Journal Articles

Permanent URI for this collectionhttps://mro.massey.ac.nz/handle/10179/7915

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Subject: search.filters.subject.1502 Banking, Finance and Investment

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Now showing 1 - 10 of 22
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    Supplier geographical concentration and corporate innovation
    (Elsevier, 2023-06-14) Xiong, Y; Wu, H; Ding, X; Wu, J
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    Missing momentum in China: Considering individual investor preference
    (Elsevier) Yao, S; Qin, Y; Cheng, F; Wu, J; Goodell, JW
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    When It Rains It Drains: Psychological Distress and Household Net Worth
    (Elsevier, 21/07/2022) Balloch A; Engels C; Philip D
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    The Predictive value of bank fair values.
    (Elsevier, 1/02/2017) Ehalaiye D; Tippett M; van Zijl T
    Fair value, the value of an item in an orderly exchange, has been shown to have greater value relevance than historical cost. However, there is limited literature on the predictive ability of fair value. Our study contributes to this emerging area of research by examining the predictive ability of the SFAS 107 fair value disclosures by U.S. banks for future performance as measured by operating cash flows and earnings over a three-year time horizon. Furthermore, we provide evidence on the influence of the 2007/2008 Global Financial Crisis (GFC) on the relationships between bank fair values and future performance, thereby showing whether market illiquidity affected the underlying relationships. We also test for the impact of bank characteristics - size, capital adequacy and growth prospects - on predictive ability. Our findings suggest that fair values have predictive ability for both the cash flow and earnings measures of performance and that the GFC did not have an adverse impact on the predictive ability of bank fair values. However, we find that the predictive ability of fair value is strongest for operating cash flows. The study supports the relevance of fair value, as indicated by predictive ability for performance, and thus makes an important contribution to the fair value accounting literature and accounting standard-setting
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    Competition and Commercial Banks Risk-Taking: Evidence from Sub-Saharan Africa Region
    (Taylor and Francis Group, 26/04/2018) Akande JO; Kwenda F; Ehalaiye D
    This study investigates the relationship between competition and the risk-taking attitude of banks. We test how this relationship manifests in the Sub-Saharan African(SSA) region’s commercial banks in light of the competition-fragility view, using the generalized methods of moments. We studied 440 commercial banks in 37 SSA countries over the period 2006–2015. The results provide evidence that supports a positive relationship between competition and banks’ overall risk as well as their credit risk but suggests that off-balance sheet risk reduces with competition. We, therefore, conclude that the propensity to undertake higher risk in a competitive banking environment largely accounts for fragility as argued in the competition-fragility view.
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    Earnings Management and Underperformance after Seasoned Equity Offerings: A Cross-Country Study
    (Emerald, 14/12/2022) Opare S; Houqe M; van Zijl T
    Purpose: This purpose of this study is to examine the association between earnings management (accruals earnings management (AEM) and/or real activities manipulation (RAM)) and firm underperformance following seasoned equity offerings (SEOs) using cross-country data. Design/methodology/approach: The study applies ordinary least squares regression analyses to a sample of 11,764 observations on firms from 22 countries over the period from 2005 to 2017. The methods include weighted least squares regression, sub-sampling approach and alternative measures of firm performance, earnings management and legal regime for robustness tests as well as a two-stage least squares instrumental variable (IV) approach to address endogeneity concerns. Findings: The results suggest that RAM has a greater negative impact on post-SEO performance than AEM. The result is economically significant for RAM only. The results also reveal that the negative impact of earnings management, in particular RAM, on post-SEO performance is greater in countries with a strong legal regime than in other countries. Practical implications: Earnings management around SEOs has important implications for investors, regulators and policymakers. The study suggests that policymakers should improve the current legal conditions to promote fairness in the equity market. Originality/value: The results from the cross-country data support earlier results from single-country studies on the impact of earnings management on post-SEO performance. The study also provides new evidence on the variation in the impact of earnings management according to the strength of the legal regime operating in a country.
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    Heterogeneous firm-level responses to the US 2018 tariff announcement
    (Emerald Publishing Limited, 7/12/2020) Qin Y; Yang Z; Bai M; Yawson, A
    Purpose This study examines the impact of the $60 billion tariff announcement of the US government on the Chinese exporting firms. In particular, we focus on firms whose revenues are highly dependent on the US economy. Design/methodology/approach This study uses an experimental analysis and event study methodology. The sample includes firms listed in mainland China and Hong Kong stock exchanges that have the highest revenues from exporting to the US. The data are obtained from CSMAR and DataStream. Findings We find that the tariff announcement has significantly negative impacts on stock performance both before and after the announcement, and the impacts are heterogeneous across our sample firms. For A-shares listed in Mainland China, firms with more revenues from the US experience greater price drops on the announcement day, regardless of being in the targeted industry or not. But such a finding is absent from H shares listed in Hong Kong. We also find that for all the firms, greater pricing power can alleviate the impacts of the tariff announcement. Originality This is the first study documenting the heterogeneity of the impact of the tariff announcement and thus contribute to the prosperous studies on the varied firm-level responses in the Chinese stock market, and to the burgeoning literature by filling the gap of the financial market responses to the protectionist policy announcement.
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    Firm size and the political cycle premium
    (EmeraldInsight, 2015) Malone CB; Anderson H; Chen P
    We investigate the role of firm size in generating political cycle outcomes. Like in the U.S., New Zealand’s political cycle premium is driven by small firms; however, the results are opposite. In New Zealand, periods governed by the right of the political spectrum produce significantly higher stock returns than those from the left and this finding is primarily driven by small firms who perform particularly poorly under left-of-centre governments. We identify several explanations for the poor performance in small firms. These firms were relatively heavily affected by the move to an open, deregulated economy; they were also less able to cope with tight monetary conditions, and periods of sharply falling inflation.
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    The Basel Accord and Financial Intermediation: The Impact of Policy
    (Federal Reserve Bank of St Louis, 16/04/2018) Berka M; Zimmermann C
    This article studies loan activity in a context where banks have to follow Basel Accord–type rules and find financing with the households. Loan activity typically decreases when investment returns of entrepreneurs decline, and we study which type of policy could invigorate an economy in a trough. The authors find that an active monetary policy increases loan volume even when the economy is in good shape, while the introduction of an active capital requirement policy is also effective if it implies tightening of regulation in bad times. This is performed with a heterogeneous agent economy with occupational choice, financial intermediation, and aggregate shocks to the distribution of entrepreneurial returns.
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    Political Background and Household Financial Asset Allocation in China
    (Taylor & Francis (Routledge), 18/01/2021) Ge Y; Chen H; Zou L; Zhou Z
    Political background is an important factor in determining the household economic behavior. Using 2014–2018 households panel data from the China Family Panel Studies (CFPS), we investigate the effects of political background on China’s household asset allocation behavior. We find that political background has a significant positive impact on the financial market participation. Mediation analysis indicates that political background leads to higher household wealth, better social capital, and fewer credit constraints, thus promotes households investments. Further analysis shows that the marginal impact of political background on household investment behavior is more significant in Eastern and urban areas. Our results contribute to the existing literature on the relationship between the political background and the household investment behavior, also enhancing the understanding of the household portfolio heterogeneity.