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Article
Publication date: 29 May 2009

David Hirshleifer and Siew Hong Teoh

Sometimes resources are badly employed because of coordination failures. Actions by decision makers that affect the likelihood of such failures are sometimes said to cause…

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Abstract

Purpose

Sometimes resources are badly employed because of coordination failures. Actions by decision makers that affect the likelihood of such failures are sometimes said to cause “systemic risk.” This paper seeks to consider the externality in the choice of ex ante risk management policies by individuals and firms, concerned with private risk, not with their contribution to systemic risk.

Design/methodology/approach

The implications for debates over fair value accounting are considered.

Findings

One consequence is that individuals and firms become overleveraged from a social viewpoint. The recent credit crisis exemplifies the importance of this problem. The US tax system taxes equity more heavily than debt, and therefore exacerbates the bias toward overleveraging. A possible solution is to reduce or eliminate taxation of corporate income and capital gains. Preparedness externalities can also cause firms to become too transparent, and thereby subject to financial runs.

Originality/value

The paper offers insights into systemic risk, coordination failures, and preparedness externalities, focusing on tax and accounting policy.

Details

Journal of Financial Economic Policy, vol. 1 no. 2
Type: Research Article
ISSN: 1757-6385

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Article
Publication date: 2 February 2015

Ray Ball and Gil Sadka

The accounting literature has traditionally focused on firm-level studies to examine the capital market implications of earnings and other accounting variables. We first develop…

389

Abstract

The accounting literature has traditionally focused on firm-level studies to examine the capital market implications of earnings and other accounting variables. We first develop the arguments for studying capital market implications at the aggregate level as well. A central issue is that diversification makes equity investors at least partially and potentially almost completely immune to several firm-level properties of earnings by holding diversified portfolios. Diversification is particularly important when assessing the welfare consequences of random errors in accounting measurement (imperfect accruals) and, to the extent it is independent across firms, of deliberate manipulation (earnings management). Consequently, some firm-level metrics of association, timeliness, value relevance, conservatism and other earnings properties do not map easily into investor welfare. Similarly, earnings-related risk manifests itself to equity investors largely through systematic earnings risk (covariation with aggregate earnings and/or other macroeconomic indicators). We conclude that the design and evaluation of financial reporting must adopt at least in part an aggregate perspective. We then summarize the literature in accounting, economics and finance on aggregate earnings and stock prices. Our review highlights the importance of studying earnings at the aggregate level.

Details

Journal of Accounting Literature, vol. 34 no. 1
Type: Research Article
ISSN: 0737-4607

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Article
Publication date: 1 January 2004

Ashley Burrowes, Horst Feldmann, Mareile Feldmann and John MacDonald

Eckbo, Masulis, & Norli (2000) question previous examination of initial public offering (IPO) underperformance with the keen argument that the increase in the number of traded…

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Abstract

Eckbo, Masulis, & Norli (2000) question previous examination of initial public offering (IPO) underperformance with the keen argument that the increase in the number of traded shares and the infusion of equity reduce two significant premia in the stock’s return, namely, liquidity risk and financial risk. The new market for high (expected) growth stock in Germany is examined for evidence of underpricing, underperformance, and liquidity improvements during the first two complete years of operation – 1998 and 1999. The initial trading period examines the offering day and also the first ten days of trading (for the investor who can not get allocation but enters the secondary market). The postissue performance study period is taken as the 5‐day period one‐year after the IPO. Using regression of four underpricing measures upon issuing firm characteristics deemed important from the extant literature, we seek to explain the degree of underpricing discovered. We find that substantial underpricing occurs and performance is high one year later, even adjusted for the German market return for the period or the firm‐specific sector performance for the same period. Trading dwindles for most stocks after the offering day. One year later, the trading of the stock is even lower. We do find that the more active the trading in the initial period, the greater the returns and trading one year after.

Details

Managerial Finance, vol. 30 no. 1
Type: Research Article
ISSN: 0307-4358

Keywords

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Case study
Publication date: 14 December 2022

Siew Yean Tham, Soo Khoon Goh and Ai Ping Teoh

(i) To determine the push and pull factors for a developing country SME to internationalize via exports. (ii) To evaluate the use of social networks in the internationalization…

Abstract

Learning outcomes

(i) To determine the push and pull factors for a developing country SME to internationalize via exports. (ii) To evaluate the use of social networks in the internationalization journey of Yew Chian Haw (YCH). (iii) To analyse how a developing country SME adapts to local conditions in order to sustain and grow the business in a foreign country.

Case overview/synopsis

Yew Chian Haw (YCH) was a small and medium enterprise (SME) producing herbal and healthcare products in Penang, Malaysia. This case study traced the company's internationalization journey, focusing on how the owner used his social networks based on common ethnic ties and language to penetrate the external markets by establishing trading companies in each of his export destinations, from Singapore to Hong Kong and later to Taiwan and China. These internationalization activities also helped him cultivate deeper local networks and enhance his business opportunities in each investment destination. The social network approach has important implications for SME firms such as YCH. The network strength helped to overcome entry barriers to foreign markets and enabled YCH to tap into local complementary resources such as local networks to sustain the internationalization process. Yew’s successful internationalization journey prompted him to focus on the external market for his company’s herbal soup products. But now he must decide whether to continue the internationalization journey in the existing external markets he has penetrated or to expand towards other markets such as Northeast Asian markets like Japan and Korea, as these countries have high income and purchasing power. However, Yew has no extensive social network in both countries, especially in terms of ethnic ties and common language. Yew therefore, had a dilemma: should he just continue expanding the existing external markets he has successfully penetrated, or should he move forward and seek to enter new markets where his current social networks may be weak or non-existent?

Complexity academic level

This case study is relevant for DBA, MBA, Master and undergraduate (International Business and Business Economics) students

Supplementary materials

Teaching notes are available for educators only.

Subject code

CSS 5: International Business

Details

Emerald Emerging Markets Case Studies, vol. 12 no. 4
Type: Case Study
ISSN:

Keywords

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Case study
Publication date: 13 August 2021

Siew Mui Kong, Rajendran Muthuveloo, Josephine Ie Lyn Chan and Ai Ping Teoh

This paper aims to enable students craft a winning corporate strategy applicable for organizations in various contexts. The practical approach consists of conducting scenario…

Abstract

Learning outcomes

This paper aims to enable students craft a winning corporate strategy applicable for organizations in various contexts. The practical approach consists of conducting scenario planning based on internal and external environment analysis, identifying the winning factor, proposing an implementation strategy of entry and exit strategies, and future customers, and evaluating matching of business ethics and legality.

Case overview/synopsis

Wesley Chen, the executive director and group chief executive officer, has the ultimate challenge of leading his management team to operate from a sole proprietorship management style to a listed large company in the Malaysian Stock Exchange. He identified the gap in the need to craft a winning corporate strategy for business sustainability. The corporate strategy should address expansion of their service offerings and needs to be carefully crafted to suit TopSteel’s risk appetite and overall business strategy. The strategy must also consider the internal and external factors that TopSteel faced with, identify the core competency of TopSteel, build in strategic agility in the implementation plans to address the dynamic business landscape, and most importantly ensure the corporate strategy must be in compliance to ethical and legal standards. The case study documents the one year of transition of TopSteel’s operations with a strong focus on the strategic management process direction for a winning OEM+ model through the use of SWIM concept.

Complexity academic level

This case is suitable for undergraduate or postgraduate programs or even executive courses in strategic management.

Supplementary materials

Teaching Notes are available for educators only.

Subject code

CSS 11: Strategy

Details

Emerald Emerging Markets Case Studies, vol. 11 no. 2
Type: Case Study
ISSN: 2045-0621

Keywords

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Case study
Publication date: 27 April 2021

Siew Mui Kong, Rajendran Muthuveloo, Josephine Ie Lyn Chan, Hossein Nezakati and Jignyasu Prafulla Joshi

This case is to familiarise students with the peculiarities of managing people by focussing on human capital development (HCD). Through the case, students are exposed to the…

Abstract

Learning outcomes

This case is to familiarise students with the peculiarities of managing people by focussing on human capital development (HCD). Through the case, students are exposed to the critical recruitment and retention issues faced by METAL STAR Limited Company (METAL STAR), which have a detrimental impact on their business operations. Through the novel use of the transformer-transactor-performer (TTP) profiling tool, students are able to recognise the importance of matching the right candidate to the right job as a solution for recruitment and retention issues. At the end of the case analysis and discussion, students would have a clear idea of the TTP Profiling tool and how to identify core elements needed for an effective and holistic recruitment-retention-separation strategy for a company. The knowledge gained is most valuable for the students as it can be applied to other companies having similar HCD issues.

Case overview/synopsis

Carina Yew is the General Manager of METAL STAR, a sheet metal fabrication company in Penang, Malaysia. After more than 28 years of operations, METAL STAR has been adopting the same human resources (HR) processes and has failed to keep up with the current HR trends. Yew has to decide the best way to lead her company in transforming the HCD strategy to enable smooth and profitable business growth.

Complexity academic level

The case is relevant for undergraduate, postgraduate or even executive students taking courses pertaining to HCD or human resource management.

Subject code

CSS 6: Human resource management.

Supplementary materials

Teaching notes are available for educators only.

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Article
Publication date: 30 June 2020

Runhui Lin, Fei Li and Adedigba Olawoyin

Overconfidence as an important psychological factor can also affect CEO’s cognitive preferences, while there are few studies about the impact of CEO’ overconfidence on the…

995

Abstract

Purpose

Overconfidence as an important psychological factor can also affect CEO’s cognitive preferences, while there are few studies about the impact of CEO’ overconfidence on the international expansion of companies. This paper aims to fill this gap and further discuss the moderating role of CEO’s overseas experience, CEO duality and ownership.

Design/methodology/approach

The authors focus on the Chinese context, collect 2008–2016 data from China's manufacturing industry as sample, use fixed effect model to analyse the effect of CEO overconfidence on international expansion strategy of Chinese firms.

Findings

The empirical results show that: CEO overconfidence positively promotes the degree of firm internationalization. CEO foreign experience positively affects the internationalization degree, but can restrain overconfidence thus negatively regulate this impact relationship. When duality is present, both CEO power and managerial discretion are pronounced and they exhibit a stronger effect. Firm’s equity nature will affect the relationship between CEOs' overconfidence and the degree of internationalization. Compared with private enterprises, CEOs in state-owned enterprises have limited power, therefore, this influence relationship is weaker.

Originality/value

This study has emphasized the importance of top executives' psychological characteristics on firm internationalization, which is key application and complement of upper echelons theory and fills the research gap in the literature. In this paper, the authors found the advantages of overconfidence for firms, which helps to understand the complex meaning of overconfidence. The results of moderating effect further explore the application of overconfidence in different context, which has some implications for management practice.

Details

Nankai Business Review International, vol. 11 no. 4
Type: Research Article
ISSN: 2040-8749

Keywords

Available. Content available
Article
Publication date: 6 February 2017

317

Abstract

Details

Personnel Review, vol. 46 no. 1
Type: Research Article
ISSN: 0048-3486

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Article
Publication date: 5 August 2014

Choy-Har Wong, Garry Wei-Han Tan, Siew-Phaik Loke and Keng-Boon Ooi

While mobile TV (m-TV) is beneficial and is currently an emerging area within mobile commerce, the adoption rate is at the infancy stage. The purpose of this paper is therefore to…

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Abstract

Purpose

While mobile TV (m-TV) is beneficial and is currently an emerging area within mobile commerce, the adoption rate is at the infancy stage. The purpose of this paper is therefore to adapt the Unified Theory of Acceptance and Use of Technology 2 (UTAUT2) model to explore on the factors in predicting users’ behavioral intention (BI) of m-TV.

Design/methodology/approach

Partial least square structural equation modeling approach was employed using 193 respondents to test the findings.

Findings

The findings revealed that effort expectancy (EE), social influence (SI), facilitating conditions (FC), hedonic motivation (HM) and habit (HT) have significant effects on BI. In addition, gender was found to have moderating effect between FC and BI.

Practical implications

Findings from this study provide valuable insights and contribute to the marketing strategy for mobile marketers, wireless communications vendors and application developers in the m-TV industry.

Originality/value

Since the emergence of m-TV is regarded as a new concept, what factors that may motivate users to watch TV using m-devices remains unexplored and therefore is currently a neglected research area. This paper provides clues and valuable insights for mobile marketers, wireless communications vendors and application developers in the m-TV industry.

Details

Industrial Management & Data Systems, vol. 114 no. 7
Type: Research Article
ISSN: 0263-5577

Keywords

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Article
Publication date: 21 December 2021

Kong Siew Mui, Rajendran Muthuveloo and Josephine Ie Lyn Chan

The purpose of this research is to examine the effect of kaizen culture on innovation and operational performance of electrical and electronic manufacturing companies in Malaysia…

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Abstract

Purpose

The purpose of this research is to examine the effect of kaizen culture on innovation and operational performance of electrical and electronic manufacturing companies in Malaysia. A research framework, with underpinning theories of dynamic capabilities and socio-technical systems, was conceptualized to investigate the interplay of these relationships.

Design/methodology/approach

Data were collected from 123 manufacturing companies using an online survey and analyzed with IBM SPSS Statistics version 24.0 and the partial least squares structural equation modeling (PLS-SEM) (SmartPLS) version 3.2.8.

Findings

Ultimately, the findings proved that kaizen culture is crucial for organizations to optimize their operational performance and can be nurtured through the implementation of process innovation and organizational innovation.

Originality/value

Unlike past studies, this research examines the concepts of innovation, kaizen culture and operational performance in a single study; thus, provides further opportunities for new discoveries through such relationships. Also, the novelty is identifying that kaizen culture can be nurtured via innovation.

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