A.H Amershi and E.H Feroz
Conducts an exploratory analysis of the probability distribution of the ratio total debt/total invest capital, to determine if the occurrence of the Finobacci golden mean and…
Abstract
Conducts an exploratory analysis of the probability distribution of the ratio total debt/total invest capital, to determine if the occurrence of the Finobacci golden mean and ratio, as possible values of this ratio, are random or indicative of firm survival. Uses highly technical mathematical and algebraic explanatory means to emphasize points. Adopts the use of figures and tables to aid explanation. Concludes that, although some progress has been made, more sophisticated analysis is required.
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Ehsan H. Feroz, Sungsoo Kim and Ray Raab
Corporate finance studies of mergers and acquisitions have relied mostly on stock price reactions to evaluate the impact of these events. In this paper, we analyze the performance…
Abstract
Corporate finance studies of mergers and acquisitions have relied mostly on stock price reactions to evaluate the impact of these events. In this paper, we analyze the performance of a sample of merged firms over a ten year period using a managerially controlled efficiency measure, data envelopment analysis (DEA). Our individual firm‐level year‐by‐year analyses indicate that the managerial performance of the merged firms generally improved in the post‐merger period as documented in the earlier studies of mergers and acquisitions. However, there were also a significant number of cases where we could not observe improved managerial efficiency using this less aggregated approach. We conclude that DEA based disaggregated approaches are useful tools in the hands of corporate governance boards with an interest in yearly or even quarterly managerial performance at the individual firm level.
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James M. Kurtenbach and Robin W. Roberts
Accounting researchers have performed many studies related to public sector budgeting and financial management. Public sector accounting research seeks to explain the role of…
Abstract
Accounting researchers have performed many studies related to public sector budgeting and financial management. Public sector accounting research seeks to explain the role of accounting and auditing in the public sector. For example, researchers examine issues such as (1) the use of accounting information by elected officials, (2) the demand for auditing, and (3) the determination of bond ratings. This review of the public sector accounting literature describes some of the theoretical foundations utilized in public sector accounting research and reviews a sample of selected empirical studies.
Ehsan H. Feroz, Sanjay Goel and Raymond L. Raab
The purpose of this paper is to show the applicability of data envelopment analysis (DEA) in arriving at an unbiased account of relative performance in a set of companies, using…
Abstract
Purpose
The purpose of this paper is to show the applicability of data envelopment analysis (DEA) in arriving at an unbiased account of relative performance in a set of companies, using the pharmaceutical industry as an example.
Design/methodology/approach
A DEA‐based income efficiency measure of business performance for the pharmaceutical industry is computed. The pharmaceutical industry, which includes many multinational corporations with complex governance problems, and the strategies that allowed firm efficiency rankings to change over time, over ten recent years, are analyzed.
Findings
The analyses indicate that the inclines and declines in DEA efficiency rankings are related to the strategic choices made by the upper management.
Research limitations/implications
The paper attempted to trace firm behavior post hoc to validate the DEA rankings. All relevant firm behavior may not have been captured; the paper only attempted to capture behavior reported in the respectable business press, which may introduce a bias.
Practical implications
The approach may be ideal to evaluate strategic managers (CEOs, general managers, and presidents) by board of directors, since it relates multiple performance indices to a meta‐measure of performance. Another group of beneficiaries include sector financial analysts. The approach adds a new dimension to sector analysis, to compare specific industries and identify the relative rankings of firms on multiple performance indices.
Originality/value
The paper demonstrates the usefulness of DEA in performance governance measurement by applying it to the pharmaceuticals industry.
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Ehsan H. Feroz, Jarrod Johnston, Jacqueline L. Reck and Earl R. Wilson
The purpose of this paper is to describe a study which examined the effects of underwriter reputation market segments on the value relevance of firm specific risk measures in the…
Abstract
Purpose
The purpose of this paper is to describe a study which examined the effects of underwriter reputation market segments on the value relevance of firm specific risk measures in the pricing of initial public offerings (IPOs).
Design/methodology/approach
The study abandons the notion of a homogenous market for IPOs and focuses instead on the differential demand for information across identifiable segments of the IPO market in the pre‐market offering period leading to the first day trading closing prices. Ordinary least square (OLS) regressions were used to test the two hypotheses developed in the paper.
Findings
It was found that firm‐specific risk measures are associated with the initial trading day returns of IPOs managed by low reputation underwriters, but not those by high reputation underwriters. However, as expected, these risk measures are impounded in initial trading day returns only for a sub‐sample of high‐risk junk IPOs that were marked down in price by the underwriter prior to the offering in order to make them more attractive to investors.
Research limitations
As with all empirical studies the tests are joint tests of the hypotheses stipulated and econometric assumptions underlying OLS. The findings of the study may not be generalized to an unrelated domain.
Practical implications
The findings suggest that ex ante risk measures are useful in picking among junk IPOs those with the best chances of survival, and thus earning an initial trading return on those IPOs.
Originality/value
This is the first study to look at junk IPOs in a systematic manner using a quasi‐experimental design.
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K. K. Raman and Wanda A. Wallace
The relationship between the size of state audit budgets, audit responsibilities, professional characteristics of staff, risk, and tax and expenditure limitations is explored…
Abstract
The relationship between the size of state audit budgets, audit responsibilities, professional characteristics of staff, risk, and tax and expenditure limitations is explored. Bivariate relationships are examined and then a model is estimated which controls for size, complexity, financial risk factors, and political risk factors. This provides a framework for considering the incremental influence of specialized audit inputs. Both "brand names" and size have been used in past research to proxy for quality dimensions intended to differentiate the audit product provided by different suppliers. This research extends such work by considering characteristics of the auditing services as reflected by specific inputs and by using cost data rather than audit fee data. The states are observed to differ in their responses to financial and political factors by spending resources on peer review, continuing professional education, certifications of professional staff, and expertise in both the computer science area and in law. A positive association of cost and auditor differentiation, implicit in past audit fee literature is corroborated.
Yan-Jie Yang, Jengfang Chen, Qian Long Kweh and Hsin Chi Chen
– This study aims to examine the effect of the separation of control and ownership on the efficiency performance of Taiwanese electronics firms.
Abstract
Purpose
This study aims to examine the effect of the separation of control and ownership on the efficiency performance of Taiwanese electronics firms.
Design/methodology/approach
The paper employs data envelopment analysis to estimate efficiency performance. Following Kuan et al., the paper measures the severity of a firm's agency problems using the difference between voting rights and cash flow rights, and the difference between seat control rights and cash flow rights. Using a panel dataset for the period from 2004 to 2010, the paper runs OLS regressions to find the relationship between efficiency performance and the separation of control and ownership.
Findings
The results show that both the divergence between voting rights and cash flow rights, and the divergence between seat control rights and cash flow rights are significantly and negatively related to efficiency performance. Using Tobit regression in the second stage also provides a consistent result.
Research limitations/implications
Shareholders, especially the minority group, should think twice before investing in a firm with a high deviation of control and ownership.
Originality/value
This is the first paper to examine the effect of the separation of control and ownership on the efficiency performance of Taiwanese electronics firms. The empirical evidence suggests existence of negative entrenchment effects in the electronics industry in Taiwan.
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A.B. Feroz Khan and Anandharaj G
The purpose of the paper is to analyze the layer wise security issues in IoT and to obtain the effective security mechanism for jamming attack .
Abstract
Purpose
The purpose of the paper is to analyze the layer wise security issues in IoT and to obtain the effective security mechanism for jamming attack .
Design/methodology/approach
In this study, the authors proposed a multi layer security approach for the detection of DDoS in IoT environment, which protects the smart devices from DDoS, this scheme also reduces the computational cost in the network under mobility condition.
Findings
Even though many works have been done for the security of wireless sensor network (WSN), all works have focused on encryption which depends on the key management strategy. In this study, the authors proposed a multilayer approach to analyze the layer wise security issues and also proposed a threshold-based countermeasure (TBC) for replay attack in each layer.
Originality/value
The results indicate that the proposed algorithm lowers the computational costs and energy consumption than in modern schemes. Also, the proposed research work improves the scalability of sensor networks using the TBC.
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Shyr-Juh Chang and Mei-Ai Cheng
The purpose of this paper is to investigate the impact of nursing quality on Taiwan nursing homes, and differences of efficiency among different management types of nursing homes…
Abstract
Purpose
The purpose of this paper is to investigate the impact of nursing quality on Taiwan nursing homes, and differences of efficiency among different management types of nursing homes.
Design/methodology/approach
This study employs data envelopment analysis (DEA) to investigate the efficiency of nursing homes with and without quality variable. The impacts of nursing quality on the efficiency of nursing homes were studied. Finally, Tobit regression is used to explore the factors influencing efficiency in nursing homes.
Findings
The analysis shows that nursing quality has significant impacts on operating efficiency of nursing homes. When quality variables are included, all efficiencies were significantly improved, except scale efficiency of government-expense nursing homes (GEH); return of scale status of GEH decrease substantially; the licensed nursing staff can always improve efficiency; higher occupancy rate increase efficiency; private-operated veteran homes performs better than government-operated homes.
Practical implications
Nursing quality has a significant effect on the efficiency measures. Thus, the nursing quality cannot be ignored in assessing the performance of nursing homes. Otherwise, it may result in biased results. The efficiencies of private-operated nursing homes are better than the government operation. Government-operated nursing homes should take private nursing homes as the benchmark.
Originality/value
The paper demonstrates the nursing quality is an important factor in the efficiency measure of nursing homes. It also shows that privatized operation has higher efficiency than the government operation.