Teddy Ossei Kwakye, Manfred Adu-Poku, Mawuena Akosua Cudjoe, William Coffie, M. Amidu
This study aims to investigate the relationship between earnings management, tax avoidance, and stock returns across different economic regions in the world. We used firm-level secondary data of selected listed firms from regions namely Europe, North America, Afro-Asia, Australia and South America, consisting of 39,490 non-financial listed firms spanning across 45 countries from 1995 to 2013. We employ comprehensive analysis using a two-step system GMM regression, with Windmeijer-corrected standard errors, small sample adjustment, and orthogonal deviation. The study finds that accounting information quality and tax avoidance influences stock returns, but the relationship varies across regions. The study’s findings have practical implications for policymakers and market participants. The results highlight the importance of improving accounting standards and transparency to provide reliable financial information and support investor decision-making. Policymakers and market participants should consider regional variations in accounting practices and tax strategies when formulating policies and conducting investment analysis.
{"title":"Regional Analysis of Stock Returns Effect of Earnings Management and Corporate Tax Avoidance","authors":"Teddy Ossei Kwakye, Manfred Adu-Poku, Mawuena Akosua Cudjoe, William Coffie, M. Amidu","doi":"10.33423/jaf.v24i3.7119","DOIUrl":"https://doi.org/10.33423/jaf.v24i3.7119","url":null,"abstract":"This study aims to investigate the relationship between earnings management, tax avoidance, and stock returns across different economic regions in the world. We used firm-level secondary data of selected listed firms from regions namely Europe, North America, Afro-Asia, Australia and South America, consisting of 39,490 non-financial listed firms spanning across 45 countries from 1995 to 2013. We employ comprehensive analysis using a two-step system GMM regression, with Windmeijer-corrected standard errors, small sample adjustment, and orthogonal deviation. The study finds that accounting information quality and tax avoidance influences stock returns, but the relationship varies across regions. The study’s findings have practical implications for policymakers and market participants. The results highlight the importance of improving accounting standards and transparency to provide reliable financial information and support investor decision-making. Policymakers and market participants should consider regional variations in accounting practices and tax strategies when formulating policies and conducting investment analysis.","PeriodicalId":505950,"journal":{"name":"Journal of Accounting and Finance","volume":"56 36","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-07-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141804755","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}
This study investigates whether governance quality is associated with asset-liability management (ALM) within the US banking industry. Based on stewardship theory, we hypothesize that there ought to be a significant, positive association between bank governance quality and a strong balance sheet due to inherent fiduciary responsibility and internal controls associated with an ALM governance process. Due to endogeneity concerns, we employ two-stage least squares regression and examine the relationship between 10 ALM metrics and governance risk scores (a component of ESG quality scores) for a cross-sectional sample of 251 US publicly traded banks in 2022. The results suggest that corporate governance influences ALM, not vice-versa. However, contrary to our hypothesized direction, favorable governance quality is associated with weaker ALM metrics as the results indicate that there is an inverse relationship between governance quality and ALM. Even so, the results provide evidence that bank governance quality is associated with balance sheet management. The results should be of interest to bank executives, regulators, investors, and other stakeholders in the banking industry.
{"title":"The Relationship Between Asset-Liability Management and Governance Quality in the Banking Industry","authors":"Gregory G. Kaufinger, Chris Neuenschwander","doi":"10.33423/jaf.v24i3.7118","DOIUrl":"https://doi.org/10.33423/jaf.v24i3.7118","url":null,"abstract":"This study investigates whether governance quality is associated with asset-liability management (ALM) within the US banking industry. Based on stewardship theory, we hypothesize that there ought to be a significant, positive association between bank governance quality and a strong balance sheet due to inherent fiduciary responsibility and internal controls associated with an ALM governance process. Due to endogeneity concerns, we employ two-stage least squares regression and examine the relationship between 10 ALM metrics and governance risk scores (a component of ESG quality scores) for a cross-sectional sample of 251 US publicly traded banks in 2022. The results suggest that corporate governance influences ALM, not vice-versa. However, contrary to our hypothesized direction, favorable governance quality is associated with weaker ALM metrics as the results indicate that there is an inverse relationship between governance quality and ALM. Even so, the results provide evidence that bank governance quality is associated with balance sheet management. The results should be of interest to bank executives, regulators, investors, and other stakeholders in the banking industry.","PeriodicalId":505950,"journal":{"name":"Journal of Accounting and Finance","volume":"26 17","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-07-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141802825","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}
Using a sample from 27 countries, this study examines whether cultural values impact managers’ real earnings management (REM) behaviors. The results indicate that uncertainty avoidance and individualism can explain the variations in REM practices across countries. Building upon the study by Lewellyn and Bao (2017), this paper examines whether cultural dimensions influence the relationship between corruption and REM. Individualism does not significantly moderate the relationship between corruption and REM. I also find that the interaction between uncertainty avoidance and corruption is negative, indicating that uncertainty-avoiding managers are less likely to manage earnings in a country with a higher level of corruption.
本研究以 27 个国家为样本，探讨了文化价值观是否会影响管理者的实际收益管理（REM）行为。结果表明，不确定性规避和个人主义可以解释不同国家在实际收益管理实践中的差异。在 Lewellyn 和 Bao（2017）研究的基础上，本文考察了文化维度是否会影响腐败与 REM 之间的关系。个人主义并没有明显缓和腐败与 REM 之间的关系。我还发现，不确定性规避与腐败之间的交互作用是负的，这表明在腐败程度较高的国家，不确定性规避的管理者不太可能管理收益。
{"title":"The Role of National Culture and Corruption on Real Earnings Management Around the World","authors":"Chu Chen","doi":"10.33423/jaf.v24i3.7117","DOIUrl":"https://doi.org/10.33423/jaf.v24i3.7117","url":null,"abstract":"Using a sample from 27 countries, this study examines whether cultural values impact managers’ real earnings management (REM) behaviors. The results indicate that uncertainty avoidance and individualism can explain the variations in REM practices across countries. Building upon the study by Lewellyn and Bao (2017), this paper examines whether cultural dimensions influence the relationship between corruption and REM. Individualism does not significantly moderate the relationship between corruption and REM. I also find that the interaction between uncertainty avoidance and corruption is negative, indicating that uncertainty-avoiding managers are less likely to manage earnings in a country with a higher level of corruption.","PeriodicalId":505950,"journal":{"name":"Journal of Accounting and Finance","volume":"16 2","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-07-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141804360","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}
Fixed point theory has been applied to various practical problems of insurance and finance during several decades. In our earlier paper (Voutilainen, 2022) we have presented problem classes tackled in the literature by fixed point methods. In Voutilainen (2023) we study fixed point problem solution methods with the help of solutions of equilibrium problems in several classes. For this paper we have gathered and commented on some specific fixed point applications to the insurance and finance areas. Many of them also adopt other interesting theoretical areas. It turns out that fixed point theory really has a number of important applications both to insurance and finance and to theoretical mathematics.
{"title":"Remarks on Fixed Point Approaches to Insurance and Finance","authors":"Raimo Voutilainen","doi":"10.33423/jaf.v24i3.7111","DOIUrl":"https://doi.org/10.33423/jaf.v24i3.7111","url":null,"abstract":"Fixed point theory has been applied to various practical problems of insurance and finance during several decades. In our earlier paper (Voutilainen, 2022) we have presented problem classes tackled in the literature by fixed point methods. In Voutilainen (2023) we study fixed point problem solution methods with the help of solutions of equilibrium problems in several classes. For this paper we have gathered and commented on some specific fixed point applications to the insurance and finance areas. Many of them also adopt other interesting theoretical areas. It turns out that fixed point theory really has a number of important applications both to insurance and finance and to theoretical mathematics.","PeriodicalId":505950,"journal":{"name":"Journal of Accounting and Finance","volume":"81 12","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-07-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141810256","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}
We examine the impact of farmland within a mixed asset portfolio consisting of U.S. stocks, bonds, Treasury Bills, real estate, and gold to determine farmland’s diversification benefits. Farmland returns are proxied via a U.S. Farmland Real Estate Investment Trust (F-REIT). Using both constrained and unconstrained asset allocation assumptions, we employ Markowitz Portfolio Optimization resulting in various asset allocation outcomes. We find farmland to be a suboptimal choice within a well-diversified portfolio despite possessing a low correlation with the other assets. By revisiting the portfolio impact of farmland, our results update findings in the literature which have been mixed and inactive in recent years. Additionally, our findings have meaningful implications for the average investor who is considering allocating investment into farmland.
{"title":"Revisiting the Portfolio Diversification Impact of Farmland","authors":"Brian A. Lavelle, Katherine Yamamoto","doi":"10.33423/jaf.v24i3.7113","DOIUrl":"https://doi.org/10.33423/jaf.v24i3.7113","url":null,"abstract":"We examine the impact of farmland within a mixed asset portfolio consisting of U.S. stocks, bonds, Treasury Bills, real estate, and gold to determine farmland’s diversification benefits. Farmland returns are proxied via a U.S. Farmland Real Estate Investment Trust (F-REIT). Using both constrained and unconstrained asset allocation assumptions, we employ Markowitz Portfolio Optimization resulting in various asset allocation outcomes. We find farmland to be a suboptimal choice within a well-diversified portfolio despite possessing a low correlation with the other assets. By revisiting the portfolio impact of farmland, our results update findings in the literature which have been mixed and inactive in recent years. Additionally, our findings have meaningful implications for the average investor who is considering allocating investment into farmland.","PeriodicalId":505950,"journal":{"name":"Journal of Accounting and Finance","volume":"75 5","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-07-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141810528","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}
Deferred tax expense reflects temporary timing differences based on differences between when an item is recognized for accounting purposes and when the same item is recognized for tax purposes. Although in theory temporary differences will reverse, the timing of the reversals are uncertain. On average, deferred income tax expense for most firms is associated with relatively small future cash payments over the two years following deferred tax expense recognition, and a large portion of deferred tax expense does not result in future tax payments in a systematic manner. Firms with high growth in property, plant, and equipment are able to defer income tax indefinitely.
{"title":"When Do Firms Pay Deferred Income Taxes?","authors":"Derek K. Oler, Mitchell J. Oler","doi":"10.33423/jaf.v24i3.7112","DOIUrl":"https://doi.org/10.33423/jaf.v24i3.7112","url":null,"abstract":"Deferred tax expense reflects temporary timing differences based on differences between when an item is recognized for accounting purposes and when the same item is recognized for tax purposes. Although in theory temporary differences will reverse, the timing of the reversals are uncertain. On average, deferred income tax expense for most firms is associated with relatively small future cash payments over the two years following deferred tax expense recognition, and a large portion of deferred tax expense does not result in future tax payments in a systematic manner. Firms with high growth in property, plant, and equipment are able to defer income tax indefinitely.","PeriodicalId":505950,"journal":{"name":"Journal of Accounting and Finance","volume":"76 15","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-07-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141812588","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}
With the growing debt harbored by the United States becoming harder to sustain, one believes it is imperative to research the effect of increases in public debt and events related to debt management policy on our financial system. In fleshing out this relationship, this paper can supplement the literature surrounding the development of nations through marketable debt products, the behavior of our financial markets and proper public debt management. This study considers the rationality of the market, as it is influenced by this exogenous variable over time, and how that relates to an equity’s price movements. Utilizing a vector-autoregression and structural vector-autoregression estimated with OLS, I will determine how events related to public debt affect equities.
{"title":"Effect of Public Debt on Equity Prices","authors":"Marvin Henry","doi":"10.33423/jaf.v24i3.7115","DOIUrl":"https://doi.org/10.33423/jaf.v24i3.7115","url":null,"abstract":"With the growing debt harbored by the United States becoming harder to sustain, one believes it is imperative to research the effect of increases in public debt and events related to debt management policy on our financial system. In fleshing out this relationship, this paper can supplement the literature surrounding the development of nations through marketable debt products, the behavior of our financial markets and proper public debt management. This study considers the rationality of the market, as it is influenced by this exogenous variable over time, and how that relates to an equity’s price movements. Utilizing a vector-autoregression and structural vector-autoregression estimated with OLS, I will determine how events related to public debt affect equities.","PeriodicalId":505950,"journal":{"name":"Journal of Accounting and Finance","volume":"99 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-07-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141812451","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}
This research paper explores the intricate relationship between minimalism and the economy of the United States, emphasizing its impact on consumer behavior, traditional industries, environmental considerations, housing trends, technology, entrepreneurial opportunities, cultural shifts, and market competition. Minimalism, characterized by intentional living, conscious consumption, and sustainability, is not merely a passing trend but a transformative movement reshaping societal values and economic paradigms. Through a comprehensive analysis, this paper delves into how minimalism influences consumer spending patterns, challenges traditional industries like fast fashion and consumer electronics, fosters sustainable practices, shapes real estate trends, influences digital minimalism, creates entrepreneurial opportunities, and impacts cultural and social norms. Furthermore, it examines the economic implications of minimalist principles on market competition, premium pricing for quality goods, and brand differentiation based on values. Ultimately, the paper highlights how minimalism redefines prosperity and fosters innovative, sustainable economic practices in the United States.
{"title":"Minimalism: Cultivating a Sustainable Economy for the Growth of the United States","authors":"Gopal Krushna Panda","doi":"10.33423/jaf.v24i3.7116","DOIUrl":"https://doi.org/10.33423/jaf.v24i3.7116","url":null,"abstract":"This research paper explores the intricate relationship between minimalism and the economy of the United States, emphasizing its impact on consumer behavior, traditional industries, environmental considerations, housing trends, technology, entrepreneurial opportunities, cultural shifts, and market competition. Minimalism, characterized by intentional living, conscious consumption, and sustainability, is not merely a passing trend but a transformative movement reshaping societal values and economic paradigms. Through a comprehensive analysis, this paper delves into how minimalism influences consumer spending patterns, challenges traditional industries like fast fashion and consumer electronics, fosters sustainable practices, shapes real estate trends, influences digital minimalism, creates entrepreneurial opportunities, and impacts cultural and social norms. Furthermore, it examines the economic implications of minimalist principles on market competition, premium pricing for quality goods, and brand differentiation based on values. Ultimately, the paper highlights how minimalism redefines prosperity and fosters innovative, sustainable economic practices in the United States.","PeriodicalId":505950,"journal":{"name":"Journal of Accounting and Finance","volume":"41 7","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-07-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141813110","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}
This study analyzes US-domiciled actively managed global real estate funds (GREMFs) from 1/2010 to 12/2023. The results show superior selectivity and adverse market timing skills of fund managers. On average, GREMFs deliver alpha ranging from 2.52 percent to 2.75 percent per year after controlling for premiums offered by the market, size, value, and momentum effects. The alpha range increases to 4.65 percent annually after including the quadratic term of excess market returns. The results also show that many funds exhibit superior selectivity skills, thus making a case for investors to invest in actively managed GREMFs rather than investing in passive indices. However, the results also indicate that GREMFs are unable to manage beta loadings to their advantage.
{"title":"Do Fund Managers of Global Real Estate Funds Exhibit Superior Skill?","authors":"Abhay Kaushik","doi":"10.33423/jaf.v24i3.7114","DOIUrl":"https://doi.org/10.33423/jaf.v24i3.7114","url":null,"abstract":"This study analyzes US-domiciled actively managed global real estate funds (GREMFs) from 1/2010 to 12/2023. The results show superior selectivity and adverse market timing skills of fund managers. On average, GREMFs deliver alpha ranging from 2.52 percent to 2.75 percent per year after controlling for premiums offered by the market, size, value, and momentum effects. The alpha range increases to 4.65 percent annually after including the quadratic term of excess market returns. The results also show that many funds exhibit superior selectivity skills, thus making a case for investors to invest in actively managed GREMFs rather than investing in passive indices. However, the results also indicate that GREMFs are unable to manage beta loadings to their advantage.","PeriodicalId":505950,"journal":{"name":"Journal of Accounting and Finance","volume":"72 3","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-07-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141812831","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 U.S.-China trade war was escalated in 2018 when the Trump administration announced a series of tariffs on Chinese products and services. In January 2018, President Trump imposed 30 percent and 20 percent tariffs on solar panels and washing machines. President Trump continued to impose more tariffs throughout 2018 and 2019. The Trump administration finally reversed course by announcing two Trump tariff cancellations in October 2019 and December 2019; thereby signaling a de-escalation in the U.S.-China trade war. We use an event study methodology to examine the announcement effects of those two Trump tariff cancellations on China’s publicly traded financial firms, including banks, insurance companies, and securities firms. We find the announcement effects are positive for China’s financial firms which experience a tremendous 5.60% cumulative abnormal return. In dollar terms, the mean market capitalization increase was $1.36 billion, cumulatively, the twenty-four financial firms in our sample gained $32.61 billion. These results clearly show that China’s financial firms welcomed the Trump tariff cancellations.
{"title":"U.S.-China Trade War: Announcement Effects of Trump Tariff Cancellations on China’s Financial Firms","authors":"Xiaochuan Tong, Ran Lu-Andrews, Robert A. Kunkel","doi":"10.33423/jaf.v24i2.7009","DOIUrl":"https://doi.org/10.33423/jaf.v24i2.7009","url":null,"abstract":"The U.S.-China trade war was escalated in 2018 when the Trump administration announced a series of tariffs on Chinese products and services. In January 2018, President Trump imposed 30 percent and 20 percent tariffs on solar panels and washing machines. President Trump continued to impose more tariffs throughout 2018 and 2019. The Trump administration finally reversed course by announcing two Trump tariff cancellations in October 2019 and December 2019; thereby signaling a de-escalation in the U.S.-China trade war. We use an event study methodology to examine the announcement effects of those two Trump tariff cancellations on China’s publicly traded financial firms, including banks, insurance companies, and securities firms. We find the announcement effects are positive for China’s financial firms which experience a tremendous 5.60% cumulative abnormal return. In dollar terms, the mean market capitalization increase was $1.36 billion, cumulatively, the twenty-four financial firms in our sample gained $32.61 billion. These results clearly show that China’s financial firms welcomed the Trump tariff cancellations.","PeriodicalId":505950,"journal":{"name":"Journal of Accounting and Finance","volume":"54 8","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-06-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141381910","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：