Lawren Julio Rumokoy, Benjamin Liu and Richard Chung
In today’s interconnected world, social capital has emerged as a crucial business competence, drawing significant attention in recent literature. Using social network analysis…
Abstract
Purpose
In today’s interconnected world, social capital has emerged as a crucial business competence, drawing significant attention in recent literature. Using social network analysis, this study aims to investigate the impact of network centrality, established by a firm through its board members (i.e. boardroom networks), on corporate cash holdings.
Design/methodology/approach
This study uses extensive panel data comprising 36,963 firm-year observations of firms listed on the Australian Securities Exchange, spanning a 22-year period (2001–2022). The study uses firm fixed-effect regression along with several alternative specifications and an instrumental variable approach to ensure the robustness of the results. Boardroom network centrality is quantified by five measures that capture different perspectives on networks as viable conduits for resource exchange and information flow: degree, two-step reach, closeness, eigenvector and betweenness.
Findings
The authors find evidence for the benefits of board networks. Firms with well-connected boards (central firms) are more likely to have smaller cash holdings. The findings also reveal distinct effects stemming from local and global properties of centrality, with local network measures playing a more pronounced role in shaping cash-holding decisions. Overall, the evidence reflects the ability of connected directors to enhance governance by limiting managerial discretion over cash reserves, thus reducing agency conflicts associated with cash holdings.
Research limitations/implications
This study offers important insights for regulators, investors and practitioners, highlighting the potential for connected directors to effectively curtail managerial autonomy in deploying corporate cash holdings.
Originality/value
This study contributes to the ongoing discussion about the advantages and drawbacks of board networks, which constitute a vibrant and burgeoning area of research in the finance literature. It also complements scanty network-based studies on firm cash holdings. Importantly, this study extends prior work by providing robust evidence and a comprehensive analysis of the nuanced roles that board networks play in affecting the level of cash reserves.
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Benjamin Liu, Allen Huang and Brett Freudenberg
The purpose of this paper is to investigate the impact of the Goods and Services Tax (GST) on mortgage pricing and to measure the GST shifting ratio of Australian credit unions…
Abstract
Purpose
The purpose of this paper is to investigate the impact of the Goods and Services Tax (GST) on mortgage pricing and to measure the GST shifting ratio of Australian credit unions.
Design/methodology/approach
Using the proprietary data from 79 credit unions in Australia, we perform multivariate regression analysis on the effect of the GST on mortgage effective yield spreads and interest margins, respectively. We also introduce a model that is used to measure the GST shifting ratio.
Findings
We document that the introduction of the GST in July 2000 led to the substantial rise in mortgage costs charged by credit unions in the post-GST periods. Overall, the GST alone contributed to the increase of effective yield spreads and interest margin by 65.3 and 70.1 basis points, respectively. As measured by the GST-shifting ratio, credit unions passed more than twice of the GST rate. This suggests GST over-shifting, and it is generally consistent with tax over-shifting literature.
Originality/value
This is the first time the GST shifting ratio has been robustly measured with the use of multivariate models on mortgage costs.
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Ahmed S. Alanazi, Benjamin Liu and John Forster
The main objective of this paper is to measure Saudi Arabian initial public offerings' (IPOs) financial performance before and after going public on the Saudi Stock Exchange…
Abstract
Purpose
The main objective of this paper is to measure Saudi Arabian initial public offerings' (IPOs) financial performance before and after going public on the Saudi Stock Exchange Market. The paper also aims to explore factors associated with the financial performance variation between pre‐ and post‐IPO.
Design/methodology/approach
A sample of 16 Saudi IPOs is investigated. A matched pairs methodology is mainly used combined with regression analysis.
Findings
Saudi IPOs exhibit a significant decline in the post‐IPO performance compared to the pre‐IPO level as measured by the return on assets and return on sales. It was also found that the performance deterioration is associated with the IPO event.
Originality/value
The paper is the first assessment of IPOs clustering occurred in Saudi Arabia.
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The purpose of this pitch research letter (PRL) is to apply the pitching template developed by Faff (2015) to an academic project on boardroom gender diversity and default risk.
Abstract
Purpose
The purpose of this pitch research letter (PRL) is to apply the pitching template developed by Faff (2015) to an academic project on boardroom gender diversity and default risk.
Design/methodology/approach
The pitching template helps the pitcher to identify the core elements that form the framework of the research project. The PRL encloses a brief background about the pitcher and pitch, followed by a brief commentary on the pitch and personal reflections of the pitcher on the pitch exercise itself.
Findings
One of the best aspects of the pitching template is that it forced the researchers to think each item over and over, enabling a synthesis of scattered ideas in a systematic way. Hence, it is strongly recommend learning and applying the pitching template as a tool to refine embryonic research ideas and to track the progress on the research projects.
Originality/value
This PRL is novel as it highlights the worth of performing the pitching exercise (i.e. quality publication), potential adoptability challenge and solutions (i.e. unfamiliarity and training), systematic process of learning the pitching template and application of the “rule of three” in pitching research. Such reflections are believed to be useful for early career researchers (ECRs).
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Samuel Jebaraj Benjamin, Nirosha Wellalage, Pallab Kumar Biswas and Shaista Wasiuzzaman
This paper aims to empirically examine the link between negative social media sentiments (SMS) and firm risk, measured by total risk.
Abstract
Purpose
This paper aims to empirically examine the link between negative social media sentiments (SMS) and firm risk, measured by total risk.
Design/methodology/approach
This paper collected data from Fortune 500 companies in the USA from 2010 to 2017. The analyses used the pooled ordinary least squares, Fama–McBeth regression, fixed-effects regression and propensity score matching.
Findings
The results show that negative SMS increase firm risk. In addition, this paper considers the effect of corporate social responsibility (CSR) disclosures on the relationship between negative SMS and firm risk. This paper finds that the effects of negative SMS on firm risk are attenuated in firms with better CSR disclosures.
Originality/value
This study offers fresh perspectives for investors and managers on firm risk and the influence of social media on firm outcomes, providing valuable insights for scholars and practitioners to understand the impact of negative social media sentiments on firm risk, along with the crucial roles played by CSR in this relationship.
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Shanshan Zhang, Ron Chi-Wai Kwok, Paul Benjamin Lowry and Zhiying Liu
Given the importance of online social network (OSN) media features, many studies have focused on how different types of OSNs with various media features influence users’ usage and…
Abstract
Purpose
Given the importance of online social network (OSN) media features, many studies have focused on how different types of OSNs with various media features influence users’ usage and engagement. However, a recent literature review indicates that few empirical studies have considered how different types of OSNs with different information accessibility levels influence users’ beliefs and self-disclosure. By comparing two OSN platforms (OSNs with high-level information accessibility vs OSNs with low-level information accessibility), the purpose of this paper is to address this opportunity by investigating the differential impacts of the two platforms on individuals’ psychological cognition – particularly users’ social exchange beliefs – and explaining how these beliefs translate into OSN self-disclosure.
Design/methodology/approach
This study used a factorial design approach in an experimental setting to examine how different levels of information accessibility (high vs low), influence the social exchange beliefs (i.e. perceived social capital bridging, perceived social capital bonding and perceived privacy risks) of OSN users and subsequently influence OSN self-disclosure.
Findings
The results show that users on OSNs with high-level information accessibility express significantly higher perceived social capital bridging and perceived privacy risks than users on OSNs with low-level information accessibility. However, users on OSNs with low-level information accessibility express higher social bonding beliefs than users on OSNs with high-level information accessibility, indicating that there are different effect mechanisms toward OSN self-disclosure.
Originality/value
The focus of this research helps unveil the complex relationships between OSN design features (e.g. information accessibility), psychological cognition (e.g. social capital bridging, social capital bonding and privacy risks) and OSN self-disclosure. First, it clarifies the relationship between information accessibility and self-disclosure by examining the mediating effect of three core social exchange beliefs. Second, it uncovers the distinct effects of high-level information-accessible OSNs and low-level information-accessible OSNs on OSN self-disclosure.
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Sara Shostak and Jason Beckfield
This chapter compares interdisciplinary research that engages genomic science from economics, political science, and sociology. It describes, compares, and evaluates concepts and…
Abstract
Purpose
This chapter compares interdisciplinary research that engages genomic science from economics, political science, and sociology. It describes, compares, and evaluates concepts and research findings from new and rapidly developing research fields, and develops a conceptual taxonomy of the social environment.
Methodology/approach
A selection of programmatic and empirical articles, published mostly since 2008 in leading economics, political science, and sociology journals, were analyzed according to (a) the relationship they pose between their discipline and genomic science, (b) the specific empirical contributions they make to disciplinary research questions, and (c) their conceptualization of the “social environment” as it informs the central problematique of current inquiry: gene-environment interaction.
Findings
While all three of the social science disciplines reviewed engage genomic science, economics and political science tend to engage genomics on its own terms, and develop genomic explanations of economic and political behavior. In contrast, sociologists develop arguments that for genomic science to advance, the “environment” in gene-environment interaction needs better theorization and measurement. We develop an approach to the environment that treats it as a set of measurable institutional (rule-like) arrangements, which take the forms of neighborhoods, families, schools, nations, states, and cultures.
Research/implications
Interdisciplinary research that combines insights from the social sciences and genomic science should develop and apply a richer array of concepts and measures if gene-environment research – including epigenetics – is to advance.
Originality/value
This chapter provides a critical review and redirection of three rapidly developing areas of interdisciplinary research on gene-environment interaction and epigenetics.
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Curtis M. Hall, Benjamin W. Hoffman and Zenghui Liu
This paper aims to investigate the effect that ownership structure (public vs private) has on the demand for high-quality auditors, specifically in the US banking industry.
Abstract
Purpose
This paper aims to investigate the effect that ownership structure (public vs private) has on the demand for high-quality auditors, specifically in the US banking industry.
Design/methodology/approach
The authors predict that public banks are more likely to hire a high-quality auditor than private banks and pay a higher audit fee premium for that high-quality auditor (due to higher agency costs, more demand for financial information and higher litigation risk). The authors analyze 2008–2014 banking data from the Federal Reserve using probit and OLS regression analysis to examine if there is a higher probability that public banks choose higher quality auditors and pay higher audit fees when they do so.
Findings
The results show that private banks are less likely to hire Big 4 auditors and industry-expert auditors than public banks. The authors also find that both private and public banks pay higher audit fees for Big 4 and industry-expert auditors, and that public banks pay a higher premium for Big 4 auditors and industry experts than private banks.
Research limitations/implications
The findings may not be fully generalizable to other types of firms, as banking is a heavily regulated and complex industry. However, inferences from this study may be generalizable to other similar industries such as insurance or health care.
Practical implications
The results of this paper imply that public and private banks have differing priorities when hiring their financial statement auditor. This may be of interest to investors and auditing regulators.
Social implications
The findings of this paper underscore the value of hiring an industry-expert auditor in an industry that is highly complex and regulated. This may be of interest to managers and policymakers.
Originality/value
Due to data restrictions, the emphasis of prior literature on the banking industry has been on public banks. This study is the first to analyze the differences between public and private banks’ demand for audit services.
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Rambabu Vana and Karunakar Perumandla
To provide a new semi-analytical solution for the nonlinear Benjamin–Bona–Mahony (BBM) equation in the form of a convergent series. The results obtained through HPTM for BBM are…
Abstract
Purpose
To provide a new semi-analytical solution for the nonlinear Benjamin–Bona–Mahony (BBM) equation in the form of a convergent series. The results obtained through HPTM for BBM are compared with those obtained using the Sine-Gordon Expansion Method (SGEM) and the exact solution. We consider the initial condition as uncertain, represented in terms of an interval then investigate the solution of the interval Benjamin–Bona–Mahony (iBBM).
Design/methodology/approach
We employ the Homotopy Perturbation Transform Method (HPTM) to derive the series solution for the BBM equation. Furthermore, the iBBM equation is solved using HPTM to the initial condition has been considered as an interval number as the coefficient of it depends on several parameters and provides lower and upper interval solutions for iBBM.
Findings
The obtained numerical results provide accurate solutions, as demonstrated in the figures. The numerical results are evaluated to the precise solutions and found to be in good agreement. Further, the initial condition has been considered as an interval number as the coefficient of it depends on several parameters. To enhance the clarity, we depict our solutions using 3D graphics and interval solution plots generated using MATLAB.
Originality/value
A new semi-analytical convergent series-type solution has been found for nonlinear BBM and interval BBM equations with the help of the semi-analytical technique HPTM.