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Article
Publication date: 5 February 2018

Manel Hessayri and Malek Saihi

The purpose of this paper is to analyze the firm’s capital market benefits in a high-quality information setting. More specifically, the authors address the question of whether…

625

Abstract

Purpose

The purpose of this paper is to analyze the firm’s capital market benefits in a high-quality information setting. More specifically, the authors address the question of whether the commonly documented IFRS benefits are capable of influencing inducing shareholders to increase their equity investment in adopting firms.

Design/methodology/approach

This study is performed on publicly listed firms in three emerging countries, namely, Morocco, South Africa and Turkey. The design of the ownership database allows a panel analysis for the years 2001 through 2011. The trend approach is suitable to account for concurrent effects that are unrelated to financial reporting while controlling for time-lasting behavior of investors. Overall, a minimum of four-year periods before and after the IFRS adoption date are warranted.

Findings

Overall, the findings support evidence of increases in equity holdings following a firm’s IFRS adoption. More specifically, institutional investors and institutional blockholders (both domestic and foreign) invest more heavily in the stocks of the firms that have committed to IFRS. By contrast, the authors fail to report evidence for ownership by blockholders and controlling shareholders.

Practical implications

The current empirical work should be of value to international investors, policy makers and market authorities. As for international investors facing reduced information disadvantage and comparable financial information across worldwide markets, they will find it easier to select and invest in value-creating stocks. This study may be useful for policy makers in acquiring a clear view of advantages, challenges and relevance of IFRS adoption to emerging markets. In particular, this study contributes to an understanding of potential capital market consequences of IFRS adoption. Furthermore, market authorities should be aware of the importance of institutional framework to enhance IFRS implementation and usage.

Originality/value

This work contributes to the ongoing empirical research on the intended capital market benefits of IFRS. The authors provide deeper insight into shareholdings changes of a number of key investors in a context where supply and demand of information are stained with asymmetry and mostly, influenced by differences in accounting practices. A major contribution of this study is the use of a methodological approach that outperforms commonly used approaches in the way how it considers concurrent events (compared to the shift specification) and time-lasting investor behavior (compared to the difference-in-differences analysis).

Details

Journal of Accounting in Emerging Economies, vol. 8 no. 1
Type: Research Article
ISSN: 2042-1168

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Article
Publication date: 16 November 2015

Manel Hessayri and Malek Saihi

The purpose of this paper is to examine whether International Financial Reporting Standards (IFRS) adoption complements corporate governance factors (e.g. ownership structure) in…

1703

Abstract

Purpose

The purpose of this paper is to examine whether International Financial Reporting Standards (IFRS) adoption complements corporate governance factors (e.g. ownership structure) in monitoring managers’ discretional behavior in an emerging market context.

Design/methodology/approach

The paper relies on a sample of listed companies in the United Arab Emirates, Morocco, South Africa and the Philippines during an eight-year period on average (four years of pre-adoption period and four years of post-adoption period).

Findings

The authors find no evidence of lower earnings management after the switch to IFRS reporting, suggesting that managerial discretional behavior is insensitive to a firm’s IFRS adoption. However, the authors document effective monitoring role of a firm’s ownership structure on earnings management. More interestingly, institutional investors are effective in constraining earnings management when holding a high level of ownership. Moreover, the effect of blockholders and institutional blockholders varies as their ownership rises following a non-linear pattern.

Research limitations/implications

First, the assumption that discretionary accruals are adequate measure of earnings management may be criticized in different ways. Second, the findings, performed on listed companies in the United Arab Emirates, Morocco, South Africa and the Philippines, should be interpreted with caution and cannot be generalized to all emerging market countries.

Practical implications

Standards setters and market authorities should be aware of earnings management determinants to set adequate and fitting accounting standards limiting opportunistic behavior of managers and mainly to set up training programs to accounting professionals improving the IFRS implementation. Moreover, considering specific features of firms in emerging market countries related to ownership structure, international investors may rely on such criteria to evaluate firms. Finally, auditors should be aware of different incentives for earnings management in order to be able to detect eventual manipulation of accounting earnings.

Originality/value

This paper provides a timely contribution to the continuous debate of the effect of IFRS adoption on earnings management in a poorly exploited setting, emerging market context. When investigating, additionally, the eventual non-linear effect of institutional ownership, block ownership, institutional block ownership and non-institutional block ownership on earnings management, a major contribution is that it brings to light the finding of a differential influence of ownership levels on earnings management.

Details

Journal of Economic and Administrative Sciences, vol. 31 no. 2
Type: Research Article
ISSN: 2054-6238

Keywords

Available. Open Access. Open Access
Article
Publication date: 18 December 2024

Angélica Muffato Reis, Elisa Verna, Lino Costa, Sérgio Dinis Sousa and Maurizio Galetto

This study bridges the gap in quality control strategies for high-volume production by balancing the cost and effectiveness of inspection strategies. Using the cost of quality…

81

Abstract

Purpose

This study bridges the gap in quality control strategies for high-volume production by balancing the cost and effectiveness of inspection strategies. Using the cost of quality (CoQ) to manage cost and external failures (EF) to gauge effectiveness, this research introduces an innovative inspection strategy chart that serves as a decision-making tool for optimizing inspection processes.

Design/methodology/approach

This paper presents a scenario-based framework designed to support strategic decision-making in inspection processes by integrating empirical data analysis with inspection strategy charts. This approach allows for a dynamic assessment and visualization of the relationship between CoQ and EF, facilitating more informed decision-making in quality management. Notably, it contrasts the traditional models with a novel approach that more accurately captures the uncertainty and correlation among key quality indicators, showcasing its potential for more refined decision-making in quality management.

Findings

Application of the framework illustrates its effectiveness in offering a nuanced understanding of the cost implications and effectiveness of various quality control strategies. This facilitates enhanced strategic decision-making, optimizing inspection processes and reducing external failures in high-volume production settings.

Research limitations/implications

The study focuses on a single industry case study, limiting the generalizability of findings across different high-volume production contexts. Future research could explore the framework’s applicability in other sectors and refine the model based on additional empirical data.

Originality/value

The research introduces a versatile framework that navigates the unique challenges of high-volume manufacturing environments. Diverging from models optimized for low-volume settings, this approach provides a valuable tool for adapting inspection strategies to complex production demands, marking a significant contribution to quality management and control literature.

Details

International Journal of Quality & Reliability Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0265-671X

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