Journal of International Financial Management & Accounting最新文献

The paper examines how central bank communication affects the macro information in analyst forecasts. Using quarterly data of Chinese-listed firms from 2007 to 2018, we find that richer and more frequent central bank communication increases the macro information contained in analyst forecasts. This effect is realized through the employment of in-house economists by security firms. In addition, we document that the effect of central bank communication on macroeconomic information in analyst forecasts is more salient under a contractionary monetary policy regime, during a bear market, or when the economic policy is more uncertain. We also show that analyst forecasts are more sensitive to central bank communication when firms that they follow are state-owned enterprises, have larger leverage ratios, or are located in more developed regions. In addition, analyst forecasts are more susceptible to central bank communication when the communication is in an informal oral format, when the public has more trust in the credibility of the central bank communication, and when the central bank pays more attention to expectation management after 2010. Finally, we show that richer and more frequent central bank communication also improves the accuracy of analyst forecasts.

In recent decades, environmental, social, and governance (ESG) factors have received increasing attention in the literature of corporate internationalization. While prior studies have extensively examined how ESG initiatives implemented in the host country enhance corporate international performance, less attention has been paid to the facilitating role of previously accumulated ESG performance in the internationalization process. Drawing on a sample of 2083 unique publicly listed Chinese firms from 2010 to 2019, we explore whether and how ESG performance promotes corporate outward foreign direct investment (OFDI). Our findings indicate a positive association between corporate ESG performance and both the propensity and scale of OFDI. We also identify financial constraints and corporate reputation as two mechanisms through which ESG performance influences OFDI. Our additional analysis suggests that the reputation-strengthening mechanism of ESG performance is more pronounced for family firms, whereas no significant difference is observed between family and nonfamily firms in terms of the financial mechanism. These findings have important implications for managers and policymakers seeking to promote sustainable development and internationalization.

We investigate how tax avoidance affects the maturity structure of debt in firms where tax avoidance costs are presumably low, namely SMEs. Previous research has shown that creditors of listed tax-avoiding companies impose shorter maturities to more frequently reassess the tax avoidance risks in debt contracts. Using a sample of 110,690 firm-year observations of Spanish SMEs over the period 2007–2020, we examine the relationship between tax avoidance and debt maturity and the channels driving this relationship. We find that tax-avoiding SMEs show a longer debt maturity. This effect is stronger for SMEs with higher profitability, lower earnings management incentives, and higher reliability of financial reporting. We also find that tax avoidance reduces leverage and short-term debt, increases future cash flows, and decreases future cash flow volatility. Overall, these findings suggest that, unlike large firms, SMEs use cash tax savings to reduce leverage and short-term debt in their financial structure and that tax avoidance is positively valued by their lenders.

This study examines whether the pre-deal target-bidder firm governance gap affects the bidder's postdeal change in governance quality. We estimate cross-sectional regressions using mergers and acquisitions from 2004 to 2016. We find that the bidder's firm-level governance improves for acquisitions where the target's governance quality is better than that of the bidder preacquisition. We attribute the results to reverse portability, suggesting that the predeal governance gap creates space for governance transfer, and bidders can adopt better governance of targets after the acquisition. Board independence, audit committee independence, CEO-Chairman separation, stock compensation, and equal treatment of minority shareholders serve as potential channels to demonstrate the bidder's higher governance after the acquisition. Our findings also reveal that bidders with governance improvement are also associated with higher operating performance. We extend the portability theory of Ellis et al. (2017) and suggest that governance can also travel from targets to bidders through mergers and acquisitions.

Sustainability has become more than just an aspiration in business. It has become an integral part of business strategy and decision-making. Organizations have realized that adhering to sustainability with its impact on multi-facets can drive business success. Long-term growth requires an understanding of the relationships between people and their surroundings. Engagement of stakeholders is essential for planning, designing, implementing, and ensuring the efficacy of programmes. Due to the requirement for sustainability and the engagement of a greater stakeholder range in project planning, the project plan complexity is growing. The lack of or insufficient engagement of stakeholders throughout the project life cycle, particularly in the early phases of implementation and planning, frequently has a detrimental effect on the intended project performance. Effective stakeholder engagement is essential to counterbalance the combined effects of a lack of contextual knowledge by stakeholders and a lack of support in the field. However, this integration encounters difficulties such as resource restrictions and competing stakeholder interests. To encourage stakeholder engagement with the initiatives, project resources may be allocated based on the relative importance of competing areas. This study intends to establish a Stakeholder Engagement Framework (SEF) to increase the effectiveness of stakeholder engagement in projects by systematically evaluating potential conflicts and integrating the perspectives of stakeholders and the project management team. To do this, we use fuzzy logic inputs to account for ambiguities throughout the project life cycle, as well as stakeholder theory, value-based management, matrix-based dependency modeling, and total quality management to provide a framework for stakeholder participation. Then we implement the suggested SEF methodology to organize stakeholder participation for a green building project. The suggested framework will promote stakeholder participation under long-term goals for project managers by identifying potential conflicts of interest.

We review the recent literature on the assurance of Extended External Reporting published since the review published in 2021 in the Journal of International Financial Management & Accounting. Our review includes 50 articles published between 2020 and August 2023 across 30 journals ranked A*, A, or B on the Australian Business Deans Council 2022 Journal Quality List. We find that the literature continues to be dominated by positivist studies investigating the determinants and consequences of assurance. Studies on determinants examine carbon assurance, ownership, governance, and institutional themes. The consequences studies included in our review examine reporting-related outcomes and investors' decisions. Other (qualitative) studies we reviewed examine issues such as assurance providers seeking meaning in their work and their attempts to promote assurance beyond merely a verification tool. We highlight several avenues for future research that could inform the work of standard setters and regulators.

This study examines the extent to which firms in emerging markets build supply chains around social relationships. Most existing studies contend that companies decide who to buy (sell) products from (to) based on cost–benefit trade considerations of product quality, price, and other factors. We argue that companies make supply chain decisions around social relations to reduce possible risks. We empirically test this conjecture by using data from Chinese municipal party secretaries who served in different places from 2006 to 2017, and the primary customers of listed companies. The results show that after an official move from one jurisdiction to work in another, the firms in the latter jurisdiction will see an increase in customers from where the official previously served. Further investigation reveals that companies that are economically strong, face fierce competition, are state-owned, and are located in areas with low degrees of marketization are more likely to attract customers from the area where the official last served after the new municipal party secretary takes office. Making supply chain decisions based on the social relationships of the secretaries of the municipal party committees does not improve companies' profitability, but doing so will increase the turnover rate of accounts receivable and accounts received in advance.

Focusing on the global financial crisis period, this paper examines risk disclosure patterns and outcomes in a cross-country setting. We build on prior risk disclosure literature and draw upon institutional and agency-based theoretical lenses to investigate the nature, comprehensiveness, evolution, and quality of disclosed risk information for matched samples of manufacturing firms in the United States, Canada, Germany, and China (Chinese Hong Kong-listed firms). The results show a high degree of heterogeneity in risk disclosure behavior and volume among the sample firms attributed to both institutional differences and corporate reporting incentives in the study period. Furthermore, we document significant associations between risk proxies, risk disclosures, and firm market performance suggesting that corporate risk disclosures are potentially informative and useful to investors and other stakeholders. The paper highlights the important joint role of corporate incentives and legal institutions in interpreting and implementing accounting standards and stock exchange listing regulations around the world and during turbulent times.

While cultural traits in a firm's location impact corporate operation, the role of local cultures on a firm's internal control effectiveness (ICE) remains unclear. Using data from a sample of Chinese firms from 2009 to 2019, we examine how the gambling culture in Chinese provinces where firms are located impacts the firms' ICE. We use per capita lottery sales of the provinces to proxy for gambling culture in China and find that firms raise their ICE in environments with strong gambling cultures. The results are robust to five components of ICE (control environment, risk assessment, control activity, information and communication, and internal monitoring), alternative metrics of gambling metrics, and after accounting for endogeneity. A mediating analysis also shows that firms in regions with a strong gambling culture engage in risky activities, which increases their ICE. Additional analyses suggest that the effect is more salient for firms with poor internal corporate governance, firms located in poor legal environments, firms with poor audit quality, or firms with more local external stakeholders, echoing that ICE and monitoring are partial substitutes.

This study examines whether financial affiliates within a nonfinancial business group perform certain roles and functions in tax avoidance by other nonfinancial affiliates or the group as a whole. Financial institutions have tax-planning expertise and knowledge and thus may assist other affiliates of the same group in avoiding taxes. In addition, regulatory loopholes leave scope for tax avoidance involving financial affiliates. Using 10,659 firm-year observations from 866 nonfinancial listed firms affiliated with business groups in Korea over the period 2001–2019, I find that firms belonging to nonfinancial groups with financial affiliates exhibit higher levels of tax avoidance than those belonging to nonfinancial groups without financial affiliates. The same result is observed at the group-level tax avoidance as well as the firm-level tax avoidance. In addition, I provide evidence that KFTC-designated business groups subject to tighter regulation engage more in tax avoidance by utilizing financial affiliates in the blind spots of regulation and oversight, and that related-party transactions (i.e., intragroup transactions) are used as avenues for financial affiliates to help other affiliates in tax avoidance. This study is one of the first empirical studies to shed light on the role of financial affiliates of nonfinancial groups in tax planning.