Browsing by Author "Eliasson, Simon"

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Assessing Subsidiary Performance in a Multinational Context - A single case study investigating practical procedures for performance measurement and underlying factors for performance creation.
(2023-07-18) Anderberg, Simon; Eliasson, Simon; University of Gothenburg/Graduate School; Göteborgs universitet/Graduate School
The path for successful performance is uncertain for any corporation, where there is no concise definition of performance and the objective of the organisation. The uncertainties and challenges related to the management of Multinational Corporations (MNCs) complicates the performance assessment of subsidiaries. Simultaneously, 70 percent of firms possess insufficient understanding of key performance indicators (KPIs) and performance measurement systems (PMSs). To address the challenges related to performance assessment, this study breaks out performance by investigating how MNCs use PMSs to assess their subsidiaries globally. The thesis addresses different factors that could influence performance for MNCs, together with aspects that are important to consider when formulating an PMS. A single case study approach was used to get valuable insight into how a single MNC has constructed their PMS and how the decision-makers use their PMS to assess the subsidiaries. Interviews conducted with directors on multiple levels in the Case Company were compared to financial statements, to investigate how the PMS is applicable in one Asian region. Findings in this thesis suggest that it is important to consider what measurements that are included into the PMS, since it could affect the ability of subsidiaries to take initiative and improve the position in MNCs internal network constellation. Furthermore, it also suggests that PMS can influence the ability to develop suitable capabilities to improve future performance. The thesis finds that there is a path in reality that is not coherent with the theoretical approach to generate performance. The analysis shows that the strategy by firms is set by the objective and that the capabilities are developed to align the given strategy. Lastly, the thesis finds that there is no clear path on measurement to assess the whole organisation, but rather a focus on the result rather than the path to performance.
How do Ownership Characteristics Affect Accounting Quality in the Banking Sector? –A Quantitative Study of US Banks
(2014-06-11) Eliasson, Simon; Fredriksson, Jennie; University of Gothenburg/Department of Business Administration; Göteborgs universitet/Företagsekonomiska institutionen
This paper investigates the effect of ownership characteristics on US banks’ accounting quality from a stakeholder perspective. The accounting quality within the banking industry is of major importance for the domestic financial stability as banks are the core of financial intermediations. Impairment of credit loans is an accounting area exposed to the subjective judgment of managers since the regulation for financial instruments is principle based, giving managers a leeway when determining the loan loss provision. Given the leeway, managers might have certain incentives to manipulate loan loss provisions in order to obtain different objectives. The nature of the owners and consequently the unique characteristics of different ownership forms are hypothesized to affect the managers’ incentives in various ways. As a result of manipulation or inaccurate estimations of loan loss provisions the accounting quality is affected negatively as the financial reports do not reflect the reality, and banks can be perceived to have lower risk than they actually have. By collecting data from American private, listed and savings banks between 2003 and 2013 a regression analysis is performed to examine the differences in accounting quality between the ownership forms. The findings document that accounting quality in listed banks is lower compared to non-listed banks. However, the accounting quality regarding other ownership forms was not proven to differ. The results of this study contributes to the field by providing additional knowledge of how different ownership constellations might affect the accounting quality in the banking industry and consequently, the quality of information provided to stakeholders. The knowledge could benefit several stakeholders, for example to enable bank regulators to choose the proper set of regulations.
Information Asymmetry and Discretionary Accounting in European Banks
(2016-09-15) Eliasson, Simon; University of Gothenburg/Graduate School; Göteborgs universitet/Graduate School
Recent theoretical research suggests that information risk is a non-diversifiable risk factor and should therefore affect the cost of capital of the individual firm. This study investigates this notion for listed European banks during the period 2005-2015. I use two measures based on the level and uncertainty of discretionary accounting choices to proxy information risk and investigate the effect on the information asymmetry component of banks' cost of capital. I study the effects on the equity market, proxied by bid-ask spreads and stock volatility, and the credit market, proxied by bond and CDS spreads. The results show that the level of discretionary accounting affects information asymmetry on the equity market, mainly through the effect on bid-ask spreads. Additional tests suggest that these effects are solely generated by the level of discretionary loan loss provisions. I find some evidence that the uncertainty in the level of discretionary accounting has a similar effect on the equity market, however these results are weak to alternative model specifications. I am unable to empirically support any effect on the credit market. My results should be of interest to standard-setters to ensure that financial accounts provide information that support investors' decisions. The results also suggest that banks are able to lower their cost of equity capital by providing high quality information.