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Business Finance and Regional Economic Development
G Model ECOFIN 544 1–3
ARTICLE IN PRESS North American Journal of Economics and Finance xxx (2015) xxx–xxx
Contents lists available at ScienceDirect
North American Journal of Economics and Finance
Editorial 1
2
Business Finance and Regional economic development
3
4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34
On December 10 and 12, 2014, National Taiwan Normal University and Toko University jointly Q3 host a conference titled “Business Finance and Regional Economic Development” at Taipei and Chiayi, Taiwan. Among the papers presented in the conference, eleven were selected by the review committee to include in this special issue. Among them, nine papers focus on finance issues. Another paper discusses corporate performance from the general organizational perspectives. The final paper examines the effects of corruption across countries in the Asia-Pacific region. Chen, Lai, and We (2015) investigate the mutual fund selection for 401(k) plans and their performance by plan sponsors and providers. They find (i) managed growth funds are favored; (ii) subject to the same objectives, funds with better performance or/and low expense ratio are chosen; (iii) at least 50% of the funds selected are among the top ten funds in terms of total net assets. These selected funds do not perform consistently nor outperform matching funds over sample years. Hence the 401(k) investment list does not convey valuable information for outside investors to mutual fund selection. It is generally regarded that foreign institutions have information advantage over domestic institutions in Taiwan’s financial markets. Lin, Tsai, and Chiu (2015) evaluate this hypothesis for Taiwan’s index options markets by examining the intraday information content of limit orders placed by the two institutions. They found the height and the length of the limit order book provided by either type of institution help predicting subsequent price changes in options, especially put options. The effect is stronger for foreign institutions and persists during the 2008–2009 financial crisis period. While previous studies often examine the effects of the number of analysts following on the firm performance, Chan, Lo, and Yang (2015) investigates the possible effects of the revision frequency of earnings forecasts. Arguing that the update frequency reflects an analyst’s effort and henceforth additional information, they hypothesize that update frequency has positive impacts on stock liquidity, cost of equity capital, and firm value. Empirical findings support the hypotheses, suggesting both the number of analysts following a firm and the frequency of news updating should be considered when assessing a firm’s information environment. Using 381 U.S. listed acquirers during 2000–2005, Lin, Tai, Hsu, and Yang (2015) investigate the relationship between their short-/long-term performance and the shareholding of their financial institutional investors. Empirical results show the changes of the ownership of commercial banks and insurance companies are positively related to the acquirers’ short-term performance while the changes of the ownership of investment bankers are negatively related to the bidders’ long-term performance. That is, investment banks and commercial banks are visionary in different ways. http://dx.doi.org/10.1016/j.najef.2015.10.003 1062-9408/© 2015 Published by Elsevier Inc.
Please cite this article in press as: Lien, D., & Chen, S. Business Finance and Regional economic development. North American Journal of Economics and Finance (2015), http://dx.doi.org/10.1016/j.najef.2015.10.003
G Model ECOFIN 544 1–3 2
ARTICLE IN PRESS Editorial / North American Journal of Economics and Finance xxx (2015) xxx–xxx
69
Wu, Chen, and Lee (2015) evaluate the relationship between independent directors and earnings management. First, the authors adopt the less biased data through external auditors. Secondly, two moderating variables are incorporated into the model, namely, controlling shareholders and the divergence of cash-flow and control rights. The results show that both variables provide significant suppressing effects on the relationship between independent directors and earnings management. In an interesting paper, Chan, Chou, Lin, and Liu (2015) shows the value of corporate governance variables in predicting bankruptcy, particularly in the post-SOX period. The results provide useful information for policymakers, companies, and investors. Huang and Lin (2015) test the hypothesis the conjecture that managers withhold bad news in order to receive expensive perquisites (Yermack, 2006). They find, in comparison to good news, the frequency and magnitude of bad news release to be greater after the chief executive officer first discloses aircraft perks. In addition, the more disclosed perks there are, the more inclined the managers to withhold bad news. Chen, Lee, and Liao (2015) first evaluate the predictability power of index risk-neutral skewness on subsequent market returns and then explore the relationship between predictability and various types of institutional investor sentiment in the futures market. They show that index risk-neutral skewness has a significantly negative effect on subsequent index futures returns. Moreover, the effect does vary with institutional investor sentiment. Adopting a behavioral approach, Li, Hsieh, and Chang (2015) examine the relationship between branding practices and supernatural beliefs in Chinese corporate branding strategy for bank marketing. Empirical data indicate, in most cases, the brand name involves a lucky number of total strokes, suggesting the lucky-stroke-number naming strategy may be an effective corporate branding tool in the Chinese business world. At the organizational level, Chen, Yuan, Chen, and Seifert (2015) introduce felt accountability into the effects of transformational leadership and core self-evaluation (CSE) on task performance and contextual performance. Felt responsibility is based on a social contingency model of accountability. Applying structural equation modeling and analysis of moment structures techniques to 302 supervisor–employee dyads, it is found that felt accountability is an important mediating variable. Huang (2015) applies the bootstrap panel Granger causality approach to investigate the relationship between corruption and economic growth in thirteen Asia-Pacific countries over the 1997 to 2013 period. Empirical results indicate no significant causality between corruption and economic growth for most countries except for South Korea and China. A significantly positive causality from corruption to economic growth is found in South Korea which is consistent with the “grease the wheels” hypothesis. On the other hand, China exhibits a significantly positive causality from economic growth to corruption. Thus, an increase in China’s economic growth would lead to an increase in corruption.
70
References
35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68
71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90
Chan, C., Chou, D., Lin, J., & Liu, F. (2015). The role of corporate governance in forecasting bankruptcy: pre- and post-SOX Enactment. North American Journal of Economics and Finance (this issue). Chan, C., Lo, H., & Yang, M. (2015). The revision frequency of earnings forecasts and firm characteristics. North American Journal of Economics and Finance (this issue). Chen, C., Lee, H., & Liao, T. (2015). Risk-neutral skewness and market returns: The role of institutional investor sentiment in the futures market. North American Journal of Economics and Finance (this issue). Chen, C., Yuan, M., Chen, J., & Seifert, R. (2015). Linking transformational leadership and core self-evaluation to job performance: The mediating role of felt accountability. North American Journal of Economics and Finance (this issue). Chen, H., Lai, C., & We, S. (2015). Mutual fund selection and performance persistence in 401(k) plans. North American Journal of Economics and Finance (this issue). Huang, C. (2015). Is corruption bad for economic growth? Evidence from Asia-Pacific countries. North American Journal of Economics and Finance (this issue). Huang, C., & Lin, C. (2015). Do aircraft perquisites cause CEOs to withhold bad news? North American Journal of Economics and Finance (this issue). Li, H., Hsieh, M., & Chang, W. (2015). Lucky names: superstitious beliefs in Chinese corporate branding strategy for bank marketing. North American Journal of Economics and Finance (this issue). Lin, L., Tai, V., Hsu, C., & Yang, C. (2015). Who is more visionary in mergers: Commercial vs. investment banks? North American Journal of Economics and Finance (this issue). Lin, W., Tsai, S., & Chiu, P. (2015). Do foreign institutions outperform in the Taiwan options market? North American Journal of Economics and Finance (this issue).
Please cite this article in press as: Lien, D., & Chen, S. Business Finance and Regional economic development. North American Journal of Economics and Finance (2015), http://dx.doi.org/10.1016/j.najef.2015.10.003
G Model ECOFIN 544 1–3
ARTICLE IN PRESS Editorial / North American Journal of Economics and Finance xxx (2015) xxx–xxx
91 92 93 94
95 96 97 98
99
100
3
Wu, S., Chen, C., & Lee, P. (2015). Independent directors and earnings management: the moderating effects of controlling shareholders and the divergence of cash-flow and control rights. North American Journal of Economics and Finance (this issue). Yermack, D. (2006). Flights of fancy: Corporate jets, CEO perquisites, and inferior shareholder returns. Journal of Financial Economics, 80(1), 211–242.
Donald Lien Q1 University of Texas at San Antonio, United States Stephen Chen Toko University, Taiwan Q2 E-mail address: [email protected] (D. Lien) Available online xxx
Please cite this article in press as: Lien, D., & Chen, S. Business Finance and Regional economic development. North American Journal of Economics and Finance (2015), http://dx.doi.org/10.1016/j.najef.2015.10.003
ARTICLE IN PRESS North American Journal of Economics and Finance xxx (2015) xxx–xxx
Contents lists available at ScienceDirect
North American Journal of Economics and Finance
Editorial 1
2
Business Finance and Regional economic development
3
4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34
On December 10 and 12, 2014, National Taiwan Normal University and Toko University jointly Q3 host a conference titled “Business Finance and Regional Economic Development” at Taipei and Chiayi, Taiwan. Among the papers presented in the conference, eleven were selected by the review committee to include in this special issue. Among them, nine papers focus on finance issues. Another paper discusses corporate performance from the general organizational perspectives. The final paper examines the effects of corruption across countries in the Asia-Pacific region. Chen, Lai, and We (2015) investigate the mutual fund selection for 401(k) plans and their performance by plan sponsors and providers. They find (i) managed growth funds are favored; (ii) subject to the same objectives, funds with better performance or/and low expense ratio are chosen; (iii) at least 50% of the funds selected are among the top ten funds in terms of total net assets. These selected funds do not perform consistently nor outperform matching funds over sample years. Hence the 401(k) investment list does not convey valuable information for outside investors to mutual fund selection. It is generally regarded that foreign institutions have information advantage over domestic institutions in Taiwan’s financial markets. Lin, Tsai, and Chiu (2015) evaluate this hypothesis for Taiwan’s index options markets by examining the intraday information content of limit orders placed by the two institutions. They found the height and the length of the limit order book provided by either type of institution help predicting subsequent price changes in options, especially put options. The effect is stronger for foreign institutions and persists during the 2008–2009 financial crisis period. While previous studies often examine the effects of the number of analysts following on the firm performance, Chan, Lo, and Yang (2015) investigates the possible effects of the revision frequency of earnings forecasts. Arguing that the update frequency reflects an analyst’s effort and henceforth additional information, they hypothesize that update frequency has positive impacts on stock liquidity, cost of equity capital, and firm value. Empirical findings support the hypotheses, suggesting both the number of analysts following a firm and the frequency of news updating should be considered when assessing a firm’s information environment. Using 381 U.S. listed acquirers during 2000–2005, Lin, Tai, Hsu, and Yang (2015) investigate the relationship between their short-/long-term performance and the shareholding of their financial institutional investors. Empirical results show the changes of the ownership of commercial banks and insurance companies are positively related to the acquirers’ short-term performance while the changes of the ownership of investment bankers are negatively related to the bidders’ long-term performance. That is, investment banks and commercial banks are visionary in different ways. http://dx.doi.org/10.1016/j.najef.2015.10.003 1062-9408/© 2015 Published by Elsevier Inc.
Please cite this article in press as: Lien, D., & Chen, S. Business Finance and Regional economic development. North American Journal of Economics and Finance (2015), http://dx.doi.org/10.1016/j.najef.2015.10.003
G Model ECOFIN 544 1–3 2
ARTICLE IN PRESS Editorial / North American Journal of Economics and Finance xxx (2015) xxx–xxx
69
Wu, Chen, and Lee (2015) evaluate the relationship between independent directors and earnings management. First, the authors adopt the less biased data through external auditors. Secondly, two moderating variables are incorporated into the model, namely, controlling shareholders and the divergence of cash-flow and control rights. The results show that both variables provide significant suppressing effects on the relationship between independent directors and earnings management. In an interesting paper, Chan, Chou, Lin, and Liu (2015) shows the value of corporate governance variables in predicting bankruptcy, particularly in the post-SOX period. The results provide useful information for policymakers, companies, and investors. Huang and Lin (2015) test the hypothesis the conjecture that managers withhold bad news in order to receive expensive perquisites (Yermack, 2006). They find, in comparison to good news, the frequency and magnitude of bad news release to be greater after the chief executive officer first discloses aircraft perks. In addition, the more disclosed perks there are, the more inclined the managers to withhold bad news. Chen, Lee, and Liao (2015) first evaluate the predictability power of index risk-neutral skewness on subsequent market returns and then explore the relationship between predictability and various types of institutional investor sentiment in the futures market. They show that index risk-neutral skewness has a significantly negative effect on subsequent index futures returns. Moreover, the effect does vary with institutional investor sentiment. Adopting a behavioral approach, Li, Hsieh, and Chang (2015) examine the relationship between branding practices and supernatural beliefs in Chinese corporate branding strategy for bank marketing. Empirical data indicate, in most cases, the brand name involves a lucky number of total strokes, suggesting the lucky-stroke-number naming strategy may be an effective corporate branding tool in the Chinese business world. At the organizational level, Chen, Yuan, Chen, and Seifert (2015) introduce felt accountability into the effects of transformational leadership and core self-evaluation (CSE) on task performance and contextual performance. Felt responsibility is based on a social contingency model of accountability. Applying structural equation modeling and analysis of moment structures techniques to 302 supervisor–employee dyads, it is found that felt accountability is an important mediating variable. Huang (2015) applies the bootstrap panel Granger causality approach to investigate the relationship between corruption and economic growth in thirteen Asia-Pacific countries over the 1997 to 2013 period. Empirical results indicate no significant causality between corruption and economic growth for most countries except for South Korea and China. A significantly positive causality from corruption to economic growth is found in South Korea which is consistent with the “grease the wheels” hypothesis. On the other hand, China exhibits a significantly positive causality from economic growth to corruption. Thus, an increase in China’s economic growth would lead to an increase in corruption.
70
References
35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68
71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90
Chan, C., Chou, D., Lin, J., & Liu, F. (2015). The role of corporate governance in forecasting bankruptcy: pre- and post-SOX Enactment. North American Journal of Economics and Finance (this issue). Chan, C., Lo, H., & Yang, M. (2015). The revision frequency of earnings forecasts and firm characteristics. North American Journal of Economics and Finance (this issue). Chen, C., Lee, H., & Liao, T. (2015). Risk-neutral skewness and market returns: The role of institutional investor sentiment in the futures market. North American Journal of Economics and Finance (this issue). Chen, C., Yuan, M., Chen, J., & Seifert, R. (2015). Linking transformational leadership and core self-evaluation to job performance: The mediating role of felt accountability. North American Journal of Economics and Finance (this issue). Chen, H., Lai, C., & We, S. (2015). Mutual fund selection and performance persistence in 401(k) plans. North American Journal of Economics and Finance (this issue). Huang, C. (2015). Is corruption bad for economic growth? Evidence from Asia-Pacific countries. North American Journal of Economics and Finance (this issue). Huang, C., & Lin, C. (2015). Do aircraft perquisites cause CEOs to withhold bad news? North American Journal of Economics and Finance (this issue). Li, H., Hsieh, M., & Chang, W. (2015). Lucky names: superstitious beliefs in Chinese corporate branding strategy for bank marketing. North American Journal of Economics and Finance (this issue). Lin, L., Tai, V., Hsu, C., & Yang, C. (2015). Who is more visionary in mergers: Commercial vs. investment banks? North American Journal of Economics and Finance (this issue). Lin, W., Tsai, S., & Chiu, P. (2015). Do foreign institutions outperform in the Taiwan options market? North American Journal of Economics and Finance (this issue).
Please cite this article in press as: Lien, D., & Chen, S. Business Finance and Regional economic development. North American Journal of Economics and Finance (2015), http://dx.doi.org/10.1016/j.najef.2015.10.003
G Model ECOFIN 544 1–3
ARTICLE IN PRESS Editorial / North American Journal of Economics and Finance xxx (2015) xxx–xxx
91 92 93 94
95 96 97 98
99
100
3
Wu, S., Chen, C., & Lee, P. (2015). Independent directors and earnings management: the moderating effects of controlling shareholders and the divergence of cash-flow and control rights. North American Journal of Economics and Finance (this issue). Yermack, D. (2006). Flights of fancy: Corporate jets, CEO perquisites, and inferior shareholder returns. Journal of Financial Economics, 80(1), 211–242.
Donald Lien Q1 University of Texas at San Antonio, United States Stephen Chen Toko University, Taiwan Q2 E-mail address: [email protected] (D. Lien) Available online xxx
Please cite this article in press as: Lien, D., & Chen, S. Business Finance and Regional economic development. North American Journal of Economics and Finance (2015), http://dx.doi.org/10.1016/j.najef.2015.10.003