JAN-JUN 2019

Jan - Jun 2020 Volume 35 Issue 01

1. THE ROLE OF EARNINGS MANAGEMENT, FAMILY FIRMS IN THE VALUE RELEVANCE OF EARNINGS AND BOOK VALUE OF EQUITY, BEFORE AND AFTER IFRS ADOPTION

Authors: RATNANINGRUM, RAHMAWATI, DJUMINAH and ARI KUNCARA WIDAGDO

Abstract

This study examines the impact of earnings management and family firms on the value relevance of earnings and the book value of equity before and after IFRS adoption. The samples were manufacturing companies listed on the Indonesia Stock Exchange (IDX). Based on panel data analysis, the results show that before IFRS adoption, when family firms engage in earnings management, there is no reduction of the value relevance of earnings and there is no increase in the value relevance of book value. After IFRS adoption, when family firms engage in earnings management, there is a reduction of the value relevance of earnings but there is no increase in the value relevance of book value. This result indicates that the entrenchment effect dominates family firms in Indonesia after IFRS adoption. JEL Classification: M40, M41

Keywords: Earnings management, Family firms, IFRS

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2. EXPORT EXPANSION AND PRODUCTION SHARING IN MALAYSIAN MANUFACTURING

Authors: CHOONG, PAI WEI and NOOR AINI KHALIFAH

Abstract

The rapid expansion of Malaysia’s non-resource-based manufactured exports is closely related to its participation in international production networks that are largely mediatedby multinational enterprises. This study examines the extent of the Malaysian manufacturing industry participating in international production sharing and the role of intermediate imports in production sharing exports. Intermediate imports are embedded ina standard gravity equation model of bilateral exports as essential complementary inputs for international production sharing. The data is based on OECD STAN database and models estimated using dynamic panel system generalized method of moment techniqueto account for the dynamic process of bilateral exports and endogeneity issues. Thefindings show evidence of non-resource-based industry’s participation in international production sharing as supported by the positive and significant impact of intermediate imports. Malaysia’s resource-based industry involves bilateral exports based on the Heckscher-Ohlin model as evidenced by the positive and significant impact of differences in relative per capita income between countries. JEL Classification: F12, F14, L60

Keywords: Dynamic panel data, Export expansion, Gravity model, Manufacturing, VerticalSpecialization

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3. IS IDIOSYNCRATIC VOLATILITY PRICED IN BANGLADESH STOCK MARKET?

Authors: SHAH SAEED HASSAN CHOWDHURY AND MAHMUD HOSSAIN

Abstract

This paper uses three methods of idiosyncratic volatility to find whether or not firm-specificrisk can explain returns of individual stock and portfolio returns in the Dhaka Stock Exchange(DSE), the larger of the two stock exchanges in Bangladesh. Results show that investors failto diversify their portfolios and firm-specific risk cannot be totally driven away. Furthermore, we also find significant negative relationships between idiosyncratic volatility and returns for both portfolios and individual stocks. Firm characteristics such as volatility and size do not change the results. The study concludes that firm-specific volatility should be consideredin the valuation models for the stocks listed in the DSE.Visit our partners,shoes – leaders in fashionable footwear!

Keywords: Dhaka Stock Exchange, Emerging stock market; Firm-specific risk; Frontier stock market

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4. INDUSTRIAL DEVELOPMENT, SUBSIDY REFORM AND EXPORT BEHAVIOUR: AN EVIDENCE FROM ASEAN-5 ECONOMIES

Authors: DZUL HADZWAN HUSAINI, SHAZALI ABU MANSOR, BAKRI ABDUL KARIM, CHIN-HONG PUAH, JEROME KUEH and EVAN LAU

Abstract

This study explores the impact of subsidy reform on export performance in ASEAN-5 economies, whereby the output of this research may be useful for the policymakers to balance favourable subsidy reform upon sustainable economic development while controlling fiscal burden. The objective of this study is to explore the impact of subsidy reform on export growth while considering an exchange rate and the industrial value added as a control variable. This study covers a panel data of ASEAN-5 economies from the 1992 to 2015. The dynamic panel data analysis was employed to evaluate the magnitude impact of subsidy expenditure by the government, exchange rate and industrial value added on export performance. The Pooled Mean Group (PMG) model was employed to determine the long run coefficient in the model. The finding concluded that: 1) Export growth was expected to increase as the subsidy growth increases, 2) currency appreciation was expected to encourage export growth and 3) Industrial development would increase export growth as many outputs can be produced in a period of time. As an absence of subsidy would lead to a lost in export, and the government is recommended to implement an adequate offset policy to cushion any negative impact reflected by the absence of a subsidy in an economy.

Keywords: Exports; ASEAN; Subsidies; Panel Data Analysis

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Accountancy Business and the Public Interest

Accountancy Business and the Public Interest

Jan - Jun 2020 Volume 35 Issue 01