The purpose of this study is to examine the effect of audit committee (AC) tenure on corporate governance, a topic that has been long debated. Social capital theory explains how…
Abstract
Purpose
The purpose of this study is to examine the effect of audit committee (AC) tenure on corporate governance, a topic that has been long debated. Social capital theory explains how directors’ effectiveness varies through tenure. Consistent with this theory, this paper argues that AC tenure has an inverted U-shaped relationship with AC governance.
Design/methodology/approach
This paper estimates a quadratic function that regresses constructs for AC governance on the average AC, the AC chair, and nonchair tenure, and their respective square terms. The constructs for AC governance include financial reporting quality measures and perceived auditor independence measures.
Findings
This paper finds that average AC, AC chair, and nonchair tenure have inverted U-shaped relationships with financial reporting quality, consistent with social capital theory. This paper also finds similar associations when examining perceived auditor independence. The results are generally consistent with AC directors accumulating knowledge and social capital, which improves AC governance to an optimal level, following which entrenchment and familiarity occur and AC governance declines.
Originality/value
To the best of the authors’ knowledge, this is the first study in AC governance literature to show a nonlinear relationship between AC tenure and AC governance. This paper extends Huang and Hilary (2018) by demonstrating that a nonlinear effect is also present in the AC, a key board committee responsible for monitoring financial reporting quality and appointing auditors and approving their services. This paper further documents that the AC subsumes the effect of the overall board in some areas of AC oversight, and reconciles the inconclusive findings of prior research by showing a nonlinear relationship between AC tenure and AC governance.
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Yan Liu and Qiang Wang
This study aims to examine the performance implications of blockchain implementation in the supply chain and explore how blockchain functions and supply chain processes of…
Abstract
Purpose
This study aims to examine the performance implications of blockchain implementation in the supply chain and explore how blockchain functions and supply chain processes of blockchain implementation moderate the effect on firm performance.
Design/methodology/approach
Using 220 blockchain implementations announced between January 2015 and December 2022, we use the event study methodology to estimate the effects of blockchain implementation on the firm value. Regression analyses are conducted to examine the moderating effects of blockchain functions and supply chain processes.
Findings
First, there is a positive and statistically significant relationship between blockchain implementation in the supply chain and firm value. Second, we find that abnormal returns from blockchain implementation are higher when used with blockchain’s contract automation function and applied in downstream processes, supporting the moderation effects.
Originality/value
The study provides empirical evidence on the effects of the blockchain implementation on firm performance, taking into account the complexity of blockchain functions and supply chain processes. It enriches the current understanding of how blockchain implementation in the supply chain contributes to firm value.
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Hilary Mati Kilonzo, Moses Muriithi and Benedicto Onkoba Ongeri
Housing finance is frequently difficult to provide in developing nations due to unstable macroeconomic conditions and a lack of supportive legal, technological and regulatory…
Abstract
Purpose
Housing finance is frequently difficult to provide in developing nations due to unstable macroeconomic conditions and a lack of supportive legal, technological and regulatory frameworks (Lea and Bernstein, 1996). Governments in these countries have, therefore, created a range of organizations and initiatives to improve the flow of capital to the housing market on a footing that is affordable to their populations given the household income levels (Ram and Needham, 2016). Housing, however, is by its very nature a significant investment requiring a considerable capital outlay at the onset (Dasgupta et al., 2014). This makes acquiring it challenging, particularly in underdeveloped nations where saving tendencies are quite low partly because of low-income levels (Keller and Mukudi-Omwami, 2017). As a result, many developing nations struggle with severe housing issues that lead to slums, overcrowding and related health issues.
Design/methodology/approach
The theoretical model for analyzing housing finance in Kenya in this study incorporates both demand and supply aspects, drawing from Brueckner’s (1994) framework. This model divides factors influencing demand into certainty and uncertainty conditions faced by households. In terms of certainty, the model considers factors that households can predict reliably. First is income, households are assumed to have stable income, allowing accurate assessment of budget constraints and mortgage decisions. Second is interest rates. While interest rates fluctuate, the model assumes that households have information about current rates, enabling informed decision-making. Finally, existing housing costs, such as rent or mortgage payments, are treated as fixed and predictable, facilitating accurate budget planning. Conversely, uncertainty factors include future income, future interest rates and housing prices. Households face uncertainty regarding future income, which can impact their mortgage repayment ability due to job market changes or unforeseen events. The model does not predict future interest rate changes, which can affect the affordability of mortgages. Furthermore, future fluctuations in housing prices add uncertainty to the benefits of homeownership and mortgage debt. Due to these uncertainties, the model in this study assumes certainty conditions, focusing on households maximizing their utility. In Brueckner’s model, a utility function captures household preferences and well-being linked to consumption choices, specifically between housing (H) and nonhousing goods (N). The utility function helps determine optimal income allocation, influenced by income (M), prices (P) and return on savings (t). The utility maximization problem involves selecting optimal amounts of housing and nonhousing consumption while managing housing credit (C).
Findings
The study confirms a significant long-run relationship between house finance and several macroeconomic variables, including interest rates on credit, inflation, unemployment and gross domestic product (GDP). The negative and significant error correction term indicates the presence of an equilibrium relationship, suggesting that the housing finance market in Kenya self-corrects swiftly in response to economic shocks. This efficiency could be attributed to increasing competition among financial institutions or a growing public awareness of housing finance options, implying a relatively well-developed market. Such responsiveness suggests that government policies aimed at influencing housing finance might have a quicker impact. For instance, introducing subsidies to reduce credit rates could rapidly boost housing finance activity (World Bank, 2019). However, the flip side of a fast-adjusting market is potential volatility, where rapid swings in economic factors could lead to significant fluctuations in housing finance availability, posing risks for both lenders and borrowers (Braun et al., 2022). Moreover, a rapid adjustment might not necessarily reflect a perfectly healthy market; it could indicate underlying issues like speculation or easy access to credit, potentially leading to bubbles or financial instability (Agnello et al., 2020).
Originality/value
This study reveals key insights into the determinants of housing finance in Kenya, demonstrating a significant long-run relationship between housing finance and economic variables such as interest rates, inflation, unemployment and GDP. The efficient adjustment of the housing finance market to economic changes suggests that government policies can rapidly influence housing finance, although this responsiveness also implies potential volatility and risks, including financial instability. Policymakers should, therefore, focus on maintaining macroeconomic stability and monitoring the housing market for signs of overheating. Encouraging competition among lenders and diversifying housing finance products can help ensure sustainable market adjustments. Credit interest rates show a modest but positive relationship with housing finance, suggesting that a stable lending environment could stimulate activity. Policymakers should manage credit availability to prevent excessive expansion and instability, enhancing financial inclusion and fostering competition in the banking sector. Inflation positively impacts housing finance, with rising inflation driving demand for real assets like housing. However, significant interest rate hikes by the Central Bank to combat inflation could reduce mortgage affordability. A flexible interest rate policy, along with targeted interventions like subsidized rates for first-time buyers, is necessary to balance market stimulation with inflation control. Unemployment’s negative impact on housing finance underscores the need for robust unemployment benefits and job training initiatives to support financial stability during job losses. Targeted housing finance programs for low- and middle-income earners can also improve mortgage accessibility. The positive correlation between GDP growth and housing finance indicates that economic expansion drives housing demand. Policymakers should prioritize initiatives that promote long-term economic growth, such as infrastructure development and innovation. Finally, the insignificance of savings interest rates in influencing housing finance suggests that traditional monetary policy may have limited effects. Promoting financial literacy and developing tailored savings instruments could strengthen the connection between savings and housing finance over time.
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Carrie Q. Gui, Meng Lyu and Joseph H. Zhang
This study aims to review and synthesize the burgeoning field of auditing research utilizing Chinese data. Over the past decades, there has been a remarkable rise in such…
Abstract
Purpose
This study aims to review and synthesize the burgeoning field of auditing research utilizing Chinese data. Over the past decades, there has been a remarkable rise in such research, driven by China’s abundant audit data, distinctive institutional features and enduring cultural influences. The purpose is to comprehensively review auditing studies featured in top-tier accounting journals, shedding light on the unique contributions made possible by Chinese data. By identifying key themes across domains, this paper aims to underscore the cultural and contextual disparities between China and Western countries, predominantly the USA, within the area of auditing.
Design/methodology/approach
This study presents a systematic review of China-themed auditing research, primarily published in seven leading global accounting journals. The researchers conducted a comprehensive search of the websites of these journals, identifying relevant articles using search terms such as “China auditing,” “Chinese Stock Market and Accounting Research (CSMAR),” “institutional environment,” and “internal control.” After the initial search, 54 relevant articles were selected and reviewed. The study covers all China-specific auditing research, categorizing key themes into six areas to explore how scholars use Chinese data to address important auditing questions.
Findings
The findings reveal a significant increase in auditing research utilizing Chinese data, prominently featured in top-tier academic journals. This study categorizes six central themes, highlighting the broad range of topics explored using Chinese audit data. More importantly, the research identifies substantial cultural and contextual differences between China and Western nations, particularly the USA, that influence the auditing profession and markets. Exploring these themes underscores the invaluable insights derived from Chinese data, shedding light on areas not previously addressed by studies relying solely on Western datasets.
Originality/value
The value of this study lies in its comprehensive examination of seminal auditing studies using Chinese data, making a distinctive contribution to the auditing literature. This paper highlights the inadequacies of Western datasets in addressing certain auditing questions and emphasizes the unique advantages offered by China’s extensive public audit data, institutional characteristics and cultural determinants. The identified gap in the literature underscores the unexplored opportunities for further research in the Chinese auditing context. This study, therefore, provides a roadmap for future scholars, encouraging the exploration of new avenues and fostering a deeper understanding of the cultural nuances influencing auditing practices in China.
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Takehide Ishiguro and Akihiro Yamada
This study investigates the relationship between foreign ownership, earnings quality and overinvestment in Japanese zombie firms.
Abstract
Purpose
This study investigates the relationship between foreign ownership, earnings quality and overinvestment in Japanese zombie firms.
Design/methodology/approach
The study makes use of data from Japanese firms listed on the first section of the Tokyo Stock Exchange from 2009 to 2019. The study employs logistic and multinomial logistic models to test whether the overinvestment behavior of zombie firms is mitigated by foreign shareholdings and earnings quality.
Findings
The results show that (1) zombie firms tend to overinvest; (2) an increase in foreign ownership mitigates the overinvestment of zombie firms and (3) the mitigation of zombie firms' overinvestment by foreign ownership is stronger with higher earnings quality.
Originality/value
This study extends the discussion of earnings quality and investment efficiency to the zombie firm setting. Previous studies in accounting suggest that high earnings quality enhances firms' investment efficiency. The findings suggest that both a change in ownership structure and high-quality accounting information are necessary to mitigate the inefficiency of zombie firms.
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Giovanna Culot, Guido Orzes, Marco Sartor and Guido Nassimbeni
This study aims to analyze the factors that drive or prevent interorganizational data sharing in the context of digital transformation (DT). Data sharing appears as a precondition…
Abstract
Purpose
This study aims to analyze the factors that drive or prevent interorganizational data sharing in the context of digital transformation (DT). Data sharing appears as a precondition for companies to capture emerging opportunities in supply chain management and for product-related servitization; however, there are ongoing concerns, and data are often perceived as the “new oil.” It is thus important to gain a better understanding of the determinants of firms’ decisions.
Design/methodology/approach
The authors develop an embedded case study analysis involving 16 firms within an extended supply network in the automotive industry. The authors focus on the peculiarities of the new context, as opposed to elements highlighted by research prior to the advent of the latest technologies. Abductive reasoning is applied to the theoretical foundations of the resource-based view, resource dependence theory and the complex adaptive systems perspective.
Findings
Data sharing is largely underpinned by factors identified prior to DT, such as data specificity, dependence dynamics and protection mechanisms and the dynamism of the business context. DT, however, can influence the extent of data sharing. New factors concern complementarities whenever data are pooled from different sources and digital platforms, as well as different forms of data ownership protection.
Originality/value
This study stresses that data sharing in the context of DT can be explained through established theoretical lenses, providing the integration of elements accounting for new technological opportunities.
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The crypto market is growing quickly, marked by a lack of fundamentals, and the risks are not yet fully comprehended by participants. Our goal is to investigate overconfidence in…
Abstract
Purpose
The crypto market is growing quickly, marked by a lack of fundamentals, and the risks are not yet fully comprehended by participants. Our goal is to investigate overconfidence in this market and analyze the role that risk propensity and certain demographics play.
Design/methodology/approach
We conducted a survey in Brazil and Portugal, leveraging an online questionnaire disseminated via social media channels to engage a diverse adult population. We collected a total of 826 responses, addressing ethical considerations throughout the process. The data analysis was conducted using SPSS statistical software and logit regression modeling.
Findings
Our study reveals that overconfidence is a notable bias that distinguishes individuals who invest in cryptocurrencies from those who do not. Although overconfidence and risk propensity are closely linked, they originate from distinct personal characteristics. Furthermore, our findings indicate that age and market experience positively correlate with overconfidence and negatively correlate with risk propensity. Financial knowledge, interestingly, did not prove to be a significant factor for cryptocurrency investment.
Originality/value
Our research augments the existing literature on overconfidence, delving into this phenomenon in a new subdomain, and in doing so, it enriches our comprehension of the unique and still relatively under-researched cryptomarket. Moreover, we illuminate individual factors that sway the decision to invest in cryptocurrencies and should be considered by market participants.
Highlights
- (1)
Pioneering work examining the presence of overconfidence bias among crypto-investors, using a robust data set collected from a binational survey.
- (2)
Verifies the relations among overconfidence, risk propensity, and demographics.
- (3)
Examines the influence of age and experience on investment decisions, revealing a positive relationship with overconfidence and a negative correlation with risk propensity.
- (4)
Logistic regression is used to determine the combined effect of overconfidence, risk propensity, and demographics on the decision to invest in cryptocurrencies.
Pioneering work examining the presence of overconfidence bias among crypto-investors, using a robust data set collected from a binational survey.
Verifies the relations among overconfidence, risk propensity, and demographics.
Examines the influence of age and experience on investment decisions, revealing a positive relationship with overconfidence and a negative correlation with risk propensity.
Logistic regression is used to determine the combined effect of overconfidence, risk propensity, and demographics on the decision to invest in cryptocurrencies.
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Nongnapat Thosuwanchot and Jitrinee Chanphati
This conceptual paper aims to contribute to prior corporate social responsibility (CSR) studies by examining CSR issues through the lens of the behavioral theory of the firm…
Abstract
Purpose
This conceptual paper aims to contribute to prior corporate social responsibility (CSR) studies by examining CSR issues through the lens of the behavioral theory of the firm, which emphasizes the bounded rationality and limited cognition of firms’ decision-makers. The authors suggest that social aspiration may be a more important benchmark since stakeholders tend to evaluate a firm’s corporate social performance (CSP) against other comparable firms.
Design/methodology/approach
After reviewing various theoretical perspectives that have been applied to CSR studies spanning from 1985 to 2023, the authors summarize their limitations on examining executives’ decisions toward CSR initiatives. By drawing on the behavioral theory of the firm, a conceptual model was developed to explain how firm executives increase subsequent CSR initiatives when their firms’ CSP is below social aspiration.
Findings
This study suggests that firms increase their subsequent CSR initiatives when their CSP is below the performance of their peers. Furthermore, the authors propose three important characteristics of chief executive officers, including tenure, hubris and international experience, as boundary conditions that can impact the extent of firms’ subsequent CSR initiatives when CSP is below social aspiration.
Originality/value
The paper contributes to the CSR literature by emphasizing the influence of decision-makers’ bounded rationality on firms’ CSR initiatives.
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Social media platforms are highly visible platforms, so politicians try to maximize their benefits from their use, especially during election campaigns. On the other side, people…
Abstract
Purpose
Social media platforms are highly visible platforms, so politicians try to maximize their benefits from their use, especially during election campaigns. On the other side, people express their views and sentiments toward politicians and political issues on social media, thus enabling them to observe their online political behavior. Therefore, this study aims to investigate user reactions on social media during the 2016 US presidential campaign to decide which candidate invoked stronger emotions on social media.
Design/methodology/approach
For testing the proposed hypotheses regarding emotional reactions to social media content during the 2016 presidential campaign, regression analysis was used to analyze a data set that consists of Trump’s 996 posts and Clinton’s 1,253 posts on Facebook. The proposed regression models are based on viral (likes, shares, comments) and emotional Facebook reactions (Angry, Haha, Sad, Surprise, Wow) as well as Russell’s valence, arousal, dominance (VAD) circumplex model for valence, arousal and dominance.
Findings
The results of regression analysis indicate how Facebook users felt about both presidential candidates. For Clinton’s page, both positive and negative content are equally liked, while Trump’s followers prefer funny and positive emotions. For both candidates, positive and negative content influences the number of comments. Trump’s followers mostly share positive content and the content that makes them angry, while Clinton’s followers share any content that does not make them angry. Based on VAD analysis, less dominant content, with high arousal and more positive emotions, is more liked on Trump’s page, where valence is a significant predictor for commenting and sharing. More positive content is more liked on Clinton’s page, where both positive and negative emotions with low arousal are correlated to commenting and sharing of posts.
Originality/value
Building on an empirical data set from Facebook, this study shows how differently the presidential candidates communicated on social media during the 2016 election campaign. According to the findings, Trump used a hard campaign strategy, while Clinton used a soft strategy.
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In order to better optimize the internal management system of book publishing and to cope with the changes in the external market environment, the purpose of this paper is to…
Abstract
Purpose
In order to better optimize the internal management system of book publishing and to cope with the changes in the external market environment, the purpose of this paper is to carry out cross-border publishing with the help of a transmedia storytelling model to realize the transformation and upgrading of the industry. Focusing on the relationship between the book publishing transmedia storytelling model and business performance, the moderating effect of the innovation environment on different variables is assessed.
Design/methodology/approach
This paper proposes several feasible hypotheses based on existing research. The research data came from 365 managers of Chinese book publishing organizations, and the scale was validated by Cronbach’s a, composite reliability (CR) and average variance extracted (AVE). Reliability and validity were verified, and correlation and regression analyses were used to test the impact of the book publishing transmedia storytelling model on business performance and to analyze the moderating role of the innovation environment.
Findings
The results show that the book publishing transmedia storytelling model (content production, technology integration, organizational innovation, marketing integration) helps to improve business performance (market performance, financial performance), and the innovation environment has a positive moderating effect on the relationship between the book publishing transmedia storytelling model and business performance, which provides a guarantee for the transformation and upgrading of book publishing. The market information reflected in the innovation environment has a certain role in promoting the innovation and business performance of the book publishing transmedia storytelling model.
Research limitations/implications
The empirical evidence provides a theoretical link between the book publishing transmedia storytelling model and business performance, but there are still some shortcomings, and more factors, such as equity structure, government subsidies and research and development investment, should be included in future research. In addition, the scope of the research should be broadened on this basis to make the results of the data analysis more objective.
Practical implications
This paper introduces the transmedia storytelling model and deeply analyzes the relationship between the book publishing transmedia storytelling model and business performance, which is of great practical significance for optimizing the application and service quality of book publishing, prolonging the industrial chain, enhancing the interaction and participation of users and perfecting the business management system of the book publishing industry.
Originality/value
The application and research of the book publishing transmedia storytelling model are imperfect. Therefore, this paper not only helps to promote the innovation of book publishing organizational structure and improve the management system of business performance, but also may help to improve the innovation environment of book publishing enterprises and promote the diversification of industrial structure.