Competition Culture and Corporate Finance

This book introduces a measure of firms' competition culture based on a textual analysis and natural language processing (NPL) of firms' 10-K filings. Using this measure, the book explores the relationship between competition culture and various phenomena in corporate finance, specifically, institutional ownership structure, stock return performance, idiosyncratic stock price crash risk, meeting/beating analysts' earnings expectations, and earnings management activity, for a large sample of US-based financial and non-financial firms. In particular, the book provides evidence that transient institutional ownership intensifies firms' competition culture, while dedicated institutional ownership lessens it. In addition, the book's findings suggest that firms with greater levels of competition culture achieve higher levels of short-term stock return performance, experience greater incidence of idiosyncratic stock price crashes, and are more prone to meet/beat analysts forecast and engagein accruals-based earnings manipulation.

Finally, the book examines the role played by competition culture in financial firms (i.e., banks). Specifically, the book explores the effect of competition culture on bank lending and shows that banks with greater levels of competition culture are generally more prone to engage in procyclical lending activity. The findings of the book have significant policy implications and will be of interests to regulators, accounting standard-setters, managers and those charged with firm governance, career academics and researchers, graduates, and those generally interested in the role played by corporate culture in the related fields of finance, economics, and accounting.

Explores the relationship between competition culture and earnings management Introduces a new measure of firms' competition culture based on a textual analysis and natural language processing Covers ownership structure, crash risk, and bank lending and loan loss provisioning

Autorentext

Terry Harris is an Associate Professor at Durham University Business School, Durham University, United Kingdom. He received his Bachelor's degree (double major) in Computer Science and Accounting, a Master of Philosophy (MPhil) in Computer Science focusing on Machine Learning, a professional accounting designation with the Association of Chartered Certified Accountants (ACCA), and a Doctor of Philosophy (PhD) in Finance. Terry has engaged in theoretical and applied research and publications primarily focused on the impact of corporate culture on firms' economic outcomes. In this vein, he has co-authored and published the articles entitled "Institutional Ownership and Firms' Thrust to Compete" in the British Journal of Management and "Measuring firms' market orientation using textual analysis of 10-K filings" also in the British Journal of Management.****

Klappentext

This book introduces a measure of firms competition culture based on a textual analysis and natural language processing (NPL) of firms 10-K filings. Using this measure, the book explores the relationship between competition culture and various phenomena in corporate finance, specifically, institutional ownership structure, stock return performance, idiosyncratic stock price crash risk, meeting/beating analysts earnings expectations, and earnings management activity, for a large sample of US-based financial and non-financial firms. In particular, the book provides evidence that transient institutional ownership intensifies firms competition culture, while dedicated institutional ownership lessens it. In addition, the book s findings suggest that firms with greater levels of competition culture achieve higher levels of short-term stock return performance, experience greater incidence of idiosyncratic stock price crashes, and are more prone to meet/beat analysts forecast and engagein accruals-based earnings manipulation. Finally, the book examines the role played by competition culture in financial firms (i.e., banks). Specifically, the book explores the effect of competition culture on bank lending and shows that banks with greater levels of competition culture are generally more prone to engage in procyclical lending activity. The findings of the book have significant policy implications and will be of interests to regulators, accounting standard-setters, managers and those charged with firm governance, career academics and researchers, graduates, and those generally interested in the role played by corporate culture in the related fields of finance, economics, and accounting.

Inhalt

Chapter 1 Introduction.- Chapter 2 Literature Review: What is Culture?.- Chapter 3 Literature Review: What is Textual Analysis, and can we use it to Measure Corporate Culture?.- Chapter 4 Institutional Investors and Competition Culture.- Chapter 5 Competition Culture and Performance.- Chapter 6 Competition Culture and Crash Risk.- Chapter 7 Competition Culture and Meeting/Beating Analysts' Earnings Forecasts.- Chapter 8 Competition Culture and Earnings Management.- Chapter 9 Competition Culture and Bank Lending.- Chapter 10 Conclusion.