Journal of Business Accounting and Finance Perspectives

(ISSN: 2603-7475) Open Access Journal
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JBAFP, Volume 2, Issue 3 (September 2020)
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JBAFP 2020, 2(3), 20; doi: 10.35995/jbafp2030020
Received: 10 Mar 2020 / Revised: 9 Jul 2020 / Accepted: 2020-08-11 / Published: 2020-08-29
Abstract
The academic literature indicates that “glamour” influences the investor’s behaviour. This article analyses the performance and value creation of the glamorous operations of mergers and acquisitions (M&A) in the telecommunications sector, trying to understand if these operations are conducive to stockholder wealth maximization.
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The academic literature indicates that “glamour” influences the investor’s behaviour. This article analyses the performance and value creation of the glamorous operations of mergers and acquisitions (M&A) in the telecommunications sector, trying to understand if these operations are conducive to stockholder wealth maximization. To conduct this analysis, the telecommunications M&A that occurred in the convulsed period of the internet bubble were counted as samples (1995–2010). The research concludes that glamour tends to be opposite to value creation in the long run: the glamour firms show significant value destruction and worse performance than non-glamour firms. Certain acquirers’ characteristics, such as size, are determinant in the glamour behaviour. This paper combats the shortage of research of a quantitative sectoral nature on telecommunications M&As, when leading international companies like Vodafone, Cable and Wireless, France Telecom or Telecom Italia are very active in this kind of operations. Full article
JBAFP 2020, 2(3), 19; doi: 10.35995/jbafp2030019
Received: 31 Mar 2020 / Revised: 16 Jun 2020 / Accepted: 2020-06-24 / Published: 2020-07-13
Abstract
This review surveys the existing empirical literature on the real effects of short selling on firms, addressing them through three main perspectives: corporate governance, financial decisions, and performance. The results of the (too) few empirical studies under scrutiny converge to a common rationale:
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This review surveys the existing empirical literature on the real effects of short selling on firms, addressing them through three main perspectives: corporate governance, financial decisions, and performance. The results of the (too) few empirical studies under scrutiny converge to a common rationale: a positive impact as a disciplinary mechanism on corporate governance and corporate investment policy and a positive impact on operating and corporate social responsibility (CSR) performance, even if some results are still puzzling. It appears that further investigations are necessary and should test the consequences of short selling on firms from a broader and more systematic perspective, with different theoretical and methodological approaches. Full article
JBAFP 2020, 2(3), 18; doi: 10.35995/jbafp2030018
Received: 20 Apr 2020 / Revised: 17 Jun 2020 / Accepted: 2020-04-22 / Published: 2020-06-20
Abstract
The spread and mortality rate of the COVID-19 virus has created enormous strains on global healthcare systems and driven governments to take extreme measures to contain the virus, including the lock down of most citizens and shutting down most economic sectors. Due to
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The spread and mortality rate of the COVID-19 virus has created enormous strains on global healthcare systems and driven governments to take extreme measures to contain the virus, including the lock down of most citizens and shutting down most economic sectors. Due to these unique challenges and coming from an economy that was weak already in 2018 and 2019, the world faces a global crisis of unprecedented impact and high uncertainty about the recovery process. In this paper, we analyze how the world economy is addressing the COVID-19 pandemic. We start with the situation of the main economic regions at the end of last year to understand the tools available to fight against what could be the worst crisis since World War II, according to the IMF1. Moreover, we review the estimated economic impact of COVID-19, as well as the expected recovery and its time frame. Additionally, we reflect on the fiscal and monetary measures adopted by different countries, especially G7 economies, to tackle the crisis. Finally, we discuss the optimal policies to overcome the situation and advance towards economic recovery and the stabilization of public finances. This crisis is a supply shock added to a forced shutdown of the economy. As such, traditional tools to boost credit demand and usual demand-side policies alone are likely to generate little positive effect, as any aggregate demand that may be incentivized will not likely be followed by aggregate supply. A combination of demand-side and supply-side measures may prove to be more effective to boost the recovery after the pandemic. Full article
JBAFP 2020, 2(3), 16; doi: 10.35995/jbafp2030016
Received: 18 Sep 2019 / Revised: 3 May 2020 / Accepted: 2020-05-20 / Published: 2020-06-10
Abstract
From a theoretical point of view, corporate social responsibility (CSR) disclosure actions have associated a large list of benefits as a result of the lower information asymmetry problems that provoke firms to enjoy better financial conditions and higher market value. However, empirically there
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From a theoretical point of view, corporate social responsibility (CSR) disclosure actions have associated a large list of benefits as a result of the lower information asymmetry problems that provoke firms to enjoy better financial conditions and higher market value. However, empirically there is no unanimity in the academy about these positive impacts. In this paper, we consider that the possible discretionary decision that managers could have in the elaboration of CSR reporting implies distrust about the credibility and utility of sustainability information. In this regard, the presence of independence in boards and directors that ensure better control of management decision could moderate the relationship between the quality of CSR reports and their benefits. Independent directors, in their decision-making process, associate their personal image, reputation, and career with CSR disclosures. For an international sample of analysis, our empirical evidence supports the premise that the market only positively assesses the utility and comparability of corporate social responsibility information, giving firms a superior value when there is a complementary mechanism that guarantees information credibility. Full article
JBAFP 2020, 2(3), 17; doi: 10.35995/jbafp2030017
Received: 20 Feb 2020 / Revised: 21 Apr 2020 / Accepted: 2020-04-30 / Published: 2020-06-09
Abstract
In September 2018, Danske Bank, the largest bank in Denmark and one of the largest in the Nordic region, published a report which detailed that the bank’s board had fallen into lapses in Anti-Money Laundering/Counter Terrorism Financing (AML/CTF) policies at the bank, in
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In September 2018, Danske Bank, the largest bank in Denmark and one of the largest in the Nordic region, published a report which detailed that the bank’s board had fallen into lapses in Anti-Money Laundering/Counter Terrorism Financing (AML/CTF) policies at the bank, in particular, within its Estonian subsidiary. The report was devastating in its criticism of AML processes in the Estonian branch, stating that, over a period of several years, “all lines of defence failed” to manage money laundering risks. Soon after the publication of this report, the CEO of Danske resigned, causing the details of the underlying scandal to become public knowledge (although some the issues involved had been aired publicly on a number of occasions previously). It was also revealed that the bank had become the subject of criminal investigations by US authorities. While the events that are covered in the initial report related to failures to manage AML risks, the situation is more complex than merely deficient AML controls in a remote branch. There was a failure to manage a smorgasbord of different types of risks at both the local and group (i.e., headquarters) level, including: strategic risks; technology risks; and especially operational risks. As befits a sophisticated modern financial institution, Danske Bank operates a group-wide enterprise risk management (ERM) framework covering multiple types of risk (credit, market operational, etc.). The fact that the failure to manage the AML risks took several years to come to light casts doubts on the efficacy of their ERM framework and its implementation. Using Turner’s case study approach, this paper considers the Danske Bank case from the perspective of operational risk management with a view to identifying lessons that can be learned from the scandal that can be applied to future, large-scale operational risk events. Full article
JBAFP 2020, 2(3), 15; doi: 10.35995/jbafp2030015
Received: 22 Oct 2019 / Revised: 14 Mar 2020 / Accepted: 2020-04-20 / Published: 2020-04-30
Abstract
Listed companies have become increasingly aware not only of the importance of being socially responsible but also about reporting their initiatives in this field. Existing research has investigated many of the impacts of the sustainable profile of companies on a wide range of
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Listed companies have become increasingly aware not only of the importance of being socially responsible but also about reporting their initiatives in this field. Existing research has investigated many of the impacts of the sustainable profile of companies on a wide range of financial dimensions. The link between the cost of equity and sustainability is extremely timely as it can have great potential in reinforcing good practices regarding sustainable engagement amongst listed companies, which can also be regarded as trendsetters by other types of companies and institutions. This paper presents a thorough literature review of 22 articles focused on the link between sustainability and the cost of capital. The main contribution of this study is the broad scope of the literature review not only regarding the number of papers revised but also the provided details and their systematisation, such that future researchers in the field can easily identify the references regarding, for instance, different theoretical approaches. The methodologies that have been used to test the hypotheses as well as how the cost of equity is proxied by the different authors is presented together with the independent variables for measuring the sustainable profile of companies as well as the control variables. Our literature review also pays special attention to the different regional settings where research has examined the link between the cost of equity and sustainability and presents new ideas for studies in the field in order to open up future avenues for research. Full article

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