Template-Type: ReDIF-Article 1.0 Author-Name: Bala Arshanapalli Author-Name: William Nelson Title: Using Quantile Regressions to Examine the Capital Structure Decision of US Firms Abstract: The paper examines the capital structure decision of 3,432 US companies in the year 2006 and 2011. The paper employs quantile regression to explore the predictions of the trade-off and pecking order models. We find evidence of heterogeneity in the capital structure and the determinants of capital structure. We find the data more consistent with the trade-off theory than the pecking order theory in 2006 but find that only economic conditions matter in 2011. Classification-JEL: G32 Keywords: Quantile Regression, Capital Structure Journal: The International Journal of Business and Finance Research Pages: 1-8 Volume: 8 Issue: 5 Year: 2014 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v8n5-2014/IJBFR-V8N5-2014-1.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:8:y:2014:i:5:p:1-8 Template-Type: ReDIF-Article 1.0 Author-Name: Daniel Folkinshteyn Author-Name: Ozge Uygur Author-Name: Gulser Meric Title: A Comparison of the Financial Characteristics of U.S. and German Manufacturing Firms Abstract: The U.S. and Germany rank #1 and #3, respectively, in the world, in terms of the total amount of international trade. U.S. and German firms compete with one another for a larger market share in other countries and in each other’s local markets. And yet, there are no published studies that compare the financial management practices of U.S. and German firms. In this paper, we make a contribution to the finance literature on this subject by comparing the financial characteristics of U.S. and German manufacturing firms. Our findings provide valuable insights for corporate financial managers and for investors who invest in these countries. Using a sample of 1166 firms, we find that the financial characteristics of U.S. manufacturing firms differ significantly from those of German manufacturing firms. MANOVA test results indicate that U.S. firms exhibit higher liquidity, lower debt, higher profitability, and lower total assets turnover. These findings are also supported by the logistic regression results. We suggest that better financial performance of U.S. firms could be attributed to more business-friendly employment laws and lower levels of unionization in the United States. Classification-JEL: G30, G31 Keywords: Financial Ratios, Manufacturing, United States, Germany, MANOVA Journal: The International Journal of Business and Finance Research Pages: 9-22 Volume: 8 Issue: 5 Year: 2014 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v8n5-2014/IJBFR-V8N5-2014-2.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:8:y:2014:i:5:p:9-22 Template-Type: ReDIF-Article 1.0 Author-Name: Dalenda Khouaja Author-Name: Salem Lotfi Boumediene Title: Regulation and Bank Deficiency: Evidence from Europe Abstract: This paper investigates the impact of bank regulation on default risk for a sample of six major European countries over 2003-2008. In the first stage of the analysis, we used a descriptive study for the determination of factors that contributed to the bank vulnerability. We measure banking fragility by using two ex-ante variables Zscore and rating to indicate future risk, and we use public intervention as an ex-post variable for bank failure. In the second stage, we used Logit regression models to assess several types of regulation on bank failure. Our results show that strengthening capital restrictions and supervision can improve bank solvency. While, market discipline and restricting bank activities can result in higher bank insolvency. Classification-JEL: G21, C35 Keywords: Bank Regulation , Basel Committee, CAMEL Model, Z score, Logit Regression Journal: The International Journal of Business and Finance Research Pages: 23-33 Volume: 8 Issue: 5 Year: 2014 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v8n5-2014/IJBFR-V8N5-2014-3.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:8:y:2014:i:5:p:23-33 Template-Type: ReDIF-Article 1.0 Author-Name: Hani El Chaarani Title: The Impact of Corporate Governance on the Performance of Lebanese Banks Abstract: This study examines the impact of corporate governance on financial performance of Lebanese banks during five years (from 2006 to 2010). Based on 182 observations, a quantitative method of data analysis was employed to investigate the relevance of corporate governance mechanisms. The first finding reveals a positive impact of independent boards on the performance of Lebanese banks. The research also finds a significant and negative relationship between CEO duality and bank performance. Finally, the paper reveals a positive impact of insider ownership concentration on the return of Lebanese banks indicating the more shares held by insiders, the better the performance. The weaknesses of corporate governance in some Lebanese banks might be compensated by higher insider ownership concentration. Classification-JEL: G2, G3 Keywords: Lebanese Banks, Financial Performance, Financial Trust, Corporate Governance Journal: The International Journal of Business and Finance Research Pages: 35-46 Volume: 8 Issue: 5 Year: 2014 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v8n5-2014/IJBFR-V8N5-2014-4.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:8:y:2014:i:5:p:35-46 Template-Type: ReDIF-Article 1.0 Author-Name: Sherry Fang Li Author-Name: Fang Sun Author-Name: Fengyun Wu Title: Analyst Reactions to Expectations Management in the Post-Regulation Fair Disclosure Period Abstract: Using a uniquely hand-collected dataset, we examine how financial analysts react to expectations management in the post-Regulation Fair Disclosure (FD) period. We find evidence that management issues pessimistic public guidance to lower analysts’ expectations to a beatable level in the new regulatory environment. Majority of the analysts revised their forecasts downward immediately (in terms of days rather than weeks) after the issuance of a pessimistic public guidance. The magnitude of the downward revision is significantly greater for firms that beat the expectations through managerial guidance than firms that beat the expectations without guidance. In addition, firms that beat analysts’ expectations through pessimistic guidance are able to achieve a larger positive earnings surprise at the earnings announcement than the legitimate beaters. Classification-JEL: M41, M48 Keywords: Expectations Management, Earnings Guidance, Managerial Guidance, Regulation FD, Analysts’ Expectations Journal: The International Journal of Business and Finance Research Pages: 47-58 Volume: 8 Issue: 5 Year: 2014 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v8n5-2014/IJBFR-V8N5-2014-5.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:8:y:2014:i:5:p:47-58 Template-Type: ReDIF-Article 1.0 Author-Name: Michael Adusei Author-Name: Samuel Yaw Akomea Author-Name: Ralph Nyadu-Addo Title: Predicting Bank Credit Risk: Does Board Structure Matter? Abstract: The study investigates the predictors of credit risk in the universal banking industry with panel data from universal banks in Ghana and finds that leverage, assets (size), loan loss provision, board size, board independence, and the number of executive directors on the board of a bank are the predictors of its credit risk. Based on these results, the study concludes that board structure matters in credit risk management of universal banks in Ghana. The recommendation is that banks could improve their credit risk management by formulating policies around these factors. Classification-JEL: E5, G21, G34, N27 Keywords: Bank Credit Risk, Board Structure, Ghana Journal: The International Journal of Business and Finance Research Pages: 59-70 Volume: 8 Issue: 5 Year: 2014 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v8n5-2014/IJBFR-V8N5-2014-6.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:8:y:2014:i:5:p:59-70 Template-Type: ReDIF-Article 1.0 Author-Name: Ya-Hui Want Title: Does Online Trading Affect Investors' Trading Intention? Abstract: The purpose of this study is to investigate the relationships and effects of online trading, the illusion of knowledge and control, information processing cost, trading intention, and expected performance. The research findings’ show that online trading itself will increase investors’ trading intentions, information processing cost, and illusion of knowledge and control. Also, the information processing cost and the illusion of knowledge and control will further raise investors’ expectations about future performance directly and indirectly via trading intention, meaning that online trading tends to make investors become overconfident about their future expected performance. Classification-JEL: D83, G02, G11 Keywords: Online Trading, Illusion of Knowledge, Illusion of Control, Information Processing Cost Journal: The International Journal of Business and Finance Research Pages: 71-79 Volume: 8 Issue: 5 Year: 2014 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v8n5-2014/IJBFR-V8N5-2014-7.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:8:y:2014:i:5:p:71-79 Template-Type: ReDIF-Article 1.0 Author-Name: Luis Ernesto Ocampo Figueroa Author-Name: Moises Alejandro Alarcon Osuna Author-Name: Carlos Fong Reynoso Title: Determinants of the Internationalization of the Firm: The Accelerated Model vs. the Sequential Model Abstract: The aim of this paper is to analyze the internationalization strategies followed by enterprises in the world, distinguishing between big enterprises and other firms (SMEs). In particular, we want to delve into determinants of internationalization and processes that allow companies to perform in international markets according to their resources. We developed an analytical framework based on the resources-based view of the firm and on two internationalization models, the Uppsala and Born-Global models, with the purpose of allowing the analysis of different typologies of internationalized firms. By the use of Probit, Logit and Linear regression models, the empirical results provide evidence supporting both theoretical models proposed. One group of firms presents a gradual internationalization, as suggests the Uppsala model. A second group follows an accelerated internationalization, consistent with the born-global approach. An interesting finding is that sequential internationalization is more common and that the structural factors explain international strategy better for SMEs than internal factors. Classification-JEL: F23, M16 Keywords: Resource-Based View, Intangible Assets, Internationalization, Born-Global Companies, Uppsala Model Journal: The International Journal of Business and Finance Research Pages: 81-93 Volume: 8 Issue: 5 Year: 2014 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v8n5-2014/IJBFR-V8N5-2014-8.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:8:y:2014:i:5:p:81-93 Template-Type: ReDIF-Article 1.0 Author-Name: Chin-Piao Yeh Author-Name: Ai-Chi Hsu Author-Name: Wei-Hsien Author-Name: Kuang-Cheng Chai Title: Neural Network Forecasts of Taiwan Bureau of National Health Insurance Expenditires Abstract: This study predicts the medical expenditure of national health insurance by a Back-Propagation Neural Network (BPN). Monte Carlo Simulation and Multiple Regression Analysis are used to compare the results of the BPN. Empirical results show the performance indicator modeled on BPN is the best, followed by those modeled on Multiple Regression Analysis and Monte Carlo Simulation. In estimating the opportunity cost that will be lost when the forecasting model overestimates the expenditure, and the resource cost that will occur when the model underestimates the expenditure, the Monte Carlo Simulation and Multiple Regression Analysis are likely to be better forecasting methods. Finally, the three key factors affecting medical expenditure are the aging population index, the inflation rate and the number of insured population. This study makes a contribution extant literature by using a BPN to predict the medical expenditure performance indicator error rate. A BPN is better than other models in terms of TIC, but may not be the best forecasting method in a variety of cost conditions. Classification-JEL: G22, G28 Keywords: Medical Expenditure Forecasting, Back-Propagation Neural Network (BPN), Monte Carlo Simulation, Multiple Regression Analysis Journal: The International Journal of Business and Finance Research Pages: 95-114 Volume: 8 Issue: 5 Year: 2014 File-URL: http://www.theibfr2.com//RePEc/ibf/ijbfre/ijbfr-v8n5-2014/IJBFR-V8N5-2014-9.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:8:y:2014:i:5:p:95-114 Template-Type: ReDIF-Article 1.0 Author-Name: Sangcheol Song Title: Value and Cost of Multinationality: International Diversification and Real Options Effects Abstract: In this research, we examine the moderating impacts of external uncertainty and portfolio ownership on the values and costs of multinationality by comparing international diversification and real options effects. We find from Korean FDI data that uncertainty strengthens the negative value of breadth in low level of multinationality, while ownership weakens. Meanwhile, in high level of multinationality, uncertainty strengthens the positive value of multinationality while ownership weakens. While the first results support international diversification perspective, the second results support real options view. Classification-JEL: F62 Keywords: Multinationality, International Area Diversification, Real Options, Uncertainty, Ownership Journal: The International Journal of Business and Finance Research Pages: 115-125 Volume: 8 Issue: 5 Year: 2014 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v8n5-2014/IJBFR-V8N5-2014-10.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:8:y:2014:i:5:p:115-125