Hyungkee Young Baek, David D. Cho, Robert Anthony Jordan and Emre Kuvvet
The purpose of this study is to examine the effects of social disclosure on loan funding and repayment within the fixed-rate peer-to-peer (P2P) lending model.
Abstract
Purpose
The purpose of this study is to examine the effects of social disclosure on loan funding and repayment within the fixed-rate peer-to-peer (P2P) lending model.
Design/methodology/approach
By analyzing 31,637 loans from the largest P2P lending company in the USA, the authors study the effects of different forms of social disclosures and the specific contents of such disclosures on the speed of funding, amount borrowed, recovered principal amount and loan default.
Findings
Some social disclosures help to fund a loan and are positively associated with loan repayment. The findings reveal prescriptive ways P2P borrowers indicate creditworthiness through social disclosure on loan listings.
Practical implications
The results suggest that it is advantageous for P2P borrowers to invest time into well-written loan descriptions and remain engaged with potential lenders.
Originality/value
The authors show that some social disclosure factors that affect funding time and likelihood do not necessarily affect the loan default and repayment in the same way.
Details
Keywords
The purpose of this study is to examine whether foreign firms pay disproportionately higher monetary penalties after controlling for factors that affect the sanctioning of the…
Abstract
Purpose
The purpose of this study is to examine whether foreign firms pay disproportionately higher monetary penalties after controlling for factors that affect the sanctioning of the firm.
Design/methodology/approach
In this paper, a cross-sectional data analysis has been used to examine the enforcement actions of the Foreign Corrupt Practices Act (FCPA) against all private and public companies from 1978 to 2019.
Findings
The findings indicate that that foreign firms pay disproportionately higher monetary penalties than domestic firms after controlling for factors that affect the sanctioning of firms. On average, foreign firms pay $43.3m more to the US government than US firms pay. This is a considerable difference in monetary penalties and equal to 68.95% of the average monetary penalty.
Originality/value
This paper shows that the US government treats US firms more favorably than foreign firms in monetary sanctions. Because the FCPA is not applied equally, this is contrary to US government guidelines and to the rule of law. The government needs to reconsider the consequences of imposing disproportionately higher penalties on foreign firms. Given the lack of judicial scrutiny of the FCPA settlement amounts against foreign firms, prosecutorial harshness against them can be remedied by amending the FCPA to eliminate the unequal treatment of foreign entities.
Details
Keywords
Darshana D. Palkar, Randi L. Sims and Emre Kuvvet
In this paper, the authors examine the association between a firm's geographical location and the value of its cash holdings.
Abstract
Purpose
In this paper, the authors examine the association between a firm's geographical location and the value of its cash holdings.
Design/methodology/approach
Following Loughran and Schultz (2005) and Nielsson and Wójcik (2016), the authors define firms as either geographically remote or geographically proximate based on their distance to areas that are either largely populated or concentrated in financial expertise. We also estimate the marginal value of cash using the model developed by Faulkender and Wang (2006).
Findings
The authors find that the marginal value of cash is $0.10–$0.16 lower in remotely located firms than in geographically proximate firms. The lower marginal value of cash is prominent among remotely located firms with greater severity of information asymmetry. Our findings support the view that the inability of shareholders to closely monitor how managers use of firm cash may increase the perceived conflicts of interest associated with managers' cash spending and decrease the value of cash.
Originality/value
Previous studies try to explain the cash holdings puzzle by attributing it to CEO overconfidence, external funding constraints, poor corporate governance, difference in corporate financial policy, poor investor protection, lack of firm diversification and large operating losses. This study contributes to the extant literature by offering new evidence of the role of geographic location on the value of cash holdings.