Review of Pacific Basin Financial Markets and Policies

Institutional differences across countries present special challenges to achieve uniformity or at least harmony in financial reporting across countries. We evaluate in this paper how accounting traditions, ownership and governance structures of Italian companies affect implementation of the European Union mandated International Financial Reporting Standards (IFRS) by Italian companies. This evaluation will enable investors, especially international investors, to have a better understanding of financial reporting by Italian companies and it will also highlight the problems and issues facing Italian companies to implement IFRS.

In Australia, the equivalent of a US VIX indicator has recently become available. In response, we consider whether the information captured in the implied volatility of options on the Australian SPI 200 Futures index is superior to the information content of a generalized autoregressive conditional heteroskedasticity (GARCH) approach to volatility prediction. We conclude that the implied volatility of at-the-money (ATM) call options on the SPI 200 Index futures is more powerful, dominating other modes of moneyness options as well as GARCH predictions.

Much research has been conducted on the accuracy of the pecking order theory and the trade-off theory. Neither theory on its own has seemed to hold sufficient explanatory power to accurately describe capital structures. Chou et al. [Sun Yat-Sen Management Review, 19, 225–227 (2011)] proposed the signal factor hypothesis (SFH) which encompasses and integrates the two theories. Using hierarchical linear modeling (HLM), we verified the predictions of the SFH, proving that companies from Taiwan and China with low information symmetry have higher debt ratios than those with high information symmetry, and that profitability has a negative influence on capital structure regardless of the degree of the information asymmetry.

The model in this paper is similar to Brailsford and Faff (1997), using a conditional CAPM model with the GARCH-M framework, but with a significant additional dummy term (in the conditional mean of the share return) that will help explain the models better in both economic and statistical sense. The relatively simpler asymmetric model in this paper is compatible to other more complex asymmetric models and hence should be easier to model and explain for practical purposes. The model in this paper is also a more effective model, in both economical and statistical terms, as compared to some other models in the GARCH family as it captures the asymmetric effect in the modeling process in both the conditional first and second moments. The findings in this paper have contributed in re-evaluating the nature and process of time varying behavior of time series of stock returns and will provide researchers and practitioners additional options and incentives to explore for future research. We have also provided statistical and practical reasons to support these findings.

We investigate buy–sell imbalances (BSIs) around ex-dividend days on the Taiwan Stock Exchange (TWSE) and find that trading activities are not entirely correlated with investor tax status. We find that margin traders and short sellers engage in arbitrage by selling more stocks for those with high abnormal returns cum- and ex-dividend, respectively. Tax-neutral dealers engage in overnight trading while tax-disadvantaged foreigners refrain from selling stocks cum-dividend.

This paper aims to investigate the role of corporate dividend policy and corporate governance in managerial timing decisions with regard to large exercise of executive stock options (ESOs). The findings indicate that the motivations behind managers’ decisions to exercise abnormally large ESOs vary depending on the strength of the related corporate governance mechanisms. Managers of weakly governed companies exploit abnormal earnings management when timing large exercises of ESOs. In contrast, managers of well-governed companies behave rationally in timing large exercises of ESOs, carrying them out in years in which their companies significantly raise dividend payouts.

The 23rd Annual Conference on Pacific Basin Finance, Economics, Accounting, and Management was held in Saigon Technology University, Ho Chi Minh City, Vietnam on July 16th and July 17th, 2015. The first conference was held at Rutgers University in 1993. Since then, the conference has been held in Hong Kong (1994, 1998), Taipei (1995, 1999, 2003, 2006, 2011), Bangkok (2000, 2004, 2009), Rutgers (1996, 2001, 2005, 2012), Singapore (1997, 2002), Vietnam (2007), Australia (2008, 2013), China (2010), and Japan (2014). The program co-directors of the conference were Cheng-Few Lee, Rutgers University, USA, and Cao Hao Thi, Saigon Technology University, Vietnam.