Matching Items (5)

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Third World Corruption: The Effect of Corruption to Brazilian and Angolan Citizens

Description

The results in this research study shows that experience with corruption affects a person's behavior, although it does not impact their attitude towards corruption. Condemnation to both corruption and bribery

The results in this research study shows that experience with corruption affects a person's behavior, although it does not impact their attitude towards corruption. Condemnation to both corruption and bribery is widespread amongst citizens of both countries; however, more Angolan citizens experienced bribe demands and confessed paying more bribes than Brazilians did. This paper studies the effect of corruption towards citizens by analyzing a sample of 200 surveyed Brazilians and Angolans. The surveys questioned participants about their (i.) experience with corruption by looking at the number of bribe demands, (ii.) attitudes by identifying their values or views towards corruption and bribery and finally (iii.) their behavior through their actions.

Contributors

Created

Date Created
  • 2018-12

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Exchange Rate Risk and Relative Performance Evaluation

Description

The relative performance evaluation (RPE) hypothesis holds that executive compensation should not depend on uncontrollable exogenous shocks. Nevertheless, prior studies often find limited empirical support for this hypothesis in part

The relative performance evaluation (RPE) hypothesis holds that executive compensation should not depend on uncontrollable exogenous shocks. Nevertheless, prior studies often find limited empirical support for this hypothesis in part because it is difficult to identify peers exposed to the same exogenous shocks. I propose a new way to identify peers and to test the RPE hypothesis in the context of a specific shock. In particular, I select peers based on the sensitivity of their stock returns to exchange rate fluctuations. I find evidence that firms respond to large exchange rate movements by ex post adjusting their peer selection to include peers with similar exchange rate risk exposure. Moreover, after allowing for ex post peer group adjustments, I find a much stronger support for the RPE hypothesis than most of prior work.

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Agent

Created

Date Created
  • 2017

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Relative Performance Evaluation and Peer Quality

Description

Relative performance evaluation (RPE) in Chief Executive Officer (CEO) compensation contracts entails the use of peer performance to filter out exogenous shocks and reduce exposure to risk. Theory predicts that

Relative performance evaluation (RPE) in Chief Executive Officer (CEO) compensation contracts entails the use of peer performance to filter out exogenous shocks and reduce exposure to risk. Theory predicts that high-quality peers can effectively filter out noise from performance measurement, yet prior empirical studies do not examine how differences in peer quality affect the use of RPE in practice. In this study, I propose a model to select peers with the highest capacity to filter out noise and introduce a novel measure of peer quality. Consistent with the theory, I find that firms with high quality peers rely on RPE to a greater extent than firms with few good peers available. I also examine the extent to which peers disclosed in proxy statements overlap with the best peers predicted by my model. I find that the overlap is positively associated with institutional ownership, use of top 5 compensation consultants, and compensation committee competence.

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Agent

Created

Date Created
  • 2020

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Does a Chief Audit Executive Matter? Evidence from Corporate Disclosure of the Position

Description

A Chief Audit Executive (CAE) is the leader of a company’s internal audit function. Because there is no mandated disclosure requirement for the internal audit structure, little is understood about

A Chief Audit Executive (CAE) is the leader of a company’s internal audit function. Because there is no mandated disclosure requirement for the internal audit structure, little is understood about the influence of a CAE on a company. Following the logic that a CAE disclosed in SEC filings is more influential in a company’s oversight function, I identify an influential CAE using the disclosure of the role. I then examine the association between an influential CAE and monitoring outcomes. Using data hand collected from SEC filings for S&P 1500 companies from 2004 to 2015, I find companies that have an influential CAE are generally larger, older, and have a larger corporate board. More importantly, I find that an influential CAE in NYSE-listed companies is associated with higher internal control quality. This association is stronger for companies that reference a CAE’s direct interaction with the audit committee. This study provides an initial investigation into a common, but little understood position in corporate oversight.

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Agent

Created

Date Created
  • 2019

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Does Credit Supply Competition Affect Accounting Conservatism?

Description

This study investigates the relation between credit supply competition among banks and their clients’ conditional accounting conservatism (i.e., asymmetric timely loss recognition). The Interstate Banking and Branching Efficiency Act (IBBEA)

This study investigates the relation between credit supply competition among banks and their clients’ conditional accounting conservatism (i.e., asymmetric timely loss recognition). The Interstate Banking and Branching Efficiency Act (IBBEA) of 1994 permits banks and bank holding companies to expand their business across state lines, introducing a positive shock to credit supply competition in the banking industry. The increase in credit supply competition weakens banks’ bargaining power in the negotiation process, which in turn may weaken their ability to demand conservative financial reporting from borrowers. Consistent with this prediction, results show that firms report less conservatively after the IBBEA is passed in their headquartered states. The effect of the IBBEA on conditional conservatism is particularly stronger for firms in states with a greater increase in competition among banks, firms whose operations are more concentrated in their headquarter states, firms with greater financial constraints, and firms subject to less external monitoring. Robustness tests confirm that the observed decline in conditional conservatism is causally related to the passage of IBBEA. Overall, this study highlights the impact of credit supply competition on financial reporting practices.

Contributors

Agent

Created

Date Created
  • 2018