Short Selling and Firm Operating Performance

While it is well known that short selling predicts future negative stock price performance, it has not been established whether short selling predicts future negative operating performance. We find that firms in the top decile of increases in short interest (an increase of about four percentage points) experience a 21% subsequent decline in operating performance relative to matched control firms. The greater the increase in short interest, the larger the decline in operating performance. The results are robust to alternative performance measures and to sample splits based on firm size. These results suggest that short interest may reflect private information about firm fundamentals rather than other factors that may drive stock price changes.     

International Diversification and Firm Value

In this paper the impact of multinationalism is examined using a valuation model incorporating geographically segmented accounting information. The results indicate that multinational companies are more highly valued than their domestic counterparts and that the valuation difference lies in all their operations and not just their foreign operations. The value advantage of MNCs appears too large to be realistically explained by cost of capital reductions and would support either that high value firms become multinationals, rather than MNCs gaining valuation benefits from foreign investments, or a pricing fad. Preliminary results support the latter explanation.     

The Effect Of International Acquisitions on Firm Leverage

To determine whether corporate international diversification leads firms to increase their leverage, we perform an event study that compares the leverage of corporations before and after they acquire foreign subsidiaries. We find that on average leverage increases from the first to the third year following the acquisition. When we examine the relation between additional debt financing after foreign acquisitions and the characteristics of these acquisitions, we find that in addition to such major determinants as size and profitability, debt financing is explained by geographical and industrial diversification effects.     

Lobbying and Uniform Disclosure Regulation

This study examines the costs and benefits of uniform accounting regulation in the presence of heterogeneous firms that can lobby the regulator. A commitment to uniform regulation reduces economic distortions caused by lobbying by creating a free‐rider problem between lobbying firms at the cost of forcing the same treatment on heterogeneous firms. Resolving this tradeoff, an institutional commitment to uniformity is socially desirable when firms are sufficiently homogeneous or the costs of lobbying to society are large. We show that the regulatory intensity for a given firm can be increasing or decreasing in the degree of uniformity, even though uniformity always reduces lobbying. Our analysis sheds light on the determinants of standard‐setting institutions and their effects on corporate governance and lobbying efforts.     

会计师事务所人力资本与薪资对其经营绩效之影响

知识经济时代,人力资本与薪酬诱因设计是影响会计师事务所经营绩效的关键因素。人力资本与薪酬诱因设计是否随着会计师事务所经营环境竞争日益激烈,而更有助于经营绩效的提高,目前仍缺乏相关证据。有鉴于此,本研究采用2004至2007年「会计师事务所服务业调查报告」之普查资料,探讨会计师事务所人力资本、薪资与经营绩效三者间之关联性。实证发现:实证结果显示,会计师事务所人力资本越高,则薪资水平越高;会计师事务所薪资水平越高,则经营绩效越好;会计师事务所人力资本越高,则经营绩效越好;员工薪资在人力资本与经营绩效间之间扮演着中介之角色。在审计市场环境日益艰困情况下,研究结果可提供会计师事务所的经营者在决策时一个有用之参考。     

Determinants and Effects of Corporate Lobbying

We examine the determinants and value effects of corporate lobbying, controlling for corporate political action committee (PAC) campaign contributions. We find evidence that firms with greater potential payoffs from favorable policy and regulations lobby most actively, and that managers often utilize both lobbying and campaign contribution channels to influence the political climate affecting the firm. We also find that shareholders value the lobbying activities pursued by management on their behalf, particularly if the firm does not have a PAC that contributed to an election campaign. The results are robust to a number of tests designed to mitigate potential omitted‐variable and self‐selection bias.     

Nonprofit Lobbying: Museums and Collections Capitalization

This research examines the museum characteristics associated with lobbying on the 1990 FASB Exposure Draft (FASB, 1990) that would have required US museums to capitalize their collections. A sample of 103 museums that lobbied on the Exposure Draft is compared to a matched sample of museums that did not choose to lobby. The results reveal that museums which lobbied are larger, older, and members of or accredited by the American Association of Museums. Also, proportionately more private museums and art museums than exist in the overall US museum population chose to lobby on the proposed requirement.     

Lobbying for size and slice of the quota

International Tax and Public Finance - The formation and allocation of an emission quota are analyzed in a common agency framework with two stages. First, the principals lobby for the size of the...     

Professional Research,Lobbying and Intangibles: A Review Essay

The publication in January 1992 of The Valuation of Intangible Assets, a report by Arthur Andersen & Co., has again stimulated the ‘brands’ debate. The Report claims to present a range of valuation methods for intangibles that command a ‘consensus’ among preparers, and that overcome the problems of subjectivity, consistency, separability and relevance identified in earlier research into brand accounting. This paper argues that the concept of separability, upon which these claims depend, is far from clear. The Andersen Report also raises questions as to the nature of its appeal to consensus, the role of codification in determining accounting policy, and the status of professional ‘research’.     

The Financial and Operating Performance of Newly Privatized Firms: An International Empirical Analysis

This study compares the pre and postprivatization financial and operating performance of 61 companies from 18 countries and 32 industries that experience full or partial privatization through public share offerings during the period 1961 to 1990. Our results document strong performance improvements, achieved surprisingly without sacrificing employment security. Specifically, after being privatized, firms increase real sales, become more profitable, increase their capital investment spending, improve their operating efficiency, and increase their work forces. Furthermore, these companies significantly lower their debt levels and increase dividend payout. Finally, we document significant changes in the size and composition of corporate boards of directors after privatization.     

International Cross-Listing, Firm Performance, and Top Management Turnover: A Test of the Bonding Hypothesis

We examine a primary outcome of corporate governance, namely, the ability to identify and terminate poorly performing CEOs, to test the effectiveness of U.S. investor protections in improving the corporate governance of cross-listed firms. We find that firms from weak investor protection regimes that are cross-listed on a major U.S. Exchange are more likely to terminate poorly performing CEOs than non-cross-listed firms. Cross-listings on exchanges that do not require the adoption of stringent investor protections (OTC, private placements, and London listings) are not associated with a higher propensity to remove poorly performing CEOs.     

Real Earnings Management,Institutional Environment,and Future Operating Performance: An International Study

This paper investigates the association between firms' engagement in real activities manipulation (hereafter REM) on future firm performance in an international setting, and whether the association is conditional upon country-level institutional factor. Our inquiry is motivated by a paucity of research on the consequences of REM in an international setting. Using a large sample over the period of 2001 to 2015, we find that current-period REM is positively associated with future performance: a finding that is consistent with Gunny (2010) in the US. Importantly, we find that the positive performance effect is driven by firms operating in countries with strong institutional environments. Finally, we find that future operating performance improves when REM is undertaken by firms in strong institutional environments only during a non-economic crisis period, but not during an economic crisis period. The paper adds to the existing REM literature by showing a non-monotonic effect of REM on future performance that is conditional on the strength of a country's institution. We also contribute to the accounting information and crisis literature by documenting a time-variant effect of REM on future performance.     

Firm location and corporate debt

This study examines the influence of a firm’s geographical location on corporate debt and provides evidence that the higher cost of collecting information on firms distant from urban areas has significant implications on a wide array of corporate debt characteristics. We find that rural firms face higher debt yield spreads and attract smaller and less prestigious bank syndicates than urban firms. Rural firms attempt to reduce their informational disadvantage by relying more on relationship banking. Our results on the effect of location on corporate debt are robust to the inclusion of an extensive set of firm and issue characteristics.     

Partial Privatization and Firm Performance

Most privatization programs begin with a period of partial privatization in which only non‐controlling shares of firms are sold on the stock market. Since management control is not transferred to private owners it is widely contended that partial privatization has little impact. This perspective ignores the role that the stock market can play in monitoring and rewarding managerial performance even when the government remains the controlling owner. Using data on Indian state‐owned enterprises we find that partial privatization has a positive impact on profitability, productivity, and investment.     

Some Implications of Auditor and Client Lobbying Activities: A Comparative Analysis

This paper examines the degree to which auditor and client lobbying is related in a UK context. This may help to identify any linkage between the wealth of clients and auditors that is affected by accounting standards, as propounded in the ‘economic consequences’ literature. It also might have some implications for the independence question. Three tests are conducted to see if auditors tend to support the lobbying position of the majority, or the most financially influential, of their clients. The third test is also used to identify any evidence that the comments of smaller clients tend to follow the lead of their audit firms/professional advisors. Auditor and corporate client written submissions on 22 proposed accounting standards are included in the study. The analyses are conducted both at an aggregated and also at a disaggregated level. The results do not indicate that auditor and client collusion took place. In particular, the results are consistent with the view that auditors are independent of their clients. Some suggestions are made for further research.     

Firm dynamics and financial development

Using comprehensive firm-level datasets, this paper studies the impact of cross-country variation in financial market development on firms' financing choices and growth. In less financially developed economies, small firms grow faster and have lower leverage than large firms. As financial development improves, the growth difference between small and large firms shrinks, while the leverage difference rises. The paper then develops a quantitative model where financial frictions drive firm growth and debt financing through the availability of credit and default risk. The model explains the observed cross-country variations in firm size, leverage and growth in response to changes in financial frictions.     

企业业绩组合业绩差异与季报披露的时间选择--管理层信息披露的组合动机与信息操作

本文主要考察企业业绩组合、业绩差异与季报披露的时间选择之间的关系以及季报披露时间的信息内涵。实证研究显示,上年年报和一季度季报均为“好消息”,一季度每股收益、净资产收益率和主营业务利润率高的上市公司季报披露时间间隔大;上年年报为“好消息”而一季度季报为“坏消息”,上年年报为“坏消息”而一季度季报为“好消息”,上年年报和一季度季报均为“坏消息”,一季度每股收益比上年度高的上市公司季报披露时间间隔小。这可能是由于一季度季报和上年年报均要求在4月30日之前披露的特殊性,上市公司管理层在信息披露的过程中可能存在组合动机与信息操作行为,一季度季报披露的时间选择可能关键取决于上年年报和一季度季报披露的“好消息”或“坏消息”带来的积极影响或消极影响的组合与权衡。     

Capital Structure and Firm Efficiency

Abstract:  This paper investigates the relationship between firm efficiency and leverage. We consider both the effect of leverage on firm performance as well as the reverse causality relationship. In particular, we address the following questions: Does higher leverage lead to better firm performance? Does efficiency exert a significant effect on leverage over and above that of traditional financial measures of capital structure? Is the effect of efficiency on leverage similar across different capital structures? What is the signalling role of efficiency to creditors or investors? Using a sample of 12,240 New Zealand firms we find evidence supporting the theoretical predictions of the Jensen and Meckling (1976) agency cost model. Efficiency measured as the distance from the industry's 'best practice' production frontier is positively related to leverage over the entire range of observed data. The frontier is constructed using the non-parametric Data Envelopment Analysis (DEA) method. Using quantile regression analysis we show that the reverse causality effect of efficiency on leverage is positive at low to mid-leverage levels and negative at high leverage ratios. Firm size also has a non-monotonic effect on leverage: negative at low debt ratios and positive at mid to high debt ratios. The effect of tangibles and profitability on leverage is positive while intangibles and other assets are negatively related to leverage.     

Firm performance and mutual fund voting

We employ a new comprehensive proxy voting records database to investigate whether mutual funds consider prior firm performance when they vote on a diverse range of management- and shareholder-sponsored proposals relating to governance, compensation, and director election. We argue that prior firm performance plays a role in the monitoring effort of mutual funds as they fulfill their fiduciary duties. Results show that voting is related to prior firm performance for selected management and shareholder proposals and that it is consistent with Institutional Shareholder Services’ recommendations. Mutual funds support management (shareholder) proposals less (more) when prior firm performance has been weak. Furthermore, even when mutual funds deviate from their fund family’s voting policies, they attach importance to prior firm performance, and their voting is, to a certain degree, affected by business ties.