After the massive data breach incident in 2017, Equifax voluntarily disclosed non-GAAP earnings that beat earnings targets by eliminating breach-related charges and used non-GAAP…
Abstract
Purpose
After the massive data breach incident in 2017, Equifax voluntarily disclosed non-GAAP earnings that beat earnings targets by eliminating breach-related charges and used non-GAAP metrics to determine its executives' compensations. However, it is unclear whether its non-GAAP earnings exclusions and the use of non-GAAP earnings in compensation plans are justified. The purpose of this study is to examine non-GAAP earnings quality in firms with data breach incidents.
Design/methodology/approach
The authors identified data breach firms from incidents reported in Privacy Rights Clearinghouse (privacyrights.org) during the period 2004–2017. The authors separate the victim firms into six groups based on financial status and non-GAAP earnings disclosure. Quarterly manager non-GAAP earnings per share data is retrieved from the database created by Bentley et al. (2018). Ordinary linear regression models are used in this study to test the authors’ hypothesis.
Findings
The authors find that, in general, the informativeness of non-GAAP earnings is higher than that of GAAP earnings in data breach firms. However, non-GAAP earnings quality vary in data breach firms with different financial health status. The quality of non-GAAP earnings in loss firms with data breach is higher than those in profit firms. Loss converters (i.e. data breach firms with negative GAAP earnings but positive non-GAAP earnings) disclose low quality non-GAAP earnings, which is different from the findings in prior studies.
Practical implications
The findings are particularly useful to analysts who want to make accurate earnings forecasts of data breach firms by incorporating managers' non-GAAP earnings disclosures.
Originality/value
The authors are among the first to comprehensively analyze the quality of non-GAAP earnings in firms with data breaches. The findings in this study address the analysts' concern that data breach firms use non-GAAP earnings metrics to determine executives' compensation after the massive data breach incidents. Next, the authors provide evidence that the financial status of data breach firms affects the quality of non-GAAP earnings.
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Guoyu Lin, Anna Bergman Brown, Eric Lin and Chunhao Xu
Unionization is generally thought to improve employee welfare through higher compensation and benefits. However, managers of unionized firms have incentives to manage earnings…
Abstract
Purpose
Unionization is generally thought to improve employee welfare through higher compensation and benefits. However, managers of unionized firms have incentives to manage earnings downward to avoid sharing rents with unionized workers, which may explain why empirical findings on the association between unionization and employee compensation are mixed. This paper develops an analytical model incorporating earnings management into the relationship between newly unionized firms and employee compensation.
Design/methodology/approach
The authors develop an analytical model that relies on Nash bargaining theory and signal jamming (Stein, 1989; Fischer and Verrecchia, 2000; Dye and Sridhar, 2004) and model a setting where newly unionized workers' collective bargaining power increases substantially. The authors' model analyzes the relationship between newly unionized firms and employee wages and benefits while incorporating firms' incentives to engage in earnings management.
Findings
The authors find that newly unionized firms are more likely to engage in income-decreasing earnings management to avoid paying higher salaries and wages to workers. Further, the authors find that this association is more pronounced when (1) the correlation of firms' earnings across periods is higher, (2) the cost of earnings management is lower and (3) firms' earnings are more volatile.
Originality/value
This is the first paper to analytically model the effect of new unionization on firms' earnings management and workers' welfare. The authors' model offers new cross-sectional predictions that have not been tested in the prior literature. Specifically, the authors show that newly unionized firms are more likely to engage in income-decreasing earnings management; when earnings are more highly correlated, the cost of earnings management is lower and earnings are more volatile. The authors' findings may be relevant to regulators and policymakers.
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The purpose of this study is to examine the effect of audit engagement partner's professional experience on audit quality. The authors also investigate the relationship between…
Abstract
Purpose
The purpose of this study is to examine the effect of audit engagement partner's professional experience on audit quality. The authors also investigate the relationship between the audit partner's experience and audit fees in both Big 4 and non-Big 4 accounting firms.
Design/methodology/approach
Since the Public Company Accounting Oversight Board (PCAOB) officially enacted Rule 3211 in 2017, US accounting firms are required to disclose detailed information of engagement partners in Form AP (PCAOB, 2015b). The authors obtained a sample of 2,283 audit partners from Form AP and hand collected their individual professional experience data through Certified Public Accountant (CPA) database, corporate disclosure and social media sites (e.g. Linkedin). Econometric models with fixed effects are used in this study to test our hypotheses. Two-stage least square (2SLS) model is used in the robustness test.
Findings
The authors find that the relationship between audit engagement partner's professional experience and audit quality is concave. It indicates that audit quality is increasing during the early stage of engagement partners' career and then decreases as the partners approaching the late-career phase. Further, the authors find that partner's professional experience is positively associated with audit fees in non-Big 4 accounting firms but not significantly associated with audit fees in Big 4 accounting firms.
Practical implications
The finding of how auditor experience impacts audit quality can be useful for accounting firms to better plan their staffing in auditing engagements. This study’s results are also helpful for small accounting firms to optimize their pricing strategy.
Originality/value
This study provides new empirical evidence about the relation between auditor professional experience and audit quality. Furthermore, the authors extend the literature of audit fee determinants by testing the joint effects of audit firm-level factors and auditor individual-level professional experience on audit fees.
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Tianjian Liu, Chunhao (Victor) Wei and Yee Ming Lee
This study aims to systematically review the work–family enrichment (WFE) studies in hospitality and tourism management and provide insight into the patterns and trends of WFE…
Abstract
Purpose
This study aims to systematically review the work–family enrichment (WFE) studies in hospitality and tourism management and provide insight into the patterns and trends of WFE literature to practitioners and future researchers.
Design/methodology/approach
This study design followed the guidelines of preferred reporting items of systematic reviews and meta-analysis. A final sample of 23 studies related to WFE that published from 2000 to 2021 was selected and systematically analyzed.
Findings
This study resulted in a framework that the antecedents and outcomes of WFE at the organizational, job and individual levels. Moderators between antecedents and outcomes were also identified. Theories such as conservation of resources theory, boundary theory, role theory and expansion theory were frequently applied in the investigation of WFE.
Research limitations/implications
This study generated a framework that illustrates the organization characteristics, the job characteristics and individual factors that have examined in hospitality literature on the topic of WFE. This study also pointed out theories that have been used in investigating WFE. However, this systematic review may subject to publication bias and number of reviewed articles remained relatively small.
Practical implications
This study provides suggestions on how hospitality operators could use internal marketing strategies and certain leadership styles (e.g. transformational and servant leaderships) to enhance employees’ WFE.
Originality/value
This study summarized the publication trends and patterns of the WFE studies in hospitality and tourism management in the past two decades, which provides suggestions for future scholars to further explore this research topic.
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Chunhao Li, Yuping Zhao and Wei Feng Chen
This study aims to investigate the dual effects of commitment-based governance on the relationship between formal control and public–private partnership (PPP) project performance…
Abstract
Purpose
This study aims to investigate the dual effects of commitment-based governance on the relationship between formal control and public–private partnership (PPP) project performance. Formal control and relationship governance are two primary forms of inter-organizational governance that affect project performance. However, little is known about the interplay between formal control and commitment and its effect on PPP projects. More specifically, previous studies have failed to distinguish the function routes of relationship governance resulting from different types of formal control (process and outcome control).
Design/methodology/approach
This study adopts a questionnaire survey to empirically investigate the mechanism that commitment-based governance influences the relationship between formal control and PPP performance. After collecting data from public and private sector professionals involved in 101 Chinese PPP projects, the theoretical framework proposed in this paper is verified by the empirical results of the hierarchical multiple regression analysis.
Findings
The results show that process control has an inverted U-shaped effect and outcome control has a significant positive influence on PPP project performance. Furthermore, commitment moderates the effect of formal control on PPP project performance by increasing the relevance of outcome control and mediates the inverted U-shaped relationship between process control and PPP project performance.
Practical implications
Managers should recognize that process control is a double-edged sword and prevent the overuse of process control. Managers should direct their attention toward efforts to improve the commitment, which allows for the effectiveness of outcome control strategies. Additionally, this study new measurement method for relationship governance suggests that managers should be aware of the difference in parties' perceptions of the relationship.
Originality/value
This study allows for a comprehensive understanding of the relationship governance-control nexus from a commitment perspective. The authors bring into light the dual role of commitment-based governance in the relationship between the two types of formal control and PPP project performance. Moreover, the new approach to measure relationship governance offers valuable insight into the measurement of variables about individual's perception.
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Yee Ming Lee and Chunhao (Victor) Wei
This study sought to understand which food allergen labeling systems (non-directive, semi-directive, and directive) were attended to and preferred by 34 participants with food…
Abstract
Purpose
This study sought to understand which food allergen labeling systems (non-directive, semi-directive, and directive) were attended to and preferred by 34 participants with food hypersensitivity and their perceived corporate social responsibility (CSR) and behavioral intention towards a restaurant that identifies food allergens on menus.
Design/methodology/approach
This study used an online survey with open-ended and ranking questions, combined with eye-tracking technology, to explore participants' visual attention and design preferences regarding four menus. This study utilized one-way repeated measures analysis of variance (RM-ANOVA) and heat maps to analyze participants' menu-reading behaviors. A content analysis of survey responses and a ranking analysis of menus were conducted to understand the reasons behind consumers' preferred menu designs.
Findings
The advisory statement was not much attended to. Participants identified food allergen information significantly quicker with the directive labeling system (icons) than the other two systems, implying they were eye-catching. Semi-directive labeling system (red text) has lower visit count and was more preferred than two other systems; each labeling system has its strengths and limitations. Participants viewed restaurants that disclosed food allergen information on menus as socially responsible, and they would revisit those restaurants in the future.
Originality/value
This study was one of the first to explore, through use of eye-tracking technology, which food allergen labeling systems were attended to by consumers with food hypersensitivity. The use of triangulation methods strengthened the credibility of the results. The study provided empirical data to restauranteurs in the US on the values of food allergen identification on restaurant menus, although it is voluntary.
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Bo Tian, Zizhao Wang, Chunhao Li and Jiaxin Fu
According to relational contract theory, relational governance has potential to improve public-private partnership (PPP) infrastructure project sustainability. The main purpose of…
Abstract
Purpose
According to relational contract theory, relational governance has potential to improve public-private partnership (PPP) infrastructure project sustainability. The main purpose of this research is to investigate the association between relational governance and the sustainability of PPP infrastructure projects. Further, this study examines the mediating effect of managerial innovation and the moderating role of public involvement.
Design/methodology/approach
Research data were collected from 158 valid questionnaires completed by Chinese PPP professionals. Structural equation modeling (SEM) was then employed to test five hypotheses.
Findings
Results indicate a positive correlation between relational governance and PPP infrastructure project sustainability. This linkage is regulated by public involvement. In addition, managerial innovation plays a mediating role between relational governance and the sustainability of PPP infrastructure projects.
Originality/value
This study verifies the relationship between relational governance and PPP infrastructure project sustainability, as well as intermediary and regulatory factors, providing a new approach to achieving sustainability in PPP infrastructure projects.
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Selim Bakir, Baker Ayoun, Chunhao(Victor) Wei and Anil Bilgihan
This study leverages the frameworks of the conservation of resources theory frameworks and Person-Organization Person-Job Fit Theory to scrutinize the direct effects of employee…
Abstract
Purpose
This study leverages the frameworks of the conservation of resources theory frameworks and Person-Organization Person-Job Fit Theory to scrutinize the direct effects of employee STARA (smart technologies, artificial intelligence, robotics and algorithms) competencies on turnover intentions. Concurrently, this study aims to investigate the mediating influence of the intention to use technologies in the aforementioned relationship.
Design/methodology/approach
Data were amassed from 547 employees in the US hotel industry and subjected to structural equation modeling for analysis.
Findings
The results reveal that there is no significant correlation between employee technology competencies and turnover intentions. However, mediation analysis elucidates that technology competencies among employees are positively and significantly correlated with turnover intentions via the intention to use technology. Moderation analysis further substantiates that this positive correlation is augmented when employees perceive a high level of alternative job opportunities.
Research limitations/implications
This research suggests that hotel businesses should not only focus on technological adoption but also consider how employees’ techno-competencies and their perceptions of fit within the organization can impact their willingness to stay or leave, thereby offering a more comprehensive approach to employee retention strategies.
Originality/value
Unlike previous research that primarily viewed STARA technologies as job replacers and threats, this study reframes them as complements to employees’ roles.
研究目的
本研究基于资源保存理论和人与组织/人与岗位匹配理论框架, 探讨员工的STARA能力(智能技术、人工智能、机器人和算法)对离职意向的直接影响。同时, 研究考察了技术使用意图在上述关系中的中介作用。
研究方法
本研究收集了来自美国酒店行业的547名员工数据, 并通过结构方程模型(SEM)进行分析。
研究发现
研究结果显示, 员工的技术能力与离职意向之间没有显著的直接关联。然而, 中介分析表明, 员工的技术能力通过技术使用意图与离职意向呈显著正相关。调节分析进一步证实, 当员工感知到较高的其他工作机会时, 这种正相关关系会加强。
研究意义
本研究建议酒店企业在关注技术应用的同时, 还应考虑员工的技术能力以及他们对组织匹配度的感知如何影响其留任意愿。这为制定更全面的员工留任策略提供了新思路。
研究创新
与以往将STARA技术主要视为工作替代者和威胁的研究不同, 本研究将其重新定义为员工角色的补充。
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Stephanie Q. Liu, Khadija Ali Vakeel, Nicholas A. Smith, Roya Sadat Alavipour, Chunhao(Victor) Wei and Jochen Wirtz
An AI concierge is a technologically advanced, intelligent and personalized assistant that is designated to an individual customer, proactively taking care of that customer’s…
Abstract
Purpose
An AI concierge is a technologically advanced, intelligent and personalized assistant that is designated to an individual customer, proactively taking care of that customer’s needs throughout the service journey. This article envisions the idea of AI concierges and discusses how to leverage AI concierges in the customer journey.
Design/methodology/approach
This article takes a conceptual approach and draws insights from literature in service management, marketing, psychology, human-computer interaction and ethics.
Findings
This article delineates the fundamental forms of AI concierges: dialog interface (no embodiment), virtual avatar (embodiment in the virtual world), holographic projection (projection in the physical world) and tangible service robot (embodiment in the physical world). Key attributes of AI concierges are the ability to exhibit semantic understanding of auditory and visual inputs, maintain an emotional connection with the customer, demonstrate proactivity in refining the customer’s experience and ensure omnipresence through continuous availability in various forms to attend to service throughout the customer journey. Furthermore, the article explores the multifaceted roles that AI concierges can play across the pre-encounter, encounter and post-encounter stages of the customer journey and explores the opportunities and challenges associated with AI concierges.
Practical implications
This paper provides insights for professionals in hospitality, retail, travel, and healthcare on leveraging AI concierges to enhance the customer experience. By broadening AI concierge services, organizations can deliver personalized assistance and refined services across the entire customer journey.
Originality/value
This article is the first to introduce the concept of the AI concierge. It offers a novel perspective by defining AI concierges’ fundamental forms, key attributes and exploring their diverse roles in the customer journey. Additionally, it lays out a research agenda aimed at further advancing this domain.