Strategic Conservative Earnings Management of Technology Firms: Evidence from the IPO Market

In this paper, we investigate the conservative earnings management strategies of technology firms in the IPO market. We hypothesize that technology IPOs, due to their fewer tangible assets, more information asymmetry, and higher uncertainties of future cash flows, tend to have higher litigation risk. At equilibrium, technology firms are more motivated to strategically employ conservative earnings management during the IPO process, to mitigate their higher litigation risk. Using a sample of U.S. IPOs, we find that technology IPOs, on average, involve significantly more conservative earnings management, especially during the bubble periods. Our results also show that the conservative earnings management strategies of technology firms tends to have a greater impact on their underpricing than for non‐tech firms, and thus effectively reduce their risk of being a target in the securities class action lawsuits.     

中国海外投资热点解析

你一定会认为,富油国尼日利亚的统治者近来不会太高兴。永无休止的游击战困扰着这个国家,令它的石油产量降到潜在产能的2／3。但现在,尼日利亚又在颁发它最高产的几个油田的开采许可证了。     

固定资产投资项目绩效审计评价指标体系构建——基于中国经验的实证研究

固定资产投资项目绩效审计评价,不仅是评价审计质量的尺度,同时关系着国家固定资产投资监管的效果。本文在现有研究基础上进行了深入实地调研,并依据固定资产投资绩效审计评价指标选取的原则,构建了投资绩效审计评价指标初始变量,并经过问卷预测试和先导测试,确立了15个指标变量。以来自国家审计机关、会计师事务所、高校、科研机构的244份有效问卷为样本进行了交叉实证检验,对其中109份问卷进行探索性因子分析,将固定资产投资项目绩效审计评价指标归为四个维度,构建了评价模型,并对另外135份问卷做验证性因子,实证结果表明所设计的评价指标具有良好信度和效度,评价模型具有较好拟合优度,在某种程度上具有一定的使用价值和推广价值。     

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.     

Strategic hybrid orientation between market orientation and brand orientation: guiding principles

Strategic orientations underpin the firm’s managerial decisions and influence its performance. Firms can combine multiple strategic orientations to achieve superior performance. Market orientation and brand orientation are well-developed, separate, strategic approaches. A 2013 study conceptually proposed a strategic hybrid orientation comprising two types: (a) market and brand orientation and (b) brand and market orientation. The current study is qualitative, using small-to-medium enterprises to investigate strategic hybrid orientations. Through propositions, the paper explains the theory and processes underlying the two hybrid orientation types. The propositions form the guiding principles for the strategic management of the hybrid orientation. The implications for managerial practice show that quite different capabilities apply to the execution of each strategic hybrid type.     

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 Impact of Earnings Guidance Cessation on Information Asymmetry

This paper studies the impact of quarterly earnings guidance cessation on information asymmetry using a large sample of firms during the years 2002–11. After earnings guidance cessation, information asymmetry may increase because less information is provided to the market. Alternatively, information asymmetry may decrease if managers have less pressure to manage reported earnings to meet guidance numbers. Our study shows guidance cessation significantly reduces information asymmetry compared to matched non‐guiders and guidance maintainers. We also find that firms engage in less earnings management after guidance cessation, especially for firms that had provided guidance on a persistent basis.     

The National Football League season wins total betting market: The impact of heuristics on behavior

Sports and racetrack betting markets have been investigated by researchers for more than 50 years. Many authors have argued that the observed biases and inefficiencies in these markets are a consequence of bettors incorrectly assessing the objective probabilities that favorites or underdogs will win. This article is the first examination of the National Football League season wins total over/under betting market where the designations of favorite and longshot do not apply. The market is found to be highly inefficient, providing several opportunities for profitable wagering. We believe these inefficiencies are a consequence of the representativeness heuristic. Most significantly, there is evidence that bettors, when considering teams with strong records in the previous season, overreact to historical performance and fail to recognize the statistical phenomenon of regression to the mean.     

Millennials and the Gender Wage Gap in the U.S.: A Cross-Cohort Comparison of Young Workers Born in the 1960s and the 1980s

Using two cohorts of young workers born in the early 1960s and early 1980s, this paper analyzes the temporal change in the U.S. gender wage gap and its determinants, which persists for both explained and unexplained reasons. Results suggest that the gender wage gap closed four (seven) percentage points at the mean (median) between cohorts. It finds cross-cohort evidence that young females’ increasing returns to marriage and a changing occupational wage structure contributed to a narrowing of the gap. Nonetheless, the majority of this convergence remains unexplained due to relative improvements in unobservable institutional factors or heterogeneity for females. Compared to the previous generation, millennials likely entered a more progressive, female-friendly labor market. It is also possible that female millennials are more ambitious and competitive in their early years of work experience relative to females born in the 1960s.