Gerard Mertens - Academia.edu (original) (raw)

Papers by Gerard Mertens

State and Local Government Review, 2020

The study is a systematic literature review that assembles scientific knowledge in local governme... more The study is a systematic literature review that assembles scientific knowledge in local government transparency in the twenty-first Century. The study finds a remarkable growth in research on local government transparency in the first nineteen years, particularly in Europe and North America. Social, economic, political and institutional factors are found to account for this trend. In vogue among local governments is the use of information technology to enhance transparency. The pressure to become transparent largely comes from the passage of Freedom of Information Laws and open data initiatives of governments.

International Journal of Business and Globalisation, 2018

The present study provides a systematic literature review of small and medium-sized enterprises (... more The present study provides a systematic literature review of small and medium-sized enterprises (SMEs) financing. The research strategy is to identify and reveal ambiguities, lacunas and inconsistencies in the literature, and provide roadmaps for further research. The research framework follows the tenets of the PRISMA Group (2009) and Tranfield et al. (2003) in organising the systematic literature review. The keyword searches yielded 72 papers and were analysed following the assessment of fit for this review with regard to reference list information, research layout and results. In spite of the contradictory findings, the reviewed articles suggest that SMEs financing deserves further research. Furthermore, the review found and analyses different types of determinants-banks' profitability determinants and determinants of banks' credit to SMEs. Further empirical research on banks' profitability determinants, determinants of banks' credit to SMEs and SMEs financing and banks' profitability are needed. The detail and all-inclusive review of the body of literatures on SMEs financing on banks' profitability is the key value of this paper.

Meditari Accountancy Research, 2020

Purpose The study aims at examining the level of financial transparency of local governments in a... more Purpose The study aims at examining the level of financial transparency of local governments in a sub-Saharan African country and how financial transparency is affected by democracy in the sub-region. Design/methodology/approach The study applied a panel regression model to data collected from public accounts of 43 local authorities in Ghana from 1995 to 2014. Financial transparency was measured using a transparency index developed based on the Transparency Index of Transparency International and the information disclosure requirements of public sector entities under the International Public Sector Accounting Standards. Findings The study finds the low level of financial transparency among the local governments in Ghana, creating information asymmetry within the agency framework of governance. Further, evidence from the study suggests a strong positive relationship between democracy and financial transparency in the local government. Research limitations/implications Deepening democ...

Maandblad Voor Accountancy en Bedrijfseconomie, 2001

In deze studie wordt nader ingegaan op de invloed van de Nederlandse Commissie Corporate Governan... more In deze studie wordt nader ingegaan op de invloed van de Nederlandse Commissie Corporate Governance (Commissie Peters) op bepaalde governance-karakteristieken van Nederlandse beursgenoteerde ondernemingen. Onderzocht wordt of de karakteristieken van governance zijn veranderd sinds de verschijning van het rapport van de Commissie Peters (1997), waarin een veertigtal aanbevelingen voor verbetering van governance is opgenomen. Tevens is onderzocht of sindsdien veranderingen zijn opgetreden in de relatie tussen governance-kenmerken en prestaties. Tenslotte worden aankondigingseffecten gemeten rondom ontwikkelingen op het gebied van governance in Nederland door middel van een event-studie. In een voorgaande bijdrage werd reeds een beschrijving gegeven van de relaties tussen kenmerken van corporate governance en financiële prestaties voor Nederlandse beursfondsen.

Journal of International Business Studies, 2017

Today more than ever it is crucial to understand the dynamic and intricate institutional landscap... more Today more than ever it is crucial to understand the dynamic and intricate institutional landscape that MNEs operate in. However, the drivers of institutional change are still little understood. We focus on a recent fundamental institutional change: the worldwide switch to International Financial Reporting Standards (IFRS). The switch to IFRS was unexpected and not particularly welcomed by MNEs given that most national accounting systems in the pre-IFRS period were considered to be well aligned to the local cultural and environmental characteristics of each country. We test the drivers of this institutional change in a sample of 168 countries between 2002 and 2012 using empirical constructs from policy diffusion theory. Our findings show that the country-level decisions to adopt IFRS are not driven by local determinants but instead by adoption decisions by other, neighbouring countries and influential organizations. We find evidence for competition, learning and emulation as driving forces for the international spread of IFRS. We conclude that the switch to IFRS was not driven by an economic rationale only and diffused beyond the influence and interest of MNEs. Understanding these drivers is essential, because it enables management to anticipate and respond to institutional changes and consequently enhance performance and create competitive advantage.

SSRN Electronic Journal, 2015

We examine how changes in mandatory disclosure requirements affect firms' earnings management pra... more We examine how changes in mandatory disclosure requirements affect firms' earnings management practices. Drawing on Ewert and Wagenhofer 2005, we predict that if the increase in mandatory disclosures reduces accrual-based earnings management firms will rely more on real earnings management. We test this prediction using the event of mandatory adoption of International Financial Reporting Standards (IFRS) among UK public firms. We find that after IFRS adoption firms disclose significantly more information in annual reports. Using mediation analysis we document that the increase in the amount of disclosures is a mechanism through which IFRS reduces accrual-based earnings management. Finally, we demonstrate that after IFRS adoption firms rely significantly more on real earnings management. Analysis of earnings management practices around IFRS adoption among firms with a specific incentive to manage earnings (among firms issuing equity) shows similar results. However, comparing earnings management among public and private firms, we find that the substitution between accrual-based and real earnings management around IFRS adoption occurs only among public firms. Overall, our results show that the initiatives towards restricting accrual-based earnings management can lead to a more costly way of managing earnings and thus can have adverse consequences to firm value. Obtained evidence also sheds light on the mechanism through which the adoption of accounting standards can impact earnings management activities of a firm.

SSRN Electronic Journal, 2005

Royal Ahold (Koninklijke Ahold NV) was one of the major success stories in the 1990s and is one o... more Royal Ahold (Koninklijke Ahold NV) was one of the major success stories in the 1990s and is one of the major failures in corporate governance, suffering a complete meltdown in 2003. This clinical study analyzes Ahold's growth strategy through acquisitions and isolates the cause of the failed strategy, i.e. the absence of internal as well as external oversight of management's strategy. This study details the consequences of the strategy: bad acquisitions, an accounting scandal and the loss of investor confidence. It illustrates how initially a family and later professional management exploited the intent of the law and existing regulatory structures to maintain absolute control of the company. It analyzes in detail the applicable governance mechanisms of Ahold that were designed to hold the self-interest of the parties in check. It asks the reader to consider whether these governance mechanisms, properly implemented, might have helped prevent Ahold or a situation similar to Ahold.

SSRN Electronic Journal, 2012

, and participants of the 5th Research Seminar in Accounting Meeting in Rotterdam and the 2006 Eu... more , and participants of the 5th Research Seminar in Accounting Meeting in Rotterdam and the 2006 European Accounting Association Meeting in Dublin for helpful comments. We gratefully acknowledge the assistance of Hendrik de Boer. We also gratefully acknowledge Thomson Financial for providing earnings per share forecast data, available though the IBES-Institutional Brokers Estimate System. This data has been provided as part of a broad academic program to encourage earnings expectations research. The usual disclaimer applies.

European Accounting Review, 1997

Rethinking Valuation and Pricing Models, 2013

This paper investigates whether industry valuation impacts firms' earnings management decisions. ... more This paper investigates whether industry valuation impacts firms' earnings management decisions. Existing accounting literature assumes that industry valuation has a constant impact on this decision. We argue that a higher industry valuation increases the perceived benefits of earnings management at a time when the negative consequences associated with accrual reversal and the probability of detection are believed to be lower. Using a sample of quarterly data of U.S. firms from 1985 to 2005, we find that the four-quarter lagged industry valuation has a positive relationship with industry aggregate (current) discretionary accruals. More specific, one standard deviation increase in the aggregate industry valuation is associated with a significant increase of 2.4 cents in quarterly earnings per share. Our results are robust after controlling for several factors, including bubble years, size, leverage and performance.

SSRN Electronic Journal, 2010

We examine the effect of mandatory International Financial Reporting Standards (IFRS) adoption on... more We examine the effect of mandatory International Financial Reporting Standards (IFRS) adoption on the cost of equity and liquidity of European banks and insurance companies. We find a statistically and economically significant decrease in cost of equity and a statistically and economically significant increase in liquidity of banks and insurance companies after IFRS adoption. In additional analyses, we find an increase in earnings volatility and a decrease in the risk-taking behavior of financial institutions after 2005. Further, we find that IFRS adopters with higher exposure to fair value accounting show a lower cost of equity.

SSRN Electronic Journal, 2011

The integrity and proper functioning of security markets are considered to be important perquisit... more The integrity and proper functioning of security markets are considered to be important perquisites for the economic growth of a country as stated by European Commission (EC Directive 2003/6/EC). Accordingly, regulators remain cautious of the operations of the security markets and bring in new regulations, if deemed necessary, to correct or eliminate practices that hinder the fair operations of security markets. In such an effort the European Commission enacted a new directive, the Market Abuse Directive (MAD) in October 2004. The objectives of this directive are to deter market abuse activities that impair the integrity of financial markets and to enhance public confidence on these markets. In this paper we examine whether the implementation of this directive has been effective and whether its implementation is associated with any adverse consequences. Our analysis provides evidence of a successful functioning of the MAD. In particular we find an average increase in the level and timing of information made available by listed firms to the financial market and a decline in the tendency of the firms to provide price sensitive inside information to selective individuals (financial analysts).

Advances in Corporate Finance and Asset Pricing, 2006

... on grant and exercise behaviour surrounding the IPO can provide more insight into the charact... more ... on grant and exercise behaviour surrounding the IPO can provide more insight into the characteristics of ... the grant and exercise of stock options for a sample of 54 Dutch IPO firms in ... that option grants to CEOs are significantly related to accounting performance (for manufacturing ...

European Accounting Review, 1998

This paper presents the results of a comparative study on auditor responsibility within two membe... more This paper presents the results of a comparative study on auditor responsibility within two members of the European Union: Germany and the Netherlands. Auditor responsibility is an important factor in establishing audit quality. The quality of service within the auditing profession is maintained through the promulgation of professional standards and disciplinary law. In Germany, the Wirtschaftspruferkammer is the supervisory body