The effect of managers’ optimism on competitive strategy and final cost models

Currently, competition in the global economy is the most complex issue that gives organizations a lot of opportunities and threats. Therefore, the manager of the organization should be able to enhance the organization's performance in this competitive environment. So the recognition of the behavioral components of managers and their impact on the performance of the organization in this competition is necessary. In this regard, the present study aims to investigate the effect of managers' optimism on competitive strategy and price leadership in the market. This research is a descriptive-correlation type and a questionnaire was used to collect information. In this research, sampling was done in a simple random that the number is 348 people. In order to investigate the research hypotheses, structural equation modeling has been used. Findings of the research showed that the correlation coefficient between managers 'optimism and competitive strategy is significant; that's mean, there is a significant and direct relationship between managers' optimism and competitive strategy; also, there is a significant relationship between managers 'optimism and employee cost leadership; that's mean, there is a significant and direct relationship between managers' optimism and employee cost leadership

Book review: Zhang, X., Yang, E., & Thomas, N: Enterprise Management Control Systems in China

Book review of Zhang, X., Yang, E., & Thomas, N: Enterprise Management Control Systems in China, 2014, Berlin, Heidelberg: Springer, 352 pp., €152,59 (hardback), ISBN: 9783642547140

Financing behavior of R&D investments in the emerging markets : the role of alliance and financial system

This paper examines the financing behaviour of R&D investments in emerging markets. Drawing on institutional theory and using panel data of generalized methods of moment (GMM) estimation for a sample of 302 firms from 20 countries during the period 2003-2015, we find that emerging market firms tend to use internal funds for financing R&D investments. Interesting results emerged when the sample was divided as alliance and non-alliance firms, and bank-based and market-based financial systems. The results show that R&D financing behaves differently for alliance and non-alliance firms. Alliance firms use both internal and external funds for R&D investments, while non-alliance firms do not use external funds. We also document that a country’s financial system influences the choice of available sources of finance. Firms from countries that follow a bank-based financial system tend to rely on external funds while firms from countries that follow a market-based financial system depend more on internal funds for financing R&D investments. This study is important as it provides new evidence on financing R&D investments in emerging countries taking into account the institutional arguments of financing choices, and so should guide stakeholders about appropriate sources of R&D financing

Corporate reporting on the Sustainable Development Goals: A structured literature review and research agenda

Purpose – The SDGs framework emerged as a guidepost for the transition to sustainable development. To achieve this transition, companies are encouraged to integrate these goals into their business strategies, processes, and corporate reporting cycle. The purpose of this paper is to review and critique the corporate SDGs reporting literature, develop insights into the state of this research field and identify a future research agenda. Design/methodology/approach – Using a structured literature review methodology, the paper reviews 65 empirical papers published in this field to identify how the current research is developing, offers a critique, and identifies future research avenues to advance this field. Findings – Corporate SDGs reporting is developing as a research area of great importance. The findings reveal that current SDGs reporting literature lacks theorisation, overly focuses on publicly listed companies and succinctly describes organisations’ engagement with the SDGs as superficial. Surprisingly, regions such as North America, the United Kingdom, and other emerging economies have received less attention from scholars. Further, only a few authors have specialised in this field and there currently exists low levels of international collaborations among authors as well as practitioners. Originality – The paper offers a comprehensive structured review of the empirical papers published on corporate SDGs reporting. It contributes to deepening this nascent research field by identifying five distinct areas where accounting and business scholars may focus to advance the field further and contribute to achieving the SDGs agenda

Bank Failure prediction: corporate governance and financial indicators

Most failure prediction studies have relied on using financial ratios as predictors. The most suitable financial predictors for banks are financial ratios following the CAMEL rating system. Also, corporate governance has been proven to be an important aspect of banks, especially after the financial crisis. Given its importance, we test the ability of corporate governance to enhance the prediction of bank failure. While there are only few studies that examine efficiency of corporate governance as a failure predictor, there are scarcely any studies that examine it as predictor of US banks failure. Using discriminant analysis, we predict the failure of banks insured by the Federal Deposit Insurance Corporation during the period from 2010 to 2018 using financial and non-financial predictors. We find that combining CAMEL ratios with corporate governance variables not only enhances the accuracy of prediction but also extends the time horizon of prediction to three years before failure. We also show that the earnings of banks are more significant in predicting bank failure than the capital structure and asset quality. The results further reveal that the CEO compensation, voting rights and institutional ownership are more significant predictors than the board characteristics. These results are robust when using logit regression. This paper provides insight to banks, regulators and shareholders by showing that corporate governance and banks earnings are strong predictors of bank failure

Evaluation of corporate governance practices in emerging markets (A case study of Nigerian Banking industry)

This study explores corporate governance practices within the context of the Nigerian banking industry using instances of corporate governance lapses that resulted in part to the Nigerian banking crises. We present multiple case analysis of publicly available documents and court papers (in the United Kingdom and Nigeria) to document instances of breach and areas of weakness in the existing Nigerian code of corporate governance. We supported these with data obtained from multiple sources (using semi-structured interviews, observation and further documentary analysis) to explain and yield insight to the motivation behind these corporate governance practices. The research’s theoretical framework adopts theoretical triangulation and is designed to extend the present application of institutional theories and legitimacy theories to include roles of external and internal institutions, power blocks, and the role of legitimacy seeking acts in influencing corporate governance practices. From the case analysis, we suggest multiple actors and influences exist to shape the corporate governance practices within most commercial banks. These lapses make it possible for dominant actors within the organisation to exhibit symbolic compliance while taking advantage of these lapses to shareholders detriment

Impact of the shadow banking system on monetary policy in China

The shadow banking system in China has its own characteristics compared to conventional commercial banks and the foreign shadow banking system. Its emergence is important to the economic development and financial system in China. However, it also challenges the implementation of monetary policy and regulation. China is in the economic shunt period and their monetary policy system is somewhat lagging behind the advanced economic system. This paper is therefore designed to figure out the impacts of the shadow banking system on monetary policy. After analysis of SVAR model, OLS regression, trend graph and correlation coefficient, results show that an increase in the growth rate of the shadow banking system would affect the monetary policy by increasing money supply and the value of CPI. Moreover, the implementation of easy or tight monetary policy by increasing or decreasing the benchmark interest rate would not be able to achieve the original goals due to the activities of the shadow banking system. It is suggested that the Chinese authorities should follow the market requirement to improve the monetary policy system by means of supervision and regulation on the shadow banking system which would the monetary policy effect

Revisiting Corporate Governance and Financial Risk-Taking

Corporate governance attributes have varying effects on risk taking when variables are examined separately. We study the effects of a large range of corporate governance attributes on risk taking using a comprehensive US sample. Our findings confirm that although there are certain characteristics that drive this positive effect such as compensation structure, there are those which have the opposite effect such as board-level attributes. Our paper contributes to the broader literature on the relationship between corporate governance and risk in financial institutions, which are often overlooked in traditional studies. We shed light on the importance of studying corporate governance at a granular level rather than using a single index. The findings offer insights to regulators in determining suitable corporate governance frameworks to ensure the protection of investors rights in financial institutions

Modeling Barriers to Social Responsibility Accounting (SRA) and Ranking its Implementation Strategies to Support Sustainable Performance – a study in an emerging market

Purpose Today, with the increasing involvement of the environment and human beings business units, paying attention to fulfilling social responsibility obligations while making a profit has become increasingly necessary for achieving sustainable development goals. Attention to profit by organizations should not be without regard to their social and environmental performance. Social responsibility accounting (SRA) is an approach that can pay more attention to the social and environmental performance of companies, but it has many barriers. Therefore, the purpose of this study is to identify barriers to SRA implementation and provide strategies to overcome these barriers. Design/methodology/approach In this study, the authors identify barriers to social responsibility accounting implementation and provide strategies to overcome these barriers. By literature review, 12 barriers and seven strategies were identified and approved using the opinions of six academic experts. Interpretive structural modeling (ISM) has been used to identify significant barriers and find textual relationships between them. The fuzzy technique for order performance by similarity to ideal solution (TOPSIS) method has been used to identify and rank strategies for overcoming these barriers. This study was undertaken in Iran (an emerging market). The data has been gathered from 18 experts selected using purposive sampling and included CEOs of the organization, senior accountants and active researchers well familiar with the field of social responsibility accounting. Findings Based on the results of this study, the cultural differences barrier was introduced as the primary and underlying barrier of the social responsibility accounting barriers model. At the next level, barriers such as “lack of public awareness of the importance of social responsibility accounting, lack of social responsibility accounting implementation regulations and organization size” are significant barriers to social responsibility accounting implementation. Removing these barriers will help remove other barriers in this direction. In addition, the results of the TOPSIS method showed that “mandatory regulations, the introduction of guidelines and social responsibility accounting standards,” “regulatory developments and government incentive schemes to implement social responsibility accounting,” as well as “increasing public awareness of the benefits of social responsibility accounting” are some of the essential social responsibility accounting implementation strategies. Practical implications The findings of the study have implications for both professional accounting bodies for developing the necessary standards and for policymakers for adopting policies that facilitate the implementation of social responsibility accounting to achieve sustainability. Social implications This paper creates a new perspective on the practical implementation of social responsibility accounting, closely related to improving environmental performance and increasing social welfare through improving sustainability. Originality/value Experts believe that the strategies mentioned above will be very effective and helpful in removing the barriers of the lower level of the model. To the best of the authors’ knowledge, for the first time, this study develops a model of social responsibility accounting barriers and ranks the most critical implementation strategies