School of Accounting, Finance and Economics

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  • ItemEmbargo
    Impacts of disease pandemics on corporate cash holdings: Evidence from US firms
    (now publishers, 2024-06-14) Lartey, Theophilus; Danso, Albert; Uddin, Moshfique; Boateng, Agyenim
    Pandemic disease outbreaks generate economic disruptions and impact on liquidity needs of firms. However, how pandemics affect liquidity management policies of firms has received relatively little attention. In this study, we examine whether U.S. firms hold more cash during disease pandemics. We find that U.S. firms increase their cash holdings in response to high disease pandemic exposure. The increase is more pronounced for firms that are small, young, or highly exposed to the uncertainty through their greater reliance on government spending. However, expected cash holdings decrease significantly for firms with male CEOs, or more able (or specialist) CEOs who possess more specific rather than general knowledge of their business to make better judgements. In particular, holding more cash in the presence of high disease uncertainty alleviates the negative impact of disease pandemics on capital investment and corporate payout targets. Our findings demonstrate that cash holdings represent a vital channel in mitigating the negative effect of disease pandemics on firm strategic outcomes.
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    Reliability of the audit committee in weak institutional environments: Evidence from Nigeria
    (2024) Ashiru, Folajimi; Adegbite, Emmanuel; Frecknall-Hughes, Jane; Daodu, Olabisi
    Relying on institutional theory, this article presents external stakeholders’ perspectives on the factors that influence audit committees’ independence and reliability in a weak institutional context. We conducted 37 semi-structured interviews with two critical external stakeholder groups (27 experienced professional investors and 10 senior regulatory officials) in the Nigerian banking sector. Our study finds that the independence of audit committee members, being an ‘a posteriori’ rather than an ‘a priori’ accountability verification, bears institutional contextual bias. Consequently, we unpack five factors (allegiance to the dominant owner; poor professional conduct; corruption; nepotism and opportunism; and impunity) that influence external stakeholders’ perception of the reliability of the audit committee’s independence in Nigeria.
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    Social networks, empowerment, and wellbeing among Syrian refugee and Jordanian women: Implications for development and social inclusion
    (Elsevier, 2023-06-28) Eggerman, Jannik J.; Dajani, Rana; Kumar, Praveen; Chui, Susanna L. M.; Qtaishat, Lina; Kharouf, Amal El; Panter-Brick, Catherine
    In response to large-scale refugee crises, frameworks for development assistance have promoted women’s empowerment, wellbeing, and social inclusion. A productive research agenda lies in analyzing social networks: it is unknown how women structure their social ties within refugee and host communities, and whether social networks matter for their sense of empowerment and wellbeing. In 2022, we surveyed Syrian refugee (n = 106) and Jordanian (n = 109) women from poor households across five neighborhoods in Amman. We implemented a standard network survey instrument (PERSNET) to assess network structure and composition. We tested associations with six measures (PE, MRS, MTL, Cantril, PWB, MSPSS) of psychological empowerment and wellbeing. We then conducted participatory network mapping (Net-Map) to assess local meanings of empowerment and visually map the pathways between social actors, community-based work, and psychological outcomes. Survey data show that networks were highly homogeneous, smaller for Syrians than Jordanians (p = 0.0001), and smaller for women in very poor households (p < 0.0001). As network size increased, so did levels of psychological empowerment (p = 0.02), motivation to lead (p = 0.007) and perceived social support (p = 0.001). Notably, as networks became increasingly kin-based, empowerment levels decreased (p = 0.003). Networks were more diverse for community volunteers, who named fewer female, married, and kin-based peers (p ≤ 0.05), and reported higher levels of resourcefulness (p = 0.01) and psychological wellbeing (p = 0.002). Qualitative data show that women, who described empowerment as “ability” and “proof of existence,” drew upon volunteering work to diversify their networks outside the home. Such evidence matters for development initiatives that build programs for women to work, learn, and socially interact. We conclude that expanding opportunities for volunteer work is one way of diversifying social networks and empowering urban poor women. Our research helps better understand how women can be supported to diversify their social ties, take community leadership roles, and respond to social change.
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    International differences in employee silence motives: Scale validation, prevalence, and relationships with culture characteristics across 33 countries
    (Wiley, 2021-05-04) Knoll, Michael; Götz, Martin; Adriasola, Elisa; Al‐Atwi, Amer Ali; Arenas, Alicia; Atitsogbe, Kokou A.; Barrett, Stephen; Bhattacharjee, Anindo; Blanco, Norman D.; Bogilović, Sabina; Bollmann, Grégoire; Bosak, Janine; Bulut, Cagri; Carter, Madeline; Černe, Matej; Chui, Susanna L. M.; Di Marco, Donatella; Duden, Gesa S.; Elsey, Vicki; Fujimura, Makoto; Gatti, Paola; Ghislieri, Chiara; Giessner, Steffen R.; Hino, Kenta; Hofmans, Joeri; Jønsson, Thomas S.; Kazimna, Pazambadi; Lowe, Kevin B.; Malagón, Juliana; Mohebbi, Hassan; Montgomery, Anthony; Monzani, Lucas; Pieterse, Anne Nederveen; Ngoma, Muhammed; Ozeren, Emir; O'Shea, Deirdre; Ottsen, Christina Lundsgaard; Pickett, Jennifer; Anna A. Rangkuti; Retowski, Sylwiusz; Ardabili, Farzad Sattari; Shaukat, Razia; Silva, Silvia A.; Šimunić, Ana; Steffens, Niklas K.; Sultanova, Faniya; Szücs, Daria; Tavares, Susana M.; Tipandjan, Arun; van Dick, Rolf; Vasiljevic, Dimitri; Wong, Sut I.; Zacher, Hannes
    Employee silence, the withholding of work-related ideas, questions, or concerns from someone who could effect change, has been proposed to hamper individual and collective learning as well as the detection of errors and unethical behaviors in many areas of the world. To facilitate cross-cultural research, we validated an instrument measuring four employee silence motives (i.e., silence based on fear, resignation, prosocial, and selfish motives) in 21 languages. Across 33 countries (N = 8,222) representing diverse cultural clusters, the instrument shows good psychometric properties (i.e., internal reliabilities, factor structure, and measurement invariance). Results further revealed similarities and differences in the prevalence of silence motives between countries, but did not necessarily support cultural stereotypes. To explore the role of culture for silence, we examined relationships of silence motives with the societal practices cultural dimensions from the GLOBE Program. We found relationships between silence motives and power distance, institutional collectivism, and uncertainty avoidance. Overall, the findings suggest that relationships between silence and cultural dimensions are more complex than commonly assumed. We discuss the explanatory power of nations as (cultural) units of analysis, our social scientific approach, the predictive value of cultural dimensions, and opportunities to extend silence research geographically, methodologically, and conceptually.
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    The impact of export VAT rebates on firm productivity: Evidence from China
    (Wiley, 2020-12-14) Tang, Baoqing; Gao, Bo; Ma, Jing
    This paper studies the impact of export VAT rebates on firm productivity with Chinese firm-product-level data. We find that higher VAT rebates significantly raise firm productivity. The results are robust to various estimations of firm productivity. Moreover, this paper finds that the impact of export VAT rebates on firm productivity is significantly different across firms and sectors. More specifically, our results suggest that the impact is mainly driven by firms with small export intensive margins and large export extensive margins, new exporters, financially constrained firms and low-productivity firms. Furthermore, in high-tech sectors, the impact is significantly large with a one percentage point increase of the firm rate of VAT rebates nearly raising firm productivity by 6%.
  • ItemOpen Access
    CEO tenure and cost of debt
    (Springer, 2022-06-21) Owusu, Andrews; Kwabi, Frank; Ezeani, Ernest; Owusu-Mensah, Ruth
    In this study, we investigate the relationship between CEO tenure and cost of debt. Using a sample of the FTSE All-Share Index firms listed on the London Stock Exchange for the period 2009 to 2018 and the ordinary least squares regression (OLS) estimation method, we find that cost of debt is higher for firms with CEOs in their early tenure in office than those in their later tenure in office. Further analysis shows that board independence attributes including (1) the proportion of independent directors on the board, (2) full (100 per cent) independent audit committee members, and (3) a lead independent director representation on the board interact with CEO early tenure in office to reduce cost of debt due to the board’s effective monitoring ability when the CEO is new and risk-seeking. Our study extends CEO tenure and corporate outcomes in general and in particular CEO risk-taking incentives and cost of debt literature, and has important implications for firms seeking to raise finance from the debt market when their CEO is new as well as identifying the control mechanisms that they need to put in place to lower the cost of debt.
  • ItemOpen Access
    COVID-19 and credit risk variation across banks: International insights
    (Wiley, 2024-05-26) Acheampong, Albert; Ibeji, Ngozi; Danso, Albert
    This paper focuses on utilizing non-performing loans (NPLs) as the primary indicator of credit risk to analyze how various bank and country-level characteristics influence changes in credit risk within and between banks across China, Europe, and the U.S. during the COVID-19 period. Over 4959 bank-quarter observations (from Q4 2019 to Q4 2021), it becomes evident that COVID-19 significantly contributes to the variation in NPLs, underscoring its adverse impact on credit risk. This pattern is consistent across all countries; however, Chinese banks exhibit more robust capabilities in managing credit risk exposure compared to their European and U.S. counterparts. These findings offer significant implications for policymakers, investors, and regulators who are concerned about the repercussions of global pandemics on financial institutions.
  • ItemOpen Access
    A classroom market experiment: Data and reflections
    (2024-06-02) Cartwright, Edward; Cartwright, Anna
    In this article, the authors analyze data accumulated over 10+ years of teaching market interaction using a simple classroom experiment. The experiment is designed to teach first-year undergraduate students the basics of supply and demand and market efficiency. In total, they analyze data from 85 teaching sessions and 243 individual markets. They find that traded prices typically (90% of the time) move in accordance with market equilibrium comparative statics. They also find that average traded prices are rarely (5% of the time) consistent with market equilibrium but typically (70% of the time) “close” to the equilibrium. The traded quantity is often (60% of the time) more than equilibrium, which results in a loss of efficiency. The law of one price is strongly rejected.
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    Board Demographic, Cognitive Diversity and Firm Performance: A Quantile Regression Approach
    (World Scientific Publishing Company, 2024-05-30) Wang, Yan; Demiralay, Sercan; Babajide, Bola
    This chapter examines the implications of board demographic diversity (e.g., gender, age) and cognitive diversity (e.g., education and financial background) on performance of tourism firms using a novel quantile regression method. Using a sample of the tourism companies listed on the Shanghai and Shenzhen stock exchanges between 2010 and 2019, we find that gender diversity is associated with tourism performance using the quantile regression method. Our results suggest that board representation of women has a greater positive impact on tourism performance in good-performing firms (average or above average) compared to poor-performing firms. Further, age and educational diversity have a positive association with firm performance and the impacts are greater on good-performing firms compared to poor-performing firms. Finally, financial background diversity is negatively and significantly associated with firm performance, but the relationship is nonlinear. Overall, our evidence indicates that the impact of board demographic and cognitive diversity is not constant along the quantiles of firm performance distribution
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    Column Generation based solution for Bi-objective Gate Assignment Problems
    (Springer, 2024-04-29) Das, Gulesin Sena; Gzara, Fatma
    In this paper, we present a column generation-based algorithm for the bi-objective gate assignment problem (GAP) to generate gate schedules that minimize squared slack time at the gates while satisfying passenger expectations by minimizing their walking distance. While most of the literature focuses on heuristic or metaheuristic solutions for the bi-objective GAP, we propose flow-based and column-based models that lead to exact or near optimal solution approaches. The developed algorithm calculates a set of solutions to approximate the Pareto front. The algorithm is applied to the over-constrained GAP where gates are a limited resource and it is not possible to serve every flight using a gate. Our test cases are based on real data from an international airport and include various instances with flight-to-gate ratios between 23.9 and 34.7. Numerical results reveal that a set of solutions representing a compromise between the passenger-oriented and robustness-oriented objectives may be obtained with a tight optimality gap and within reasonable computational time even for these difficult problems.
  • ItemOpen Access
    Structural changes in contagion channels: the impact of COVID-19 on the Italian electricity market
    (Springer, 2024-03-15) Ahelegbey, Daniel Felix; Casarin, Roberto; Fianu, Emmanuel; Grossi, Luigi
    Operating on electricity markets requires accurately identifying, quantifying, and measuring risk coupled with their corresponding return: this appears as a crucial point, particularly during and after the COVID-19 pandemic. The aim of the present paper is twofold. First, we propose a novel econometric approach to identifying relevant market factors that capture several elements of the risk transmission mechanism inherent in energy systems. The proposed model extends Bayesian graphical models with change points to a multiple-layer set-up. Multilayer graphs encompass the two relevant channels of shock transmission: volatility and price contagion effects. The choice of these two layers seems natural because electricity 2 prices and their spiky nature, coupled with inherent volatility, constitute essential influential elements for market players to maximize their profits. The change-point specification allows for detecting relevant changes in the electricity market. Second, we apply the proposed econometric framework to the Italian zonal markets analyzing the effects of returns and volatility contagion in several periods detected by the model. The last time intervals identified by the change-point methodology overlap the COVID-19 pandemic period. The model captures relevant abrupt changes in prices and volatility in the zonal electricity market and provides new evidence of interconnections in the zones of the Italian market related to the risk alone, price process alone, and risk versus price process relationship and their interactions.
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    The impact of political uncertainty on the cost of capital
    (Springer, 2024-01-20) Kwabi, Frank; Owusu, Andrews; Ezeani, Ernest; Boateng, Agyenim
    We investigate the impact of political uncertainty on the relationship between foreign equity portfolio flow and the cost of capital. Using panel data from 40 countries from 2001 to 2016, our results show that the year before a national election is associated with a higher cost of capital. Further analyses show that the relationship between international equity portfolio flow and the cost of capital is sensitive to political uncertainty. In line with the institutional quality channel, we find that checks and balances interact with political uncertainty to reduce the negative effects of political uncertainty on the cost of capital. The results are consistent with the hypothesis that foreign investors strategically reduce their equity portfolio investment to the recipient country before a national election which reduces risk-sharing between domestic and foreign investors.
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    Why Do Female Lead Auditors Charge a Fee Premium? Evidence from the UK Audit Market
    (Elsevier, 2024) Owusu, Andrews; O'Sullivan, Noel; Kwabi, Frank; Holmes, Mark David
    Existing research documents a fee premium for female partner led audits (Ittonen & Peni, 2012; Hardies et al., 2015; Burke et al., 2019; Lee et al., 2019; Hardies et al., 2021). We take this work forward by investigating a possible justification for the observed premium by examining how auditor gender is related to audit report lag and whether the female partner audit fee premium is driven by audit report lag. We find that firms audited by a female lead auditor have a significantly shorter audit report lag but pay a significantly higher audit fee. In further analysis, we find that the fee premium for a female partner led audits is higher for clients receiving a more timely audit opinion. Our findings are consistent with female lead auditors delivering more timely audits and audit clients being prepared to pay a premium for such timeliness. Our study extends our understanding of the importance of gender in the auditing process and the value clients see in audits led by female auditors. Given the relatively low proportion of female lead auditors, our findings should also encourage audit firms to appreciate the economic value of female lead auditors and to actively facilitate their progression to senior roles.
  • ItemOpen Access
    Impacts of cross-border equity portfolio flow and central bank transparency on financial development: the role of economic freedom and international bonds
    (Wiley, 2024-01-08) Kwabi, Frank; Chizindu, Wonu; Ezeani, Ernest; Owusu, Andrews; Leone, Vitor
    We investigate the effects of international equity portfolio diversification and central bank independence on financial development using panel data from 49 countries from 2001 to 2016. We find that international equity portfolio diversification improves financial development. We correspondingly examine potential factors through which international equity portfolio diversification may impact financial development and find that central bank transparency provides an important channel for improving financial development. We further find that the relationship between international equity portfolio diversification and financial development is sensitive to economic freedom. Concerning sequencing, we find that foreign equity and debt flow are complementary to financial system development. Our results are robust to endogeneity using the exogenous shock of the 2008 financial crisis. This study offers new empirical evidence on the relationship between international capital and financial development.
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    The Impact of Central Bank Independence and Transparency on Non-Performing Loans and Economic Stability
    (Elsevier, 2024-02-20) Mamoon, Abdullah; Kwabi, Frank; Ezeani, Ernest; Hu, Wansu
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    Cutting ties with local bureaucrats: How does the environmental vertical management reform affect firm pollution in China?
    (Elsevier, 2024-02-23) Du, Limin; Wang, Ruqi; Wang, Zheng
    China's local environmental protection agencies are the basic government units that implement the country's environmental regulations. Initiated decades ago, the vertical environmental management reform was gradually rolled out throughout the country with the aim of enhancing the independence of local environmental enforcement by shifting the control of the agencies' resources from local governments to higher-level environmental protection authorities. This research investigates the effects and influencing channels of this reform on firm pollution behavior in China. Combining manually collected data on the timing of the reform at the county level with a unique firm-level emission dataset, we use a difference-in-differences approach to estimate the effect of the reform. Our results suggest that the reform leads to a significant reduction in firms' pollution, and this reduction is achieved mainly through a scaled-back production and a cleaner production process. A further analysis shows that the reform weakens local bureaucrats' political and economic incentives that could distort environmental enforcement. Our findings highlight the importance of minimizing political interventions in environmental governance in a large country like China to achieve environmental targets.
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    Cross-country analysis of the effects of political uncertainty on stock price informativeness
    (Elsevier, 2023-08-25) Fulgence, Samuel; Kwabi, Frank; Boateng, Agyenim; Hu, Wansu; Paudyal, Krishna
    We examine the effects of political uncertainty on the informativeness of stock prices. Using panel data from 49 countries and 441,882 firm-year observations from 2000 to 2020, our results evince several interesting aspects. First, we find that, whereas political uncertainty reduces stock price informativeness in the year prior to elections and during the elections, stock prices tend to be more informative in non-election years. Second, we find that the sensitivity of stock price informativeness to political uncertainty is reduced by the strength of institutional quality. Third, the effects of political uncertainty appear to be heterogeneous across less/unregulated and regulated industries. Lastly, our channel analysis indicates that during the year of elections, firms tend to disclosure less information thereby exerting a negative impact on stock price informativeness. Our results are robust to the system generalized method of moments (SGMM), difference-in-difference, and alternative specifications.
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    Exploring Accounting History: Literature and Standard Setting in India
    (American Accounting Association, 2023-11-15) Verma, Shraddha
    This paper provides a summary of the accounting history literature relating to India and provides suggestions for potential future research. The paper also identifies key events in standard setting between 1973 and 2023 and presents an exploratory analysis of the introduction of standard setting in India in 1977, highlighting both local and international factors influencing the process.
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    Humans needed, more than ever
    (Chartered Institute of Public Relations (CIPR), 2023-08-19) Gregory, Anne; Virmani, Swati; Valin, Jean
    New research from the Chartered Institute of Public Relations (CIPR) has found that up to 40% of tasks performed by public relations professionals are now assisted by AI tools. The report reveals that, while the adoption of AI tools has accelerated, they are still not widely used even though they make task execution more efficient and effective.
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    Diversity and inclusive leadership: an entrepreneurial opportunity?
    (IGI Global, 2023) Puntaier E.; Zhu T.
    The purpose of this chapter is to assess the link between diversity and inclusive leadership from the entrepreneurial perspective. If the entrepreneur is the efficient decision maker, there is an expectation that the benefits of diversity are harnessed through an inclusive leadership mindset. Yet the literature on the diversity-inclusive leadership relation is limited, scattered across a broad field, and largely omits the entrepreneurial dimension. This chapter makes an attempt to consolidate the existing literature by conducting a systematic literature review and proposes the extension of the diversity-inclusive leadership construct by adding the entrepreneurial perspective. The inclusive entrepreneur recognizes diversity as an opportunity and adopts attitudes that promote an inclusive organizational culture that is dynamic and sustainable.