Template-Type: ReDIF-Article 1.0 Author-Name: Yahn-Shir Chen Author-Name: Yi-Fang Yang Author-Name: I-Ching Huang Title: EFFECTS OF INCREASED COMPETITION ON SMALLSIZED AUDITORS IN TAIWAN: FIGHT OR FLIGHT? Abstract: Taiwan established the Certified Public Bookkeepers Act to regulate tax agents in providing services to small and medium-sized enterprises in 2004. The Act enhances the capabilities of tax agents in competing business with auditors. Auditors face increased competition in rendering services to the same target clients as tax agents. What is the responding measure, fight or flight, for auditors? Based on both economic theory and business competitive strategy theory, this study investigates the effects of the Certified Public Bookkeepers Act in 2004 on small-sized auditors in Taiwan. Empirical results indicate that both businesses and operating performance of auditors are better after the regulation, consistent with the responding measure of fight. This study contributes knowledge to the literature and conveys managerial implication to the practitioners. Classification-JEL: M41, L51 Keywords: Tax Agents, Auditors, Proprietorship Public Accounting Firms, Operating Performance Journal: The International Journal of Business and Finance Research Pages:1-17 Volume: 15 Issue: 1 Year: 2021 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v15n1-2021/IJBFR-V15N1-2021-1.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:15:y:2021:i:1:p:1-17 Template-Type: ReDIF-Article 1.0 Author-Name: Arturo Rubalcava Title: DETERMINANTS OF PRICE RESPONSE TO CANADIAN BOUGHT DEALS AND MARKETED UNDERWRITTEN EQUITY OFFERS: EVIDENCE BEFORE AND AFTER THE CANADIAN SOX Abstract: This paper examines determinants of price response to announcing Canadian bought deals and marketed underwritten equity offers. It includes periods before and after the passage of Canadian SOX. This is a critical government law equivalent to the U.S. Sarbanes-Oxley Act. Both laws have had important effect on changes in governance and compliance for public companies. Bought deals and marketed underwritten offers are two standard methods of issuing equity by publicly traded firms. Did the Canadian law influence the determinants of price response for both underwriting methods? From fifteen different determinants, this study shows trading shares volume is the only common determinant for bought deals for the pre- and post-Canadian SOX periods. Mostly, for shares listed on the Toronto Stock exchange (and not cross-listed in the U.S.). Marketed underwritten offers do not show consistent determinants for the pre- and post-Canadian SOX periods. Also, none of the expected determinants are significant during the post-Canadian SOX period for marketed underwritten offers. In essence, the Canadian law had a different effect on expected determinants for bought deals and marketed underwritten offers, respectively. Classification-JEL: G24, G32 Keywords: Deals, Marketed Underwritten Offers, Canadian SOX, Sarbanes- Oxley, Seasoned Equity Offerings, Cross-Listed Journal: The International Journal of Business and Finance Research Pages: 19-32 Volume: 15 Issue: 1 Year: 2021 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v15n1-2021/IJBFR-V15N1-2021-2.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:15:y:2021:i:1:p:19-32 Template-Type: ReDIF-Article 1.0 Author-Name: Ya-Kai Chang Author-Name: Che-Jui Chang Title: THE MAGNET EFFECT UNDER RELAXED DAILY PRICE LIMITS: EVIDENCE FROM TAIWAN Abstract: This study investigates the magnet effect after relaxing the daily price limits in the Taiwan Stock Exchange by using a logit model, as proposed by Hsieh, Kim, and Yang (2009). Our empirical results indicate that the magnet effect disappears after the relaxed daily price limits, especially in the down market. That is, the relaxation of the daily price limits lowers market volatility and thus facilitate market stability. Our empirical findings have important policy implications for regulators who are especially concerned about financial market stability and capital market development due to the price limit changes. Classification-JEL: G14, G15, G18 Keywords: Price Limits, Magnet Effect, Logit Model Journal: The International Journal of Business and Finance Research Pages: 33-44 Volume: 15 Issue: 1 Year: 2021 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v15n1-2021/IJBFR-V15N1-2021-3.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:15:y:2021:i:1:p:33-44 Template-Type: ReDIF-Article 1.0 Author-Name: Daniel Folkinshteyn Title: FINANCIAL EXPERTS ON THE AUDIT COMMITTEE: WOLVES IN SHEEP’S CLOTHING? Abstract: Research literature in accounting has assumed, and supported, the idea that financial expertise on the audit committee of firms is a positive influence on the quality of earnings reports, as measured by various proxies for earnings quality. In this paper I attempt to model and demonstrate empirically that financial expertise on the audit committee may in fact serve to merely obscure any earnings manipulation performed by managers, rather than prevent or mitigate it. The results provide support for the idea that financial expertise, when put together with certain adverse incentive factors (share ownership, being a current executive in another firm), actually increases the probability of just meeting or beating analyst consensus estimates, a measure of earnings manipulation. This presents an important contribution to the literature on the topic, elucidating the idea that financial expertise on the audit committee is not necessarily a beneficial factor. Classification-JEL: G30, G38 Keywords: Financial Experts, Audit Committee, Earnings Management, Sarbanes-Oxley Journal: The International Journal of Business and Finance Research Pages: 45-60 Volume: 15 Issue: 1 Year: 2021 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v15n1-2021/IJBFR-V15N1-2021-4.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:15:y:2021:i:1:p:45-60 Template-Type: ReDIF-Article 1.0 Author-Name: Bienvenido S. Cortes Title: A MODEL OF MICROPOLITAN AREA SENSITIVITY TO THE BUSINESS CYCLE: EVIDENCE FROM THE PLAINS REGION Abstract: Past literature has examined the responsiveness of various economies (region, state, and metropolitan area) to changes in the U.S. business cycle. The objective of this study is to determine if spatial disaggregation to the small core city provides further insights to the co-movement of local area conditions to national business swings. Earlier studies have underscored the importance of examining the role of small cities and the factors which influence their sensitivity to the national cycle. This study focuses on another spatially disaggregated level: the micropolitan statistical area which consists of one or more counties with at least one city with more than 10,000 but less than 50,000 people. It focuses on 87 micropolitan statistical areas located in the seven states (Kansas, Iowa, Missouri, Minnesota, Nebraska, North Dakota, and South Dakota) of the Plains region. The study estimates and analyzes the correlations of annual percentage changes in various micropolitan area economic measures (total employment, nonfarm employment, Gross Regional Product, and personal income) with respect to changes in US real GDP over the 1969-2017 period. There are wide variations in business cycle sensitivity of micropolitan areas across-states, withinstates, and depending on the specific economic measure used. Classification-JEL: R11, R12 Keywords: Micropolitan, Business Cycle, Sensitivity Journal: The International Journal of Business and Finance Research Pages: 61-76 Volume: 15 Issue: 1 Year: 2021 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v15n1-2021/IJBFR-V15N1-2021-5.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:15:y:2021:i:1:p:61-76 Template-Type: ReDIF-Article 1.0 Author-Name: Anthony Enisan Akinlo Author-Name: Olufemi Gbenga Onatunji Title: EXCHANGE RATE VOLATILITY AND FOREIGN DIRECT INVESTMENT IN SELECTED WEST AFRICAN COUNTRIES Abstract: This paper empirically investigates the exchange rate volatility-FDI nexus in selected Economic Community of West African Sates (ECOWAS) countries using time series data from 1986-2017. Using Autoregressive Distributed Lag (ARDL) model and Toda-Yamamoto (1995) causality techniques, the effects of exchange rate volatility on FDI and causality relationship between the two are examined. The empirical results show that the estimated coefficient of nominal exchange rate volatility is negative in all the selected countries but significant only in Ghana, Sierra Leone, and Nigeria. Conversely, the effect of real exchange rate volatility is negatively significant as expected, in Nigeria, Togo, Sierra Leone, and Cote d’lvore. However, the effect is positive but statistically insignificant in Ghana and Gambia. Furthermore, the causality test results show unidirectional causality from exchange rate volatility to FDI in all selected countries except in Ghana when the nominal exchange rate is employed. On the other hand, when real exchange rate volatility is employed, there is evidence of bidirectional causality between the two variables only in Nigeria and Sierra Leone. Classification-JEL: F21, F31, F39 Keywords: Exchange Rates Volatility, Foreign Direct Investment, Autoregressive Distributed Lag Model, Economic Community of West African States Journal: The International Journal of Business and Finance Research Pages: 77-88 Volume: 15 Issue: 1 Year: 2021 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v15n1-2021/IJBFR-V15N1-2021-6.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:15:y:2021:i:1:p:77-88 Template-Type: ReDIF-Article 1.0 Author-Name: Shih-Ping Feng Title: THE INFORMATION CONTENT OF OPTION TRADING AND LIQUIDITY RISK Abstract: This paper presents strong evidence to show that stock liquidity and option liquidity play important roles in explaining the information content of options trading for future stock returns. Using implied volatility skew to capture the option trading activity of informed traders, we provide a clear and negatively predictive linkage between option trading and stock returns. The negatively predictive relation between options trading activity and stock returns is particularly accentuated for stocks with lower liquidity. This shows that lower levels of stock liquidity increase the amount of informed trading activity in the option market, and stock is slow to incorporate information embedded in option trading activities. In addition, the predictive ability of option trading activity tends to increase with option liquidity, for each level of stock liquidity. The empirical results are sufficiently robust for different liquidity measures. Classification-JEL: G12, G14, G17 Keywords: Stock Liquidity, Option Liquidity, Information Content, Option Trading Journal: The International Journal of Business and Finance Research Pages: 89-98 Volume: 15 Issue: 1 Year: 2021 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v15n1-2021/IJBFR-V15N1-2021-7.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:15:y:2021:i:1:p:89-98 Template-Type: ReDIF-Article 1.0 Author-Name: Angelo O. Burdeos Author-Name: Melanie B. De Ocampo Title: IMPACT OF CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE ON SURVIVAL OF INITIAL PUBLIC OFFERINGS: EVIDENCE FROM THE PHILIPPINES Abstract: This paper examines the impact of corporate governance and ownership structure variables on the survival of initial public offerings in the Philippine Stock Exchange. Using a sample of 141 firms that went public from 1989-2011 and a seven-year observation period, the paper finds that 93.62% of IPOs survive. Employing the Cox proportional hazards model, the paper finds a negative significant relationship between survival and the ownership ratio between top five and non-top five owners. In addition, there is a negative significant relationship between survival and manufacturing industry sector and firm size. Furthermore, there is a positive significant relationship between survival and ownership retained by original owners. Moreover, there is an insignificant relationship between survival and percentage of independent directors, number of underwriters, age of the IPO firm, type of offering, and return on assets. Classification-JEL: G3, G32, G34 Keywords: Corporate Governance, Ownership Structure, Initial Public Offering, Survival, Delisting, Philippines Journal: The International Journal of Business and Finance Research Pages: 99-112 Volume: 15 Issue: 1 Year: 2021 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v15n1-2021/IJBFR-V15N1-2021-8.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:15:y:2021:i:1:p:99-112