ORIGINAL_ARTICLE
The effect of the politically connected CEO on credit risk in Iranian commercial banks
It has been widely stated in the theoretical literature that political connections increase the value of organizations. Political connections may have both a positive and negative effect on the performance of the bank. Politically connected banks may have better access to financing, timely liquidity support from the central bank or banks which are connected with other political organizations and reduction in the pressure of legal authorities if such a reduction is possible, such as the easy passage of legal inspection. A politically connected bank can also use communications to exchange assistance to achieve the organization's goals. Therefore, answering the question of whether banks' political connections have a positive or negative impact on their financial performance cannot be answered with certainty. This study attempts to investigate the effects of interactions between politically connected CEO (PCCEO), independent directors, and credit risk of banks in an emerging country context where corporate governance systems appear weak. In this study, to collect the required data, we use the information database of Codal publishers for the listed banks in the Tehran Stock Exchange and the information existing in the performance report of the Iranian banks for public banks that collected by the Iran Banking Institute. For the investigation of this issue, we employ the SGMM method (System Generalized Method of Moments) or in other words, dynamic GMM approach, and we find politically connected boards to exert significant influence on credit risk.
https://www.ijfifsa.ir/article_119165_c23c4760e7bc595e69a718d8d49162a8.pdf
2020-07-01
1
17
10.22034/ijf.2020.244253.1150
Credit risk
Politically Connected CEO
Iranian Commercial Banks
SGMM
Ali
Heidari
aliheidari_62@yahoo.com
1
Ph.D. Candidate in Finance, Central Tehran Branch, Islamic Azad University, Tehran, Iran.
AUTHOR
Ezatollah
Abbasian
e.abbasian@ut.ac.ir
2
Associate Prof. in Economics, Department of Public Administration, Faculty of Management, University of Tehran, Tehran, Iran.
LEAD_AUTHOR
Farzaneh
Khalili
farzaneh_khalili2001@yahoo.com
3
Assistant Professor in Economics, Department of Humanities, Abhar Branch, Islamic Azad University, Zanjan, Iran.
AUTHOR
Aggarwal, R.K., Meschke, F., Wang, T.Y., 2012. Corporate political donations: Investment or agency? Bus. Politics 14 (1), 1649–3569.
1
Arellano, M., Bover, O., 1995. Another look at the instrumental variable estimation of error components models. J. Econ. 68 (1), 29–51.
2
Blundell, R., Bond, S., 1998. Initial conditions and moment restrictions in dynamic panel data models. J. Econ. 87 (1), 115–143.
3
Boateng, Agyenim, Liu Yang and Brahma Sanjukta, 2019. Politically connected boards, ownership structure and credit risk: Evidence from Chinese commercial banks, Research in International Business and Finance 47, 162–173.
4
Charumilind, C., Kali, R., Wiwattanakantang, Y., 2006. Connected lending: Thailand before the financial crisis. J. Bus. 79 (1), 181–218.
5
Chen, T., 2015. Institutions, board structure, and corporate performance: evidence from Chinese firms. J. Corp. Finance 32, 217–237.
6
Delis, M. D., Hasan, I., & Mylonidis, N., 2017. The risk‐taking channel of monetary policy in the US: Evidence from corporate loan data. Journal of Money, Credit and Banking, 49(1), 187-213.
7
Do, Q.-A., Y.T. Lee, and B.D. Nguyen, 2016, “Directors as Connectors: The Impact of the External Networks of Directors on Firms,” University of Cambridge Working paper.
8
Dong, Y., Meng, C., Firth, M., Hou, W., 2014. Ownership structure and risk-taking: comparative evidence from private and state-controlled banks in China. Int. Rev. Financial Anal. 36, 120–130.
9
Faccio, M., Masulis, R., McConnel, J., 2006. Political connections and corporate bailouts. J. Finance 61 (6), 2597–2635.
10
Greene, W.H. (2008) Econometric Analysis (sixth edition). Upper Saddle River, NJ: Prentice-Hall.
11
Habib, Ahsan. Ranasinghe, Dinithi. Haris Muhammadi Abdul, Islam, Ainul. (2018), Political connections, financial reporting and auditing: Survey of the empirical literature, Journal of International Accounting, Auditing and Taxation, S1061-9518(18)30114-9 DOI: https://doi.org/10.1016/j. intaccaudtax.2018.05.002 Reference: ACCAUD 240.
12
Houston, J.F., L. Jiang, C. Lin, and Y. Ma, 2014, “Political Connections and the Cost of Bank Loans,”
13
Hung, C.-H.D., Jiang, Y., Liu, H., Tu, H., Wang, S., 2017. Bank political connections and performance in China. J. Financial Stab. 32, 57–69.
14
Johnson, S., Mitton, T., 2003. Cronyism and capital controls: evidence from Malaysia. J. Financial Econ. 67 (2), 351–382.
15
Ling, Leng, Zhou, Xiaorong, Liang, Quanxi, Song, Pingping, Zeng, Haijian. (2016). “Political connections, overinvestments and firm performance: Evidence from Chinese listed real estate firms”. Finance Research Letters 1–6.
16
Masulis, R.W., C. Wang, and F. Xie, 2007, “Corporate Governance and Acquirer Returns,” Journal of Finance, vol. 62, issue 4, 1851-1889.
17
Mazandarani, S., Saeedi, P., 2018. Investigating the Effect of Political Relationships on Financial Performance and Risk of Banking Facilities, Journal of Accounting and Economic Sciences, 4, pp 15-28 (in Persian).
18
Nelly Sari, R. and R. Anugerah. (2011). “The Effect of Corporate Transparency On Firm Performance: Empirical Evidence from Indonesian Listed Companies”, Modern Accounting and Auditing, Vol. 7, No. 8, pp. 773-783.
19
Nikomram, Hashem., Bani Mahd, Bahman., Rahnama Rudposhti, Fereydoun., And Kiani, Ali (2013), "Economics based on relations, political relations and the quality of accruals". Auditing Knowledge, Volume 13, Number 50, Pages 55-41.
20
Nys, E., Tarazi, A., Trinugroho, I., 2015. Political connections, bank deposits, formal deposit insurance. J. Financial Stab. 19, 83–104.
21
Rezaei F., Afrouzi L., 2015. The Relation between Cost of Debt and Corporate Governance in Firms with Political Connections, Accounting and auditing research journal, 16, pp 85-112 (in Persian).
22
Salehinia, M., Tamoradi, A., 2019. The Effect of Political Connections on Financing Policies, Financial accounting research journal, 40, pp 39-60 (in Persian).
23
Schmitz, A., 2012. Individual Finance, by-nc-sa 3.0(http://creativecommons.org/licenses/by-nc-sa/3.0/)license, volume 1.
24
Shi, H., Xu, H., Zhang, X., 2018. Do politically connected independent directors create or destroy value? J. Bus. Res. 83, 82–96.
25
Windmeijer, F., 2005. A finite sample correction for the variance of linear efficient two-step GMM estimators. J. Economet. 126 (1), 25–51.
26
Wintoki, M., Linck, J., Netter, J., 2012. Endogeneity and the dynamics of internal corporate governance. J. Financial Econ. 105 (3), 581–606.
27
ORIGINAL_ARTICLE
Privatization, Changes in Management Accounting Practices and their impacts on Financial Performance – Evidence from Iran
The purpose of this study is to investigate the impacts of external and internal organizational factors of the privatization process on management accounting practices and the impact of these changes on the financial performance of listed companies on Tehran Stock Exchange that more than 51% of the companies' shares have been transferred to the private sector. This research, based on institutional and structural theories, provides an exhaustive explanation of changes in management accounting practices by considering the conflict of the internal and external factors and the role of the human factor in the privatization process. In this study, according to the general policies of Article 44 of the Constitution, to increase competitive advantage, management accounting has been used as a mediating variable in the relationship between privatization and financial performance. To this research, 60 companies which their ownership transferred to the private sector during the period from 2002 to 2018 were investigated. To collect data, questionnaire survey and companies financial statements were adopted and to test the hypothesis Structural equation An investigating of the impacts of external and internal organizational 19 modeling using Smart PLS software. The findings of the study show that external and internal organizational factors in the privatization process, have a significant impact on the management accounting practices that these changes effects on the financial performance of companies. The result is that in the privatization process, the external and internal organizational factors and contradiction of the incompatibility of these factors with the human factor provide the conditions for changes in management accounting practices that effect on the financial performance of companies. The results of the current study could be useful for the effectiveness of management accounting changes and their impact on the financial performance of companies in the merger and acquisition processes in developing countries.
https://www.ijfifsa.ir/article_119167_6024f513fdffed5b995256f1781484ee.pdf
2020-07-01
18
48
10.22034/ijf.2020.231937.1129
Privatization
external organizational factors
Internal Organizational Factors
Management Accounting Practices
Management Accounting Innovations
Merger and Acquisition
financial performance
Fatemeh
Safari Sarchah
fateme.safari8280@yahoo.com
1
Ph.D. Candidate, Department of Accounting, Zahedan Branch, Islamic Azad University, Zahedan, Iran.
AUTHOR
Hassan
Yazdifar
hyazdifar@bournemouth.ac.uk
2
Prof. of Accounting and Head of Accounting, Department of Finance and Economics, Bournemouth University, England.
LEAD_AUTHOR
Ahmad
Pifeh
pifeh@acc.usb.ac.ir
3
Assistant Prof., Department of Accounting, Sistan and Baluchestan University, Zahedan, Iran.
AUTHOR
Abdel-Kader, M., & Luther, R. (2008). The impact of firm characteristics on management accounting practices: A UK-based empirical analysis, British Accounting Review,doi: 10.1016/j.bar.2007.11.003.
1
Abeydeera, S., Tregidga, H., & Kearins, K. (2016). Sustainability reporting–more global than local?. Meditari Accountancy Research.
2
Abolhassani, A.(2010). Investigating the effect of privatization of state-owned companies on their economic value added. Master Thesis in Accounting, Islamic Azad University, Arak Branch. (In Persian).
3
Abubakar Nuhu, N., Baird, K ., & Appuhami, R. (2016). The association between the use of management accounting practices with organizational change and organizational performance. Advances in Management Accounting, Vol.26, ISSN:1474-7871.
4
Ahmad, K. (2012). The use of management accounting practices in Malaysian SMEs, Submitted by to the University of Exeter as a thesis for the degree of Doctor of Philosophy in Accountancy, available at https://ore.exeter.ac.uk/repository/handle/10036/3758.
5
Albu, N., & Albu, C. (2012). Factors associated with the adoption and use of management accounting techniques in developing countries: The case of Romania. Journal of International Financial Management & Accounting, 23(3), pp.245-276.
6
Alhashmi, A.(2014).An Empirical Investigation of Management Accounting and Control Systems Change in Two Libyan State-owned Manufacturing Companies, An Institutional Perspective, A Thesis in Fulfilment of the Requirements of the Degree of Doctor of Philosophy in Accounting, School of Business University of Dundee, Scotland.
7
Aliabadi, S., Dorestani, A., & Balsara, N. (2013). The Most Value Relevant Accounting Performance Measure by Industry, Journal of Accounting and Finance, Vol.13, No.1, pp.22-34.
8
Al-Khasawneh, S. M., Endut, W. A., & Rashid, N. M. N. N. M. (2020). Factors Affecting Usage of Modern Management Accounting Techniques in Industrial Companies Listed in Amman Stock Exchange. International Journal of Research In Commerce and Management Studies (ISSN: 2582-2292), 2(3), 14-36.
9
Al-Nimer, M.B. (2010). An exploratory study on factors influencing the adoption of management accounting practices in developing countries: evidence from Jordan, Management Accounting Section, available at http://ssrn.com/abstract=1661975.
10
Amat,J,Carmona,S.and Roberts, H. (1994).Context and change in management accounting systems: a Spanish case study, Management Accounting Research, 5, 107–126.
11
Arabi, M., & Kavianifard, H.(2013). Examining the relation between stage of management accounting practice and technological innovation and management accounting innovation in the companies listed in Tehran Stock Exchange, Advances in Environmental Biology, 7(10),pp.3145-3159.
12
Ardakani, S; Izadi, M, & Izadi, F.(2018). Investigating the effect of capital structure on the rate of return on assets and economic value added due to the intensity of competition in the product market in the industry (Case study of companies listed on the Tehran Stock Exchange). Asset Management and Financing, Year 6, No. 20. (In Persian).
13
Asadi, A; Zandedel, A, & Kiani Nejad, A. (2013). Relationship between economic value added information content and traditional criteria with corporate market value-added. Accounting and Auditing Reviews, 20th Year, No. 2, pp. 18-1. (In Persian).
14
Asghar, B., Wasim, A., Jahanzaib, M., & Hussain, S., (2016). Impact of Privatization on Employee Relations at PakistanTelecommunication Company Limited.The Nucleus 53, No. 4 (2016) 243-253www.thenucleuspak.org.pk.
15
Azarbayjani, K., Soroush Yar, A., & Yarian Kupani, S.(2011). Searching for the best measure of financial performance, Auditor's Magazine, No. 52. (In Persian).
16
Bachiller, P., (2017).A meta-analysis of the impact of privatization on firm performance.Management Decision, Vol.55 No. 1, 2017, pp. 178-202.DOI 10.1108/MD-12-2015-0557.
17
Bartley, T. (2003). Certifying forests and factories: States, social movements, and the rise of private regulation in the apparel and forest products fields. Politics & Society, 31(3), 433-464.
18
Burns, J.and Baldvinsdottir, G.(2007).The Changing Role of ManagementAccountants. in Hopper, T, Northcott, D and R. Scapens Ed.^Eds. Issues in Management Accounting. Harlow, Financial Times Prentice Hall.pp.117-132.
19
Chan, A. M. Y. (2015). Accounting regulation research and structuration theory. Journal of Modern Accounting & Auditing, 11(3), 131-137.
20
Chan, A. M. Y. (2017). Accounting systems in cultural context: A research framework for China studies in the global economy. Journal of Modern Accounting & Auditing, 13(2), 45-50.
21
Collier, P.M. (2001).The power of accounting: a field study of local financial management in the police force. Management of Accounting Research 12(4),pp.448–465.
22
Cosset, J. C., Durnev, A., & dos Santos, I. O. (2020). Privatization and state ownership of natural advantage industries. The Quarterly Review of Economics and Finance, 76, 68-83.
23
Dahmardeh Ghalehno, M; Bahman Doust, B; Zarei, H, & Soleimani, M. (2020). Human resource accounting: background, concepts, criteria and measurement models. Accounting and auditing research. (In Persian).
24
Dehgan, R., Khodamipour, A., & Sadeghi, Z. (2015). Studying Effect of Privatization on Application of Management Accounting Tools and Performance of National Iranian Copper Industries Company, International Journal of Economy, Management and Social Sciences, 4, 1,pp.58-66.
25
Demerjian, P., Lev, B., & MacVay, S.(2012). Quantifying managerial ability: A new measure and validity test. Management Science .58(7),pp.1229-1248.
26
DianatiDeilami, Z., Alambeigi, A., & Barzegar, M. (2016). Investigating the relationship among privatization, management accounting tools and financial performance of the firms listed in Tehran Stock Exchange, Journal of empirical studies of financial accounting. Year 13, No. 51, pp. 47-78.
27
DiMaggio, P. J., & Powell, W. W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American sociological review, 147-160.
28
Dublish, N., & Kansal, M. S. (2020). Privatization of Public Sector Undertakings in India. Studies in Indian Place Names, 40(56), 527-534.
29
Firoozkoohi, A; & Zarei, H. (2019). A Review of the Reasons and Theoretical Foundations of Corporate Social Responsibility, Environmental Sustainability Reporting, 17th National Accounting Conference of Iran, Qom, Farabi Campus, University of Tehran. (In Persian).
30
Galyan, G., & Lutz, S.(2007). Firm Performance and Privatization in Ukraine. Journal of Economic Change, Vol. 40, pp. 253-266.
31
Ghasemi, R., Noor Azmi, M., Karami, M., Norkhairul, H.B., & Asgharizade, E. (2015). The Relationship among Strategy, Competition and Management Accounting Systems on Organizational Performance, European Online Journal of Natural and Social Sciences,pp.565-581.
32
Giddens, A. (1984). The Constitution of Society: Outline of the Theory of Structuration.Cambridge, Polity.
33
Granlund, M. (2001).Towards explaining stability in and around management accounting systems. Manage. A. Res. 12 (2),141–166.
34
Gord, A., Waqfi, S. H., & Fakuri, M.(2014). Investigating the Relationship between Financial Leverage Measures (Capital Structure) and Performance Evaluation Measures. Accounting Research Quarterly, Fourth Year, No. 15.pp.110-121. (In Persian).
35
Gudarzvand Chegini, M., & Mirzad Zare, M.(2010).The effects of ceding (privatization) on efficiency (Telecommunication Company of Gilan).business survey, No 40,pp.121-135.
36
Haldma, T.and Laats, K. (2002).Contingencies influencing the management accounting practices of Estonian manufacturing companies, Management Accounting Research, Vol. 13 No. 4, pp. 379-400.
37
Higgins, C., & Larrinaga, C. (2014). 16 Sustainability reporting. Sustainability accounting and accountability, 273.
38
Hoffman, A. J. (1999). Institutional evolution and change: Environmentalism and the US chemical industry. Academy of management journal, 42(4), 351-371.
39
Hopwood, A.G. (1972). An empirical study of the role of accounting data in performance evaluation. Journal of Accounting Research, Vol. 10,pp.156-182.
40
Innes, J., & Mitchell, F. (1990). The Process of Change in Management Accounting: Some Field Study evidence. Management Accounting Research, 1 (1),pp.3-19.
41
Jafari Jam, H; Ali Asgari, F; & Zarei, H. (2019). Financial performance and value of companies: The role of disclosure of sustainability information. Financial Accounting Knowledge, Year 6, No. 22, pp. 242-215. (In Persian).
42
Johnson, G., Smith, S., & Codling, B.(2000). Micro-Processes of Institutional Change in the Context of Privatization. Academy Of Management Review.25(3), pp. 572-580.
43
Jones, C. (1985). An empirical study of the evidence for contingency theories of management accounting systems in conditions of rapid change. Accounting, Organizations and Society.
44
Kashanipour, M., & Rasaeian, A. (2001). The relationship between Tobin’s Q and companies performance measurement in Iran, Financial accounting, No.3,pp.131-146.
45
Khani, A., & Ahmadi, M. (2012). Performance evaluation based on balanced evaluation card measures and strategy. No. 10, pp. 1-26. (In Persian).
46
Laitinen, E.K. (2001)."Management Accounting Change in Small Technology Companies: Towards a Mathematical Model of the Technology Firm."Management Accounting Research. 12: 507-541.
47
Leykun, F. (2020). Privatization Modalities and Business Valuation: An Ethiopian Focus. Journal of Investment and Management, 9(1), 12.
48
Macarthur, J. (2006)."Cultural Influences on German versus U.S. management Accounting Practices", Management Accounting Quarterly, winter Vol.7, No.2.
49
Mahoney, R. L. (2011). EVA momentum as a performance measure in the United States lodging industry, A dissertation submitted to the graduate faculty in partial fulfillment of the requirements for the degree of Doctor of Philosophy, Iowa State University.
50
Maziriri, E, T., & Mapuranga, M. (2017). The Impact of Management Accounting Practices (Maps) on the Business Performance of Small and Medium Enterprises within the Gauteng Province of South Africa. journal of Accounting and Management, Vol.7, No.2.
51
Moung Yin Chan, A., Lo, P., & Ng, K. (2020). An Analysis of Management Accounting System Development from the Structuration Theory Viewpoint. Journal of Accounting, Business & Management, 27.
52
Nguyen, N.T., Nguyen, T. T.H., Chu, T. T. T., Nguyen, D. D., & Nguyen, T. T. P.(2019). Factors affecting the application of management accounting in small and medium enterprises in Hanoi, Vietnam. Management Science Letters.No.9 .pp. 2039–2050.
53
Nikoo Maram, H., & Alaviyan Qavanini, M. (2009). A study of the relationship between economic value-added growth and operating leverage and company value, Journal of Financial Studies, No. 2. pp. 65-90. (In Persian).
54
Oanh Le,T.T., Bui,T.N., Tran,T.T.P., & Nguyen,Q.H.(2020). Factors affecting the application of management accounting in Vietnamese enterprises. Uncertain Supply Chain Management.No. 8 .pp. 403–422.
55
Parker, D. (1995). Privatization and agency status: identifying the critical factors for performance improvement. British journal of management, 6(1), 29-43.
56
Peers, H., Easley, D., Hvidkjaer, S., & Hara, M, O., (2012). Firm characteristics and informed trading: Implications for asset pricing. working paperm, 2012.
57
Pirayesh, R., & Seydi, F.(2015). Investigating the relationship between management accounting techniques and improving managers' decision-making among private banks in Zanjan city. 5th National Conference and 3rd International Conference on Accounting and Management, Tehran, Top Services Company. (In Persian).
58
Pradhan, D., Swain, P, K., & Dash, M.(2018).Effect Of Management Accounting Techniques On Supply Chain And Firm Performance An Empirical Study. International Journal of Mechanical Engineering and Technology, Vol. 9, Issue 5, pp.1049–1057.
59
Ramamonjiarivelo, Z., Weech-Maldonado, R., Hearld, L., Pradhan, R., & Davlyatov, G. K. (2020). The privatization of public hospitals: Its impact on financial performance. Medical Care Research and Review, 77(3), 249-260.
60
Safari Sarchah,F;Yazdifar,H;& Pifeh,A.(2019). The Effects of Intra- and Extra-Organizational Factors on Management Accounting Practices in the Privatization Processes: Evidence from Iran, International Journal of Finance and Managerial Accounting, Vol.4, No.15, Autumn 2019, PP.97-113.
61
Scott, W. R. (1987), The adolescence of institutional theory. Administrative Science Quarterly, 32, pp. 493–511.
62
Scott, W. R. (2013). Institutions and organizations: Ideas, interests, and identities. Sage publications.
63
Seo, G. H. (2020). Competitive Advantages of International Airline Alliances: A Critical Review. HOLISTICA–Journal of Business and Public Administration, 11(1), 139-145.
64
Spathis, C., & Constantinides, S.(2004). Enterprise resource planning systems’ impact on accounting processes. Business Process Management Journal, Vol. 10 No. 2, pp. 234-247.
65
Stubbs, W., & Higgins, C., (2014). Integrated Reporting and internal mechanisms of change.Accounting, Auditing and Accountability Journal,27(7),1068-1089.
66
Sulaiman, S., & Ramli, A.(2008). What factors drive change in management accounting in Malaysian organisations Accounting. Research Institute & Faculty of Accountancy University Teknologi, Malaysian accounting review, vol. 7, No.1.
67
Termes, A., Edwards Jr, D. B., & Verger, A. (2020). The Development and Dynamics of Public-Private Partnerships in the Philippines' Education: A Counterintuitive Case of School Choice, Competition, and Privatization. Educational Policy, 34(1), 91-117.
68
TuanMat, T.Z., Smith, M., & Djajadikerta, H.(2010). Management Accounting and Organizational Change: An Exploratory Study in Malaysian Manufacturing Firms. Journal of Applied Management Accounting Research,8(2):51-79.
69
Vanhonnaeker, L. (2020). The Impacts of Local Equity Requirements on Competition. In International Investment Law and Competition Law (pp. 51-72). Springer, Cham.
70
Verbeeten, F. (2010).The Impact of Business Unit Strategy, Structure and Technical Innovativeness on Change in Management Accounting and Control Systems at the Business Unit Level: An Empirical Analysis. International Journal of Management.Vol.27.No.1.pp.123-143.
71
Villegas, A., Molinos-Senante, M., Maziotis, A., & Sala-Garrido, R. (2020). Financial winners and losers since the privatization of the English and Welsh water and sewerage industry: a profit decomposition approach. Urban Water Journal, 1-11.
72
Wanderley, C.D.A.(2014).Privatisation and management accounting change: the drivers of changes in a Brazilian Electricity distribution company. World Review of Entrepreneurship, Management and Sust, Vol.10, No.1.
73
Waweru, N.M., Hoque, Z., & Uliana, E.(2004). Management accounting change in South Africa Case studies from retail services. Accounting, Auditing & Accountability Journal, Vol. 17, No. 5, pp. 675-704.
74
Weijermars, R., & Moeller, J. (2020). Saudi Aramco Privatization in Perspective: Financial Analysis and Future Implications. Journal of Finance and Economics, 8(4), 161-170.
75
Yalcin, N., Bayrakderaglu, A., & Kahraman, C. (2012). Application of fuzzy multi-measures decision-making methods for financial performance evaluation of Turkish manufacturing industries. Expert Systems with Applications, No. 39, pp.350-364.
76
Zarei, H., Yazdifar, H., & Ghaleno, M. D., Adzmaneh, R. (2020). Predicting auditors' opinions using financial ratios and non-financial metrics: evidence from Iran. Journal of Accounting in Emerging Economies.
77
ORIGINAL_ARTICLE
Dynamic Product Portfolio Management Modeling for the Financial Technology Industry
Resource allocation, as the main objective of managerial science, requires analyzing the long- and short-term effects of a policy, although this analysis would be more difficult in dynamic and volatile industries such as financial technology. Moreover, the integration of industries leads to more diverse product categories for a single company and makes it difficult for the implementation of decision making about resource allocation. In this regard, systemic PPM (PPM) models can be applied to balance long- and short-term generated values of the company by adopting policies about resource allocation for different products with respect to risk management concepts. The proposed systemic model should include interrelationships between different products, time relevant, and most importantly the potentials of dynamic analysis of product strategies, which is the main purpose of this research. The research strategy is to conduct a case study on the Iranian financial technology industry, by using systemic PPM modeling. In this research, a dynamic model was used in the payment industry, due to its competitive forces. Thus, system dynamics methodology was the research tool for analyzing data. Further, four cycles of risk management, resource allocation, innovation, and development were identified and then, analyzed in a dynamic approach to evaluating their efficiency for business development. Based on the results, the system dynamics methodology provided great outcomes for this problem. Finally, scenario analysis, focus, deep understandings of the decision-making process with respects to mental models, and stock and flow diagrams were among the most significant findings of this article.
https://www.ijfifsa.ir/article_119168_85b8490fc971d741f0d139df825c6dde.pdf
2020-07-01
49
79
10.22034/ijf.2020.209903.1092
Product portfolio management
system dynamics
Resource Allocation
Fintech industry
Financial Services
Seyed Behnam
Khakbaz
khakbazbehnam@gmail.com
1
Ph.D. Candidate, Department of Business Management, Faculty of Management, University of Tehran, Tehran, Iran.
AUTHOR
Mohammad Ali
Shahhoseini
shahhoseini@ut.ac.ir
2
Associate Prof., Department of Business Management, Faculty of Management, University of Tehran, Tehran, Iran.
LEAD_AUTHOR
Ali
Divandari
divandari@ut.ac.ir
3
Prof., Department of Business Management, Faculty of Management, University of Tehran, Tehran, Iran.
AUTHOR
Hamidreza
Rabiee
rabiee@sharif.edu
4
Prof., Faculty of Information Technology, Sharif University of Technology, Tehran, Iran.
AUTHOR
Bausch, A., & Pils, F. (2009). Product diversification strategy and financial performance: meta-analytic evidence on causality and construct multidimensionality. Review of Management Science, 90-157.
1
Blaikie, N. (2009). Designing Social Research: The Logic of Anticipation (2nd ed.). Oxford: Polity Press.
2
Brown, S., & Eisenhardt, K. (1997). The art of continuous change: linking complexity theory and time-paced evolution in relentlessly shifting organizations. Administrative Science Quarterly, 42(1), 1-34.
3
Chao, R. O., & Kavadias, S. (2008). A theoretical framework for managing the new product development portfolio: When and how to use strategic buckets. Management Science, 54(5), 907-921.
4
Cooper, R. G., & Sommer, A. F. (2020). New-PPM with Agile. Research-Technology Management.
5
Cooper, R. G., Edgett, S. J., & Kleinschmidt, E. J. (1999). New PPM: practices and performance. Journal of Product Innovation Management, 16(4), 333-351.
6
Cooper, R. G., Edgett, S. J., & Kleinschmidt, E. J. (2004). Benchmarking Best NPD Practices—II. Research-Technology Management, 47(3), 50-59.
7
Cooper, R., Edgett, S., & Kleinschmidt, E. (2000). New problems, new solutions: making portfolio management more effective. Research-Technology Management, 43(2), 18-33.
8
Eggers, J. (2012). All experience is not created equal: learning, adapting, and focusing in PPM. Strategic Management Journal, 33(3), 315-335.
9
Eggers, J., & Kaplan, S. (2009). Cognition and renewal: comparing CEO and organizational effects on incumbent adaptation to technical change. Organization Science, 20(2), 461-477.
10
Fernhaber, S. A., & Patel, P. C. (2012). How do young firms manage product portfolio complexity? The role of absorptive capacity and ambidexterity. Strategic Management Journal, 33(13), 1516-1539.
11
Jugend, D., & da Silva, S. L. (2014). Product-portfolio management: A framework based on Methods, Organization, and Strategy. Concurrent Engineering: Research, 22(1), 17-28.
12
Kester, L., Hultink, E. J., & Griffin, A. (2014). An Empirical Investigation of the Antecedents and Outcomes of NPD Portfolio Success. Journal of Product Innovation Management, 31(6), 1199-1213.
13
Khakbaz, S. B., & Hajiheydari, N. (2015). Proposing a basic methodology for developing balanced scorecard by the system dynamics approach. Kybernetes, 44(6/7), 1049-1066.
14
Killen, C., Jugdev, K., Drouin, N., & Petit, Y. (2012). Advancing Project and Portfolio Management Research: Applying Strategic Management Theories. International Journal of Project Management, 30(5), 325-538.
15
Kortelainen, S., Piirainen, K., & Tuominen, M. (2008). A System Dynamics Model of Learning and Innovation Process Profitability. Athens, Greece: The International Conference of the System Dynamics Society.
16
Lee, C.-H., Venkatraman, N., Tanriverdi, H., & Iyer, B. (2010). Complementarity‐based hyper-competition in the software industry: Theory and empirical test, 1990–2002. Strategic Management Journal, 31(13), 1431-1456.
17
Lindstedt, M., Liesio, J., & Salo, A. (2008). Participatory development of a strategic product portfolio in a telecommunication company. International Journal of Technology Management, 42(3), 250-265.
18
Markowitz, H. (1952). Portfolio selection. The Journal of Finance, 7(1), 77-91.
19
McKinsey & Company. (2020). McKinsey on Payments. McKinsey Insights.
20
McNally, R. C., Durmusoglu, S. S., Calantone, R. J., & Harmancioglu, N. (2009). Exploring new PPM decisions: The role of managers' dispositional traits. Journal of Product Innovation Management, 38(1), 127-143.
21
Merten, P. P., Reiner, L., & Wiedmann, K.-P. (1987). Portfolio simulation: a tool to support strategic management. System Dynamics Review banner, 3(2), 81-101.
22
Mustonen, E., Seppänen, J., Tolonen, A., & Harkonen, J. (2019). PPM Strategic Targets And Key Performance Indicators Over Life-Cycle – A Case Study In Telecommunications Business. Business and Society.
23
Oh, J., Yang, J., & Lee, S. (2012). Managing uncertainty to improve decision-making in NPD portfolio management with a fuzzy expert system. Expert Systems with Application, 39(10), 9868-9885.
24
Otten, S., Spruit, M., & Helms, R. (2015). Towards decision analytics in PPM. Decision Analytics, 2(4), 1-25.
25
Rothaermel, F. T., Hitt, M. A., & Jobe, L. A. (2006). Balancing Vertical Integration and Strategic Outsourcing: Effects on Product Portfolio, Product Success, and Firm Performance. Strategic Management Journal, 27(11), 1033-1056.
26
Schmalensee, R. (2000). Antitrust issues in Competitive industries. American Economic Review, 99, 192-196.
27
Stake, R. E. (1995). The art of case study research. Thousand Oaks: SAGE Publications.
28
Sterman, J. D. (2000). Business Dynamics: Systems Thinking and Modeling for a Complex World (1st ed.). Boston, MA.: McGraw-Hill Education.
29
Sterman, J. D. (2001). System dynamics modeling: Tools for learning in a complex world. California Management Review, 43(4), 8-25.
30
Tanriverdi, H., & Venkatraman, N. (2005). Knowledge relatedness and the performance of multibusiness firms. Strategic Management Journal, 26(2), 97-119.
31
Teece, D., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509-533.
32
Tiedemann, F., Johansson, E., & Gosling, J. (2020). Structuring a new product development process portfolio using decoupling thinking. Production Planning & Control.
33
Turnbull, P. W. (1990). A review of portfolio planning models for industrial marketing and purchasing management. European Journal of Marketing, 24(3), 7-22.
34
Villasalero, M. (2018). Multi-Business Firms, Knowledge Flows and Intra-Network Open Innovations. Journal of the Knowledge Economy, 9(1), 162-179.
35
Voss, M. (2012). impact of customer integration on project portfolio management and its success—developing a conceptual framework. International Journal of Project Management, 30(5), 567-581.
36
W.Seifertab, R., Jean-SébastiennTancrezc, & Biçera, I. (2016). Dynamic PPM with life cycle considerations. International Journal of Production Economics, 71-83.
37
Wolstenholme, E. (1998). Qualitative v. Quantitative Modelling: The Evolving Balance. Journal of the Operational Research Society, 50(4), 422-428.
38
Woodside, A. (2006). Advancing systems thinking and building microworlds in business and industrial marketing. Journal of Business and Industrial Marketing, 21(1), 24 -29.
39
www.shaparak.ir. (2020). Retrieved from www.shaparak.ir: https://shaparak.ir/content?id=754
40
Yin, R. K. (2011). Applications of case study research (3rd ed.). SAGE Publications, Inc.
41
ORIGINAL_ARTICLE
The Relationship between Technology Use Factors based on the Developed Unified Theory of Acceptance and Use of Technology with Auditors' Ethical Behavior
This study aims to investigate the relationship between technology use factors based on the developed unified theory of acceptance and use of technology (DUTAUT) with auditors' ethical behavior. This research is applied and descriptive-correlational and its population include various auditors of Iran, 164 of whom are selected using simple random sampling. Structural equations and Smart PLS software analysis are also used to test the hypotheses. The findings show that there is a positive and significant relationship between technology use factors based on DUTAUT, including motivational components, effort expectancy, performance expectancy, and social effects, and ethical behavior of auditors. Other findings show that there is a positive and significant relationship between motivation (64%), effort expectancy (31%), and social effects (43%) with auditors' ethical behavior at the 95% confidence level. Given that the use of technology is expanding and is in line with current social needs and increases the level of ethical behavior in auditors, it is necessary to pay more attention to it in order to increase the ethical climate in this profession.
https://www.ijfifsa.ir/article_119169_dd57168297cdbd7b7124cf65f38601e7.pdf
2020-07-01
80
102
10.22034/ijf.2020.242095.1145
Auditing
Ethical Behavior
Information technology
and the Developed Unified Theory of Acceptance and Use of Technology
Hossein
Rajabdorri
hosrado@gmail.com
1
Ph.D. Candidate, Department of Accounting, Bandar Abbas Branch, Islamic Azad University, Bandar Abbas, Iran.
AUTHOR
Hamidreza
Vakilifard
vakilifard.dr@gmail.com
2
Associate Prof., Department of Accounting and Finance, Science and Research Branch, Islamic Azad University, Tehran, Iran.
LEAD_AUTHOR
Hojjatollah
Salari
hojjatslri@gmail.com
3
Assistance Prof., Department of Accounting, Bandar Abbas Branch, Islamic Azad University, Bandar Abbas, Iran.
AUTHOR
Ali
Amiri
amiristudy@gmail.com
4
Assistance Prof., Department of Accounting, Bandar Abbas Branch, Islamic Azad University, Bandar Abbas, Iran.
AUTHOR
Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50,179-211.
1
Ajzen, I. (2011). The Theory of Planned behaviour: Reactions and Reflections. Psychology & Health, 26, 1113-1127.
2
Ajzen, I., and M. Fishbein. (1980). Understanding attitudes and predicting social behavior: Prentice-Hall, Inc. Upper Saddle River NJ, 07458.
3
Al-Qirim, N. (2007). A research trilogy into e-commerce adoption in small businesses in New Zealand. Electronic Markets, 17(4): 263-285.
4
Amani, J., Khezri Azar, H., and Mahmoudi, H. (2012). Introducing the modeling of structural equations by PLS-PM method and its application in behavioral research. Psychological knowledge, 1: 41-55. (In Persian)
5
Andersen, TB. (2009). E-Government as an anticorruption strategy. Information Economics and Policy, 21(3), 201-10.
6
Awang, Y., Ismail, S., and A. Abdul Rahman. (2017). Measuring the potential for financial reporting fraud in a highly regulated industry. The International Journal of Accounting and Business Society, 24 (1), 81- 97.
7
Awiagah, R., Kang, J., and J. Lim. (2015). Factors affecting e-commerce adoption among SMEs in Ghana. Information Development, 1(12), 20- 22.
8
Benitez, J., Thompson, Y., Teo, S., and A. Ajamieh. (2018). Evolution of the impact of e-business technology on operational competence and firm profitability: A panel data investigation. Information & Management, 55 (1), 120-130.
9
Bertot, J.C., Jaeger, P.T., and J. Grimes. (2010). Using ICTs to create a culture of transparency: E-government and social media as openness and anti-corruption tools for societies. Government Information Quarterly, 21(3), 264-271.
10
Betz, M., O’Connell, L., and J. Shepard. (1989). Gender differences in proclivity for unethical behavior. Journal of Business Ethics, 8, 321-324.
11
Brennan, L., and V. Johnson. (2004). Social, Ethical and Policy Implications of Information Technology. USA: Information Science Publishing.
12
Brown, S. A., and V. Venkatesh. (2005). Model of adoption of technology in households: A baseline model test and extension incorporating household life cycle. MIS Quarterly, 29(3), 399–426.
13
Buchan, H. F. (2005). Ethical decision making in the public accounting profession: An extension of Ajzen‘s theory of planned behavior. Journal of Business Ethics, 61(2), 165-181.
14
Carpenter, T. D., and J. Reimers. (2005). Unethical and fraudulent financial reporting: applying the theory of planned behavior. Journal of Business Ethics, 60 (2), 115-129.
15
Dahl, J.G., Mandell, M.P., and M. Barton. (1988). Ethical frameworks of “tomorrow’s business leaders. International Journal of Value-Based Management, 1 (2), 65-81.
16
Davis, F. D. (1989). Perceived usefulness, Perceived ease of use, and user acceptance of information technology. MIS Quarterly, 13(3), 319-340.
17
Davis, F. D., Bagozzi, R. P., and P. Warshaw. (1989). User acceptance of computer technology: a comparison of two theoretical models. Management Science, 35(8), 982-1003.
18
Davis, F. D., Bagozzi, R. P., and P. Warshaw. (1992). Extrinsic and intrinsic motivation to use computers in the workplace. Journal of Applied Social Psychology, 22 (14), 1111–1132.
19
Davis, F., and V. Venkatesh. (1996). A critical assessment of potential measurement biases in the technology acceptance model: Three experiments. International Journal of Human-Computer Studies, 45, 19-45.
20
Deci, E. L., and R. Ryan. (1985). Intrinsic Motivation and Self-Determination in Human Behavior. New York: NY: Plenum Press.
21
Decman, M. (2015). Modeling the acceptance of e-learning in mandatory environments of higher education: The influence of previous education and gender. Computers in Human Behavior, 49, 272–281.
22
Dubinsky, A. J., and B. Loken. (1989). Analyzing ethical decision making in marketing. Journal of Business Research, 19(2), 83-107.
23
Eynon, G., Hill, N.T., and K. Stevens. (1997). Factors that influence the moral reasoning abilities of accountants: Implications for universities and the profession. Journal of Business Ethics, 16, 1297-1309.
24
Fagan, M. (2019). Factors influencing student acceptance of mobile learning in higher education. Computers in the Schools, 36 (2), 105-121.
25
Fagan, M. H., Neill, S., and B. Wooldridge. (2008). Exploring the intention to use computers: An empirical investigation of the role of intrinsic motivation, extrinsic motivation, and perceived ease of use. Journal of Computer Information Systems, 48(3), 31–37.
26
Fakhari, H., and Rajabdorri, H. (2018). A survey on the ethical approach of chief editors and members of the editorial board of scientific and research journal of accounting in the publication of the article in the own magazine. Financial Accounting Knowledge, 5 (1): 1- 24. (In Persian)
27
Friedman, M. (1984). Has monetarism failed? Manhattan Report, 4(3), 3-4.
28
Ghorbani, R., and Izadi, F. (2017). A study of the relationship between motivation for academic achievement and emotional intelligence and quality of life in students. Journal of Health_ Based Research, 3 (3): 297-3030. (In Persian)
29
Gibson, A. M., and A. Frakes. (1997). Truth or consequences: A study of critical issues and decision making in accounting. Journal of Business Ethics, 16 (2), 161-171.
30
Glover, S.H., Bumpus, M.A., Logan, J.E., and J. Ciesla. (1997). Re-examining the influence of individual values on ethical decision making. Journal of Business Ethics, 16(13), 1319-1329.
31
Godin, G., Sheeran, P., Conner, M., and M. Germain. (2008). Asking questions changes behavior: Mere measurement effects on the frequency of blood donation. Health Psychology, 27, 179-184.
32
Hair, J. F., Sarstedt, M., Ringle, C. M., and J. Mena. (2012). An assessment of the use of partial least squares structural equation modeling in marketing research. Journal of the Academy of Marketing Science, 40 (3), 414-433.
33
Heeks, R. (1998). Information technology and public sector corruption. Available at: http://unpan1.un.org/intradoc/groups/public/docu ments/NISPAcee/UNPAN015477.pdf. Accessed: 28 Nov 2008.
34
Hwang, Y., and D. Grant. (2014). An empirical study of enterprise resource planning integration: global and local perspectives. Information Development, 32 (3), 260- 270.
35
Karamanou, I., and N. Vafeas. (2005). The association between corporate boards, audit committees, and management earnings forecasts: An empirical analysis. Journal of Accounting Research, 43(3), 453-486.
36
Kim, S., Kim, H.J., and H. Lee. (2009). An institutional analysis of an e-government system for anticorruption: the case of OPEN. Government Information Quarterly, 29, 42-50.
37
Kudeshia, C., Sikdar, P., and A. Mittal. (2016). Spreading love through fan page liking: a perspective on small scale entrepreneurs. Computers in Human Behavior, 54, 257-270.
38
Lee, Y., Kozar, K. A., and K. Larsen. (2003). The technology acceptance model: Past, present, and future. Communications of the Association for Information Systems, 12(1), 752–780.
39
Leonard, L. N. K., Cronan, T. P., and J. Kreie. (2004). What influences IT ethical behavior intentions—planned behavior, reasoned action, perceived importance, or individual characteristics? Information & Management, 42(1), 143-158.
40
Lewis, C. C., Fretwell, C. E., Ryan, J., and J. Parnham. (2013). Faculty use of established and emerging technologies in higher education: A unified theory of acceptance and use of technology perspective. International Journal of Higher Education, 2(2), 22–34.
41
Mahmood, R. (2004). Can information and communication technology help reduce corruption? How so and why not: two case studies from South Asia. Perspectives on Global Development and Technology, 3(3), 347-373.
42
Malaquias, F., Malaquias, F., and Y. Hwang. (2016). Effects of information technology on corporate social responsibility: Empirical evidence from an emerging economy. Computers in Human Behavior, 59, 195- 201.
43
McCabe, D.L., Dukerich, J.M., and J. Dutton. (1991). Context, values and moral dilemmas: Comparing the choices of business and law school students. Journal of Business Ethics, 10: 951-960.
44
McCuddy, M.K., and B. Perry. (1996). Selected individual differences and collegians ethical beliefs. Journal of Business Ethics, 15(3), 261-72
45
McNeel, S.P. (1994). College Teaching and Student moral Development. In J. R. Rest and D. Narvaez (Eds.). Moral development in the professions. Hillsdale, NJ: Lawrence Erlbaum: 27-50.
46
Musa, P. F. (2010). Making a case for modifying the technology acceptance model to account for limited accessibility in developing countries. Information Technology for Development, 12(3), 213-224.
47
Namazi, M., and H. Rajabdorri. (2020). A mixed content analysis model of ethics in the accounting profession. Meditari Accountancy Research, 28 (1), 117-138.
48
Nikou, S. A., and A. Economides. (2017). Mobile-based assessment: Investigating the factors that influence behavioral intention to use. Computers & Education, 109, 56–73.
49
Ongori, H., and S. Migiro. (2010). Information and communication technologies adoption in SMEs: a literature review. Journal of Chinese Entrepreneurship, 2(1), 93-104.
50
Patterson, D.M. (2001). Causal effects of regulatory, Organizational and personal factors on ethical sensitivity. Journal of Business Ethics, 30 (2), 123-59.
51
Raman, A., and Y. Don. (2013). Preservice teachers’ acceptance of learning management software: An application of the UTAUT2 model. International Education Studies, 6 (7), 157–164.
52
Relly, J.E., and M. Sabharwal. (2009). Perceptions of transparency of government policymaking: a Cross-national study. Government Information Quarterly, 26(1), 148-157.
53
Rezaei, M. (2009). Common theories on the acceptance of information and communication technology. Communication Research, 4 (60): 63-93. (In Persian)
54
Roxas, M.L., and J. Stoneback. (2004). The importance of gender across cultures in ethical decision-making. Journal of Business Ethics, 50 (2), 149-65.
55
Ruegger, D., and E. King. (1992). A study of the effect of age and gender upon student business ethics. Journal of Business Ethics, 11, 179-186.
56
Salb, D., Friedman, H. H., and L. Friedman. (2011). The role of information technology in fulfilling the promise of corporate social responsibility. Computers and Information Science, 4(4), 2-9.
57
Santhanam, R., and R. Hartono. (2003). Issues in linking information technology capability to firm performance. MIS Quarterly, 27(1), 125-153.
58
Schultz, O., and D. Tran. (2015). Business Ethics and the Influence on the Development of Intellectual Capital: A Study of the Auditing Profession. Master Thesis at Kristianstad University. Section for Health and Society.
59
Shim, D.C., and T. Eom. (2009). Anticorruption effects of information communication and technology (ICT) and social capital. International Review of Administrative Sciences, 75(1), 99-116.
60
Sidani, Y., Zbib, I., Rawwas, M., and T. Moussawer. (2009). Gender, age, and ethical sensitivity: the case of Lebanese workers. Gender in Management: An International Journal, 24 (3), 211-227.
61
Singh, A., and J. Teng. (2016). Enhancing supply chain outcomes through information technology and trust. Computers in Human Behavior, 54, 290-300.
62
Siti Noor Hayati, M. Z., Kamil, M. I., Rashidah, A. R., and Y. Wah. (2011). Antecedents of non-normal financial reporting. International Journal of Business and Social Science, 2(5), 170-178.
63
Sturges, P. (2004). Corruption, transparency and a role for ICT? International Journal of Information Ethics, 2 (11), 1-9.
64
Talebnia, G., and Rajabdorri, H. (2018). Effect of the audit committee on the stock prices crash risk: Looking at the ethical voluntary disclosure. Financial Accounting Researches, 10 (1): 95-110. (In Persian)
65
Taylor, P. (1975). Principles of Ethics. Encino. Dickenson.
66
Thoma, S.J. (1986). Estimating gender differences in the comprehension and preference of moral issues. Developmental Review, 6, 165-180.
67
Tosuntas, S. B., Karadag, E., and S. Orhan. (2015). The factors affecting acceptance and use of interactive whiteboard within the scope of the FATIH project: A structural equation computers in The school 119 model based upon the unified theory of acceptance and use of technology. Computers & Education, 81, 169–178.
68
Tronto, J.C. (1993). Moral Boundaries: Apolitical Argument for an Ethic of Care, Routledge. New York, NY.
69
Udry, J.R. (2001). Feminist critics uncover determinism, positivism, and antiquated theory. American Sociological Review, 66 (4), 611-8.
70
Venkatesh, V., and F. Davis. (2000). A theoretical extension of the technology acceptance model: Four longitudinal field studies. Management Science, 46 (2), 186–204.
71
Venkatesh, V., Morris, M. G., Davis, G. B., and F. Davis. (2003). User acceptance of information technology: Toward a unified view. MIS Quarterly, 27(3), 425–478.
72
Venkatesh, V., Sykes, T. A., and X. Zhang. (2011). Just what the doctor ordered: A revised UTAUT for EMR system adoption and use by doctors. Proceedings of the 44th Hawaii International Conference on System Sciences (HICSS). Washington, DC: IEEE Computer Society.
73
Vinod, H.D. (1999). Statistical analysis of corruption data and using the Internet to reduce corruption. Journal of Asian Economics, 10 (4), 591-603.
74
Wang, Y. S., Wu, M. C., and H. Wang. (2009). Investigating the determinants and age and gender differences in the acceptance of mobile learning. British Journal of Educational Technology, 40 (1), 92–118.
75
Waterman, A. S., Schwartz, S. J., and R. Conti. (2008). The implications of two conceptions of happiness (hedonic enjoyment and Eudaimonia) for the understanding of intrinsic motivation. Journal of Happiness Studies, 9 (1), 41–79.
76
Winner, L. (2009). Applied Statistical Methods, Department of Statistics, and the University of Florida.
77
ORIGINAL_ARTICLE
CEO Power and Sustainability Reporting in Iran: Effect of Life Cycle and International Relations
In recent years, corporate sustainability reporting and its effective dimensions on it have always been considered from the perspective of users of financial reporting. Sustainability reporting is the environmental, social, and economic achievements of a company and shows how the organization implements its development plans in the future, taking into account these issues. In this study, the relationship between CEO power, life cycle, and sustainability reporting has been investigated and the effect of international relations has been considered. To investigate this issue, 4 hypotheses were developed and tested with a sample consisting of 119 companies listed on the Tehran Stock Exchange in the period 2012 to 2019. The results showed that CEO power has a negative effect on sustainability reporting and life cycle has a positive effect on the relationship between CEO power and sustainability reporting. The results of the study did not confirm the adjusting effect of international relations on the relationship between CEO power and sustainability reporting, while the results showed that international relations hurt the relationship between life cycle and corporate sustainability reporting.
https://www.ijfifsa.ir/article_119170_8b188b6f9c40ea4b985b08aed468d40b.pdf
2020-07-01
103
121
10.22034/ijf.2020.245563.1151
CEO power
life cycle
international relations
and Sustainability Reporting
Parisa Saadat
Behbahaninia
p.behbahaninia@alzahra.ac.ir
1
Assistant Prof, Department of Accounting, Faculty of Social Sciences and Economics, Alzahra University, Tehran, Iran.
LEAD_AUTHOR
Mohadeseh
Golbidi
mohadeseh.golbidi@yahoo.com
2
M.Sc in Accounting, Department of Accounting, Faculty of Social Sciences and Economics, Alzahra University, Tehran, Iran.
AUTHOR
Adams, R. B., Almeida, H., & Ferreira, D. (2005). Powerful CEOs and their impact on corporate performance. The Review of Financial Studies, 18(4), 1403-1432.
1
Akbas, H. H.(2014). “ company characteristics and Environmental Disclosure: An empirical investigation on companies listed on borsal Istanbul 100 index" Journal of Accounting and Finance, Vol. 14, No. 1, pp. 145-164.
2
Albrecht, M. (2015). On the relationship between sustainability and financial return in the U.S. stock market. Department of Finance Copenhagen Business School, 1-66.
3
Al‐Hadi, A., Chatterjee, B., Yaftian, A., Taylor, G., & Monzur Hasan, M. (2019). Corporate social responsibility performance, financial distress and firm life cycle: evidence from Australia. Accounting & Finance, 59(2), 961-989.
4
Alsaeed, K. (2005). The association between firm characteristics and disclosure. Journal of American Academy of Business, 7(1): 310-321.
5
Al-Shaer, H., & Zaman, M. (2019). CEO compensation and sustainability reporting assurance: Evidence from the UK. Journal of Business Ethics, 158(1), 233-252.
6
Anthony, J. H., & Ramesh, K. (1992). Association between accounting performance measures and stock prices: A test of the life cycle hypothesis. Journal of Accounting and Economics, 15(2-3), 203-227.
7
Bae, S. M., Masud, M., Kaium, A., & Kim, J. D. (2018). A cross-country investigation of corporate governance and corporate sustainability disclosure: A signaling theory perspective. Sustainability, 10(8), 2611.
8
Baker, T. A., Lopez, T. J., Reitenga, A. L., & Ruch, G. W. (2019). The influence of CEO and CFO power on accruals and real earnings management. Review of Quantitative Finance and Accounting, 52(1), 325-345.
9
Bebchuk, L.A., Cremers, M., Peyer, U., 2011. The CEO pay slice. J. Financ. Econ. 102 (1), 199–221.
10
Boiral, O., & Heras-Saizarbitoria, I. (2020). Sustainability reporting assurance: Creating stakeholder accountability through hyperreality?. Journal of Cleaner Production, 243, 118596.
11
Bolton, B. J. (2013). Corporate social responsibility and bank performance. Available at SSRN 2277912.
12
Chuang, K. S. (2020). Private placements, market discounts and firm performance: the perspective of corporate life cycle analysis. Review of Quantitative Finance and Accounting, 54(2), 541-564.
13
Correa-García, J. A., García-Benau, M. A., & García-Meca, E. (2020). Corporate governance and its implications for sustainability reporting quality in Latin American business groups. Journal of Cleaner Production, 121142.
14
DeAngelo, H., DeAngelo, L., & Stulz, R. M. (2006). Dividend policy and the earned/contributed capital mix: a test of the life-cycle theory. Journal of Financial Economics, 81(2), 227-254.
15
DeBoskey, D. G., Luo, Y., & Zhou, L. (2019). CEO power, board oversight, and earnings announcement tone. Review of Quantitative Finance and Accounting, 52(2), 657-680.
16
Dickinson, V. (2011). Cash flow patterns as a proxy for firm life cycle. The Accounting Review, 86(6), 1969-1994.
17
Fang, H., Lee, J. S., Chung, C. P., Lee, Y. H., & Wang, W. H. (2020). Effect of CEO power and board strength on bank performance in China. Journal of Asian Economics, 101215.
18
Frias-Aceituno, J.V., Rodríguez-Ariza, L., García-S_anchez, I.M., 2013. The role of the board in the dissemination of integrated corporate social reporting. Corp. Soc. Responsib. Environ. Manag. 20 (4), 219e233. https://doi.org/10.1002/csr.1294.
19
Fuente, J.A., García-S_anchez, I.M., Lozano, M.B., 2017. The role of the board of directors in the adoption of GRI guidelines for the disclosure of CSR information. J. Clean. Prod. 141, 737e750. https://doi.org/10.1016/j.jclepro.2016.09.155.
20
Gómez-Bezares, F., Przychodzen, W., & Przychodzen, J. (2016). Corporate sustainability and shareholder wealth—Evidence from British companies and lessons from the crisis. Sustainability, 8(3), 276.
21
Gong, T., & Tang, Y. (2019, July). How CEO Power within Boards and TMT Moderate Effect of CEO's International Experience on Firms' Earnings Management. In Academy of Management Proceedings (Vol. 2019, No. 1, p. 14572). Briarcliff Manor, NY 10510: Academy of Management.
22
Harper, J., Johnson, G., & Sun, L. (2020). Stock price crash risk and CEO power: Firm-level analysis. Research in International Business and Finance, 51, 101094.
23
Kato, T., & Long, C. 2006. CEO turnover, firm performance, and enterprise reform in China: Evidence from microdata. Journal of Comparative Economics, 34: 796–817.
24
Kaymak, T., Bektas, E., 2017. Corporate social responsibility and governance: information disclosure in multinational corporations. In: Corporate Social Responsibility and Environmental Management. https://doi.org/10.1002/csr.1428.
25
Khalid, T. B., Kouhy, R., & Hassan, A. (2017). The impact of corporate characteristics on social and environmental disclosure (CSED): The case of Jordan. journal of Accounting and Auditing: Research and Practice, 2017, 369352.
26
Larcker, D.F., Tayan, B.)2012(. Is a Powerful CEO Good or Bad for Shareholders? Stanford Closer Look Series. pp. 1–5.
27
Latridis .G.E, Accounting disclosures, accounting quality and conditional and unconditional conservatism. International Review of Financial Analysis. 20. 88-102.
28
Lee, K. H., & Saen, R. F. (2012). Measuring corporate sustainability management: A data envelopment analysis approach. International Journal of Production Economics, 140(1), 219-226.
29
Liang WL, Chan K, Lai WH, Wang Y (2013) Motivation for repurchases: a life cycle explanation. J FinanceServ Res 43:221–242.
30
Li, T., Munir, Q., & Abd Karim, M. R. (2017). The nonlinear relationship between CEO power and capital structure: Evidence from China's listed SMEs. International Review of Economics & Finance, 47, 1-21.
31
Liu, Y., Li, J., Quan, B. ting, Yang, J. bi).2019(. Decision analysis and coordination of two-stage supply chain considering cost information asymmetry of corporate social responsibility. J. Clean. Prod. 228, 1073e1087. https://doi.org/10.1016/j.jclepro.2019.04.247.
32
Madugba, J. U., Ben-Caleb, E., Lawal, A. I., & Agburuga, U. T. (2020). Firm Size and Tax Saving Behaviour of Listed Companies in Nigeria. Academic Journal of Interdisciplinary Studies, 9(3), 184-184.
33
Mahdavi, Gholam Hossein; Daryaee, Abbas Ali; Ali Khani, Razieh and Maran Jori, Mehdi (2015). Investigating the relationship between company size, industry type and profitability with disclosure of environmental and social accounting information. Journal of Experimental Accounting Research, Fourth Year, No. 15, 87-103. (in Persian)
34
Masoumi, Seyed Rasool. Saleh Nejad, Seyed Hassan. Zabihi Zarrin Kalay, Ali. (2019). Investigating the effect of some internal factors on the level of sustainability reporting of pharmaceutical companies listed on the Tehran Stock Exchange. Journal of Health Accounting. Volume 19. Number 1. Pages 103-126. (in Persian)
35
Mehrani, Kaveh Shakir Taheri, Seyed Hossein (2020). Develop a corporate sustainability reporting framework. Journal of Experimental Accounting Research. (in Persian)
36
Monzur Hasan, M., Hossein, M., Cheung, A., Habib, A., (2015). Corporate life cycle and cost of equity capital. journal of contemporary accounting and economics. 11, 46-60.
37
Owen S, Yawson A (2010) Corporate life cycle and M&A activity. J Bank Finance 34:427–440.
38
Park Y, Chen K. The Effect of Accounting Conservatism And Life-Cycle
39
Stages On Firm Valuation. Journal of Applied Business Research
40
2006;.22: 75-92.
41
Russo, M.V. and Fouts, P.A. (1997), "A resource-based perspective on corporate environmental performance and profitability", Academy of Management Journal, Vol. 40 No. 3, pp. 534-559.
42
Sheikh, S. (2019). An examination of the dimensions of CEO power and corporate social responsibility. Review of Accounting and Finance.
43
Stewart, R., Fantke, P., Bjørn, A., Owsianiak, M., Molin, C., Hauschild, M. Z., & Laurent, A. (2018). Life cycle assessment in corporate sustainability reporting: Global, regional, sectoral, and company‐level trends. Business Strategy and the Environment, 27(8), 1751-1764.
44
Surroca, J. and Tribo, J.A. (2008), “Managerial entrenchment and corporate social performance”, Journal of Business Finance and Accounting, Vol. 35 Nos 5/6, pp. 748-789.
45
X, Bixia. Life Cycle Effect on the Value Relevance of CommonRisk Factor. Review of Accounting and Finance 2007;6: 162-175.
46
Zahid, M., Rahman, H. U., Ali, W., Khan, M., Alharthi, M., Qureshi, M. I., & Jan, A. (2020). Boardroom gender diversity: Implications for corporate sustainability disclosures in Malaysia. Journal of Cleaner Production, 244, 118683.
47
ORIGINAL_ARTICLE
Investigating the Relationship between Voluntary Disclosure and Financial Performance and Earnings Management (Emphasizing the Moderating Role of the Corporate Life Cycle)
This study aimed to investigate the relationship between voluntary disclosure and earnings management and financial performance during the life cycle of the listed companies in Tehran Stock Exchange. The statistical population of the study included all listed companies in Tehran Stock Exchange since 2013-2018. In this study, earnings management, the financial performance of the companies (including return on equity, returns on assets, Tobin Q ratio, economic value-added, and refined economic value added) were the dependent variables, and the level of voluntary disclosure was the independent variable and the life cycle of the company was considered as the moderating variable. Also, in order to test the research hypotheses, a linear multivariate regression model using combined data was used. The results showed that earnings management and financial performance indicators have a significant relationship with voluntary disclosure over the life cycle. Accordingly, an increase in the level of voluntary disclosure increased the company's performance. Also, the results of the study indicated that the company's life cycle mediates the relationship between the level of voluntary disclosure and the company's performance.
https://www.ijfifsa.ir/article_119171_bdb6b824d8d149efc888d0ca528313b7.pdf
2020-07-01
122
148
10.22034/ijf.2020.249971.1158
Voluntary Disclosure
Earnings Management
financial performance
life cycle
Seyyed Mohammad
Hosseini
smh970@gmail.com
1
Ph.D. Candidate, Department of Accounting, University of Mazandaran, Babolsar, Iran.
AUTHOR
Esfandyar
Malekian
e.malekian@umz.ac.ir
2
Prof., Department of Accounting, University of Mazandaran, Babolsar, Iran.
LEAD_AUTHOR
Alves, H, S., Canadas, N., & Rodrigues, A, M. (2015). Voluntary disclosure, information asymmetry and the perception of governance quality: An analysis using a structural equation model. Tekhne, 13(1), 66-79.
1
Amoozesh, N, Moeinfar, Z., & Mousavi, Z. (2013). Evaluation of the relationship between disclosure quality and corporate governance quality in Tehran Stock Exchange, Universal Journal of Marketing and Business Research, 2(1), 16-22.
2
Bazrafshan, E., Kandelousi, A. S., & Hooy, C. W. (2016). The impact of earnings management on the extent of disclosure and true financial performance: Evidence from listed firms in Hong Kong. The British Accounting Review, 48 (2), 206-219.
3
Bolo, Q., & Ebrahimi Meymand, M. (2011). Relationship between management structure and quality of disclosure in the Tehran Stock Exchange. Journal of Financial Accounting, 3 (12), 50-69 (in Persian).
4
Bushee, B.J., Core, J.E., Guay, W., & Hamm, S.J (2010). The role of the business press as an information intermediary. Journal of Accounting Research. 48 (1), 1–19.
5
Dickinson, V. (2011). Cash flow patterns as a proxy for the firm life cycle. The Accounting Review. 86 (6): 1969-1994.
6
Didar, Hamzeh; Mansourfar, Gh., & Zare, E.(2017). Investigating the effect of corporate governance quality on the quality of disclosure with emphasis on the moderating role of product market competition in the listed companies in the Tehran Stock Exchange, Financial Accounting Research, 9 (31), 11-97 (in Persian).
7
Eugster, F., & Wanger, A, F. (2013). Voluntary Disclosure Quality, Operating Performance, and Stock Market Valuations, http://papers. ssrn. com/sol3/papers. cfm?abstract_id=1879804.
8
Ferguson, M. J., Lam, K. C., & Lee, G. M. (2002). Voluntary disclosure by state-owned enterprises listed on the stock exchange of Hong Kong. Journal of International Financial Management and Accounting, 13(2), 125-152.
9
Ghorbel, H. & Triki, F.(2016). The Consequences of Voluntary Information Disclosure on FirmValue: Case of Tunisian listed firms. Research Journal of Finance and Accounting, 7 (6),153-163.
10
Gietzmann, M. & Trombetta, M. (2003). Disclosure interactions: accounting policy choice and voluntary disclosure effects on the cost of rising outside capital. Accounting & Business Research, 33(3), 187-205.
11
Haffar, M., & Searcy, C.(2017). Classification of trade-offs encountered in
12
the practice of corporate sustainability. Journal of business ethics, 140(3), 495-
13
Heitzman, S., Wasley, C. & Zimmerman., J.(2010). The joint effect of materiality thresholds and voluntary disclosure incentives on firms disclosure decisions. Journal of Accounting and Economics, 49(1), 109-132.
14
Ho, P., & Taylor, G. (2013). Corporate governance and different types of voluntary disclosure. Pacific Accounting Review, 25 (1), 4-29.
15
Iatridis, G., & Alexakis, P. (2012). Evidence of voluntary accounting disclosures in the Athens Stock Market. Review of Accounting and Finance, 11 (1), 73 - 92.
16
Ilhan Ciftcia, I., Tatoglub, Ekrem., Woodc, G., Demirbagc, M., & Zaim, S. (2019). Corporate governance and firm performance in emerging markets: Evidence Journal of International Business Review, 28, 90–103.
17
Jiao, Y. (2011). Corporate disclosure, market valuation, and firm performance, Financial Management, 40(3), 647-676.
18
Khodamipour, A., Khorshidi, A., &Shirzad, A.(2013). The effect of disclosure quality on various types of earnings management. Accounting and Auditing Reviews, 4 (20), 21-38 (in Persian).
19
Kothari, S.P., Leone, A.J. & Wasley, C.E. (2005). Performance matched discretionary accruals measures. Journal of Accounting and Economics, 39(1): 163–197.
20
Larijani, A., and Rahmani, A. (2018). Relationship between disclosure of internal control reports, agency costs and earnings management. Journal of Management Accounting and Auditing Knowledge, 7 (25), 29-40 (in Persian).
21
Lokman, N., Cotter, J., & Mula, J. (2012). Corporate governance quality, incentive factors and voluntary corporate governance disclosures in annual reports of Malaysian publicly listed companies, Corporate Ownership and Control, 10(1), 329-352.
22
Mirabbasi, S.J., & Khazen, A. (2017). The effect of disclosure quality on the relationship between corporate governance and earnings management in the listed companies of the Tehran Stock Exchange. Modaber Management Research Institute, 1 (4), 1-28 (in Persian).
23
Parsian, H., Kazemi, H., & Rezazadeh, J.(2018). Identifying the components of voluntary disclosure between the corporate governance system and information asymmetry in operating companies in the Tehran Stock Exchange. Journal of Financial Economics, 12 (43), 107-132 (in Persian).
24
Pedersen, E. R. G., Gwozdz, W., & Hvass, K. K. (2018). Exploring the relationship between business model innovation, corporate sustainability, and organisational values within the fashion industry. Journal of Business Ethics, 149(2), 267-284.
25
Pourheidari, O., Yusufzadeh, Y.,& Azami, Z. (2017). Investigating the relationship between profit quality and cost of capital with voluntary disclosure. Journal of Financial Accounting Knowledge, 4 (12), 1-20 (in Persian).
26
Pourzamani, Z., Jamshidi, Sh. (2015). Investigating the effect of company life cycle on the relationship between disclosure quality and capital structure. Accounting and Management Knowledge, 4 (13), 55-66 (in Persian).
27
Utami, S, R., & Inanga, E, L.(2012). The Relationship between Capital Structure and the Life, International Research Journal of Finance and Economics Cycle of Firms in the Manufacturing Sector of Indonesia, 8(1), 69-91.
28
Uyar, A., Kilic, M., & Bayyurt, N. (2013). Association between firm characteristics and corporate voluntary disclosure: Evidence from Turkish listed companies. http://www. redalyc. org/articulo. oa?id=54929516007.
29
Waleed, M., Al-ahdala, M., &Alsamhib, M, I. (2020). The impact of corporate governance on the financial performance of Indian and GCC listed firms: An empirical investigation. Journal of Research in International Business and Finance. 51 (1), 1 -13.
30
Wallace, R. S. O., & Naser, K. (1995). Firm-specific determinants of the comprehensiveness of mandatory disclosures in the corporate annual reports of firms listed on the stock exchange of Hong Kong. Journal of Accounting and Public Policy, 14(1), 311-368.
31
Wang, L. L., & Mak, Y. T. (2003). Corporate governance and voluntary disclosure. Journal of Accounting and Public Policy, 22 (4), 325-45.
32