Papers by Naomi Soderstrom
Smoke haze hurts financial markets as well as the environment
Literature in accounting, economics, and strategy has identified several factors that drive firms... more Literature in accounting, economics, and strategy has identified several factors that drive firms ’ decisions to outsource including the cost implications, risk, potential for hold-up, quality, and an assessment of key competencies. This paper adds to this literature by exploring variations in the outsourcing decision associated with differences in ownership. Governance, incentives, and the types of institutional constraints faced by the firm are all affected by ownership. Therefore, ownership is likely to influence major decisions such as outsourcing. We examine the effects of ownership form on firms ’ outsourcing decisions in response to competitive and financial pressures. Using panel data from hospitals, we explore outsourcing of non-clinical and clinical services, as well as financial implications of outsourcing. We find differences in the extent of outsourcing and the types of services outsourced as a function of ownership. In addition, we find different effects on ROA for out...
Contemporary Accounting Research, 2020
have provided valuable research assistance. We thank Peter Clarkson and two anonymous reviewers f... more have provided valuable research assistance. We thank Peter Clarkson and two anonymous reviewers for their valuable advice and guidance. An earlier version of the paper circulated under the title "Estimation Bias and Monitoring in Clean Development Mechanism Projects.
Asbestos Contamination: Governance and Financial Reporting Issues in the Public, Private and Not‐for‐profit Sectors
Australian Accounting Review, 2021
ACM SIGMIS Database: the DATABASE for Advances in Information Systems, 1986
This paper examines the use of Agency Theory and Information Economics Models to determine the ty... more This paper examines the use of Agency Theory and Information Economics Models to determine the types of information that should be used in an information system. Under examination is the payment system used by the federal government to reimburse hospitals for treatment of Medicare patients. Incentives for the government and hospitals as a result of a payment system will be examined and an information system will be developed which will help to alleviate some of the incentive problems that exist. Payment is currently on the basis of Diagnosis Related Groups (DRGs). The DRGs are categories of illnesses, and hospitals receive different amounts of money for each DRG.
Unusual Patterns in Executive Compensation
SSRN Electronic Journal, 2012
ABSTRACT Some argue that executive compensation, particularly cash compensation, is surprisingly ... more ABSTRACT Some argue that executive compensation, particularly cash compensation, is surprisingly insensitive to firm performance. Hall and Liebman (1998), for example, find that virtually all pay-performance sensitivity for CEOs is a result of changes in equity holdings. We extend prior studies by incorporating inferences from the tax, earnings management and psychology literatures and by exploring discontinuities in the distribution of cash compensation that are unrelated to determinants derived from traditional agency theory. In addition to the discontinuities driven by a $1 million tax deductibility cap on non-performance-based components of executive compensation (Rose and Wolfram 2000, 2002) and the surprising number of CEOs that receive no more than $1 in salary (Hamm, Jung, and Wang 2011), we document additional discontinuities at amounts evenly divisible by $100,000 and where the second digit from the left is either a zero or a five. Empirical analyses provide evidence that taking these discontinuities into consideration for traditional compensation analyses increases the strength of the association between cash compensation and traditional agency theory-driven factors.
Journal of Accounting and Economics, 2006
I find evidence consistent with managers manipulating real activities to avoid reporting annual l... more I find evidence consistent with managers manipulating real activities to avoid reporting annual losses. Specifically, I find evidence suggesting price discounts to temporarily increase sales, overproduction to report lower cost of goods sold, and reduction of discretionary expenditures to improve reported margins. Cross-sectional analysis reveals that these activities are less prevalent in the presence of sophisticated investors. Other factors that influence real activities manipulation include industry membership, the stock of inventories and receivables, and incentives to meet zero earnings. There is also some, though less robust, evidence of real activities manipulation to meet annual analyst forecasts.
SSRN Electronic Journal, 2016
A significant portion of CEOs in publicly-listed Chinese state-owned enterprises receive zero pay... more A significant portion of CEOs in publicly-listed Chinese state-owned enterprises receive zero pay from the companies for which they work. Instead, they are paid directly by their controlling shareholder who can be the Chinese government or parent firms controlled by the Chinese government. While their actual pay is unobservable, it is known to be low and contain few performance-based incentives. We explore how these parent-paid executives are motivated and whether the outcomes of this unusual incentive differ from conventional compensation. Consistent with career concerns as their main incentive, we find that these CEOs have a significantly higher probability of future promotion than other CEOs. We also conduct an event study using the Split Share Structure Reform in 2005. The reform liberalized the Chinese stock market and enhanced the role of the market mechanisms that potentially replaced promotion incentives in executive compensation contracts. Our evidence is generally consistent with a reduction in the strength of promotion incentives following the reform. Further analyses indicate that, compared to peers that directly pay their CEOs, firms with parent-paid CEOs have higher return on assets and asset growth, and they experience less tunneling by their shareholders.
SSRN Electronic Journal
We provide the first direct analysis of the magnitude and determinants of the unreliability of Co... more We provide the first direct analysis of the magnitude and determinants of the unreliability of Corporate Social Responsibility (CSR) reports. We examine the frequency, magnitude and determinants of CSR report restatements for the Global Fortune 250 (G250) across the period from 2006 to 2013. During this period, 39% of G250 CSR reports have been restated, with a monotonic increase across time from 29% in 2006 to 53% in 2013. The median magnitude of the restatement of each line item is 10%, with a bias towards overstatement. In our exploration of determinants and economic incentives associated CSR report restatements, we find restatement frequency is positively associated with firm environmental and social complexity and that restatements occur more frequently in firms that have reported a high level of social performance and have environmental targets. We also find that frequency of restatement is positively associated with firms that reside in strong law countries and have their CSR reported audited. Our reporting bias finds a negative association between adoption of GRI reporting guidelines and the likelihood of an overstatement. We also find a positive association between having the CSR reported audited and the likelihood of overstatements. Together, our results indicate that CSR information could be very unreliable and firms that face pressure to perform well have more restatements. However, use of measurement guidelines helps restrict managers' disclosure choices and thus guards against opportunistic choice of measurement methods. Further auditors appear to invest more time and effort to reduce over-rather than understatement of performance. Restatement of CSR Reports: Frequency, Magnitude and Determinants "In the absence of credible, verifiable information…it is difficult for shareholders, investors, and pension fund managers to make meaningful assessments and decisions about the CR [corporate responsibility] practices" (ISO 2002, page IV).
The Influence of Governance Constraints on Outsourcing
Cybersecurity Awareness and the Cost of Liquidity
SSRN Electronic Journal
Putting some “sense” into our research
Meditari Accountancy Research
Purpose This paper aims to propose using human senses as a means of thinking about the contributi... more Purpose This paper aims to propose using human senses as a means of thinking about the contributions of this research. Design/methodology/approach Based upon the metaphor of human senses, the model describes different aspects of research, such as topic selection, theory and method, providing suggestions for enhancing relevance and expanding the audience for the research. The model is applied to a current working paper on cyber security and then more broadly to provide suggestions for researchers who are interested in conducting research on risk. Findings The model can be used to frame different types of research projects in a way that helps to increase the interest in and impact of this research. Research limitations/implications The model in the paper is ad hoc but provides a fresh way to view this research. Social implications Increasing interest in accounting research can result in a broader audience for this work. Originality/value The paper provides a means for researchers to s...
Air Pollution and Analyst Information Production
SSRN Electronic Journal
Responsible science: Celebrating the 50-year legacy of using a registration-based framework
Pacific-Basin Finance Journal
Cybersecurity awareness and market valuations
Journal of Accounting and Public Policy
Firm value and government commitment to combating climate change
Pacific-Basin Finance Journal
Market response to expected regulatory costs related to haze
Journal of Accounting and Public Policy
Does Capacity Utilization Affect the “Stickiness” of Cost?
Journal of Accounting, Auditing & Finance, 2004
3g code division multiple acces... eigenvector multimedia piles (3) post-grouting stickiness util... more 3g code division multiple acces... eigenvector multimedia piles (3) post-grouting stickiness utilization wand 局麻开发利用控制论螺旋钻孔灌注桩桩端压力注浆工艺桩端压力注浆桩techno... 蜜露棉花粘性射频卷标图像处理芯片封装盐湖资源综合利用
Meltdown - or Not? for Utilities
Journal of Accountancy, Mar 1, 2000
Spending Patterns with Lapsing Budgets: Evidence from U.S. Army Hospitals
J Manag Account Res, 2007
We explore how the practice of reverting unused funds (budget lapsing) affects intra- and inter-y... more We explore how the practice of reverting unused funds (budget lapsing) affects intra- and inter-year spending patterns. Data from 31 army hospitals over a period of five years provide strong support for a saving-dissaving model. Hospital administrators appear to stockpile pharmaceuticals and other supplies toward the end of a fiscal year, leading to a significant spike in spending that potentially exhausts their budget. Interestingly, data show a decline at the start of the next fiscal year that is larger than the preceding spike, indicating that mangers build a reserve for later use. The magnitude of the reserve accumulated at the start of a year is reliably persistent across years and accelerates the upward trend in spending through the year. That is, managers increasingly expend the reserve as environmental uncertainty decreases.We conclude that risk-aversion plays a significant role in determining intra-year trends.
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Papers by Naomi Soderstrom