Value relevance of earnings: Evidence from Middle Eastern and North African Countries

Researchers as well as regulators are increasingly more interested in enhancing their understanding of the factors that influence value relevance of reported earnings in financial statements. In the light of globalization and increased exposure to international accounting practices, a better comprehension of factors contributing to or reducing value relevance of earnings is essential. This paper investigates the value relevance of earnings and its components for a number of Middle Eastern and North African (MENA) countries. Additionally, the paper examines how differences in levels of mandated disclosures, source of accounting standards, and legal systems moderate the informativeness of earnings to investors. We find that mandated disclosure and source of accounting standard, (especially non-governmental source) are positively associated with earnings informativeness. Additionally, MENA countries with French civil law and systems have lower value relevance relative to countries in our sample with English and related legal codes. Further, the firms that have adopted international financial reporting standards have higher value relevance than firms in MENA countries which adhere to local standards.     

Russian Roulette at the Trade Table: A Specific Factors CGE Analysis of an Agri‐food Import Ban

In the summer of 2014 Russia imposed a ban on most agri‐food products from countries enforcing Ukraine‐related sanctions against Russia. We use a specific factors computable general equilibrium (CGE) model to simulate the short‐run impact of this retaliatory policy. The baseline is carefully designed to isolate the impacts of the ban on the European Union (EU), Russia itself and a selection of key trade partners. The modelling of the ban follows a novel approach, where it is treated as a loss of established trade preferences via reductions in consumer utility in the Armington import function. Not surprisingly, the results indicate that Russia bears the highest income loss (about €3.4 billion) while the EU recovers part of its lost trade through expansion of exports to other markets. An ex‐post comparison between simulation results and observed trade data reveals the model predictions to be broadly accurate, thereby validating the robustness of the modelling approach.     

Political Uncertainty and Bank Loan Contracts: Does Government Quality Matter?

Journal of Financial Services Research - We investigate the relation between political uncertainty and bank loan spreads using a sample of loan contracts for the G20 firms during the period from...     

Did you really take a hit? Understanding how video games playing affects individuals

This study addresses the important and recurring question of whether playing video games is detrimental to the socio-economic development of a person. It does this by using novel data from the Taking Part Survey in England to establish whether games playing is associated with particular socio-economic characteristics and/or other forms of cultural participation. The results do not indicate any obviously negative effects of video games playing: rather, those who play are typically better educated and no less wealthier, and games players are also more likely than non-games players to participate in other forms of culture, particularly active forms of participation. These findings are reinforced when comparing the characteristics of individuals who did and did not play video games when younger.     

Corporate social responsibility performance,financial distress and firm life cycle: evidence from Australia

This study examines the association between corporate social responsibility (CSR) performance and financial distress and additionally the moderating impact of firm life cycle stages on that association. Based on a sample of 651 publicly listed Australian firm‐years’ data covering the 2007–2013 period, our regression results show that positive CSR activity significantly reduces financial distress of the firm. In addition, the negative association between positive CSR performance and financial distress is more pronounced for firms in mature life cycle stages. Our results are robust to alternative proxy measures of financial distress, CSR performance and life cycle stages.     

Business Strategy and Labor Investment Efficiency*

This paper examines the relation between business strategy and labor investment efficiency. Since business strategy affects both the agency problem and firm‐level uncertainty, as well as the overall shape of corporate behavior, we would expect the efficiency of labor investment to vary with the particular business strategy a firm pursues. Using a large sample of US data, we find that firms having a prospector‐type business strategy are associated with inefficient labor investment, while those having a defender‐type business strategy are associated with efficient labor investment. We provide evidence that uncertainty, rather than the agency problem, causes prospector‐type firms to exhibit inefficient labor investment. Finally, we document that inefficient labor investment by prospectors leads to relatively low profitability in subsequent periods. These findings are robust when subjected to a series of sensitivity tests.     

Do Asian Countries Upgrade in Global Value Chains? A Novel Approach and Empirical Evidence

This paper examines the move into upstream and downstream global value chain (GVC) activities by 11 Asian countries. We use international input–output tables in combination with employment data and measure the number of workers in each country involved in manufactures GVC. Jobs are classified by business function based on occupational information, such as R&D, fabrication, logistics, sales and marketing. In most Asian countries, we find a faster employment increase in R&D and other support services relative to fabrication activities between 2000 and 2011. However, the participation in GVC and the pace of upgrading appears to differ substantially across Asian countries. We use a structural decomposition method to explore the role of trade, consumption and technological change in accounting for changes in countries' involvement in GVC.     

Business strategies and annual report readability

This study investigates the association between firm-level business strategy and the readability of narrative disclosures in annual reports. As business strategy affects the information environment and financial performance of firms, we expect the readability of narrative disclosures to vary with the particular business strategy that a firm pursues. In accord with this expectation, we find that firms with prospector-type business strategies produce less readable narratives, while those with defender-type business strategies produce more readable narratives. We also document that the association between strategy and readability is partially mediated by organisational performance, although the mediation effect is rather modest. These findings are robust when subjected to a series of sensitivity tests.     

‘All you need is brand love’: a critical review and comprehensive conceptual framework for brand love

ABSTRACT

Brand love has received increasing attention given its potential to enhance customer engagement, brand advocacy, commitment and loyalty. Despite its relevance, few studies explore brand love per se, and existing conceptualisations remain sporadic and fragmented. The purpose of the current paper is to critically assess available work on brand love, reviewing conceptualisations, measurements and key proximal constructs. Expanding upon and synthesising earlier work and conceptualisations, we develop and propose a comprehensive conceptual framework for brand love that is innovative for the following reasons. In particular, our model takes a developmental rather than a snapshot approach to capture brand love trajectories as a function of their onset and evolution; incorporates key frameworks and as such builds on interpersonal, parasocial and experiential theories; and acknowledges the important role of brand hate. Managerial implications and future research directions are discussed.     

Cost efficiency in Bangladesh banking: does financial reform matter?

This article estimates the cost efficiency of the commercial banks of Bangladesh in the context of financial reform. Employing the single-stage stochastic frontier analysis (SFA) model, the study uses a unique balanced panel data set comprising bank-level annual data from the dominant commercial banks in Bangladesh for the period 1983–2012. The results show that bank cost has fallen due to financial deregulation. Our results from the data envelopment analysis do not vary significantly that we obtained from the SFA. In addition, the presence of politically linked directors on the bank board has an adverse effect on efficiency. These findings suggest that further reforms aiming at removing all sorts of political influence should continue to ensure competitive environment in order to achieve cost efficiency in the financial sector of the country.