Audit regulators around the world have expressed concern over market dominance by Big 4 accounting firms and the potential adverse effect it may have on the quality of audited financial statements. ...We use cross‐country variation in the audit market structure of 42 countries to examine two separate aspects of Big 4 dominance: (1) Big 4 market concentration as a group relative to non–Big 4 auditors; and (2) concentration within the Big 4 group in which one or more of the Big 4 firms is dominant relative to the other Big 4 firms. We find that in countries where the Big 4 (as a group) conduct more listed company audits, both Big 4 and non–Big 4 clients have higher quality audited earnings compared to clients in countries with smaller Big 4 market shares. In contrast, in countries where there is a greater concentration within the Big 4 group, we find that Big 4 clients have lower quality audited earnings compared to countries with more evenly distributed market shares among the Big 4. Thus concentration within the Big 4 group appears to be detrimental to audit quality in a country and of legitimate concern to regulators and policymakers. However, Big 4 dominance per se does not appear to harm audit quality and is in fact associated with higher earnings quality, after controlling for other country characteristics that potentially affect earnings quality.
The authors test five theoretically derived hypotheses about what drives video ad sharing across multiple social media platforms. Two independent field studies test these hypotheses using 11 emotions ...and over 60 ad characteristics. The results are consistent with theory and robust across studies. Information-focused content has a significantly negative effect on sharing, except in risky contexts. Positive emotions of amusement, excitement, inspiration, and warmth positively affect sharing. Various drama elements such as surprise, plot, and characters, including babies, animals, and celebrities arouse emotions. Prominent (early vs. late, long vs. short duration, persistent vs. pulsing) placement of brand names hurts sharing. Emotional ads are shared more on general platforms (Facebook, Google+, Twitter) than on LinkedIn, and the reverse holds for informational ads. Sharing is also greatest when ad length is moderate (1.2 to 1.7 minutes). Contrary to these findings, ads use information more than emotions, celebrities more than babies or animals, prominent brand placement, little surprise, and very short or very long ads. A third study shows that the identified drivers predict sharing accurately in an entirely independent sample.
Post-1970, share issuance exhibits a strong cross-sectional ability to predict stock returns. This predictive ability is more statistically significant than the individual predictive ability of size, ...book-to-market, or momentum. Our finding is related to research that finds that long-run returns are associated with share repurchase announcements, seasoned equity offerings, and stock mergers, although our results remain strong even after exclusion of the data used in these studies. We estimate the issuance relation pre-1970 and find no statistically significant predictive ability for most holding periods.
The Marginal Product of Capital Caselli, Francesco; Feyrer, James
The Quarterly journal of economics,
05/2007, Letnik:
122, Številka:
2
Journal Article
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Whether or not the marginal product of capital (MPK) differs across countries is a question that keeps coming up in discussions of comparative economic development and patterns of capital flows. ...Using easily accessible macroeconomic data we find that MPKs are remarkably similar across countries. Hence, there is no prima facie support for the view that international credit frictions playa major role in preventing capital flows from rich to poor countries. Lower capital ratios in these countries are instead attributable to lower endowments of complementary factors and lower efficiency, as well as to lower prices of output goods relative to capital. We also show that properly accounting for the share of income accruing to reproducible capital is critical to reach these conclusions. One implication of our findings is that increased aid flows to developing countries will not significantly increase these countries' capital stocks and incomes.
Platform envelopment Eisenmann, Thomas; Parker, Geoffrey; Van Alstyne, Marshall
Strategic management journal,
December 2011, Letnik:
32, Številka:
12
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Due to network effects and switching costs in platform markets, entrants generally must offer revolutionary functionality to win substantial market share. We explore a second entry path that does not ...rely upon Schumpeterian innovation: platform envelopment. Through envelopment, a provider in one platform market can enter another platform market, and combine its own functionality with that of the target in a multi-platform bundle that leverages shared user relationships. Envelopers capture market share by foreclosing an incumbent's access to users; in doing so, they harness the network effects that previously had protected the incumbent. We present a typology of envelopment attacks based on whether platform pairs are complements, weak substitutes, or functionally unrelated and we analyze conditions under which these attack types are likely to succeed.
We examine the association of a venture capital (VC) firm’s reputation with the post-initial public offering (IPO) long-run performance of its portfolio firms. We find that VC reputation, measured by ...the past market share of VC-backed IPOs, has significant positive associations with long-run firm performance measures. While more reputable VCs initially select better-quality firms, more reputable VCs continue to be associated with superior long-run performance, even after controlling for VC selectivity. We find that more reputable VCs exhibit more active post-IPO involvement in the corporate governance of their portfolio firms, and this continued VC involvement positively influences post-IPO firm performance.
Some considerations concerning the shares Lupulescu, Ana-Maria
Proceedings of the ... International Conference on Business Excellence,
12/2021, Letnik:
15, Številka:
1
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The registered capital of the company by shares is divided into fractions known as shares, which, unlike the parts of interests or social parts, represent negotiable instruments, presenting first of ...all the advantage of being negotiable and freely transferable, subject to limitations that could be introduced by the associates by the constitutive act. Therefore, in exchange for the contributions made to registered capital of the company by shares, the associates receive a number of shares corresponding to the value of these contributions, which represents a certain fraction of its registered capital.
Taking into account the negotiable nature of the shares, the quality of shareholder derives and is more related to the quality of owner of shares, dissociating itself from that of signatory of the company’s constitutive act, obliged, inter alia, to make contributions, the latter quality being relevant only at the moment of incorporation of the company. Actually, during the existence of the company, the quality of owner of shares, and therefore of shareholder, can change significantly and uninterruptedly, depending on the operations performed with these titles, causing appropriate changes in the shareholder structure of the company.
We argue that information about firm activities can vary substantially in the presence of founder or heir ownership, thereby influencing the risks borne by minority investors. We explore two ...hypotheses with regard to these controlling shareholders and corporate transparency, focusing on their role as monitor in-place and their potential to exploit firm opacity to accrue private benefits of control. To test these notions, we create an opacity index that ranks the relative transparency of the two thousand largest industrial US firms and find founder and heir ownership in 22% and 25% of these firms, respectively. Our analysis indicates that, in large, publicly traded companies, both founder and heir firms are significantly more opaque than diffuse shareholder firms. We also find that founder and heir-controlled firms exhibit a negative relation to performance in all but the most transparent firms. Surprisingly, additional tests reveal that concerns about divergences in ownership versus control (management type, dual class shares, and board influence) appear to be substantially less important than corporate opacity in explaining the performance impacts of founder and heir control. Finally, we decompose corporate opacity into disclosure and market scrutiny components, finding that the disclosure quality component appears to be of greater importance to investors. However, irrespective of whether these controlling shareholders create or stay in the firm because of corporate opacity, our analysis suggests that founders and heirs in large, publicly traded firms exploit opacity to extract private benefits at the expense of minority investors.
Evidence from firms in 47 countries shows that companies with political connections have higher leverage and higher market shares, but they underperform compared to nonconnected companies on an ...accounting basis. Differences between connected and unconnected firms are more pronounced when political links are stronger. Differences also vary depending on the level of corruption and the degree of economic development in individual countries.
Slicing Up Global Value Chains Timmer, Marcel P.; Erumban, Abdul Azeez; Los, Bart ...
The Journal of economic perspectives,
04/2014, Letnik:
28, Številka:
2
Journal Article
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In this paper, we “slice up the global value chain” using a decomposition technique that has recently become feasible due to the development of the World Input-Output Database. We trace the value ...added by all labor and capital that is directly and indirectly needed for the production of final manufacturing goods. The production systems of these goods are highly prone to international fragmentation as many stages can be undertaken in any country with little variation in quality. We seek to establish a series of facts concerning the global fragmentation of production that can serve as a starting point for future analysis. We describe four major trends. First, international fragmentation, as measured by the foreign value-added content of production, has rapidly increased since the early 1990s. Second, in most global value chains there is a strong shift towards value being added by capital and high-skilled labor, and away from less-skilled labor. Third, within global value chains, advanced nations increasingly specialize in activities carried out by high-skilled workers. Fourth, emerging economies surprisingly specialize in capital-intensive activities.
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