Earnings Management and Investor Protection: An International Comparison

机构投资者作为证券市场中的重要力量,越来越受到理论界和实务界的关注。论文对宾夕法尼亚大学沃顿商学院会计学教授布赖恩-布希（Brian Bushee）的论文＂The influence of institutional investors on myopic R＆D investment behavior＂（机构投资者对企业短视研发投资行为的影响,以下简称Bushee（1998））进行评价并提出相关的建议和研究方向。

《The influence of institutional investors on myopic R＆D investment behavior》述评

[1] Arctic amplification (AA) – the observed enhanced warming in high northern latitudes relative to the northern hemisphere – is evident in lower-tropospheric temperatures and in 1000-to-500 hPa thicknesses. Daily fields of 500 hPa heights from the National Centers for Environmental Prediction Reanalysis are analyzed over N. America and the N. Atlantic to assess changes in north-south (Rossby) wave characteristics associated with AA and the relaxation of poleward thickness gradients. Two effects are identified that each contribute to a slower eastward progression of Rossby waves in the upper-level flow: 1) weakened zonal winds, and 2) increased wave amplitude. These effects are particularly evident in autumn and winter consistent with sea-ice loss, but are also apparent in summer, possibly related to earlier snow melt on high-latitude land. Slower progression of upper-level waves would cause associated weather patterns in mid-latitudes to be more persistent, which may lead to an increased probability of extreme weather events that result from prolonged conditions, such as drought, flooding, cold spells, and heat waves.

The dependability of behavioral measurements: theory of generalizability for scores and profiles

This thesis investigates the relationship between economic growth and financial development in developing countries over 1988-2001. Previous studies have generally used averaged data, for both developing and developed countries, and inappropriate estimation methods. In an attempt to reach some definitive conclusions, Generalised Method of Moments dynamic estimation is used with a newly collected panel of annual data to assess the relationship. The results show that while banks performance has a negative impact on growth, stock markets positively promote growth. To reach an overall conclusion about the impact of finance on growth and to solve the problems associated with the existence of multicollinearity among the different measures of financial development, principal components analysis is used to generate new, comprehensive measures of financial development. In assessing the link between the new measures and financial development and growth, the results support the existence of an overall positive relationship. The thesis also examines the behaviour of interest rates in developing and industrialised countries using individual and panel unit root tests. The results are sensitive to the choice of the test, country and time unit.

Stock markets, banks and economic growth

(ProQuest: ... denotes formulae omitted.)IntroductionThe corporate finance literature has traditionally focused on the study of long-term financial decisions, particularly investments, capital structure, dividends or company valuation decisions. However, short-term assets and liabilities are important components of total assets and need to be carefully analyzed. Management of these short-term assets and liabilities warrants a careful investigation since the working capital management plays an important role in a firm's profitability and risk as well as its value (Smith, 1980). Efficient management of working capital is a fundamental part of the overall corporate strategy in creating the shareholders' value. Firms try to keep an optimal level of working capital that maximizes their value (Deloof, 2003; Howorth and Westhead, 2003 and Afza and Nazir, 2007).In general, from the perspective of Chief Financial Officer (CFO), working capital management is a simple and straightforward concept of ensuring the ability of the organization to fund the difference between the short-term assets and short-term liabilities (Harris, 2005). However, a 'Total' approach is desired as it can cover all the company's activities relating to vendor, customer and product (Hall, 2002). In practice, working capital management has become one of the most important issues in the organizations where many financial executives are struggling to identify the basic working capital drivers and an appropriate level of working capital (Lamberson, 1995). Consequently, companies can minimize risk and improve the overall performance by understanding the role and drivers of working capital management.A firm may adopt an aggressive working capital management policy with a low level of current assets as a percentage of total assets, or it may also be used for the financing decisions of the firm in the form of high level of current liabilities as a percentage of total liabilities. Excessive levels of current assets may have a negative effect on the firm's profitability, whereas a low level of current assets may lead to a lower level of liquidity and stockouts, resulting in difficulties in maintaining smooth operations (Van Horne and Wachowicz, 2004).The main objective of working capital management is to maintain an optimal balance between each of the working capital components. Business success heavily depends on the financial executives' ability to effectively manage receivables, inventory, and payables (Filbeck and Krueger, 2005). Firms can reduce their financing costs and/or increase the funds available for expansion projects by minimizing the amount of investment tied up in current assets. Most of the financial managers' time and efforts are allocated towards bringing non-optimal levels of current assets and liabilities back to optimal levels (Lamberson, 1995). An optimal level of working capital would be the one in which a balance is achieved between risk and efficiency. It requires continuous monitoring to maintain proper level in various components of working capital, i.e., cash receivables, inventory and payables, etc.In general, current assets are considered as one of the important components of total assets of a firm. A firm may be able to reduce the investment in fixed assets by renting or leasing plant and machinery, whereas the same policy cannot be followed for the components of working capital. The high level of current assets may reduce the risk of liquidity associated with the opportunity cost of funds that may have been invested in long-term assets. Though the impact of working capital policies on profitability is highly important, only a few empirical studies have been carried out to examine this relationship. This study investigates the potential relationship of aggressive/conservative policies with the accounting and market measures of profitability of Pakistani firms using a panel data set for the period 1998-2005. …

Impact of Aggressive Working Capital Management Policy on Firms' Profitability

Literature on corporate finance has traditionally focused on the study of long-term financial decisions. Researchers have examined, in particular, the investment decisions, capital structure, dividends or company valuation decisions, among other topics. However, short-term assets and liabilities are important components of total assets and need to be carefully analyzed. Management of these short-term assets and liabilities warrants a careful investigation because working capital management plays an important role in a firm’s profitability as well as its value (Smith, 1980). The optimum level of working capital is determined, to a large extent, by the methods adopted by the management. Continuous monitoring is required to maintain optimum levels of various components of working capital, such as cash receivables, inventory and payables. In line with the studies of Afza and Nazir (2007 and 2008), the present study examines the factors that determine the working capital requirements of the firms. For this purpose, a study of 132 manufacturing firms from 14 industrial groups that were listed on Karachi Stock Exchange (KSE) between the period 2004-2007 was undertaken. While the working capital requirement was used as the dependent variable, various financial and economical factors, such as operating cycle of the firm, level of economic activity, leverage, growth of the firm, operating cash flows, firm size, industry, return on assets and Tobin’s q, were used as the determining factors of working capital management. Regression analysis was carried out on the panel data for 132 non-financial firms over a period of nine years. Finally, the study suggests some policy implications for the managers and investors of Pakistani markets.

Working Capital Requirements and the Determining Factors in Pakistan

This study investigates the relationship between the aggressive/conservative working capital policies for seventeen industrial groups of public limited companies listed at Karachi Stock Exchange for a period of 1998-2003. The ordinary least square regression model has been used to investigate into the relationship of working capital approaches and the returns of firms. The study found significant differences among their working capital investment and financing policies across different industries. Moreover, these significant differences are remarkably stable over the period of six years. The aggressive investment working capital policies are accompanied by aggressive working capital financing policies. Finally, we found a negative relationship between the profitability measures of firms and degree of aggressiveness of working capital investment and financing policies. The study would contribute a better understanding of working capital management policies in an emerging market like Pakistan. A firm may adopt an aggressive working capital management policy with a low level of current assets as percentage of total assets. Moreover, an aggressive working capital management policy may be used for the financing decisions of the firm with high level of current liabilities as percentage of total liabilities. Excessive levels of current assets may have a negative effect on the firm's profitability whereas a low level of current assets may lead to lower level of liquidity and stockouts resulting in difficulties in maintaining smooth operations (Van Horne and Wachowicz 2004). Working capital management is very important for the success of a business. The optimal level of working capital is determined to a large extent by the methods adopted for the management of current assets and liabilities. It requires continuous management to maintain proper level in various components of working capital i.e. cash receivables, inventory and payables etc. In general, current assets represent important component of total assets of a firm. A firm may be able to reduce the investment in fixed assets by renting or leasing plant and machinery, whereas, the same policy cannot be followed for the components of working capital. The high level of current assets may reduce the risk of liquidity associated with the opportunity cost of funds that may have been invested in long-term assets. The above discussion highlights the significance of working capital management in a business. The impact of working capital policies is highly important, however, no empirical research has been carried out to examine the impact of working capital policies on profitability and risk of firm in Pakistan. This study will contribute to better understand these policies and their impact especially in the emerging markets like Pakistan. The present study investigates the relationship of the aggressive and conservative working capital investment and financing polices. Following are the main objectives of the present study:

https://www.econstor.eu/bitstream/10419/187978/1/pjcss006.pdf

Working Capital Approaches and Firm's Returns in Pakistan

Integration of global markets has highlighted the issue of economic competitiveness, the base line to attract the foreign direct investment. In this increasingly globalized and interdependent world economy, knowledge and skills of workforce will be the key competitive weapons of nations and thus should be focused for enhancement of the economic competitiveness (Thurow, 1994). The current study focuses on the role of human resource management as a tool to improve the economic competitiveness of South Asian region in general and Pakistan in particular and hence attracting the foreign capital inflow to boost the economic growth.

/pdf/pakistan-economic-and-social-review-3ayd7mrzex.pdf

Pakistan Economic and Social Review

https://www.econstor.eu/bitstream/10419/187967/1/1-s2.0-S2314721017301044-main.pdf

Mian Sajid Nazir

Papers

Impact of Aggressive Working Capital Management Policy on Firms' Profitability

Working Capital Requirements and the Determining Factors in Pakistan

Working Capital Approaches and Firm's Returns in Pakistan

Pakistan Economic and Social Review

Does managerial behavior of managing earnings mitigate the relationship between corporate governance and firm value? Evidence from an emerging market