Purpose This study aims to examine whether and how the power of a chief executive officer (CEO) relates to firm-level research and development (R&D) investment. Design/methodology/approach The authors use clustered standard errors ordinary least squares regression using a large sample of US firms from 1994 to 2017. Findings The authors find a significant negative relation between CEO power and R&D investment, suggesting that firms with more powerful CEOs are less likely to invest in R&D activities. Besides, the study finds that this significant negative relation is largely driven by firms with weaker corporate governance. Originality/value This study contributes to the finance literature on the impact and consequences of having powerful CEOs and the financial accounting literature on the determinants of R&D expenditures.
PurposeThe purpose of this study is to evaluate the tempering effect of the presence of a female chief financial officer (CFO) on potentially dominant chief executive officer (CEO) behavior expressed through the overvaluing of acquisition premiums.Design/methodology/approachThis study used Securities Data Corporation (SDC) database data over an eight-year period to analyze the relationships between CEO dominance and the acquisition premiums paid in an acquisition deal. The study also analyzes the effect of CFO gender in curbing CEO dominance in the acquisition deals. The authors employ clustered standard errors ordinary least squares (OLS) regression analysis along with robustness testing, which supports the validity of our conclusions.FindingsThe authors expect and find that as CEO dominance rises, so does the acquisition premium; however, the presence of a female CFO in such situations significantly reduces the overpayment of the acquisition premium.Practical implicationsThe study findings advocate for organizational change in the form of an increased presence of female CFOs within business organizations.Originality/valueThis study contributes to the accounting literature by timely exploiting a rising trend in which female executives are expected to become more prolific. The authors’ research indicates that their entrenchment into business organizations, thereby promoting gender diversity, produces beneficial outcomes for those organizations. It also capitalizes on the specific attributes of the CEO–CFO relationship, which lends itself to particular effectiveness in the hands of female CFOs.
Purpose This paper aims to investigate the determinants and consequences of using disclaimer language in the banks’ audit committee (AC) reports. This study aims to analyze the factors tempting AC members of banks to disclose disclaimer language in the AC reports and the effect of such language on the cost of equity. Design/methodology/approach The data cover the period from 2006 to 2015 and considers the top US bank holding companies. Voluntary disclosure in the AC report is manually coded by using a scoring grid. Multivariate regression analysis is mainly used in the study. Findings The findings suggest that the ACs are using the disclaimer language to protect themselves when disclosing a high level of voluntary information that describes their oversight activities or to reduce their liability exposure due to lower financial reporting quality. The findings also reveal that investors are requiring a higher return on their investments whenever ACs use disclaimer language in their reports. Originality/value The AC report provides useful information to shareholders who evaluate the AC’s performance and accordingly vote for or against AC members on annual basis. The paper sheds lights on the motives and consequences of disclaimer language in the ACs report. Thus, the study benefits shareholders by providing empirical evidence in regard to the usage of disclaimer language. Also, the findings benefit industry, corporate governance organizations, standard setters and regulators that analyze AC disclosures and issue recommendations or new standards for improving those disclosures.
Cette étude offre un éclairage sur les pratiques de transition aux normes IFRS qui représentent un enjeu majeur pour les organisations et la fonction comptable. Comparativement aux recherches antérieures qui suggèrent que les entreprises suivent toutes un même chemin de transition vers les IFRS, cette étude révèle plusieurs chemins de transition distincts en s’appuyant sur l’analyse qualitative de sept entreprises canadiennes. Les entreprises étudiées ont suivi des chemins de transition vers les IFRS variés ; maîtrisé, apprenant, commode, précipité, en expansion, autonome ou efficace. Suivant la théorie de la pratique de Schatzki (2002), l'étude montre, en outre, comment le contexte dans lequel et dans le cadre duquel une organisation passe aux IFRS produit une intelligibilité pratique située incitant à suivre un des nombreux chemins possibles vers les IFRS. Cette constatation contribue à notre compréhension de ce qui influence la façon dont les entreprises passent aux IFRS et met en évidence le rôle important du contexte qui offre une intelligibilité pratique située pour la mise en œuvre des pratiques de transition.
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