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  • ItemEmbargo
    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.
  • ItemEmbargo
    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, O.; 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
  • ItemEmbargo
    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.
  • ItemEmbargo
    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.
  • ItemMetadata only
    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.
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    Board diversity as strategic choice and why it should matter to SMEs
    (Emerald, 2022-12-06) Puntaier, E.; Zhu, T.; Hughes, P.
    Purpose Diversity in boards has gained attention as a reflection of societal imbalances. The purpose of this paper is to investigate the impact of diversity in terms of both gender and nationality in management boards of small and medium-sized enterprises (SMEs) on firm performance from an upper echelons perspective. The authors also examine how board-specific characteristics influence the structural makeup of boards in gender and nationality diversity terms. Design/methodology/approach The authors focus on the UK because of its individualistic society and flexible labour market and assess 309 SMEs in the manufacturing industry over 2009–2019. A 3-stage least squares (3SLS) estimator is used to analyse the data, the Shannon index to measure board diversity, return on assets as proxy for firm performance, and owner-manager presence, board member age and tenure are the board-specific characteristics of primary interest. Findings Both gender and nationality diversity contribute to firm performance and represent distinct upper echelon characteristics that change the cognitive and psychological dynamics of boards. Firms with larger boards do not perform better, but diverse boards reduce the narrowing view of CEOs. Yet the presence of owner-managers, despite their performance-enhancing contribution, holds firms back from benefitting from diversity as a strategic choice. Originality/value This study extends the upper echelons theory to include board diversity as an important aspect that should become more central in upper echelon thinking when understanding firm performance. The authors’ findings suggest that theoretical developments in search of understanding firm behaviour must proceed by accounting for diversity and not simply focusing on decision-making styles.
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    If Global or Local Investor Sentiments are Prone to Developing an Impact on Stock Returns, is there an Industry Effect?
    (Wiley, 2020-08-21) Zhu, Tingting; Ausloos, M.; Shi, J.
    This article investigates the heterogeneous impacts of either global or local investor sentiments (IS) on stock returns (SR). We study 10 industry sectors through the lens of six (so-called) emerging countries: China, Brazil, India, Mexico, Indonesia, and Turkey, over the 2000 to 2014 period. Using a panel data framework, our study sheds light on a significant effect of local IS on expected returns for basic materials, consumer goods, industrial, and financial industries. Moreover, our results suggest that from global IS alone, one cannot predict expected SR in these markets.
  • ItemOpen Access
    Charity can still begin at home: Examining the drivers and boundary conditions of Africa-to-Africa outward foreign direct investment (OFDI)
    (Elsevier, 2023-12-12) Owusu-Yirenkyi, Diana; Akolgo, Portia M.; Naab, Gilbert Zana; Donbesuur, Francis; Danso, Albert
    Recent studies on ‘Africa Rising’ and ‘Africa-to-Africa Internationalization’ have propelled conversations on how African Small and Medium-Sized Enterprises (SMEs) can continue to internationalize within African countries. From the tenets of the institutional theory and the dynamic capabilities perspectives, this study proposes and tests a framework of how and when dysfunctional competition drives SMEs' outward foreign direct investments within African countries. Analysis of a survey data from 196 Ghanaian SMEs operating across the African continent indicates that cross-border open innovation mediates the relationship between dysfunctional competition and SMEs' intra- Africa OFDI activities. Further analysis revealed that SMEs' strategic agility plays a double-edged sword moderating role in enhancing the effects of dysfunctional competitions and cross-border open innovation on intra-Africa OFDI. These findings have significant implications for the international business and finance literature as well as the management and growth of African SMEs.
  • ItemOpen Access
    Public firm presence, growth opportunity and investment in fixed intangible assets of private UK firms
    (Emerald, 2023-10-20) Danso, Albert; Adu-Ameyaw, Emmanuel; Boateng, Agyenim; Bolaji, Iyiola
    Purpose: Prior studies suggest that, in an industry in which several public firms operate (i.e., greater public firm presence), uncertainty about business operations within the industry is reduced due to greater analyst coverage and quality of information disclosure. In this study, we examine how UK private firms respond to investment opportunities in fixed intangible assets in an environment characterised by greater public firm presence. Design/method/approach: Using data from 61,278 (1,358) private (public) UK firms operating in ten (10) sectors spanning from 2006 to 2016, we conduct our analysis by using panel econometric techniques. Findings: We observe that private firms are more responsive to their fixed intangible asset (FIA) investment opportunities when they operate in industries with more public firm presence. Also, we find that firms in industries with better information quality use more debt and have longer debt maturity security but less internal cash flow. Overall, our findings indicate that public firm presence generates positive externalities for private firms by lessening industry uncertainty and enhancing more efficient FIA investment. Our results are robust to endogeneity concerns. Originality/value: While this paper builds on the information disclosure and corporate investment literature, it is one of the first attempts, to the best of our knowledge, to explore how private UK firms respond to investment in fixed intangible assets in an environment characterised by greater public firm presence.
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    Board characteristics and corporate cash holding: evidence from the UK, France and Germany
    (Emerald, 2023-03-28) Ezeani, Ernest; Salem, Rami Ibrahim A.; Usman, Muhammad; Kwabi, Frank
    Purpose Prior studies suggest that corporate cash holding will reflect firms' corporate governance (CG) environment. Consistent with this prediction, this study aims to examine the impact of board characteristics on firms' cash holding in the UK, France and Germany. Design/methodology/approach Using 2,805 firm-year observations between 2009 and 2019, the authors examine the relationship between board characteristics and corporate cash holding. The authors used two measures of cash holdings as our dependent variables. As independent variables, the authors used CG characteristics relevant to effective board monitoring such as board meetings, outside directors, board size and board gender diversity. Findings The authors find that board characteristics influence firms' cash holdings of firms in the UK, France and Germany. However, this study documents evidence of varying impacts of board monitoring on the cash holding of the UK when compared to German and French firms, the countries that are classifiable as bank-based economies. The result of this study is robust to alternative cash-holding measures and endogeneity. Practical implications This study provides evidence supporting the board's impact in mitigating agency conflict in shareholder- and stakeholder-oriented CG environments. Originality/value This study contributes to previous works on firms’ financial orientation by showing that the impact of board characteristics on corporate cash holdings varies between bank- and market-based economies.
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    Lead Independent Director, Managerial Risk-Taking and Cost of Debt: Evidence from UK
    (Elsevier, 2023-09-25) Owusu, Andrews; Kwabi, Frank; Owusu-Mensah, Ruth; Elamer, Ahmed Ahmed
    We extend the existing literature on how the adoption of a lead independent director is related to corporate outcomes by documenting that the presence of a lead independent director on the board is significantly and negatively related to managerial risk-taking. The result is more pronounced for firms with a non-independent board chair. In a further analysis, we document that decreased managerial risk-taking leads to a reduction in the cost of debt for firms with a lead independent director on the board. Overall, our results suggest that the adoption of a lead independent director is an effective governance mechanism when the board chair is not independent, which supports the motivation of the United Kingdom corporate governance code.
  • ItemEmbargo
    Mitigating Information Frictions in Trade: Evidence from Export Credit Guarantees
    (Elsevier, 2023-10-31) Agarwal, Natasha; Chan, Jackie M.L.; Lodefalk, Magnus; Tang, Aili; Tano, Sofia; Wang, Zheng
    Information frictions make foreign trade risky. In particular, the risk of buyer default deters firms from selling abroad. To address this issue, many countries offer export credit guarantees to provide insurance to exporters. In this paper, we investigate the causal effects of guarantees by exploiting a quasi-natural experiment in Sweden and rich register data on guarantees, firms and trade. Estimates from a fuzzy regression discontinuity design show large positive effects on the probability of exporting and the value of exports to the destination for which the guarantees are issued. These results are robust to an alternative approach using a difference-in-differences matching estimator. Further findings suggest that guarantees impact firms heterogeneously and play an important role in resolving buyer default risk and easing liquidity constraints. Larger impacts are observed in non-OECD countries, on smaller, liquidity constrained exporters and for firms selling products that face a relatively high cost of buyer default.
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    Analysing the Informal Economy: data challenges, research transparency and methodological plurality
    (Wiley, 2023-10-14) Igudia, Eghosa; Ackrill, R.
    Analyses of the informal economy are vital to understanding economic activity in developing countries, but challenges abound when analysing something that is so difficult to measure. In this article we explore these challenges and what they mean for research and research design in studies of the informal economy. We review key economic theories developed to study the informal economy, before critically discussing the range of methods of data collection available for researchers. All approaches to data collection have limitations, yet many studies fail to reflect adequately on these in their design and presentation. In reviewing data sources for economic analyses of informality, we give particular attention to surveys designed and led by academic researchers, the consideration of which is omitted from leading official organisations’ own reports on data collection in the informal economy. In the absence of a unifying theory and data sources that deliver the ‘comprehensive and accurate’ data called for by some authors we argue, first, that no one source of data is intrinsically superior; and second, that research on the informal economy must embrace transparency – around the data used, their alignment with the underlying theory adopted, and the detailed arrangements for data collection and analysis.
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    The case for mixed methods research: Embracing Qualitative Research to Understand the (Informal) Economy
    (Wiley, 2023-10-21) Igudia, Eghosa; Cartwright, E.
    Economics has long shunned qualitative research methods, such as interviews, focus groups and observational studies, in preference for quantitative methods, such as empirical analysis of secondary data and field experiments. More over, recent years, with advances in econometric theory, have seen a notable increase in the size and quality of data sets that are needed to publish quantitative research in leading journals. This has the effect of significantly increasing the ‘entry costs’ for researchers interested in studying economic development. Crucially, it also limits the topics that can be studied. In particular, it focuses attention on issues and countries where large data sets exist or can be collected. In this paper we argue that by putting too much weight on internal validity, economics has adopted a too narrow definition of ‘rigor’ and would benefit from embracing qualitative and mixed methods research. To illustrate our point we pay particular attention to the informal economy. The informal economy is under-studied by economists because of the lack of available quantitative data. We show that this fundamentally impacts our understanding of the wider economy. Qualitative research can enrich our under standing by providing a more complete and nuanced view of the economy.
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    Street Level Bureaucrats, Policy Entrepreneurship, and the Challenge of Enforcing Bans on Motorcycle Taxis in Lagos, Nigeria.
    (Wiley, 2023-10-21) Igudia, Eghosa; Ackrill, R.; Olusanya, O.; Oyalowo, B.
    Recently, the authorities in Lagos have implemented policies progressively restricting the operation of okadas (motorcycle taxis). We analyse the enforcement of these measures through the lens of Street Level Bureaucrats (SLBs) and Street Level Policy Entrepreneurs (SLPEs). Doing so, we introduce two novel features into the literature. First, the extant literature focuses primarily on policies that deliver public services, whereas policies can also control proscribed behaviour. We refer to these as service delivery and regulation, respectively. Second, the exercise of discretion by SLBs and SLPEs can result in both ‘under-enforcement’ and ‘over-enforcement’ of regulatory policies, the latter potentially involving breaking the law. Drawing on extensive fieldwork in Lagos between 2021 and 2023, we find strong evidence of both under- and over-enforcement of okada bans over time, but with more over-enforcement. This offers important insights conceptually for the SLPE literature, and empirically to the challenges of policing urban Lagos.
  • ItemEmbargo
    Exploring the nexus between price and volume changes in the cryptocurrency market
    (Springer, 2023-08-12) Adediran, Adeyinka; Babajide, Bola; Osina, Nataliia
    The analysis of the price–volume relationship offers valuable insights into the underlying dynamics of financial markets, enabling investors and market participants to make informed inferences based on the data derived from price and volume. This concept has extensively been studied in the stock market, while it remained understudied in the cryptocurrency trading system. The study aims to contribute to the literature by examining the causal relationship between price changes and trading volume for the top three cryptocurrencies (Bitcoin, Ethereum and Tether) listed on CoinMarketCap. Previous research that examined causal relationship focused on Bitcoin and Ethereum, while neglecting Tether, which is often used by investors to avoid price volatility. The study employs correlation matrix, vector autoregression Model, and granger causality to conduct the analysis of the research. The data for this study were extracted from CoinMarketCap, which provides the daily closing price and 24 hours traded volume of the top three cryptocurrencies from January 1, 2016 to December 31, 2021. The outcome of the preliminary study suggested that there is a positive significant price–volume relationship for Bitcoin and Ethereum, while there is a negative relationship for Tether. Furthermore, the study exhibits that there is a unidirectional causality between price return and volume change of Bitcoin and Ethereum, while there is no evidence of causality for Tether. Therefore, the empirical results establish the reliability of variable forecasting, empowering market participants and investors to make informed investment decisions.