A perspective on regulatory paradigms: The case of IRS and Sarbanes-Oxley approaches to executive compensation-related regulation

In this paper we explore two regulatory paradigms, with an emphasis on the regulation of executive compensation. An example of the traditional rule-based paradigm is Internal Revenue Code Section 162(m) in which a tax-deductible cap was passed into law to limit executive compensation. We demonstrate that this approach yielded mixed results. While stronger pay/performance sensitivity has been documented, Section 162(m) appears to have actually exacerbated the level of executive compensation. We contrast the rules-based paradigm with an alternative paradigm illustrated by the Sarbanes-Oxley Act in which the US Congress introduced a series of corporate governance initiatives into federal securities law. The transformation of the mode of regulatory intervention as reflected by SOX is shown to be fully consistent with recent changes in the generally accepted conceptual framework for financial reporting.     

中小企业出口融资新模式——结构性贸易融资

传统单一的贸易融资方式已经不能适应国际贸易发展的要求,这就要求我国金融机构不仅需要引入新的国际贸易融资方式,也要充分利用"组合理论"原理,通过搭配不同的国际贸易融资方式,最大限度满足中小企业的融资需求,并相应降低总体的融资风险。结构性贸易融资创造性地利用传统贸易融资方式与现代融资方式,将整个贸易流程作为融资对象,通过组合搭配这些融资方式,使进出口商在承担适度风险的基础上获得全程的融资服务,减少自身的资金占压,为中小企业提供了新的出口融资模式。     

The Role of Private Knowledge in Reducing the Information Wedge: A Research Note

Abstract:   In this first ever study to examine the marginal importance of collateral level vis‐à‐vis reputation in reducing information asymmetry, we find using unique data for UK business credit, that pre‐existing reputation is the single‐most important determinant in inducing a bank to extend a loan. Moreover, a bank responds positively to higher levels of collateral and negatively to higher credit requests. Similar to Cole (1998) , but controlling for collateral level, we find that it helps to have banked with the lender before. Non‐trivial information search costs imply an important role for reputation in extending credits.     

Reining in auditors: On the dynamics of power surrounding an “innovation” in the regulatory space

In the aftermath of Enron and the collapse of Arthur Andersen, new “independent” institutions were created to oversee financial auditing. Based on a modified version of Lukes’ multidimensional model of power, we first investigate how the creation of the Canadian Public Accountability Board (CPAB) has affected the dynamics of power among the main players enlisted in Canada’s regulation of public accounting. Our findings strengthen the view that a “form of allegiance” was, at the time of data collection, developing between CPAB and the largest Canadian accounting firms. Through a second analytical movement, we extend the boundaries of our argument, showing that patterns of resistance against the logic of arm’s length regulation operate in a variety of audit regulatory sites. Our conclusion points, in particular, to the spatial gap - and incidentally the limitations - of any attempt to control and supervise a globalized industry from a national or regional perspective.     

Do banks effectively manage their risks? The role of risk governance in the MENA region

This study aims to investigate (1) the effects of the creation of a board-level risk committee (RC) and the designation of a chief risk officer (CRO) on the risk-taking practices undertaken by financial institutions and (2) whether these mechanisms improve the risk management effectiveness of both conventional banks (CBs) and Islamic banks (IBs). We contribute to the scarce literature on the relationship between risk governance and risk-taking behaviour and investigate IBs in this context. Using a sample of 573 observations representing 65 banks (28 CBs and 37 IBs) in the Middle East and North Africa (MENA) region from 2005 to 2015, we find a negative association between the risk governance indices and their risk perspectives across both types of banks for the post-crisis period. Interestingly, we find that the existence of risk governance mechanisms in IBs is associated with higher risk taking for the pre-crisis period, i.e., before the recent amendments to the risk governance principles in the MENA region. This result implies that IBs can respond to regulatory reforms in the post-crisis period by curbing excessive risk taking. We offer further evidence that the risk governance effect on overall risk taking stems only from the stand-alone board-level RC and not from the role of the CRO. We note that the CBs’ performance is more associated with risk taking for banks with stronger board-level RCs. The board-level RCs improve the effectiveness of risk management within CBs but do not influence the risk management effectiveness of IBs.     

Many small antelopes make a dragon

This study focuses on small business in Taiwan. It first discusses the most important features that modern small firms provide, how they are involved in the growing integrated world economy, and the recent rising trends in the number of small and medium sized enterprises (SMEs). This trend, which follows an earlier decrease is further investigated in the context of the Taiwan economy. Finally, three conditions of Taiwan’s successful small firm sector are discussed: appropriate policy, global involvement, and entrepreneurship. Alternative small business futures depend on the conditions that encourage the development of SMEs. In one scenario, where SMEs can find the niche markets quickly, and enhance their expertise in logistics, a rise in SMEs in the global market may be expected. In another scenario, if SMEs fail in forming alliances and networks when confronting with giant firms or large Foreign Direct Investment, there might be a reduction in enterprising behavior. Judging from the former performance of Taiwan’s SMEs, it can be concluded that there is a good chance that SMEs will remain a vibrant and important participant of its economy and the world economy in the future.     

Solving the futures challenge - all you need is a 3LA

In this article, the author responds to a number of claims regarding the Integral Operating System, Causal Layered Analysis and the field of Futures. In particular, the author takes aim at those who claim that the reason the futures field has been lacking in influencing change towards more positive world is the result of not having an effective tool kit. To the contrary, the author suggests that the Futures community's failure at changing the existing ‘market driven paradigm’ has more to do with “… an unwillingness to get our hands dirty and to play in the same sandbox as our clients.” To that end the author targets in particular, a piece suggesting that making the Causal Layered Analysis more complex, exclusionary and ‘new and improved’ is the best way to make inroads into the economic liberalism model now in control. In counterpoint the author suggests that not only is this a flawed approach, it is unlikely to assist those with greatest need - the wider Futures Community.     

Current Trends within Social and Environmental Accounting Research: A Literature Review

Given the recent rise in the evolution and maturity of social and environmental accounting (SEA) research and scholarship, we provide a literature review of the current trends within this area in a concise and harmonized manner for a wider audience in academia and practice. More specifically, we visit the current state of scholarly work, which can be useful in facilitating future research questions and further development of SEA research associated with relations between corporate social performance (CSP), corporate social disclosure (CSD), and corporate financial performance (CFP). Our goal is to offer insights to the current state of SEA research that is informative to both novice and expert SEA scholars, with the hope to promote and stimulate further advancement of research in this particular area. Drawing knowledge from relevant disciplines such as accounting, management, finance, and economics, this article visits the current trends within SEA research in terms of definition, research topics, theoretical viewpoints, methodological approaches, as well as suggestions for future research.