Weiping Li, Huirong Li, Xuan Sean Sun and Tairan Kevin Huang
The purpose of this paper is to examine the impact of directors’ and officers’ liability insurance (D&O insurance hereafter) on corporate governance and firm performance, with a…
Abstract
Purpose
The purpose of this paper is to examine the impact of directors’ and officers’ liability insurance (D&O insurance hereafter) on corporate governance and firm performance, with a specific focus on investment efficiency.
Design/methodology/approach
Using a sample of Chinese A-share listed firms from the period 2007 to 2020, this study uses Ordinary Least Squares regressions to investigate the research questions, as well as moderating and mediating effects. Additionally, alternative measures of investment efficiency are used, and the Heckman two-stage model and propensity score matching model are used to demonstrate the consistency of the findings and to mitigate the risk of endogeneity.
Findings
The findings of this study suggest that purchasing D&O insurance has a detrimental impact on corporate investment efficiency, particularly in the context of over-investment activities; robust internal governance mechanisms, exemplified by a higher shareholding ratio of the top shareholder and enhanced internal control quality, alleviate this negative effect; and financing constraints act as a mediating factor in the association between D&O insurance and investment efficiency.
Originality/value
Corporate investment efficiency is of significant importance for both national macroeconomic growth and micro-enterprise development. Notably, the prevalence of D&O insurance among Chinese firms is progressively increasing, thus exerting a growing influence. This study contributes to the existing literature on D&O insurance and corporate investment efficiency, providing valuable insights into the economic impact of D&O insurance on Chinese firms. The empirical evidence presented herein facilitates future reforms and adjustments.
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Xuan Sean Sun, Ahsan Habib and Daifei Troy Yao
This study aims to examine the impact of different levels of required book-tax conformity (BTC) on audit clients' demand for auditor-provided tax services (APTS). In addition, the…
Abstract
Purpose
This study aims to examine the impact of different levels of required book-tax conformity (BTC) on audit clients' demand for auditor-provided tax services (APTS). In addition, the authors also investigate the effects of the European Union (EU) Regulation (2014).
Design/methodology/approach
This study utilizes a sample of listed companies from 10 EU countries between 2010 and 2019. The final sample consists of 16,049 firm-year observations from 2,515 unique firms, and the authors use both probit and ordinary least square (OLS) regression models in this study.
Findings
The main finding of this paper is that companies listed in countries with a higher level of BTC are less likely to purchase tax services from incumbent auditors and pay fewer auditor-provided tax service fees. Results from further analyses confirm that firms substantially reduced their purchase of APTS after the EU Regulation (2014) was implemented, but these reduced purchases were found to be more pronounced for firms located in countries with low BTC.
Originality/value
This study advances the understanding of the determinants of APTS and the consequences of BTC. Specifically, the authors report that variation in a country-specific feature (i.e. BTC) also affects firms' decision to purchase APTS. Moreover, this paper provides some preliminary evidence of the new regulation and contributes to the literature on APTS regulation. The findings of this study have important policy implications for regulators and are also relevant for various capital market participants.
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Xuan Sean Sun, Muhammad Nurul Houqe, Md. Borhan Uddin Bhuiyan and Mahbub Zaman
This research examines the influence of financial secrecy culture on audit fees. Additionally, we investigate the potential moderating effect of adopting International Financial…
Abstract
Purpose
This research examines the influence of financial secrecy culture on audit fees. Additionally, we investigate the potential moderating effect of adopting International Financial Reporting Standards (IFRS) on the relationship between financial secrecy culture and audit fees.
Design/methodology/approach
We use an international dataset comprising 249,217 firm-year observations from 30 countries/regions listed between 1996 and 2022. Our analysis includes regression analysis, the Heckman self-selection bias test, change analysis and various robustness tests.
Findings
Our results reveal a significant positive association between audit fees and firms listed in secretive jurisdictions, suggesting that auditors charge higher fees to accommodate additional audit effort or risk premiums. Furthermore, our empirical findings indicate that implementing IFRS in countries/regions with higher levels of secrecy introduces complexities or ambiguities in audit procedures, leading to increased audit fees. These results hold up under rigorous endogeneity tests and remain consistent across alternative measures and tests.
Research limitations/implications
Our findings establish a direct link between financial secrecy and audit fees, demonstrating higher costs for firms with greater secrecy. Additionally, they show that implementing IFRS in secretive jurisdictions intensifies audit complexities, resulting in higher fees. These findings emphasize the critical importance of transparency, regulatory compliance and risk management in financial reporting, with implications for investor confidence and regulatory strategies.
Originality/value
This study contributes to the literature by exploring the previously unexamined relationship between financial secrecy culture and audit fees while also assessing the moderating effect of IFRS adoption. By utilizing a comprehensive international dataset spanning multiple jurisdictions and years, our research provides valuable insights into cross-border variations in audit practices and their broader implications.
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Simon Manyiwa, Constantinos Vasilios Priporas and Xuan Lorna Wang
This study aims to examine the influence of perceived city brand image on emotional attachment to the city. The study also compares the effects of perceived brand image of the…
Abstract
Purpose
This study aims to examine the influence of perceived city brand image on emotional attachment to the city. The study also compares the effects of perceived brand image of the city on the emotional attachment to the city across two groups: local residents and visitors.
Design/methodology/approach
A total of 207 usable questionnaires were collected from 107 residents of the city of Bratislava, Slovakia and 100 visitors to the city. Partial least square structural equation modeling (PLS-SEM) method was used for data analysis.
Findings
This study establishes that perceived city brand image significantly influences emotional attachment to the city. The study concludes that affective city image has a greater impact on emotional attachment to the city among the residents than visitors. By contrast, the influence of cognitive city image on emotional attachment to the city does not vary across the two categories of residents and visitors to the city.
Practical implications
City tourism marketers should focus on improving city brand images to enhance tourists’ emotional attachment to the city to promote repeat visits among visitors.
Originality/value
This study contributes to improving understanding of the impact of perceived city brand image on emotional attachment to the city across the two groups, residents and visitors, using social exchange theory (SET). Furthermore, the findings come from a relatively under-researched Central and Eastern European (CEE) region.
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Hassanudin Mohd Thas Thaker and Mohamed Ariff
This study aims to explore the issue of residential price in Malaysia from a supply-side perspective. The views are directly obtained from medium and small-scale developers in…
Abstract
Purpose
This study aims to explore the issue of residential price in Malaysia from a supply-side perspective. The views are directly obtained from medium and small-scale developers in Malaysia.
Design/methodology/approach
We used the semi-structured interview for analysis purpose. The samples are from property developers (medium and small-scale developers) and a single respondent from the Malaysian National House Buyers Association. We used the judgmental sampling method to choose respondents for this study. The interview results went through content analysis in order to derive common themes, resulting in the identification of four main themes.
Findings
First, developers view that the residential market is growing at a good pace, albeit slowly. However, the issue of unaffordability and construction costs remains to haunt the progress of property development in Malaysia. Second, from supply-side perspectives, there are several main reasons why the residential prices in Malaysia are uncontrollable: (1) costs of construction, (2) taxes, (3) existing units, (4) location and (5) urbanization. The third theme is the government support in catering to the needs and wants of middle- and lower-income earners. Most respondents agreed that the government has been providing low-cost houses supported by various incentives. Finally, on price control strategies for residential units, recommended suggestions are as follow: embracing different methods of construction styles, promote the uses of local materials instead of relying on imported materials, continuously review rules and regulations, provide more incentives and to build partnerships between the government and private companies on affordable housing projects.
Practical implications
The research is expected to present solid findings and claimsseveral significant contributions, especially policy-wise. We believe this contribution will enrich the existing literature on residential market. The present study is also predicted to produce noteworthy findings to all stakeholders in the real-estate industry, such as potential home buyers and existing house owners to housing developers, marketers and government policy regulators, as well as academic institutions.
Originality/value
This study is expected to enrich the existing literature available in the context of real-estate finance such as property price and property policy in emerging economies like Malaysia. One distinguishing factor which differentiates this study from others in the literature is the feedbacks obtained from medium and small-scale developers, therefore deemed to be more solid and reliable. The current research in real-estate finance is mainly focused on empirical analysis and we believe this study will offer a breakthrough view on the matter of residential market in Malaysia.
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The purpose of this study is to analyze the determinants of intention for energy and water conservation behavior in Prishtina, Kosovo by using the theory of planned behavior (TPB…
Abstract
Purpose
The purpose of this study is to analyze the determinants of intention for energy and water conservation behavior in Prishtina, Kosovo by using the theory of planned behavior (TPB) conceptual framework and then examine the influence of intention and demographic factors on the conservation behavior itself. In addition, the present study examines the differences between urban and rural consumers in Prishtina in terms of their intention for energy and water conservation behaviors and their actual conservation behavior.
Design/methodology/approach
This study uses a qualitative approach by conducting ten in-depth interviews followed by one focus group with urban consumers and ten in-depth interviews followed by one focus group with rural consumers in Prishtina to analyze the influence of determinants on the conservation intention. In addition, the present study uses the quantitative research method to empirically examine the influence of intention and demographic variables on the actual conservation behavior.
Findings
The findings show that there is a difference between the urban and rural sample populations in Prishtina in terms of determinants that influence their intention to conserve energy and water. While attitude is the strongest determinant among the urban population, the social norms seem to be the strongest antecedent of the behavioral intention among the rural population. In addition, the study finds that the intention, income, family size and place of residence as a whole influence the actual behavior; however, the manifestation of the influence of separate variables on the actual conservation varies between urban and rural population. While intention is very strong among urban respondents and the actual conservation behavior is less dependent on the income level and family size, in the case of rural respondents, intention alone is not sufficient to predict the actual behavior and varies also on the income level.
Originality/value
The study brings unique and new knowledge about the application of the TPB in the context of small and developing economies bridging the research gaps arising from few scholarly research studying the differences between urban and rural populations.