How Important are Earnings Announcements as an Information Source?

In a competitive information market, a single information source can only dominate other sources individually, not collectively. We explore whether earnings announcements constitute such a dominant source using Ball and Shivakumar's (2008) [How much new information is there in earnings?, Journal of Accounting Research, 2008, 46(5), pp. 975–1016] R ² metric: the proportion of the variation in annual returns explained by the four quarterly earnings announcement returns. We find that the earnings announcement days' R ² is 11% – higher than the corresponding R ² of days with dividend announcements, management forecasts, preannouncements, and 10-K and 10-Q filings and their amendments, and comparable to that of the four days with the largest realised absolute returns in a year. Additional analysis reveals that earnings announcements convey extreme bad news as often as management forecasts and preannouncements; for any other type of news, earnings announcements are much more frequent. We conclude that earnings announcements are an important source of new information in the equity market.     

Vietnam in transition: SMEs and the necessitating environment for entrepreneurship development

A transitional economy has been characterized as experiencing a large amount of economic and social change. SMEs can be considered as the vehicle for entrepreneurship development in such a context. The purpose of this paper is to further the investigation of the favourability of the transitional environment on SMEs and entrepreneurship in Vietnam. Using a new approach, we analyse the transitional economy discourse via examining government policies, international organization reports and academic articles on Vietnam. Our findings suggest that, in Vietnam, compared to an overall normative framework developed from a wide literature review, the settings generally support a vibrant transitional entrepreneurship development and SMEs. However, more needs to be done to build up favourable sociocultural setting and effective business support systems in the country. Implications for the relevant stakeholders and suggestions for future research in the East Asian and Central and Eastern Europe regions are also provided.     

How foreign direct investment promote institutional quality: Evidence from Vietnam

Using a unique dataset from a provincial competitiveness survey and the rising foreign direct investment (FDI) from joining the World Trade Organization (WTO), I find that variations in economic institutions across the provinces of Vietnam are associated with the flow of foreign investment. To overcome endogeneity problems, I use the minimum distance from each province to a main economic centre as an instrument for foreign investment inflows. The instrumental variable approach shows that the direction of influence is from greater foreign investment to better institutions. These results hold after controlling for various additional covariates, and are also robust to various alternative measures of institutions. I also find that foreign direct investment has greater short-term impacts on institutional quality in the northern provinces.     

Strategic Human Resource Management as Ethical Stewardship

The research about strategic human resource management (SHRM) has suggested that human resource professionals (HRPs) have the opportunity to play a greater role in contributing to organizational success if they are effective in developing systems and policies aligned with the organization??s values, goals, and mission. We suggest that HRPs need to raise the standard of their performance and that the competitive demands of the modern economic environment create implicit ethical duties that HRPs owe to their organizations. We define ethical stewardship as a model of governance that honors obligations due to the many stakeholders and that maximizes long-term organizational wealth creation. We propose that if HRPs adopt an ethical stewardship framework and the qualities of transformative leaders, they will be more aware of their ethical duties to their organizations and more effective in helping their organizations to create increased wealth, achieve desired organizational outcomes, and establish work environments that are more satisfying to employees.     

Stock-market efficiency in thin-trading markets: the case of the Vietnamese stock market

This article reviews developments in the Stock Trading Centre (STC) in Ho Chi Minh City, Vietnam, the main stock market in the country, since its start in 2000. It presents information about developments in the number of stocks traded, trading activity and stock-price developments. This article focuses on the question whether the market is weak-form efficient. An important element of the investigation concerns the possible bias of the results caused by the thin trading that characterizes the STC. Stock-market returns are corrected for this. The main conclusion is that the STC is not efficient in the weak form.     

Optimal financial contracts with hidden effort,unobservable profits and endogenous costs of effort

This paper studies financial contracting in a two-period financing model with double moral hazard, as entrepreneurial effort choices and profits are unobservable and non-verifiable. The optimal financial contract must induce both the high effort level and truthful revelation of profits. The paper further analyses the structure of the optimal contract where the entrepreneur's payoff takes a general functional form that allows for endogenously determined costs of effort. The entrepreneur's performance is influenced by not only extrinsic work motivation factors but also intrinsic factors so that the degree of control imposed by the investor, in the form of end-of-period transfers, affects the entrepreneur's costs of effort. The finding shows that under well-defined conditions, the optimal contract that solves a model with non-verifiable profits also elicits effort, and generally resembles a simple debt contract. The structure of the optimal contract is robust in the general case where the entrepreneur's payoff function is non-linear in transfers.     

Post earnings announcement drift and the roles of drift-enhanced factors in New Zealand

This study examines the profitability of trading on analyst forecast-based earnings surprises during the post announcement period in the New Zealand stock market over the period 1994 to 2008. The results show that a post earnings announcement drift (PEAD) anomaly exists in the New Zealand equity market. A hedge strategy of going long the top quintile of earnings surprise stocks and short the bottom quintile of earnings surprise stocks can generate more than 6% excess return in the 60 days following the earnings announcement. I further test the association between PEAD and several control variables and find that PEAD is increasing in 1) earnings surprise defined relative to past earnings, and 2) the level of arbitrage risk. Interestingly, I do not find evidence of a positive relation between PEAD and revenue surprise after controlling for earnings surprise as documented in the United States (Jegadeesh and Livnat, 2006). There is also no evidence that the 2002 Disclosure Reform in the New Zealand Stock Exchange reduced the magnitude of PEAD.     

An Empirical Study of Business-to-Business Electronic Marketplace Usage: The Impact of Buyers' E-Readiness

This study addresses critical questions regarding the extent of business-to-business electronic marketplace usage for purchasing, and the degree and impact of buyers' e-readiness on the range of electronic marketplace usage. The data from a Web-based survey of 359 purchasing professionals in the United States suggests that buyers with more experience in using information technology, the Internet to facilitate purchasing, and information systems for enhancing supply chain management would more likely use electronic marketplaces for purchasing. This study has significant theoretical implications because it confirms the important role of e-readiness in the electronic marketplace usage model. The practical implications of this study are also discussed.     

The Gambler,the Carrots,and the Cook: A Critical Evaluation of Investment Potential in the Vietnamese Software Industry

The Vietnamese software industry has shown substantial development in recent years. On the basis of interviews with informed respondents this article investigates the condition and potential for further development of the industry, using a soft systems approach. Finegold's eco-system model is used to build a model of the industry. Partnerships and networks are identified as important factors in industry evolution, with the key role played by venture capital. Furthermore, the Vietnamese government and its institutions will continue to have a significant influence on the industry.