International Journal of Managerial Finance最新文献

{"title":"Corporate takeover susceptibility and classification shifting","authors":"A. Zudana, Solomon Opare","doi":"10.1108/ijmf-11-2022-0478","DOIUrl":"https://doi.org/10.1108/ijmf-11-2022-0478","url":null,"abstract":"PurposeThis paper examines the effect of firms’ takeover susceptibility on the manipulation of financial statements through classification shifting.Design/methodology/approachThe paper applies ordinary least squares regression (OLS) with fixed effects analyses to a sample of United States listed firms over the period 1992–2014. We use takeover index as a proxy for takeover susceptibility of firms, with high values representing higher takeover susceptibility and lower values representing lower takeover susceptibility.FindingsThe study finds that firms engage in classification shifting through core expenses, suggesting that takeover threats reduce the incentive to manage earnings through classification shifting. We also find that takeover susceptibility improves the monitoring mechanism for firms with low profitability because these firms have greater incentives to engage in classification shifting. Finally, we find that the Sarbanes–Oxley Act strengthens the monitoring mechanism influenced by takeover threats. Overall, the results provide evidence of the important role of takeover susceptibility in mitigating classification shifting. Our results are robust to a battery of sensitivity tests.Practical implicationsThe results emphasise the disciplinary role of the legal environment around corporate takeovers. The study suggests that policymakers and regulators should be cognisant of antitakeover laws which may increase agency conflicts between managers and shareholders and promote managerial self-seeking behaviours such as classification shifting.Originality/valueThe paper highlights the important role of takeover threats as an external governance mechanism to mitigate classification shifting which is detrimental to investors’ value. From prior literature, this study is the first to provide evidence of the effect of takeover threats on classification shifting.","PeriodicalId":51698,"journal":{"name":"International Journal of Managerial Finance","volume":null,"pages":null},"PeriodicalIF":1.7,"publicationDate":"2024-06-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141355824","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Working capital management in competitive market: empirical insights","authors":"Pradip Banerjee, Soumya G. Deb","doi":"10.1108/ijmf-01-2024-0019","DOIUrl":"https://doi.org/10.1108/ijmf-01-2024-0019","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This study seeks to examine the relationship between a firm’s effectiveness in managing working capital (WCM), as measured by the cash conversion cycle (CCC), and its exposure to product market competition (PMC).</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>Using 85,356 firm-year observations of 9,611 unique firms for the period 1990–2019, from the US, the baseline model assesses the CCC and PMC connection while controlling for multiple firm-level factors. Additional analyses are conducted to control for financial constraints, economic policy uncertainty, and endogeneity.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>An inverse relationship is shown between PMC and CCC, indicating that firms facing increased competition tend to implement more efficient WCM strategies in order to free up scarce resources. In addition, we observe that increased PMC pushes companies to strategically adjust their credit policies, while also improving their administration of payables and inventories, resulting in improved efficiency. Our research highlights that CCC serves as a mediator between PMC and firm performance.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>This study enhances comprehension of the impact of PMC on WCM, offering practical recommendations for companies seeking to optimize their strategy in competitive settings.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>The study provides valuable insights for managers operating in competitive markets, highlighting the significant influence of working capital on business policies as a response to competition. This study contributes to the existing literature on WCM and PMC by providing guidance to organizations on how to improve their WCM practices, maintain competitiveness, and free up scarce resources.</p><!--/ Abstract__block -->","PeriodicalId":51698,"journal":{"name":"International Journal of Managerial Finance","volume":null,"pages":null},"PeriodicalIF":1.7,"publicationDate":"2024-06-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141256764","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Does crude oil price volatility affect risk-taking capability in business group firms: evidence from India?","authors":"Nitya Nand Tripathi, Aviral Kumar Tiwari, Shawkat Hammoudeh, Abhay Kumar","doi":"10.1108/ijmf-10-2023-0486","DOIUrl":"https://doi.org/10.1108/ijmf-10-2023-0486","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>The study tests risk-taking and risk-aversion capabilities while distinguishing between business group firms and stand-alone firms and considering oil price volatility. Second, this attempt to study the linkage between risk-taking during market down movements and when the firms have established themselves as product market leaders. Third, this study analyses the “sentiment” state, where it explores the reaction of corporations when the market is in the negative direction, and lastly, it explores the linkage between product market competition and risk-aversion.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>This study uses financial information for 1,273 non-financial companies and other required data from various sources. The study employs panel data and utilizes different empirical methodologies, including the generalized method of moments (GMM) estimator, to test the stated hypotheses.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>We find that the business group firms have more risk-taking proficiencies compared with the stand-alone firms. Moreover, this study discovers that the corporates avoid taking risks when the market is not performing well. Also, when the market is down and crude prices are high, the management expects high earnings in the future, willingly takes risks and shows that product market leaders do not follow the risk-aversion strategy.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>The empirical results indicate that oil price movement can restrict management’s behaviour when choosing a risky investment project. Management should develop a robust policy that follows the group of firms. In the policy, the management should describe the level of risk that may be taken by the firm and implement it when required.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>Since we do not find any studies in this context, then there is a major and essential gap in the literature that this study should fill.</p><!--/ Abstract__block -->","PeriodicalId":51698,"journal":{"name":"International Journal of Managerial Finance","volume":null,"pages":null},"PeriodicalIF":1.7,"publicationDate":"2024-06-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141196802","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Employee treatment and annual report readability","authors":"Brid Murphy, Li Sun, Meng (Vivian) Wang","doi":"10.1108/ijmf-03-2023-0151","DOIUrl":"https://doi.org/10.1108/ijmf-03-2023-0151","url":null,"abstract":"PurposeIn this study, we examine the relation between employee treatment and annual report readability, which is measured as a reading difficulty score.Design/methodology/approachWe use regression analysis to explore the impact of employee treatment on annual report reading difficulty.FindingsWe find a significant negative relation between employee treatment and reading difficulty, which suggests that annual reports of firms with better employee treatment are easier to read and understand (i.e. more readable).Originality/valueOur study contributes to a more thorough knowledge of annual report readability and our findings may be of relevance to accounting standard setters and investors.","PeriodicalId":51698,"journal":{"name":"International Journal of Managerial Finance","volume":null,"pages":null},"PeriodicalIF":1.7,"publicationDate":"2024-05-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140961682","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Linking executive pay to ESG goals: the role of board gender diversity","authors":"Thanh Dat Le, Julie T. D. Ngo","doi":"10.1108/ijmf-10-2023-0546","DOIUrl":"https://doi.org/10.1108/ijmf-10-2023-0546","url":null,"abstract":"PurposeIn recent years, US firms have increasingly integrated ESG performance goals into their executive remuneration packages. This study examines the relationship between board gender diversity and the tendency of firms to incorporate ESG metrics in performance-based compensation using data from US firms. The key questions this study addresses are: Are firms with more females on the board more likely to link executive compensation metrics? What components and types of ESG metrics are more likely to be adopted by firms with more females on the board?.Design/methodology/approachThis study employs OLS regression, logistic regression, as well as instrumental variable, propensity score matching, and entropy balance methods to establish causality.FindingsThis study finds that firms with gender-diverse boards are more likely to shape their executive remuneration plans to be more ESG-oriented. The most significant positive relationship is observed with environmental and social sub-categories. The results also demonstrate that female directors are more likely to encourage firms to evaluate managers based on absolute and short-term ESG goals.Originality/valueThis study is one of the early studies that examine the adoption of ESG performance goals into executive compensation plans. It contributes to the existing literature by exploring the relationship between board gender diversity and the probability of firms incorporating ESG performance goals into executive compensation packages using a sample of US firms.","PeriodicalId":51698,"journal":{"name":"International Journal of Managerial Finance","volume":null,"pages":null},"PeriodicalIF":1.7,"publicationDate":"2024-05-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140969939","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Unveiling the driving forces behind high non-performing loans in zombie enterprises: an executive-centric study","authors":"Min Bai, Dong Zhang, Wenzhuo Zhao","doi":"10.1108/ijmf-09-2023-0434","DOIUrl":"https://doi.org/10.1108/ijmf-09-2023-0434","url":null,"abstract":"PurposeExcessive borrowing significantly contributes to pushing businesses towards default and their transition into zombie enterprises. Despite government efforts to implement deleveraging policies and guide bank credit flows, it’s essential to delve into the internal dynamics that steer the borrowing behavior of these zombie enterprises at a micro level. To gain a comprehensive understanding of the issue, this study focuses on examining the incentives that drive corporate executives of zombie enterprises to consistently engage in large-scale borrowing from banks.Design/methodology/approachIn this study, panel data analysis is utilized, incorporating firm-, industry- and year-fixed effects. Drawing from data pertaining to listed companies in China spanning from 2007 to 2020, we employ a one-by-one identification method to pinpoint zombie enterprises. Ultimately, a total of 2,533 samples of zombie enterprises were obtained.FindingsThe results indicate that as bank loans to zombie enterprises increase, executive monetary compensation decreases, while on-the-job consumption by executives increases, and they are less likely to be forced into rotation. Mechanism testing reveals that corporate performance partially mediates the relationship between bank loans and executive monetary compensation, but this mediation is ineffective for on-the-job consumption and job rotation. Further investigation suggests that the property rights nature of central enterprises and modified audit opinions can exacerbate the adverse impact of bank loans on the monetary compensation of zombie corporate executives, without significantly affecting on-the-job consumption or job rotation. Conversely, executive power does not enhance the positive effects of bank loans on monetary compensation or on-the-job consumption, but it diminishes the negative impact of bank loans on the forced rotation of zombie executives.Research limitations/implicationsThese results indicate that while bank loans may have a negative impact on corporate value, they function as safeguards for the positions and interests of executives. As a result, bank loans serve as incentives for executives of zombie enterprises.Originality/valueThis study holds theoretical significance as it explores the motivations behind non-performing loans in high-borrowing enterprises, sheds light on corporate governance challenges encountered by zombie enterprises and provides policy insights aimed at addressing the underlying causes of persistent non-performing loans in high-borrowing enterprises, including zombie enterprises.","PeriodicalId":51698,"journal":{"name":"International Journal of Managerial Finance","volume":null,"pages":null},"PeriodicalIF":1.7,"publicationDate":"2024-05-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141004132","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Economic uncertainty, risk-taking incentives and production management","authors":"Hussein Abdoh, Aktham Maghyereh","doi":"10.1108/ijmf-11-2023-0589","DOIUrl":"https://doi.org/10.1108/ijmf-11-2023-0589","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This study aims to validate the link between production manipulation and a firm’s performance variability (fundamentals and stock returns). It explores whether executives' risk-taking incentives encourage production deviations around the normal level during uncertainty.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>Utilizing panel data of manufacturing firms from Compustat over three decades, the study investigates production management practices during economic uncertainty. The Economic Policy Uncertainty Index (EPU) is employed as a key metric. The empirical strategy involves documenting the effect of economic uncertainty on overproduction and underproduction, examining the role of executive compensation and assessing the impact on risk.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The research finds that risk-taking incentives increase over/underproduction, particularly amplifying the extent of underproduction during uncertainty. Production deviation rises, indicating that firms take greater risk by engaging in abnormal business operations. The study’s results are robust against various econometric methods, emphasizing the influence of risk-taking incentives on corporate production decisions.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>While providing valuable insights, the study acknowledges inherent limitations, including factors influencing production decisions beyond risk-taking incentives. Further research could explore additional determinants for a comprehensive understanding.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>The findings highlight the potential dark side of executive compensation that motivates suboptimal risk-taking decisions, impacting risk, cost of capital and firm performance. Policymakers and compensation committees can use these insights to design efficient systems that mitigate moral hazard problems associated with productivity changes.</p><!--/ Abstract__block -->\u0000<h3>Social implications</h3>\u0000<p>The study emphasizes the broader social implications of production manipulation under uncertainty. It prompts discussions on the ethical considerations of managerial opportunism, its potential consequences for stakeholders and market dynamics.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>This study contributes to the literature by examining the role of economic uncertainty on production manipulation and the influence of risk-taking incentives. It extends the earnings management literature by considering real activity manipulation and emphasizing the importance of decomposing production deviation into positive and negative values.</p><!--/ Abstract__block -->","PeriodicalId":51698,"journal":{"name":"International Journal of Managerial Finance","volume":null,"pages":null},"PeriodicalIF":1.7,"publicationDate":"2024-05-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140831997","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Can institutional investors influence media sentiment?","authors":"Heng (Emily) Wang, Xiaoyang Zhu","doi":"10.1108/ijmf-08-2023-0389","DOIUrl":"https://doi.org/10.1108/ijmf-08-2023-0389","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>The dissemination of misleading and false information through media can jeopardize a company’s reputation, thus posing a threat to its stock and performance. Institutional investors are known to influence capital markets. Therefore, this paper investigates whether institutional investors engage in shaping the media sentiment stock nexus, stabilize company stocks and enhance performance.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>We first investigate the effect of media sentiment on market reactions by using panel regression models. To examine the role of institutional investors, we design a quasi-experiment by exploiting the Financial Crisis of 2008 and go further by examining the heterogeneity across levels of institutional ownership. Due to risk-averse, investors may respond asymmetrically to pessimistic and positive sentiment. Accordingly, we split the sample into two sub-types, good news and bad news, based on keywords representing positive or negative content.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>We find supportive evidence that institutional investors have impacts on how the markets react to media news, and the impacts are heterogeneous in the face of bad and good news. We conjecture that institutional investors act as a stabilizer of stock prices through media sentiment management.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>This paper confirms the distinctive effects of institutional investors on capital markets, and uncovers the behind-the-scenes intervention and possible causal link running from institutional investors to media sentiment management. It contributes to the broad field of institutional investors' behavior, media news involvement in capital markets and market efficiency.</p><!--/ Abstract__block -->","PeriodicalId":51698,"journal":{"name":"International Journal of Managerial Finance","volume":null,"pages":null},"PeriodicalIF":1.7,"publicationDate":"2024-04-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140615158","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Oil price uncertainty and excess value of diversification","authors":"Amanjot Singh","doi":"10.1108/ijmf-10-2023-0517","DOIUrl":"https://doi.org/10.1108/ijmf-10-2023-0517","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This study examines the value implications of oil price uncertainty for investors in diversified firms using a sample of 922 USA firms from 2001 to 2019.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>Our study employs a panel dataset to examine the value implications of oil price uncertainty for diversified firm investors. We consider several alternative specifications to account for unobserved factors and measurement errors that could potentially bias our results. In particular, we use alternative measures of the excess value of diversified firms and oil price uncertainty, additional control variables, fixed-effects models, the Oster test, impact threshold for confounding variable (ITCV) analysis, two-stage least square instrumental variable (2SLS-IV) analysis and the system-GMM model.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>We find that the excess value of diversified firms, relative to a benchmark portfolio of single-segment firms, increases with high oil price uncertainty. The impact of oil price uncertainty is asymmetric, as corporate diversification is value-increasing for diversified firm investors only when the volatility is due to positive oil price changes and amidst supply-driven oil price shocks. The excess value increases irrespective of diversified firms’ financial constraints and oil usage. Diversified firms become conservative in their internal capital allocations with high oil price uncertainty. Such conservatism is value-increasing for diversified firm investors, as it supports higher performance in response to oil price uncertainty.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>Our study has three important implications: first, they are relevant to investors in understanding the portfolio value implications of oil price uncertainty. Second, they are helpful for firm managers while comprehending the value-relevant implications of internal capital allocations. Finally, our findings are policy relevant in the context of the future of diversified firms in developed markets.</p><!--/ Abstract__block -->","PeriodicalId":51698,"journal":{"name":"International Journal of Managerial Finance","volume":null,"pages":null},"PeriodicalIF":1.7,"publicationDate":"2024-04-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140580129","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Unveil the benefit of independent leadership structure on employee welfare","authors":"Thanh Dung Nguyen, Thuong Harvison, Ali Ashraf","doi":"10.1108/ijmf-11-2023-0582","DOIUrl":"https://doi.org/10.1108/ijmf-11-2023-0582","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>Employees play a vital role in the success of a corporation. While boards of directors are created to protect shareholders’ interests, it is unclear if these directors also ensure employee welfare. In this vein, our paper examines the relationship between board leadership structure and employee well-being.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>The authors employ several analysis techniques, including univariate analysis, ordinary least squares (OLS) regressions, two-stage least squares (2SLS) regressions, propensity score matching methodology, the Heckman Selection model and difference-in-differences analysis. The sample comprises USA public firms for the period 1998–2018.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>Our findings indicate that having an independent chairperson can significantly benefit the welfare of employees, especially for firms with overly powerful chief executive officers (CEOs) and during times of financial distress.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>Independent leadership structure is one of the crucial board characteristics that have not been examined to explain employee welfare at firms. We find that an independent chairperson can mitigate the negative effect of overly powerful CEOs on employee benefits. Importantly, independent chairpersons are beneficial for employees in difficult times and when CEOs are busy with daily activities.</p><!--/ Abstract__block -->","PeriodicalId":51698,"journal":{"name":"International Journal of Managerial Finance","volume":null,"pages":null},"PeriodicalIF":1.7,"publicationDate":"2024-04-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140580215","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}