Eduardo Flores, Elionor Farah Jreige Weffort, Aldy Fernandes da Silva and L. Nelson G. Carvalho
The purpose of this paper is to investigate whether macroeconomic crises are a motivational factor for earnings management practices by the companies listed in the capital markets…
Abstract
Purpose
The purpose of this paper is to investigate whether macroeconomic crises are a motivational factor for earnings management practices by the companies listed in the capital markets of Brazil and the USA.
Design/methodology/approach
The sample consisted of 7,932 firm-quarter observations from listed Brazilian companies and 99,931 from listed US companies, covering a 13-year period (1998-2010). The authors developed regression models for the panel data, taking into account discretionary accruals as an earnings management proxy (dependent variable), while crises were regarded as a macroeconomic factor (dummy variable of interest). Also considered were return on assets, market-to-book ratio, size, leverage, foreign direct investment, income taxes, quarters, and sectors, which were treated as control variables.
Findings
The results corroborate the conceptual issues involved in undertaking this study, and they demonstrate that in periods of macroeconomic crises, companies are more motivated to employ earnings management practices both in Brazil and in the USA.
Originality/value
Unlike previous studies, the model developed in our research includes multiple macroeconomic crises simultaneously. Furthermore, it was applied in two markets at different stages of development and operating in distinct institutional contexts, which indicates its viability for replication for a large number of countries.
Details
Keywords
Gaki Wangmo, Rico Piehler and Chris Baumann
Brand competitiveness as a brand’s outperformance of competing brands is receiving growing attention in the literature. This study aims to provide a theoretical underpinning for…
Abstract
Purpose
Brand competitiveness as a brand’s outperformance of competing brands is receiving growing attention in the literature. This study aims to provide a theoretical underpinning for the construct’s relevance, introduce customer-based brand competitiveness (CBBC) as a customer-based perspective and develop a scale to measure the construct.
Design/methodology/approach
The scale development process comprises three stages, with a literature search and a qualitative consumer study (n = 20) in the scale construction stage, interviews and a survey with academic branding experts (n = 21) in the scale refinement stage and three quantitative studies with consumers (n = 1,157), resulting in 2,078 brand evaluations across five industries, in the scale validation stage.
Findings
This study develops a seven-item CBBC scale, representing a powerful yet parsimonious tool for measuring brand competitiveness. The superiority of the new over the existing brand competitiveness scale was validated through structural equation modelling by comparing the performance in explaining customer-based brand equity and purchase intentions.
Originality/value
To the best of the authors’ knowledge, this study is the first to develop a brand competitiveness scale following a scholarly scale development process. The CBBC scale advances the relative perspective in brand performance measures, considering the relativity at the individual customer level. This study offers a theoretical underpinning for the construct’s relevance and further insights into brand competitiveness by investigating the customer-based perspective. Finally, this study suggests and empirically validates customer-based brand equity and purchase intentions as outcomes of CBBC, extending research into the nomological network of brand competitiveness.