CEO Type and Earnings Management to Avoid Loss or Earnings Decreases: Evidence from South Korea

This study examines the relations between the CEO type (owner CEO vs. professional CEO) and earnings management over 9,266 firm-years from 2011 to 2020 in Korea. Two earnings management measures, accrual management and real activity management (abnormal cash flow from operations, abnormal production cost, and abnormal discretionary expense), are considered as means to avoid reporting losses or earnings decreases. We partition the sample into two groups based on the type of CEO (owner CEO vs. professional CEO) and investigate whether earnings management is used for achieving earnings targets (small profit or small earnings increases) for each group. We find all earnings management measures are significant at the 5% level or better in the direction of aggressive earnings management in the owner CEO sample, while all but one measure (abnormal production cost) are insignificant in the professional CEO sample. Our findings suggest that an owner CEO is more likely to manage earnings to achieve small profit or small earnings increases compared to a professional CEO

Financial Distress and Audit Report Lags: An Empirical Study in Korea

This study examines the association between a firm’s financial distress and audit report lags. Through this analysis, we intend to reveal whether auditors consider theclients’ financial distress when performing external audits. This study employs 2,786 firmyear observations from 2011 to 2018. The sample of this study consists of companies listedon the Korea Composite Stock Price Index (KOSPI) and the Korea Securities Dealers Automated Quotation (KOSDAQ). We perform OLS regression analysis to test our hypothesis. The OLS regression analysis is conducted through the SAS and STATA programs.We find that there is a significant and positive association between financial distress andaudit report lags. The audit report lags increase as the likelihood of clients’ financial distress increases. The results indicate that audits take different amounts of audit effort whenauditors consider financial distress as a business risk when they conduct audits. In otherwords, we provide evidence that auditors increase the amount of audit effort when thelikelihood of clients’ financial distress is high. In the absence of studies on how externalauditors respond to audited firms' financial distress, this study analyzes whether externalauditors change their audit efforts by assessing the audited firms' financial distress. Second, the empirical result that external auditors actually follow the guidelines related tobusiness risk and financial distress specified in the Korean Auditing Standards supportsthe effectiveness of the business risk-related regulations specified in the Korean AuditingStandard

The Effect of Entrepreneurial Attitudes and Individual Attributes on Entrepreneurial Activity in the context of ASEAN Member States: Evidence from Thailand and Vietnam

This study analyzes the influence of entrepreneurial attitudes and individual at­tributes on entrepreneurial activity in two ASEAN member countries: Vietnam and Thai­land. By applying the multinomial logistics regression (MLR) analysis method, the results show that those with an entrepreneurial network, who can read business opportunities, and have skills and knowledge, have a positive and significant influence when deciding to start and invest in others’ new businesses. On the other hand, females and those with a secondary education were more likely to engage in entrepreneurial activities. The study also shows that Vietnam’s entrepreneurial attitudes and individual characteristics seem to be better, differentiating it from Thailand. The Global Entrepreneurship Monitor (GEM) data from 2017 were the most recent data available at the time of this study. However, the availability of more up-to-date data is considered necessary to enrich and expand the im­pact of future research

Investigating The Mediating Role of Financial Literacy on The Relationship Between Women Entrepreneurs’ Behavioral Biases and Investment Decision Making

This study investigates the theoretical link between heuristic behavioral factors and the investment decision-making of women entrepreneurs, focusing on the impor­tance of financial literacy as a potential mediator shaping prudent decision-making. We argue that women’s financial literacy is an efficient way to apply behavioral considerations in wise decision making. Using the proportionate stratified sampling method, we collect­ed data from women entrepreneurs who were formally registered in Punjab Province, Pakistan. Owing to the complex model and small sample size, the smart PLS method was applied to analyze the structural relationship between the measured and latent con­structs. The results show that overconfidence and availability heuristics have a significant positive impact on investment decisions, while financial literacy plays an essential inter­vening role between the overconfidence heuristic, availability heuristic, and investment decision-making. Our results support the execution of financial literacy awareness among women entrepreneurs to stimulate their financial decision control and give them the in­dependence to make prudent financial decisions

The Relationship Between Export Market Orientation and Firm Performance: A Meta-Analysis of Main and Moderator Effects

Despite various studies into the relationship between performance and the ex­port market orientation, researchers still argue that the current findings remain mixed and inconclusive. In this study, the authors use meta-analytic techniques to examine the relationship between the export market orientation and performance, and the impact of firm-level, industry-level and country-level moderators using a total sample of 10,758 firms in 51 manuscripts from 19 countries. In particular, this study focuses on the nature of incongruent findings across studies conducted in different contexts around the globe. The results reveal that market orientation has a positive overall relationship with export­ers’ revenue-based and profit-based performance. Moreover, the moderated regression analysis results indicate that the type of construct (general versus export-specific) and firm size moderate the relationship between the export market orientation and perfor­mance. The results also reveal that market turbulence, competitive intensity, and techno­logical turbulence are significant industry-level moderators of the relationship between the market orientation and performance. This study contributes to the body of knowledge by aggregating the empirical evidence from the past literature and providing conclusive results that are beneficial for practitioners and researchers

Is Service with a Smile Enough to Satisfy Customers? Sincere and Insincere Smiles via Video and Vignette

The current service trend does not merely involve face-to-face interactions, including smiling (high-contact-service) by service employees, but also using methods such as texting (low-contact service). Sincere and insincere smile studies have used a method involving dynamic (videos) and static stimuli (photographs). However, research into the different types of smiles is still limited to methods using a vignette. This study aims to examine the effect of the type of smile on customer satisfaction using a vignette and video. A total of 139 people participated in 2 (smile: sincere versus insincere) x 2 (media: vignette versus video) groups. The study found that there is an influence from the type of smile on customer satisfaction. A sincere smile using video produces greater customer satisfaction than using a vignette does, because the emotional contagion process through video is more real than it is through a vignette. The interesting finding from this study is that there is a gap in the insincere smile condition between using video and a vignette. The dissatisfaction of customers is greater when served with an insincere smile by text (vignette), compared with a face-to-face interaction by video. Video could only capture the muscle movement on a person’s cheeks (zygomaticus major), but it could not see the muscle wrinkles formed around the eyes (orbicularis oculi), compared to a vignette. This study implies that although the standard operational procedure (SOP) for service demands friendliness, a customer can feel whether a server’s smile is genuine or fake. The customer’s dissatisfaction toward an insincere smile will be higher with a low-contact service using text than a high-contact service with video

Determining Factors of Peer-to-Peer (P2P) Lending Avoidance: Empirical Evidence from Indonesia

P2P lending offers loans to the public with easy processes and terms. However, the level of P2P lending disbursements is still lower than that of the banks. In addition, a comparison of the number of users of P2P lenders and the productive age population of Indonesia shows that there are still many people who do not use P2P lending. This paper examines the factors that make Indonesians avoid P2P lending. This study used an online survey approach for its data collection and structural equation modeling (SEM) to analyze the data from 499 responses. The study found that the perceived threat from P2P lending is influenced by its perceived severity, perceived susceptibility, and risk tolerance. This perceived threat and social influences cause people’s avoidance motivation. This study contributes to the fintech literature by providing empirical evidence on the avoidance of P2P lending from the borrowers’ perspectives using the TTAT model. Other implications are an input for regulators/governments to enforce the rules for user protection and input for the P2P lending service providers to provide educational programs regarding the use of P2P lending

A Test of Positive Feedback Trading among Foreign Portfolio Investors in Nigeria

It has been established in the literature that the trading behavior of international investors may increase market vulnerability, especially for emerging markets. Consequently, this study examines whether positive feedback trading exists in the Nigerian stock market. Both descriptive and inferential analyses are carried out on monthly data covering the period 2013 to 2020.  Specifically, the ARDL bounds testing approach is employed. Findings indicate that positive feedback trading exists in the market, as stock returns have positive and significant influence on foreign portfolio inflows. The results further show that this trading pattern becomes more prominent with rising economic growth. The findings again reveal that the exchange rate and the interest rate explain the foreign portfolio inflows in the Nigerian market. The study’s outcomes lend support for the pull theory in explaining the foreign portfolio inflow. However, no evidence is found in support of the push theory, as an explanation for the foreign portfolio inflow as the “OPEC basket crude oil price” is insignificant. It is thereby recommended that regulators should adopt measures that will help foreign investors to be better informed about the Nigerian market, in order to reduce their positive feedback trading behavior. Moreso, there is a need for the government to put in place policies targeted toward enhancing the growth of the stock market and the economy. In this way, the negative impact of such trading behavior will be minimal, as short-term trading by foreign investors will be reduced and the foreign portfolio inflows will be sustainable

The Impact of Organizational Justice on the Organizational Citizenship Behavior of Contract Workers in Indonesia: The Role of Exchange Quality and Multifocal Trust

This study aims to examine the role of the double mediation of cognition-based trust and affect-based trust, along with the quality of the exchanges (perceived organi­zational support/POS and leader-member exchange/LMX), on the influence of organi­zational justice on organizational citizenship behavior (OCB). The survey involved 182 contract lecturers from the five top Muhammadiyah universities in Indonesia. Using structural equation models, this study has succeeded in demonstrating that the quality of the individual exchanges between supervisors and subordinates (LMX and affective-based trust) successfully mediate the sources of justice from the supervisors (interactional and informational justice). The quality of the individual exchanges with organizations (cogni­tive-based trust and POS) successfully mediate the sources of the organization (procedur­al justice). Implications for the theory and practice are discussed

A Comparison of Financial Well-Being and Its Antecedents Across Different Employment Categories in Malaysia

This study compares the level of financial well-being (FWB) and its antecedents(financial stress, financial behaviour, financial literacy, and the internal locus of control(LOC)) across individuals of different employment categories in Malaysia. Second, it investigates the relationship between those antecedents and FWB and compares the differences in the strength. Data were collected from 1,867 respondents from four employmentgroups using a questionnaire-based survey. Descriptive statistics and analysis of variance (ANOVA) were conducted to achieve the first research objective, and ordinary leastsquares (OLS) regression was used to achieve the second research objective. The resultsindicate that FWB and its antecedents of Malaysian employees vary considerably acrossemployment categories. The FWB of the unemployed and private-sector workers is significantly lower than their government sector and self-employed counterparts. Financialstress, financial behavior, and an internal LOC are the most determinative of employees’FWB, however, they have varying degrees of impact across different employment categories. The results relate to employers and policymakers in formulating strategies to promotehigher FWB among Malaysian employees, based on their employment categories