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Cooperative versus Conventional (Joint-Stock) Banking In Europe: Comparative Resistance And Resilience During The Recent Financial Crisis
Get PDFDuring the banking crisis of the 1990s, French cooperative banks emerged as more resistant and efficient than joint-stock banks, which enabled them to improve their market share and increase their reserve capital. This subsequently became the keystone of the external restructuring that led to the transformation of cooperative banks into large universal banking groups. At the time, their competitive advantage relied mainly on a different approach to risk-taking, which was associated with their cooperative legal form and their specific governance model.However, the same features have clearly not prevailed during the financial phase of the most recent crisis. Whereas governance models in the banking sector have been deeply questioned, the original cooperative model has evolved differently within European countries, with a high level of hybridization in some and a very diffuse cooperative network in others. Some European cooperative groups have been damaged by the crisis, mainly because of the corporate and investment banking that formed part of their activity.Yet the recent crisis has revealed the importance of a resistant and resilient worldwide banking system and the diversity of legal forms and organizations could contribute to achieving this goal. In this paper, we assess the resistance and resilience of major joint-stock banks during the crisis and compare them to cooperative banks in different European countries and Canada. We conduct our analysis at an aggregated/consolidated level for these two categories of banks. Using different indicators (e.g., z-score, loans to the economy, return on equity) as dependent variables, we verify whether the cooperative form is synonymous with greater resistance or resilience, and whether the results may be explained by different organizational schemes in cooperative banking
Foreign Country-Specific Experience And Ownership Level: Moderating Effect Of Host Country’s Government Corruption
Get PDFAccording to internalization theory, corporate international expansion occurs as a series of incremental commitment processes, such as an increased level of ownership. In addition, it is well known that host country-specific experience facilitates the increased ownership level. However, the existing empirical studies show the mixed results about the relationship between host country-specific experience and ownership level: positive, negative, and non-significant. To elucidate these mixed results, this study carefully explores how host country’s government corruption moderates the relationship, given that institutional environments influence standard economic activities within a specific economy. This study found that host country-specific experience has a positive effect on the ownership level in their foreign subsidiaries but the positive relationship was moderated by the negative effect of host countries’ government corruption. Accordingly, this study carefully qualifies the direct relationship between country-specific experience and ownership strategy, suggesting that an institutional contingency perspective needs to be considered to understand corporate international expansion strategies by the increased ownership level
The Effect Of Family Firm On The Credit Rating: Evidence From Republic Of Korea
Get PDFThis study examined whether there were differences in the credit ratings of family firms, one type of business ownership and corporate governance in Korea. Credit rating agencies which evaluate a company's ability to pay back the debt play a key role in evaluating corporate values in the capital market. A variety of standards are applied to evaluate corporate credit ratings. The corporate governance structure is also under consideration. Credit rating agencies may give excellent credit ratings to family firms if they judge that family companies have efficient governance structures resulting in lower agency costs as companies which try to match minority shareholders' interests. On the other hand, they may give lower credit ratings to family firms if they judge that family firms have a negative impact on firm performance. In this context, this study planned to investigate how credit rating agencies constituting the mainstay in the evaluation of corporate values with analysts judged the roles of family firms which had been controversial in previous studies in the capital market, and present direct results
Corporate Accelerators As Recent Form Of Startup Engagement: The What, The Why, And The How
Get PDFAn increasing number of established companies have recently started to launch corporate accelerator programs to engage with entrepreneurial startups, making this a worldwide, cross-industrial phenomenon. Nevertheless, there is a lack of understanding of the various objectives and approaches adopted by companies. This article examines 13 in-depth case studies of corporate accelerator programs and is the first to empirically derive and discuss a typology for corporate accelerators, assessing objectives and design configurations. Thereby, the article contributes to the emerging discussion about corporate accelerators in corporate entrepreneurship literature. Moreover, the findings provide corporate managers with an understanding of corporate accelerators and guidance for how to make design choices for startup engagement programs.
A Case Study On Big Bath Earnings Management With Large Shareholder Changes With A Focus On The Setting Of Loan Loss Allowances For A Savings Bank
Get PDFThe management performance of a bank is highly affected by bad debt the bank has written off related to loan receivables. When this happens, discretionary action regarding the setting of the allowance for loan losses is enabled, through which the big bath phenomenon often occurs. The present study investigates this big bath phenomenon. In particular, it attempts to determine whether it occurs when the allowance for loan losses is set during a specific period of time – namely the period in which large shareholders change and the new shareholder brings a capital influx. An examination was carried out through a case analysis for a savings bank. Z Savings Bank was selected, and for comparison and analysis, similar savings banks were studied. From 2002 to 2014, large shareholders at Z Savings Bank changed four times. The analysis revealed that when individual-to-individual shareholder changes took place, the big bath phenomenon did not occur. However, in two cases, one in 2011 and the other in 2014, individual-to-company shareholder changes took place. In these two cases, management performance showed high variations, and it was confirmed that the typical big bath phenomenon occurred. According to the analysis, this was due to an environmental factor that caused distressed debts to be reflected at their maximum value. This was done via an inspection process that was triggered when the capital held by the large companies – both Korean and foreign – was brought in. Specifically, the bad debt being written off and the allowances for loan losses were intentionally exposed in the accounting in order to provide transparency when the shareholder changes took place. This phenomenon occurred because the Financial Supervisory Commission reinforced the obligatory allowance-setting rate to ensure the soundness of assets
Transfer Pricing As A Vehicle In Corporate Tax Avoidance
Get PDFUsing transfer pricing, U.S. Corporations are able to transfer revenues to foreign affiliates with a lower corporate tax rates. The Internal Revenue Code requires intercompany transactions to comply with the “Arm’s Length Principle” in order to prevent tax avoidance. We describe and use elaborate examples to explain how US companies exploit flexibility in the tax code to employ transfer pricing and related tax reduction and avoidance methods. We discuss recent responses by regulatory bodies
Using Social Media As Historical Marketing Tool For Heritage Sites In Eastern New York State
Get PDFHeritage tourism marketing has been studied around the globe with many different areas of focus. This study examines heritage site marketing techniques in New York State and uses three research objectives: (1) to determine what marketing techniques are currently being used by heritage sites (2) examine how the heritage sites use social media and (3) determine social media best practices for heritage sites and recommendations for improvement. Findings show that New York State heritage sites primary use word of mouth marketing, relationship marketing, and e-marketing. Social media is used to communicate mostly with adults and seniors but do not focus heavily on millennials which is a major issue as identified in the study. Finally, the preferred social media platforms used by heritage sites are websites and Facebook, which are effective tools for visitor engagement, marketing events, programs and exhibits, and attracting new visitors.
Improvement Of Competitiveness In Small And Medium-Sized Enterprises
Get PDFWhile SMEs (small and medium-sized enterprises) contribute much to the economy, their competitiveness compared to that of large enterprises is negligible. Periodic evaluation of the overall competitiveness of SMEs is important to determine the reasons behind their relatively low growth rate. In order to maximize the effects of support for SMEs through government policies, determining the best means of providing support and enhancing competitiveness is necessary. Government funds or other sources of support for SMEs must be supplied according to the circumstances surrounding each enterprise. For instance, if the government invests in tangible assets, SMEs must be the target, because their size guarantees that despite their lower flexibility, competitiveness will improve. If investment is made in research and development, the firm’s long-term capacity for growth must be evaluated rather than its profitability, since there is an immediate increase in costs. There are differences in the effects of investment on flexibility, immaterial capital, and the ability to compete according to the size of the firm and the number of years it has been in business; these factors must be taken into account. Also, in allocating supporting funds to SMEs, the sites at which the funds are to be used must be examined. Active use of funds in areas where SMEs cannot invest in themselves is encouraged, rather than investment in general
Effect Of Liability Of Foreignness And Family Ownership On Cross-Listing Location Choice
Get PDFFirms incur liability of foreignness (LOF) when they expand their businesses to foreign countries. This study examines the applicability of LOF in the context of financing in a foreign capital market. Using an alternative-specific conditional logit model, we investigate the cross-listing decisions of firms from 28 countries that select among eight target destinations from 1994 to 2008. These firms target capital markets with lower LOF, which is measured by institutional, economic, geographic, and cultural distance. Such preference is particularly stronger for firms with higher levels of family ownership, suggesting family owners’ tendency to be averse to risk is also manifested in financing context
The Effect Of Accruals Quality On The Association Between Voluntary Disclosure And Information Asymmetry In Korea
Get PDFUsing data on the firms' voluntary disclosures from the Korea Stock Exchange from 2011 to 2014, we first empirically examine the association between voluntary disclosure and information asymmetry and then investigate the extent to which this association is affected by accruals quality since Korea adopted International Financial Reporting Standards (IFRS) in 2011. We use Comprix et al. (2011) and Shin and Park (2014)'s measures of information asymmetry. They are daily stock return volatility (VOLA) and trading volume turnover (VOL). We use the Dechow et al.'s (1995) revised Jones model and the Kothari et al.'s (2005) performance matched discretionary accrual model to measure the discretionary accruals. The absolute values of discretionay accruals are used as proxies for accruals quality. Final research samples with voluntary disclosure for this study are 1,226 (firms-years) companies. The research findings generally support our hypotheses. First, the relation between voluntary disclosure and information asymmetry is statistically and significantly positive as we have expected. The Korean companies with high voluntary disclosure would experience higher daily stock return volatility and less trading volume, which implies that companies tend to disclose biased information to the outside, which is consistent with prior studies in Korea. Second, the accruals quality (moderating variable) on the relation between voluntary disclosure and information asymmetry is statistically and significantly negative. Thus, we can conclude that when accruals quality is high, more voluntary disclosure decreases information asymmetry. These findings imply that accruals quality works as a mechanism in reducing the negative effect of voluntary disclosure on information asymmetry after the adoption of IFRS in Korea. The limitation of this study is such that we might not have considered other omitted variables and other proxies for the accruals quality, voluntary disclosure, and information asymmetry