing exports’ performances.
{"title":"Manufacturing exports and institutional qualities in Central Asian countries","authors":"Hiroyuki Taguchi, Abdukodirov Amirjon","doi":"10.1080/16081625.2021.2012703","DOIUrl":"https://doi.org/10.1080/16081625.2021.2012703","url":null,"abstract":"ABSTRACT This paper evaluates the export values of manufactured goods for the Central Asian countries using a gravity trade model and investigates the roles of institutional qualities in manufacturing exports based on the World Governance Indicators. The findings of this study are summarized as follows. With Kazakhstan being a benchmark country, the remaining four Central Asian countries have downward deviations in manufacturing exports and institutional qualities. Then, the institutional qualities such as control of corruption, government effectiveness and rule of law are identified to be the major factors to explain the differences in the manufacturing exports’ performances.","PeriodicalId":45890,"journal":{"name":"Asia-Pacific Journal of Accounting & Economics","volume":"16 1","pages":"769 - 779"},"PeriodicalIF":1.1,"publicationDate":"2021-12-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81262696","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-11-27DOI: 10.1080/16081625.2021.2003212
Ziye He, Jianxin Tang
ABSTRACT Using data on non-financial firms listed on China’s A-share market from 2011 to 2018, we study how the effect of the China’s deleveraging policies on firms’ tax planning changes with their engagement in leverage management. We find that the effect of the policies on tax planning of over-indebted firms is more negative when they engage in more leverage management. These results are stronger when (1) tax enforcement is less strict; (2) firms are more financially constrained; and (3) firms are non-state-owned enterprises (non-SOEs). These findings increase our understanding of the economic consequences of deleveraging policies and leverage management. They also contribute to the literature on capital structure and corporate tax planning.
{"title":"Deleveraging policy, leverage management, and firms’ aggressive tax planning","authors":"Ziye He, Jianxin Tang","doi":"10.1080/16081625.2021.2003212","DOIUrl":"https://doi.org/10.1080/16081625.2021.2003212","url":null,"abstract":"ABSTRACT Using data on non-financial firms listed on China’s A-share market from 2011 to 2018, we study how the effect of the China’s deleveraging policies on firms’ tax planning changes with their engagement in leverage management. We find that the effect of the policies on tax planning of over-indebted firms is more negative when they engage in more leverage management. These results are stronger when (1) tax enforcement is less strict; (2) firms are more financially constrained; and (3) firms are non-state-owned enterprises (non-SOEs). These findings increase our understanding of the economic consequences of deleveraging policies and leverage management. They also contribute to the literature on capital structure and corporate tax planning.","PeriodicalId":45890,"journal":{"name":"Asia-Pacific Journal of Accounting & Economics","volume":"23 1","pages":"594 - 618"},"PeriodicalIF":1.1,"publicationDate":"2021-11-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83964250","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-11-27DOI: 10.1080/16081625.2021.2007408
Zeynep İltüzer
ABSTRACT This study proposes a methodology incorporating machine learning algorithms to predict stock returns and construct portfolios that beat the market. The performance evaluation is based on the statistical metrics as well as the return and Sharpe ratios of the portfolios. Additionally, a new performance evaluation metric, Safe-Side, is introduced to address the needs of conservative portfolio managers and investors. The results provide strong evidence that the machine learning algorithms can be used to predict the stock returns with approximately 86% classification accuracy. The proposed methodology also provides guidance for investors and portfolio managers for their portfolio selection problems.
{"title":"Predicting stock returns with financial ratios: A new methodology incorporating machine learning techniques to beat the market","authors":"Zeynep İltüzer","doi":"10.1080/16081625.2021.2007408","DOIUrl":"https://doi.org/10.1080/16081625.2021.2007408","url":null,"abstract":"ABSTRACT This study proposes a methodology incorporating machine learning algorithms to predict stock returns and construct portfolios that beat the market. The performance evaluation is based on the statistical metrics as well as the return and Sharpe ratios of the portfolios. Additionally, a new performance evaluation metric, Safe-Side, is introduced to address the needs of conservative portfolio managers and investors. The results provide strong evidence that the machine learning algorithms can be used to predict the stock returns with approximately 86% classification accuracy. The proposed methodology also provides guidance for investors and portfolio managers for their portfolio selection problems.","PeriodicalId":45890,"journal":{"name":"Asia-Pacific Journal of Accounting & Economics","volume":"77 1","pages":"619 - 632"},"PeriodicalIF":1.1,"publicationDate":"2021-11-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80573126","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-11-22DOI: 10.1080/16081625.2021.2003213
Kambar Farooq, C. Chui, Muhammad Azeem
ABSTRACT We study whether firms with central network boards influence investment efficiency. The results demonstrate that board centrality enhances investment efficiency and mitigates overinvestment but show an insignificant impact on underinvestment. This asymmetric effect on over and underinvestment can be attributed to different roles played by executive (internal) directors and external directors on the board. Further analysis reveals that the board centrality and investment efficiency relationship is stronger for firms with higher managerial entrenchment and informational asymmetry problems. The findings support the notion that social capital, in the shape of board networks, improves monitoring and information environment, consequently enhancing investment efficiency.
{"title":"Board centrality and investment efficiency","authors":"Kambar Farooq, C. Chui, Muhammad Azeem","doi":"10.1080/16081625.2021.2003213","DOIUrl":"https://doi.org/10.1080/16081625.2021.2003213","url":null,"abstract":"ABSTRACT We study whether firms with central network boards influence investment efficiency. The results demonstrate that board centrality enhances investment efficiency and mitigates overinvestment but show an insignificant impact on underinvestment. This asymmetric effect on over and underinvestment can be attributed to different roles played by executive (internal) directors and external directors on the board. Further analysis reveals that the board centrality and investment efficiency relationship is stronger for firms with higher managerial entrenchment and informational asymmetry problems. The findings support the notion that social capital, in the shape of board networks, improves monitoring and information environment, consequently enhancing investment efficiency.","PeriodicalId":45890,"journal":{"name":"Asia-Pacific Journal of Accounting & Economics","volume":"11 1","pages":"633 - 666"},"PeriodicalIF":1.1,"publicationDate":"2021-11-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77487592","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-11-21DOI: 10.1080/16081625.2021.2003210
Zhe Li, Yirong Zou, Qinyuan Chen
ABSTRACT This study provides fresh evidence on the impact of CEOs’ secretarial experience on the quality of Management Discussion and Analysis (MD&A) disclosure. This study finds that in China, CEOs with secretarial experience significantly lead to more MD&A modifications (renew text information timelier). Cross-sectional analyses reveal that the improvement of information disclosure by CEOs with secretarial experience is more prominent for firms without political connection and for CEOs whose birthplace has a stronger cultural environment. Additional test shows that the modification of MD&A provides incremental information for investors and the stock price has a stronger response to the revision made by CEOs with secretarial experience, suggesting investors appreciate CEOs with secretarial experience. Overall, our evidence suggests that CEOs with secretarial experience are more skilled in comprehensive report writing and have stronger ability to provide incremental information.
{"title":"CEOs’ secretarial experience and MD&A disclosure quality: a study based on textual analysis","authors":"Zhe Li, Yirong Zou, Qinyuan Chen","doi":"10.1080/16081625.2021.2003210","DOIUrl":"https://doi.org/10.1080/16081625.2021.2003210","url":null,"abstract":"ABSTRACT This study provides fresh evidence on the impact of CEOs’ secretarial experience on the quality of Management Discussion and Analysis (MD&A) disclosure. This study finds that in China, CEOs with secretarial experience significantly lead to more MD&A modifications (renew text information timelier). Cross-sectional analyses reveal that the improvement of information disclosure by CEOs with secretarial experience is more prominent for firms without political connection and for CEOs whose birthplace has a stronger cultural environment. Additional test shows that the modification of MD&A provides incremental information for investors and the stock price has a stronger response to the revision made by CEOs with secretarial experience, suggesting investors appreciate CEOs with secretarial experience. Overall, our evidence suggests that CEOs with secretarial experience are more skilled in comprehensive report writing and have stronger ability to provide incremental information.","PeriodicalId":45890,"journal":{"name":"Asia-Pacific Journal of Accounting & Economics","volume":"40 1","pages":"1305 - 1326"},"PeriodicalIF":1.1,"publicationDate":"2021-11-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87897426","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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