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Available. Open Access. Open Access
Article
Publication date: 14 June 2018

Jim Haslam, Jiao Ji and Hanwen Sun

The purpose of this paper is to summarise and reflect upon key issues at the interface of prices, information and regulation with a focus upon the stock market in context…

10934

Abstract

Purpose

The purpose of this paper is to summarise and reflect upon key issues at the interface of prices, information and regulation with a focus upon the stock market in context. Reflecting upon academic research in the area of efficient markets, and regulatory policy, the concern is to discern issues in terms of policy and support for policy. What does the research imply for policy? Is it possible that the research, perhaps given its rhetoric, can be misinterpreted in relation to policy? The study is also concerned to develop avenues for future research based on these considerations.

Design/methodology/approach

The paper is an analytical and critical review and writing.

Findings

The reading of the research suggests a pragmatic regulatory policy that should be concerned to improve stock market functioning, including with respect to information, as well as the context of which this is part. At the same time, the literature may be read as promoting anti-regulatory policy.

Practical implications

On the one hand, these are consistent with the pragmatic policy referred to above. On the other hand, further research is suggested to explore substantively the rhetoric of the research and its interpretation and to explore understandings of the research and its implications amongst key constituencies in practice.

Originality/value

The concern is to bring key insights from the academic literature together with a view to promoting a pragmatic policy orientation, while cautioning in a critical perspective about how this academic literature and research might be interpreted from a policy perspective.

Details

Journal of Capital Markets Studies, vol. 2 no. 1
Type: Research Article
ISSN: 2514-4774

Keywords

Available. Open Access. Open Access
Article
Publication date: 30 July 2018

Güler Aras

507

Abstract

Details

Journal of Capital Markets Studies, vol. 2 no. 1
Type: Research Article
ISSN: 2514-4774

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Article
Publication date: 1 April 2024

Xin Liu, Siyi Liu, Jiani Wang and Hanwen Chen

This study examines the relationship between internal control and corporate environmental responsibility.

224

Abstract

Purpose

This study examines the relationship between internal control and corporate environmental responsibility.

Design/methodology/approach

Unlike US studies that concentrate solely on internal control over financial reporting, this study uses a comprehensive index that encompasses internal control over financial reporting, operations, and compliance. Corporate environmental responsibility is measured by environmental investments. Our research sample comprises Chinese listed firms from 2010 to 2018.

Findings

The results demonstrate a positive correlation between internal control and corporate environmental investments. Furthermore, we find that firms with high-quality internal control can improve their financial and environmental performance through environmental investments. After decomposing internal control into its five components, we show that the control environment, control activities, and information and communication components exhibit stronger effects on environmental investments than the risk assessment and monitoring components. Finally, the cross-sectional analyses reveal that the positive effect of internal control is more pronounced in private firms and in firms that are subject to weaker environmental regulation.

Originality/value

By focusing on the effect of a comprehensive internal mechanism on corporate environmental responsibility in China, this study contributes to the literature in developed-country settings that overwhelmingly focuses on the impact of external stakeholders and regulations.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

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Article
Publication date: 2 December 2019

Hanwen Chen, Liquan Xing and Haiyan Zhou

Product market competition may have various impacts on audit fees. On the one hand, according to the agency theory, product market competition can mitigate agency problems between…

851

Abstract

Purpose

Product market competition may have various impacts on audit fees. On the one hand, according to the agency theory, product market competition can mitigate agency problems between management and shareholders. For clients with higher product market competition, auditors will lower the level of engagement risk assessment and reduce the required level of audit evidence, and hence audit fees will be lower. On the other hand, according to the audit risk model, product market competition will increase client business risk and audit engagement risk. Moreover, for clients with competition advantage, client business risk and audit engagement risk will be lower, and hence a lower audit fee. The paper aims to discuss this issue.

Design/methodology/approach

In this paper, the authors collect financial accounting data and audit fee data from CSMAR database. Our sample selection starts with all available observations on the Chinese listed companies during 2006–2011. Since there is a big difference in accounting practices between financial companies and other industries, the authors delete observations on financial companies. The authors further remove observations with missing data, yielding 6,709 observations for the final analysis. To define the industry, the authors use the first two digits of standard industry classification code set by China Securities Regulatory Commission. In order to reduce the effect of extreme observations, the authors also truncate the data at 1 and 99 percent. The authors use the Herfindahl–Hirschman index (HHI) and the natural logarithm of the number of listed companies within the industry to measure product market competition intensity. HHI is calculated as the sum of the squared percentage of revenues of the client firm among the total revenues of all public companies, i.e. HHI = i = 1 N ( s i / S )2. N is the number of listed companies in the industry, Si is the revenues for an individual firm and S is the total revenues of all public companies within the same industry. A higher HHI score indicates fewer companies dominate the industry and hence lower intensity of competition in the product market. The second measure of industry competition intensity is LNN, the natural logarithm of the total number of public companies in the same industry of a client firm. A larger value of LNN indicates a larger number of competitors in the industry, and a higher level of competition intensity. Following the literature (Kale and Loon, 2011), the authors use Lerner index (or price-cost margin (PCM)) to measure the listed company’s competitive advantage. It is actually a measure of a firm’s power to influence product prices in the industry. The authors adopt the Peress (2010) method to estimate Lerner index as net operating income, divided by sales, i.e. PCM=(Sales–COGS–Selling expenses–Administrative expenses)/Sales. A higher value of PCM indicates more product pricing power and a higher competitive advantage of a company. The authors also use Lerner index ranking (R_PCM) to measure the competitive advantage of a company in the industry. The authors sort PCM values in ascending order in each industry and divide into ten groups. Then, the authors assign a value from one to ten to each listed company within each group in each industry. A higher R_PCM value represents higher market power and higher competitive advantage of a company. Based on Simunic (1980) framework, the authors develop the following model to test the relationship between product market competition, competition advantage and audit fees: LNAFit01 PMCit2 SIZEit3 INVit4 RECit5 GROWTHit6 PRELOSSit7 LEVit8 QUICKit9 OPINit10 IBIG4it11 DBIG10it12 SWITCHit13 LOCATEit14 STATEit+∑β YearDummiesit.

Findings

Using a sample of 6,709 firm-year observations from the Chinese stock market for the period of 2007–2011, the authors find that the product market competition intensity has a negative impact on audit fees, which means that agency cost effect is dominant in audit pricing at industry level. In addition, a company’s competitive advantage in the industry has a significant and negative impact on audit fees, which means that business risk effect also plays a critical role in audit pricing of individual engagement. The findings indicate that, in determining audit fees, auditors in the emerging market of China consider both the competition intensity of their clients’ product market at the industry level and the competitive advantage of the specific clients within the industry.

Originality/value

The findings indicate that, in determining audit fees, auditors in the emerging market of China consider both the competition intensity of their clients’ product market at the industry level and the competitive advantage of the specific clients within the industry.

Details

Asian Review of Accounting, vol. 28 no. 1
Type: Research Article
ISSN: 1321-7348

Keywords

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Article
Publication date: 17 September 2024

Bo Zhang, Xi Chen, Hanwen You, Hong Jin and Hongxiang Peng

Ultracapacitors find extensive applications in various fields because of their high energy density and long cycling periods. However, due to the movement of ions and the…

39

Abstract

Purpose

Ultracapacitors find extensive applications in various fields because of their high energy density and long cycling periods. However, due to the movement of ions and the arrangement patterns on rough/irregular electrode surfaces during the charge and discharge process of ultracapacitors, the parameters of ultracapacitors usually change with the variation of operating conditions. The purpose of this study is to accurately and quickly identify the parameters of ultracapacitors.

Design/methodology/approach

A variable forgetting factor recursive least square (VFFRLS) algorithm is proposed in this paper for online identifying the equivalent series resistance and capacitance C of ultracapacitors. In this work, a real-time error-based strategy is developed to adaptively regulate the value of the forgetting factor of traditional forgetting factor recursive least square (FFRLS) algorithm. The strategy uses the square of the average time autocorrelation estimation of the prior error and the posterior error between the predicted output and the actual output as the adjustment basis of forgetting factors.

Findings

Experiments were conducted using the proposed scheme, and the results were compared with the estimation results obtained by the recursive least squares (RLS) algorithm and the traditional FFRLS algorithm. The maximum root mean square error between the estimated values and actual values for VFFRLS is 3.63%, whereas for FFRLS it is 9.61%, and for RLS it is 19.33%.

Originality/value

By using the proposed VFFRLS algorithm, a relatively high precision can be achieved for the online parameter estimation of ultracapacitors. Besides, the dynamic balance between parameter stability and tracking performance can be validated by dynamically adjusting the forgetting factor.

Details

COMPEL - The international journal for computation and mathematics in electrical and electronic engineering, vol. 43 no. 6
Type: Research Article
ISSN: 0332-1649

Keywords

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Article
Publication date: 19 September 2019

Kemin Li, Zhifu Huang, Hanwen Ma, Shaofei Wang, Chaofeng Qin and Pengcheng Liu

The purpose of this study was to investigate the tribological properties of bulk Fe2B with pre-oxidation treatment.

152

Abstract

Purpose

The purpose of this study was to investigate the tribological properties of bulk Fe2B with pre-oxidation treatment.

Design/methodology/approach

Bulk Fe2B was oxidized in an electric box furnace with a soaking time of 9 min under 750°C in air. Then, the tribological experiments were carried out on an UMT-Tribolab tester.

Findings

The oxide layer was composed of Fe, Fe2O3, Fe3O4, B2O3 and H3BO3. The oxidative direction of bulk Fe2B was perpendicular to the sample surface. But, the oxidative direction of Fe2B crystals was irregular. At 0.1 m/s, the friction coefficient was the lowest. The effects of shortening the running-in period of friction and reducing the friction coefficient by pre-oxidation treatment at 0.1 m/s were remarkable. Nevertheless, the effect of pre-oxidation treatment was futile at 0.2 m/s. Wear mechanisms of oxidized Fe2B mainly were adhesive and abrasive wear.

Originality/value

The effects of shortening the running-in period of friction and reducing the friction coefficient by pre-oxidation treatment were remarkable.

Details

Industrial Lubrication and Tribology, vol. 72 no. 1
Type: Research Article
ISSN: 0036-8792

Keywords

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Article
Publication date: 25 October 2022

Hanwen Chen, Siyi Liu, Xin Liu and Jiani Wang

The paper aims to examine the corporate social responsibility (CSR) activity of audit firms.

1208

Abstract

Purpose

The paper aims to examine the corporate social responsibility (CSR) activity of audit firms.

Design/methodology/approach

Using hand-collected data on all Chinese audit firms’ CSR activities from 2007 to 2020, this study constructs two measures to proxy for audit firms’ CSR engagement: a dummy variable to indicate whether an auditor engages in CSR activities in year t and the frequency with which auditors conduct CSR activities in year t. The authors use ordinary least squares regression as a baseline methodology, along with the entropy balancing method and instrumental variable approach to alleviate potential endogeneity concerns.

Findings

The baseline results show that socially responsible audit firms provide higher quality audit services than their counterparts. In particular, the authors find that clients audited by socially responsible audit firms are less likely to receive an aggressively clean opinion. Moreover, the findings suggest that CSR activities related to community and employees are more relevant in improving audit quality compared with those related to other dimensions of CSR. Further analyses show that capital markets and audit clients react positively to audit-firm CSR activity. Audit firms engaging in CSR increase their audit inputs in response to risky clients, as compared with their counterparts. Finally, cross-sectional analyses show that the positive relationship is more pronounced for non-Big 4 and non-industry experts and is attenuated by within-firm geographic dispersion. In terms of client characteristics, the positive effect of audit-firm CSR is stronger when their clients face the higher financial risk or have lower CSR awareness than others. Taken together, these findings are consistent with the ethical view of audit-firm CSR engagement.

Practical implications

The study advances investors’ understanding of audit-firm CSR engagement and helps them evaluate the credibility of audited financial reports. Besides, the findings may also help guide the audit firms to conduct more CSR activities and help guide the audit clients to choose CSR audit firms.

Originality/value

To the best of the authors’ knowledge, this study provides the first large-sample evidence by empirically examining the association between audit-firm CSR activity and audit service performance. Besides, this paper also explores audit-firm CSR activity from two competing perspectives, thereby providing a comprehensive understanding of this issue. Finally, this work responds to the call for more CSR research in emerging markets.

Details

Managerial Auditing Journal, vol. 38 no. 2
Type: Research Article
ISSN: 0268-6902

Keywords

Available. Content available
Book part
Publication date: 12 November 2016

Abstract

Details

The Political Economy of Chinese Finance
Type: Book
ISBN: 978-1-78560-957-2

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Book part
Publication date: 12 November 2016

Jongmoo Jay Choi, Michael R. Powers and Xiaotian Tina Zhang

The paper provides an overview of material helpful in placing the subsequent papers in context, as well as a summary of the research contributions made by the individual papers…

Abstract

Purpose

The paper provides an overview of material helpful in placing the subsequent papers in context, as well as a summary of the research contributions made by the individual papers themselves.

Methodology/approach

We begin with a timeline of China’s Economic Reform, including both major events that permitted the opening and expansion of the nation’s economy, and important milestones of the historical movement. We then consider the impact of philosophy and culture (particularly, Confucianism and socialism) on China’s society and government, which leads naturally to certain observations regarding the political-economic model in which state-owned enterprises play a central role. In the final section, we briefly summarize the contents of the remaining papers.

Details

The Political Economy of Chinese Finance
Type: Book
ISBN: 978-1-78560-957-2

Keywords

Available. Content available
Article
Publication date: 26 August 2014

418

Abstract

Details

Asian Review of Accounting, vol. 22 no. 3
Type: Research Article
ISSN: 1321-7348

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