Australian Academy of Accounting and Finance Review

The Chairman of the Board – Leader or Lame Duck? An Empirical Analysis of the Importance of the Chairman in US Firms

Dominik Jurek — 2024-03-30

Academic literature generally views the chairman of the board as a mere additional title for the CEO. I critically review this concept and explore a distinct chairman effect on company performance. For this purpose, I examine policy variable changes and stock market reactions to chairman turnovers for large US companies between 1998 and 2012. I find that chairman-CEOs are more entrenched and preserve their empire until their retirement. The chairman has only limited relevance to large companies, but for small companies, the chairman provides valuable knowledge and guidance.

Keywords: Chairman of the Board; Duality; Entrenchment

Australian Academy of Accounting and , volume 6, issue 1, January 2024, pp 1-67

Economic Policy and Livability: The Role of Government and Business Collaboration

Satpreet Singh — 2024-03-30

The relationship between government and businesses in modern societies is significant in creating economic policies that improve living standards. This paper focuses on studying the mechanisms and results of this partnership, which can result in job creation, economic growth, and social well-being. The literature review explores the existing body of knowledge concerning government-business collaboration in the context of economic policies and livability. The review identifies gaps in current research and underscores the need for a comprehensive understanding of the multifaceted nature of livability and how such collaboration influences its various dimensions. This research primarily employs case studies as the research method. A selection of pertinent case studies is analyzed to gain insights into the collaborative dynamics between government and businesses and their influence on livability. Qualitative data sources, including government reports, academic studies, and expert interviews, are utilized to provide depth to the analysis. The analysis of case studies reveals that government-business collaboration can significantly enhance the quality of life for citizens. The paper discusses the positive outcomes of this collaboration, particularly in terms of job creation, economic growth, and social well-being. It highlights the role of economic, social, and environmental dimensions in understanding livability. The paper offers theoretical implications by emphasizing the interplay of economic, social, and environmental factors in assessing livability. Practically, it advocates for transparent, accountable, and inclusive government-business collaborations as a means to create policies that genuinely serve the public interest and enhance livability. The study acknowledges potential limitations, recognizing the context-specific nature of case studies and their inherent constraints. These limitations are taken into account to ensure a balanced and well-informed understanding of government-business collaboration and its implications for livability.

Keywords: Economic policies; Social well-being; Regulations; Sustainable future; Livability

Australian Academy of Accounting and , volume 6, issue 1, January 2024, pp 68-81

Patent Issuances and Stock Volatility

Dominik Jurek — 2024-03-30

How do patents affect firm risk? In recent years, the US patent system has experienced a large expansion, granting more patents than ever before. Exploiting the heterogeneity of this expansion between patent classes, this paper asks how the patent system is changing individual firm’s stock volatility. Introducing a novel shift-share instrument based on patent applications across industry sectors, I document how patent issuances were volatility increasing before 2000 but volatility reducing since then. This stock volatility reduction effect is concentrated among firms in highly competitive sectors, giving evidence that patents have been used more defensively against competition since 2000 rather than as growth options.

Keywords: Patenting; Firm risk; Real options; Shift-share instrument

Australian Academy of Accounting and , volume 6, issue 1, January 2024, pp 82-97

Informal Financing: Is It Attractive to The Companies?

Andre — 2024-03-30

Informal financing is essential as a source of company financing because, apart from being low risk, not all companies have adequate access to formal financing. However, until the latest study, no substantial evidence has been found for the role of informal financing sources on public perception. By taking samples from all companies in Indonesia for the period 2003 to 2022, this study aims to investigate this issue. A series of robust tests, including financial conditions, industry effects, and crises, show that informal financing plays a role in companies. Companies with higher managerial talent in trade credit management will be increasingly attractive to the public and become acquisition targets. The results of this study are useful, at least for academics, companies, and regulators in policy making.

Keywords: Informal Financing; Trade Credit; Acquisition; Crisis; Emerging Market

Australian Academy of Accounting and , volume 6, issue 1, January 2024, pp 98-104