Helmi Hentati, Maha Khemakhem Jardak and Neila Boulila
The purpose of this study is to examine the effect of contingency factors, namely, strategy and the technological environment, on the degree of digitalization and on operational…
Abstract
Purpose
The purpose of this study is to examine the effect of contingency factors, namely, strategy and the technological environment, on the degree of digitalization and on operational performance in accounting firms.
Design/methodology/approach
The methodology used in this research relies on the utilization of a structural equation model. Data was collected from the perspectives of 128 directors and managers from various accounting firms. We try to test the moderator effect of strategy and technological environment affecting the digitalization level and the operational performance in accounting firms.
Findings
The study confirmed the contingency theory in the digital transformation process, impacting operational performance. Accounting firms have demonstrated that the adoption of digital strategies contributes to enhancing the relationship between digitalization levels and operational performance. However, the risky technological environment poses a challenge, as it has a negative moderating influence on the degree of digitization and the performance of accounting firms.
Research limitations/implications
The study adds a valuable nuance to the understanding of digitalization and technological transitions in accounting firms. The research enriches the existing literature by highlighting the consistency of contingency theory explaining the success or failure of the digital transformation of accounting firms.
Practical implications
This research encourages managers to proactively adopt technological advances and provides recommendations on aligning strategies with technology, considering the technological environment. Managers must be aware that the success of the digital transformation process in accounting firms depends on two important factors: actively engaging in the development of clear digital strategies and encouraging technology adoption within their teams. By equipping themselves with an environment that accounts for financial, resistance, regulatory, dependency and security risks, managers can better manage the risks associated with digitization to optimize operational performance.
Originality/value
The added value of this research lies in its significant contribution to the understanding of digital transformation within accounting firms, particularly by highlighting the relevance of contingency theory in this specific context. It confirms how accounting firms can optimize their performance by crucially aligning their contingency variables: strategy and environment.
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Maha Khemakhem Jardak, Marwa Sallemi and Salah Ben Hamad
Remuneration policies may differ from country to country, and their effect on bank stability could be due to the legal framework. Therefore, this study aims to investigate how the…
Abstract
Purpose
Remuneration policies may differ from country to country, and their effect on bank stability could be due to the legal framework. Therefore, this study aims to investigate how the legal system impacts the relationship between CEO compensation and bank stability across countries.
Design/methodology/approach
To test the study hypotheses, the authors use panel data of 74 banks operating in ten OECD countries during the period 2009–2016 and apply the generalized moments method regression model to better remediate the endogeneity problem.
Findings
The findings confirm that a country’s banking regulations significantly affect its bank stability. Common law countries have less bank stability than civil law countries. This result can be interpreted by the fact that, in common-law countries, banks’ CEO are strongly protected by the law, so they allocate a large part of bank assets to risky loans to improve their variable remuneration.
Practical implications
The research can help policymakers understand bank stability in one country. Any legal reform would require prior knowledge of how risk-taking may arise in executive compensation.
Originality/value
The contribution is to explain the controversial effect of executive compensation on bank stability in the framework of legal theory. The authors argue that regulators should monitor compensation structures and that the country’s legal origin of law shapes the CEO compensation structure and is a determinant of bank stability. To the best of the authors’ knowledge, there are no studies exploring this field. So, this study tries to shed more light on the dark side of CEOs’ behavior when undertaking risky projects to maximize their remuneration.
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Maha Khemakhem Jardak and Salah Ben Hamad
The objective of this research is to examine empirically the effects of digital maturity (DM) on the firm's financial performance as measured by return on assets (ROA), return on…
Abstract
Purpose
The objective of this research is to examine empirically the effects of digital maturity (DM) on the firm's financial performance as measured by return on assets (ROA), return on equity (ROE) and Tobin's Q.
Design/methodology/approach
The authors use a panel data sample of 92 observations collected from 23 listed firms on Sweden's stock exchange over four years, 2015–2018. The authors hand collect DM from the digital leader's reports and collect financial data from DataStream. Using both static and dynamic panel (generalized method of moments (GMM) estimation) regression models to perform endogeneity problem, the authors explore the impact of the DM index on ROA, ROE and Q of Tobin.
Findings
The results show that DM has a negative effect on ROA and ROE but a positive effect on Q of Tobin. This negative relationship can be explained, by the fact that information technology (IT) investment and the DM could take years to be materialized and to be captured by performance indicators. Company investment in IT will increase and basically the ROA will be negatively affected because the higher value of IT assets is not amortized. Nevertheless, in the long term, company can maximize its performance. The positive effect on Q of Tobin captures the long-run effect of digital transformation.
Research limitations/implications
This research can be helpful for firms in their process of digital transformation to succeed with the change, create value and to understand the challenges they have to face. In the short term, firms undertaking digital transformation will face some financial difficulties which affect negatively their ROA and ROE, but in the long term they can maximize their performance (captured by Tobin’s Q) and improve their market value.
Originality/value
In previous research, the impact of digital transformation on performance has been measured in terms of revenue growth, profit margins and in terms of earnings before interest and taxes (EBIT). Even if the authors have sufficient evidence of the positive effect of digital transformation on organizational performance, there is no support of the positive effect on financial performance. So, the authors try to fill this gap. This research has also the merit of examining this relationship empirically through a dynamic panel data estimation two-step system GMM, while the majority of previous studies are qualitative in nature based on interviews and questionnaires or simple correlations.
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Maha Khemakhem Jardak and Hamadi Matoussi
The purpose of this study is to examine the effectiveness of financial market rules in protecting minorities.
Abstract
Purpose
The purpose of this study is to examine the effectiveness of financial market rules in protecting minorities.
Design/methodology/approach
The study compares two alternative disclosure rules on insider trading, namely, the market abuse directive (Directive 2004/72/EC), inspired from the United State (US) insider trading regulation enacted by the Sarbanes–Oxley act and the transparency directive enacted by the European (Directive 2004/109/EC) dealing with the crossing of the shareholding threshold. To investigate which one is more effective in signaling reserved information, and thus in reducing information asymmetry, the authors run an event study on the French context, where both regulations are adopted. The data were hand collected from the French stock exchange securities commissions during the two years following the implementation of the two regulations in 2004. The final sample consists of 363 insiders trading and 35 crossing shareholding thresholds for 10 top French firms during the period 2006-2007.
Findings
The results show that the French market reacts significantly to insider trading, but poorly to the crossing shareholding thresholds. Abnormal returns are greater after insider purchases than after crossing up thresholds. These findings support the superiority of the insider disclosure regulation, as it has better information content and provides better protection to minorities.
Research limitations/implications
The study contributes to the corporate governance literature by comparing two disclosure-trading policies. The authors conclude that regulation of disclosure of insider trading along the lines of US disclosure rules is more informative to the market and thus more relevant and important than disclosure of cross-threshold trades.
Practical implications
The study contributes to the corporate governance literature by comparing two disclosure-trading policies. The authors conclude that regulation of disclosure of insider trading along the lines of US disclosure rules is more informative to the market and thus more relevant and important than disclosure of cross-threshold trades. This finding can be helpful for the securities lawmakers and regulators in the process of insider trading law enforcement.
Originality/value
Previous researchers approached the question of insider trading focusing on the identity of insiders. In the research, the authors address the question from another perspective, namely, the crossing of thresholds. Another methodological contribution of the study is the use of a market model that incorporates GARCH (generalized autoregressive conditional heteroskedastic) effect and time-varying systematic risk parameter (β), which is recommended to tackle the classical event study problem of detecting the exact timing of the event.