Impact of the Financial Crisis on Banking Acquisitions: A Look at Shareholder Wealth

This paper examines the influence of the 2007–08 financial crisis on value creation for acquirer’s shareholders in the banking industry using a sample of 883 deals over 2004–12. Applying an exploratory and top-down approach, banking acquisitions are considered at the global level, narrowing the analysis step by step to consider domestic versus cross-border acquisitions. Then cross-border deals are split based on the economic development of the acquirer and target countries. It is observed that only acquisitions involving emerging-economy acquirers and developed-economy targets generate positive and significant returns to shareholders after the crisis. Major changes in the global acquisition landscape are also observed since 2007, with emerging-economy banks increasing their acquisition activity, both nationally and internationally.     

Occupational status,earnings, and fertility expectations: Development and estimation of a causal model

Summary This paper tests, within the framework of LISREL, the causal structures of occupational status, earnings, and fertility expectations using data from the 1984 Canadian Fertility Survey of currently married and common-law women aged 18–44. Differential occupational status, earnings, and fertility among three groups of wives classified by generation of Canadian residence are also examined. The models incorporate age, education, work experience, and ethnic/English language ability as exogenous determinants of occupational status, earnings, and fertility.The major findings are: (1) lower earnings of third generation wives are strongly related to lower levels of education, work experience, and job status; (2) wives who speak an ethnic language are likely to have lower fertility than comparable wives who do not speak an ethnic language; and (3) generational effects on earnings and fertility are limited to differences in education, work experience, and occupational status.The author is grateful to Dr. Karol J. Krotki, co-director of the Canadian Fertility Study, for permission to analyze the Canadian Fertility Survey data. Special thanks are also due to Ms. Margaret King for her comments on an earlier draft of the paper.     

A tax-based motive for the underpricing of initial public offerings

This paper presents a model of entrepreneurial wealth maximization for the pricing of initial public offerings (IPOs). It is an extension of one previously presented in the literature. The model shows that personal tax rates on ordinary income and capital gains may, in part, determine IPO pricing: an increase in the capital gains tax rate should lower the degree of underpricing. An empirical analysis of the effect of the Tax Reform Act of 1986, which raised the capital gains tax rate, shows that the average degree of underpricing did decrease as predicted, and that this occurs after controlling for other possible influences.     

Pro forma disclosures,audit fees,and auditor resignations

The disclosure of non-GAAP (pro forma) earnings numbers by managers in the post-SOX era continues to attract attention from regulators, media, and researchers. However, there is limited empirical evidence on how auditors view clients that emphasize pro forma earnings over GAAP earnings. We study the extent to which audit fees and auditor resignations are associated with opportunistic non-GAAP disclosures. We find that during the pre-SOX period, optimistic pro forma differences, measured using either IBES actual earnings or hand-collected pro forma earnings, are associated with higher audit fees and a higher likelihood of auditor resignations. Additional results indicate that auditors seem to be more concerned with non-GAAP earnings disclosures in the post-SOX period.     

Are non‐audit services associated with firm value? Evidence from financial information system‐related services

The purchase of non‐audit services from incumbent auditors has generated considerable attention. Surprisingly, limited empirical evidence exists on the association of non‐audit services with firm value. Focusing on services related to financial information system (FIS), we find that the market value of equity is greater for firms that purchase FIS‐related services from their incumbent auditors relative to firms that do not. The levels of FIS fees are also positively related to firm value after controlling for total other fees, or total other non‐audit fees. Hence, despite the negative perception associated with non‐audit services, investors regard FIS‐related services as value‐adding activities.     

Social isolation and social anxiety as drivers of generation Z's willingness to share personal information on social media

Generation Z's (gen z) sharing of personal information on social media is a growing phenomenon with significant ramifications. Existing research, however, focuses on examining the role of social and/or psychological factors and fails to consider how and when social, psychological, and organizational factors affect gen z's willingness to share personal information on social media. To fill this gap, we propose a conceptual model based on the tenets of sociometer theory, to understand the dynamics of gen z's willingness to share personal information while considering its process and boundary conditions. Using a sequential multi-study design, we conducted an experiment followed by a survey to test our hypotheses using data collected from gen z in India. Our findings show that when gen z feels socially isolated/anxious, they are more likely to share personal information on social media. The effect of social isolation on sharing of personal information increases when gen z fear that they are missing out on the rewarding experiences others are having, are engaged in repetitive negative thoughts and perceive their firm's privacy policy as transparent and ethical. Our findings provide a better understanding of why, how, and when gen z's are willing to share personal information on social media. We extend existing limited research on the psychological aspects of digital natives' interaction with modern technologies. Our results equip social media marketing and brand managers with the knowledge they need to increase gen z's willingness to share personal information.     

How product–cause fit and donation quantifier interact in cause-related marketing (CRM) settings: evidence of the cue congruency effect

We are the first to examine the joint impact of product–cause fit and donation quantifier in the cause-related marketing (CRM) domain. We show that these two CRM cues interact in a unique manner, reflecting the cue congruency effect. Specifically, congruent combinations of these two cues result in high purchase intentions when the cues individually have positive effects. In all other cases, however, purchase intentions are low. Furthermore, we identify moderators of the above cue congruency effect. In Study 1, we show that the cue congruency effect is moderated by product-type, evidencing only in more hedonic product contexts. In Study 2, we show that the above cue congruency effect is moderated by purchase-type, evidencing in planned purchase contexts, but reversing in impulse purchase contexts. We discuss the process mechanism driving these effects, specify the contribution of this research for CRM, cue congruency and impulse purchases, and outline implications for practice.