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Article
Publication date: 27 November 2023

Ziyun Yang, Lanyi Yan Zhang and Claire J. Yan

This study investigates the impact of bank CEOs’ inside debt on shareholder benefits in the context of bank mergers and acquisitions (M&A) before the 2008–2009 financial crisis…

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Abstract

Purpose

This study investigates the impact of bank CEOs’ inside debt on shareholder benefits in the context of bank mergers and acquisitions (M&A) before the 2008–2009 financial crisis.

Design/methodology/approach

Employing an event-study methodology, this analysis delves into market reactions to bank M&A announcements during 2006–2007, encompassing 105 M&As by 79 public commercial banks. This era witnessed heightened risk-taking behavior on the verge of the financial crisis. We explore the relation between relative inside debt and market abnormal returns at M&A announcements and the association between relative inside debt and cash payment preferences in M&As.

Findings

Evidence suggests that M&A announcements from banks where acquiring CEOs hold a substantial inside debt experience favorable stock market reaction, particularly for smaller banks. Additionally, banks with elevated CEO inside debt tend to favor cash as a payment mode for M&As.

Research limitations/implications

One limitation of this study is the short period of data availability. The data used in this study covers only 2006 and 2007, the periods marked by notable risk-taking activities on the verge of the financial crisis. Although this period is perfectly suitable for our investigation, given the prevalence of conflicts between equity and debt holders, it is essential to acknowledge that our findings may not capture changes or trends over time. Nevertheless, the results offer valuable insights into the factors that influence the behavior of the studied population. Future research could employ a longitudinal design to address this limitation and gain a more comprehensive understanding of the dynamics over extended periods.

Practical implications

Our study has significant implications for businesses and policymakers as it provides insights into the factors contributing to financial crises and how compensation mechanisms can be used to moderate bank risk-taking. We propose that CEO inside debt compensation presents a plausible mechanism that boards of directors can incorporate into bank executive compensation contracts. By doing so, they can promote value-enhancing investments and moderate excessive risk-taking, thereby safeguarding the financial stability of individual banks and overall financial system.

Originality/value

Our study sheds light on the beneficial role of bank CEO inside debt for shareholders, contributing empirical backing to the conflict resolution viewpoint in the discourse on wealth appropriation. From a regulatory stance, our findings advocate for the inclusion of bank CEO inside debt in executive remuneration agreements. Such a strategy can empower boards of directors to mitigate undue risk and enhance shareholder value in M&As, safeguarding both individual bank and broader financial system stability.

Details

Journal of Financial Regulation and Compliance, vol. 32 no. 1
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 8 May 2017

Ziyun Yang

The purpose of this paper is to examine the effect of a firm’s customer base concentration on its loan contract terms and how this effect varies with the strength of its customer…

1092

Abstract

Purpose

The purpose of this paper is to examine the effect of a firm’s customer base concentration on its loan contract terms and how this effect varies with the strength of its customer relationship.

Design/methodology/approach

This study is an archival research based on a sample of US public firms that have loan contract data between 1990 and 2008. Major customer sales data are used to construct customer concentration and customer relationship measures. A debt contract model is employed to relate loan spread and other contract terms to customer concentration and relationship.

Findings

This study finds that firms with more concentrated customer bases have higher loan spread and shorter loan maturity and are more likely to issue secured loans. These negative effects disappear when the supplier firm maintains strong relationship with its customers.

Research limitations/implications

Additional forward-looking measure of customer relationship could benefit future research.

Practical implications

A firm’s customer base characteristics can have significant impacts on the terms of its loan contracts. Findings from this study support the notion that customer relationship is an important intangible asset that is informative to stakeholders of the firm.

Originality/value

This study proposes a new measure of customer relationship based on the past repeated relationships between a firm and its major customers. It shows that customer characteristics may affect firms’ contracts with creditors: customer base concentration increases credit risk whereas strong customer relationship improves credit quality.

Details

Journal of Applied Accounting Research, vol. 18 no. 2
Type: Research Article
ISSN: 0967-5426

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Article
Publication date: 14 September 2015

Xavier Garza-Gomez, Xiaobo Dong and Ziyun Yang

The purpose of this paper is to extend prior findings on firms’ rounding up net income numbers to meet cognitive reference points and to examine whether segment-level earnings…

414

Abstract

Purpose

The purpose of this paper is to extend prior findings on firms’ rounding up net income numbers to meet cognitive reference points and to examine whether segment-level earnings exhibit similar unusual patterns.

Design/methodology/approach

This study is an archival research based on a sample of US public firms that report segment data between 1998 and 2011. The authors use Benford’s law to establish benchmarks for expected frequency of each number on the second digit of segment earnings and test whether the actual distributions deviate from expectations.

Findings

The authors find more zeros and fewer nines than expected by chance in the second-from-the-left most digit for segment earnings numbers of US public firms, suggesting that segments round up earnings to meet cognitive reference points. The results complement the existing studies by showing that the rounding up of earnings not only exists at the firm level but also at the segment level, probably because subdivision managers have motivation to exceed certain reference points when reporting earnings.

Research limitations/implications

As the authors cannot observe the contracts received by divisional managers, the authors rely on measures related to operating diversity to capture internal agency costs.

Practical implications

The findings suggest internal and external auditors should pay close attention to segments that are suspected of earnings management, i.e. segments that report zeros on the second digit of revenues or earnings. Increased auditor attention is especially necessary for profitable segments operating in highly diversified multi-segment firms.

Originality/value

The authors find that unusual patterns in segment reporting are more prominent in firms that operate in multiple and dissimilar segments, suggesting that higher internal agency conflict might lead to the rounding up of earnings.

Details

Journal of Applied Accounting Research, vol. 16 no. 2
Type: Research Article
ISSN: 0967-5426

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Article
Publication date: 9 March 2020

Yijin Chen, Yiming Zhao and Ziyun Wang

This study considers online searching by health information consumers as a learning process. We focus on search sequences, query reformulation, and conceptual changes.

925

Abstract

Purpose

This study considers online searching by health information consumers as a learning process. We focus on search sequences, query reformulation, and conceptual changes.

Design/methodology/approach

A qualitative user study (30 participants; three health information seeking tasks) investigated mobile searching behavior. Recorded screen activity, questionnaires, and in-depth personal interview data were collected and analyzed.

Findings

(1) Search platform sequences of health information consumers in search as a learning process were exacted and their features were highlighted. (2) Query sequence and reformulation pattern of health information consumers were exacted and discussed. (3) The types and degree of conceptual changes of health consumers were reflected by their query reformulation behavior and differ from different health information search tasks. (4) Characteristics of health consumers' search as learning process were revealed.

Research limitations/implications

(1) A novel perspective of consumer health information studies was proposed by exacting search platform sequence, query sequence and linking them with conceptual changes during the search as learning process. (2) Conceptual changes in the searching as a learning process are regarded as a measure of search outcome in this study, in which terms extracted from queries were used to reflect conceptual changes in consumers' mind. (3) Our findings provide evidences that types of health information seeking tasks do have significant influences on the search as a learning process.

Practical Implications

The findings of this study can lead to the fit-to-needs of the search platforms, provide advice for information architecture of search list of search platforms, and guide the design of knowledge graph of health information systems.

Originality/value

Potential relationships between information-seeking behavior and conceptual changes in search as a learning process relative to health information were revealed.

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Article
Publication date: 14 November 2022

Yujia Liu, Changyong Liang, Jian Wu, Hemant Jain and Dongxiao Gu

Complex cost structures and multiple conflicting objectives make selecting an appropriate cloud service difficult. The purpose of this study is to propose a novel group consensus…

172

Abstract

Purpose

Complex cost structures and multiple conflicting objectives make selecting an appropriate cloud service difficult. The purpose of this study is to propose a novel group consensus decision making method for cloud services selection with knowledge deficit by trust functions.

Design/methodology/approach

This article proposes a knowledge deficit-based multi-criteria group decision-making (MCGDM) method for cloud-service selection based on trust functions. Firstly, the concept of trust functions and a ranking method is developed to express the decision-making opinions. Secondly, a novel 3D normalized trust degree (NTD) is defined to measure the consensus levels. Thirdly, a knowledge deficit-based interactive consensus model is proposed for the inconsistent experts to modify their decision opinions. Finally, a real case study has been carried out to illustrate the framework and compare it with other methods.

Findings

The proposed method is practical and effective which is verified by the real case study. Knowledge deficit is an important concept in cloud service selection which is verified by the comparison of the proposed recommended mechanism based on KDD with the conventional recommended mechanism based on average value. A 3D NTD which considers three values (trust, not trust and knowledge deficit) is defined to measure the consensus levels. A knowledge deficit-based interactive consensus model is proposed to help decision-makers reach group consensus. The proposed group consensus model enables the inconsistent decision-makers to accept the revised opinions of those with less knowledge deficit, rather than accepting the recommended opinions averagely.

Originality/value

The proposed a knowledge deficit-based MCGDM cloud service selection method considers group consensus in cloud service selection. The concept of knowledge deficit is considered in modeling the group consensus measuring and reaching method.

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Article
Publication date: 26 July 2021

Ruihuan Liu, Chunqiao Tan and Chengwei Zhao

Vaccine safety is a major issue in the world. Blockchain technology is the right solution to this worldwide problem. The impact of introducing blockchain technology on the…

1113

Abstract

Purpose

Vaccine safety is a major issue in the world. Blockchain technology is the right solution to this worldwide problem. The impact of introducing blockchain technology on the operational efficiency of the vaccine supply chain is unclear. Therefore, from the perspective of game theory, this paper aims to construct a vaccine supply chain model consisting of a vaccine manufacturer, a vaccine traceability service platform based on blockchain technology and a vaccination unit to discuss its pricing and coordination.

Design/methodology/approach

This study analyzes the pricing and coordination of the vaccine supply chain based on blockchain technology, compares the decision-making of fixed charge scenario and proportional charge scenario and reveals the impact of blockchain on the vaccine supply chain.

Findings

Results demonstrate that the revenue-sharing contract can coordinate the vaccine supply chain when the proportion of revenue sharing meets certain conditions. The fixed charge scenario is more beneficial to the vaccine supply chain than the proportional charge scenario. The introduction of blockchain technology increases the total profit, consumer surplus and social welfare of the vaccine supply chain. Therefore, the operational efficiency of the vaccine supply chain is improved.

Originality/value

This study not only provides important support for enterprises to adopt blockchain technology but also provides some guidance for decision-makers to implement scientific and feasible vaccine supply chain management schemes.

Details

Internet Research, vol. 31 no. 6
Type: Research Article
ISSN: 1066-2243

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