Why did some firms perform better in the global financial crisis?

Chen, Mei‐Ping; Ning, Shao-Lin

doi:10.1080/1331677x.2017.1355258

Cited by 26 publications

(29 citation statements)

References 128 publications

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“…due to the increased scrutiny of accounting practices. Facts such as weak investors' rights protection can provide insiders with incentives to extract private benefits by disguising the actual performance of the company (Fel ıcio et al, 2018;La Porta et al, 2000) and by obfuscating firm performance (Dick et al, 2017;Lee, Chen, & Ning, 2017;Leuz et al, 2003). The S.O.X.…”

Section: Institutional System and Real Activities Manipulationmentioning

confidence: 99%

Real earnings management and corporate governance: a study of Latin America

Mellado

Saona

2019

Economic Research-Ekonomska Istraživanja

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This article analyses the impact of ownership structure features and institutional settings on real activities manipulation. The analysis is based on a sample of listed companies in the underexplored Latin American market for the period of 2004-2016. Paneldata-based G.M.M. System Estimation is used in the empirical analysis. The results confirm that the monitoring role of the majority owner is crucial in mitigating managerial opportunistic behaviour. Here, opportunistic behaviour refers to engaging in real activities manipulation that reduces the informative content of financial statements. However, analysis of insider ownership revealed that managers had a negative impact on transparency. We observed that as insider ownership increases, managers engage more actively in real earnings management. We also find that the institutional ownership and the quality of the regulatory system proved to be effective mechanisms in reducing real activities manipulation. ARTICLE HISTORY

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Section: Institutional System and Real Activities Manipulationmentioning

confidence: 99%

Real earnings management and corporate governance: a study of Latin America

Mellado

Saona

2019

Economic Research-Ekonomska Istraživanja

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“…Moreover, recent studies confirm that performance assessment is sensitive to the definition of family firms (Lee et al 2017 ). In terms of the financial condition of family firms, their performance in times of uncertainty, economic downturn, crisis, or recession seems essential.…”

Section: Literature Reviewmentioning

confidence: 88%

Measuring the impact of financial cycles on family firms: how to prepare for crisis?

Škare

Porada-Rochoń

2021

Int Entrep Manag J

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Financial cycles have sizeable economic effects, as witnessed during the 2008 financial crisis. However, despite the topic’s research importance, there is limited literature on how financial cycles and financial crises affect individual family firms. To the best of our knowledge, our study is among the first to measure the impact of financial cycles and crises on family firms. To study the impact of financial cycles on family firms, we use the Amadeus database on European companies. We identify family firms following the Global Family Business Index methodology 2019 (EY and the Center for Family Business of the University of St. Gallen). To measure the impact of financial cycles, we use the credit-to-GDP gap indicator from the Bank for International Settlements. Using the credit-to-GDP gap as a proxy for financial cycles, we use panel structural vector autoregression (Abrigo and Love 2016 ), Wald tests of Granger causality (Granger 1969 ), and impulse response functions (Lütkepohl 2010 ; Lütkepohl et al. 2015 ). We prove that family firms are less vulnerable than non-family firms to financial cycles during both financial booms and busts. Family firms perform better when financial cycle shocks have a less pronounced impact on firms’ performance. Non-family firms are highly vulnerable to financial cycles, performing worse during both booms and busts. The adoption of family firm management and governance policies should improve non-family firms’ performance and help the economy recover rapidly in times of crisis (exogenous shocks). Our study is the first to explore the impact of financial cycles on the micro level with a focus on family firms. The results could help managers and practitioners better form their business policy by looking at family firms’ experiences. Targeting economic policy more towards family firms in good and bad times will allow policymakers to prepare for future economic crises.

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“…In case of inbound deals in India, Reddy (2015) found that number and value of cross-border acquisitions have markedly declined both in continents and in industries around the crisis. Researchers across the globe investigated the impact of subprime crisis on the financial performance of the companies; Madaleno and Barbuta-Misu (2019) for non-financial firms from European countries, Yap, Mohamed, and Chong (2014) for Malaysian manufacturing companies, Lee, Chen, and Ning (2017) for Chinese companies, Kontogeorgos, Pendaraki, and Chatzitheodoridis (2017) for Greek Cheese companies, Zhao, Jiang and Li (2015) in Asia, Mahajan and Singh (2013) for Indian corporate sector and found mixed results. This article examined the effect of subprime crisis while empirically investigating the impact of M&As or corporate performance.…”

Section: Theoretical Constructmentioning

confidence: 99%