Should banks diversify or focus? Know thyself: The role of abilities

The paper investigates whether diversification/focus across assets, industries and borrowers affects bank performance when banks’ abilities (screening and monitoring) are considered. The initial results show that diversification (focus) at the asset, industry and borrower levels is expected to decrease (increase) returns. However, once banks’ screening and monitoring abilities are controlled for, the effect of diversification/focus either gets weaker or disappears. Further, in some cases, these abilities enhance banks’ long-run performance, but in others they prove to be costly, at least, in the short run. Thus, the level of monitoring and screening abilities should be taken into consideration in understanding, planning and implementing diversification/focus strategies.     

Usability Problem Areas on Key International and Key Arab E-commerce Websites

This research aims to identify, compare, and contrast the usability of key international e-commerce websites with those in the Arab world, and to offer advice on how to remedy the usability problems on the latter to make them more competitive. Heuristic evaluations were undertaken on three international e-commerce websites and four comparable Arab e-commerce websites. Major and minor problems were identified and rated on each of the sites before being categorized into problem areas. As expected, more major and minor usability problems were identified on the Arab e-commerce websites (average of 22 and 85 per site, respectively) compared to the key international e-commerce websites (average of 12 and 55 per site, respectively). Most problems with both the international and Arab e-commerce websites were related to content and design usability areas, respectively. A variety of unique usability problems were found on the Arab e-commerce websites.     

Gender Differences in Financial Reporting Decision Making: Evidence from Accounting Conservatism

This paper investigates the effect of CFO gender on corporate financial reporting decision making. Focusing on firms that experience changes of CFO from male to female, the paper compares the firms' degree of accounting conservatism between pre‐ and post‐transition periods. We find that female CFOs are more conservative in their financial reporting. In addition, we find that the relation between CFO gender and conservatism varies with the level of various firm risks, including litigation risk, default risk, systematic risk, and CFO‐specific risk such as job security risk. We further find that the risk aversion of female CFOs is associated with less equity‐based compensation, lower firm risk, a higher tangibility level, and a lower dividend payout level. Overall, the study provides strong support for the notion that female CFOs are more risk averse than male CFOs, which leads female CFOs to adopt more conservative financial reporting policies.     

The Government’s Role in Government-owned Banks

In this study, we reinvestigate the question of whether government banks are inferior to private banks. We use cross country data from 1993 to 2007 to trace the different types of government banks. These types comprise banks that acquire distressed banks, normal banks, or no banks at all. Contrary to common belief, the evidence shows that unless government banks are required to purchase a distressed bank because of political factors (the government’s role), their performances are at par with that of private banks. This fact particularly holds true in countries with poor records on political rights and governance.     

The Role of Middle Class in Economic Development: What Do Cross‐Country Data Show?

This paper investigates the channels through which the middle class may matter for consumption growth. Using several different middle‐class measures and a panel of 105 developing countries spanning the period 1985–2013, we find that a larger middle class influences consumption growth primarily through higher levels of human capital accumulation. There is also a significant direct effect of middle‐class size on consumption growth, which is more pronounced in the latter half of the sample, the 2000–2013 period.     

Auditor-provided tax services and stock price crash risk

This paper examines whether auditor-provided tax services affect stock price crash risk: an important consideration for stock investors. Provision of tax services by incumbent auditors could accentuate or attenuate crash risk depending on whether such services give rise to knowledge spillover or impair auditor independence. The study investigates two channels through which tax services might affect crash risk: earnings management in tax expenses and tax avoidance. Also examined is whether the association between tax services and crash risk is moderated by the particular business strategy that organizations pursue. A two-stage model is used to control for the potential endogeneity inherent in the selection of auditors for tax services. Empirical findings reveal that auditor-provided tax services attenuate crash risk by constraining both earnings management in tax expenses and tax avoidance. Further evidence shows that auditor-provided tax services reduce crash risk for firms following innovator business strategies. Taken together, empirical findings reported in this study support knowledge spillover benefits, that is, insights gained from tax services can enhance audit effectiveness.     

A general equilibrium investigation of handguns,cops and robbers

We study a general equilibrium environment in which the only activity of interest is armed robbery. Agents choose to be citizens or robbers, and to purchase handguns or not. By arming, citizens can protect themselves from robbery. The government chooses the intensity of police efforts to arrest would-be robbers and to arrest citizens who arm for self-defense. Properties of an equilibrium are characterized and comparative statics results are obtained. We then show why empirical work that examines variations in “shall issue” laws could lead to wrong conclusions. Our analysis produces counterexamples to the following propositions: raising the arrest rate of robbers reduces crime; increasing the arrest rate of armed citizens reduces the number of armed citizens (crime rate, gun death rate). We thank V. V. Chari, John Kareken, Ross Levine, Andy McLennan, Raj Singh, David Smith, and an anonymous referee for helpful comments.     

Religiosity as a source of influence on work engagement: a study of the Malaysian Finance industry

Abstract

The majority of work engagement studies have been conducted using a quantitative approach with limited attention to the institutional and social contexts. Meanwhile, the role of religion in shaping people’s philosophy and behaviour in life and work has been gaining attention from management researchers. Studies have revealed the positive impact of religiosity on a number of human resources and organizational outcomes. However, few studies treat religious belief as a job or personal resource from a HRM perspective. This study fills part of this research gap by focusing on the relevant factors that may affect work engagement in the Malaysian Islamic context. Drawing on data from 41 semi-structured interviews with mid-ranking professionals from the finance sector, this study responds to calls for more focus on contexts and for deeper qualitative investigations into individual dynamics that concern religiosity and work engagement. It provides evidence that religiosity plays an important role in work engagement. Our findings have implications for people management in organizations that have a diverse workforce representing multiple religions.     

Suspension of payments, bank failures, and the nonbank public's losses

We present evidence on the effects of suspensions of payments from an episode that is close to a controlled experiment for examining those effects. In 1861, about 44% of the banks in Wisconsin closed, 81% of the banks in Illinois closed, and noteholders suffered substantial losses. The historical record suggests that an effective suspension of payments in Wisconsin but not in Illinois may explain the difference. Our statistical evidence indicates that the suspension of payments increased the probability of a bank remaining open by about 21 percentage points and decreased noteholders’ losses by about 14 cents per dollar.     

Effect of guideline implementation on costs of hand hygiene

Hands of health care personnel frequently serve as vectors for the transmission of organisms between patients and are also a major reservoir for pathogens with antimicrobial resistance. Hand hygiene is one effective strategy to reduce health care associated infections. The purposes of this study were to (a) compare the costs of hand hygiene in hospitals with high and low hand hygiene compliance as well as high and low frequency of alcohol hand rub use; and (b) examine associations between hospital characteristics and hand hygiene compliance as well as frequency of alcohol hand rub use. Nursing and health care policy leaders should look for ways to promote sustained adherence to hand hygiene recommendations.