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- Supervisory boards, financial crisis and bank performance: do board characteristics matter?Publication . Fernandes, Catarina; Farinha, Jorge; Martins, Francisco Vitorino; Mateus, CesárioFailures in governance, especially in regard to boards of directors, have been blamed for the 2007-2008 financial crisis. The increased public scrutiny regarding the actions and role of the board of directors in banks, following the crisis, inspires to examine whether and to what extent the characteristics of banks’ boards influence their performance in the crisis. Using a sample of 72 publicly listed European banks, we find that banks with more independent and busy boards experienced worse stock returns during the crisis. Conversely, the better performing banks had more banking experts serving as supervisory directors. Additionally, we find that gender and age diversity improved banks’ performance during the crisis; hence, diversity matters. We also construct a governance quality index on the basis of board characteristics and conclude that governance quality positively affects banks’ returns during the crisis. Overall, we find evidence that banks’ performance during the financial crisis is a function of their boards’ characteristics.
- Determinants of European Banks’ bailouts following the 2007–2008 financial crisisPublication . Fernandes, Catarina; Farinha, Jorge; Martins, Francisco Vitorino; Mateus, CesárioExtraordinary amounts of public funds and/or assistance were made available to banks since the onset of the 2007–8 financial crises. Governments worldwide have launched a massive bailout package to support banks in distress. Using a probit model, this article investigates the likelihood of bailouts following the financial crisis. Our results lead us to conclude that the governance characteristics of banks, specifically the characteristics of boards, bank risks, as well as bank-level and country-specific banking sector features, explain the likelihood of bailouts in the European banking sector. In particular, we find that board banking experience, longer directors’ tenure, less busy boards, and the existence of a corporate governance committee decrease the likelihood of banks participating in a bailout programme. Inversely, board independence, credit, and liquidity risks increase the probability of banks being bailed out. Furthermore, fewer limitations on banking freedom and greater openness of the banking sector have a harmful impact on the occurrence of bailouts. Our study therefore suggests relevant policy implications, which might help supervisors, regulators, and other public authorities in avoiding costly bailouts.
- Governo das sociedades, custos de agência e crise financeira: que relação?Publication . Fernandes, CatarinaO debate sobre o governo das sociedades tem ganho crescente relevo nos meios académico e empresarial desde o fim da década de 1980. Esse maior destaque foi originado por diversos fatores, dos quais se salientam a crise na Ásia, os escândalos financeiros que assolaram grandes empresas cotadas norte-americanas e algumas empresas de auditoria e, mais recentemente, a crise financeira mundial. Embora há muito defendida a necessidade de aperfeiçoar os instrumentos existentes e de descobrir novos mecanismos, de modo a encontrar um sistema de governo das sociedades que minimize os custos de agência, a crise financeira mundial com origem nos EUA veio dar-lhe novo “fôlego”. E, agora, com especial ênfase na banca. Falhas no governo das sociedades, em particular no setor bancário, têm sido apontadas como culpadas pela crise financeira global iniciada em 2007, só comparável à Grande Depressão. Assim, este artigo pretende, em primeiro lugar, apresentar uma caracterização genérica dos mecanismos de governo das sociedades, integrando no estudo os denominados custos de agência e, em seguida, analisar tais mecanismos no setor bancário, estabelecendo uma relação entre eles e a crise financeira. A pesquisa efetuada permite demonstrar a importância dos instrumentos de governo das sociedades na minimização dos custos de agência, nomeadamente no contexto da crise financeira. Ainda que o setor bancário tenha as suas especificidades, a investigação feita indica que existe uma relação entre aqueles instrumentos e a performance dos bancos e que fragilidades no governo das sociedades determinaram em larga medida a crise financeira.
- Board´s characteristics and the financial crisisPublication . Fernandes, Catarina; Farinha, Jorge; Martins, F. Vitorino; Mateus, CesárioThe 2007-2008 financial crisis is considered the worst financial crisis since the Great Depression and failures in governance, especially concerning boards, have been blamed for this financial turmoil. But, when dealing with governance issues, most research excludes financial firms from its analysis and is focused on US. So, we intend to fill this gap by analysing European banks. Also, why some banks suffered much more than others despite that they were exposed to the same macroeconomic factors? Can board’s features explain the variation of banks’ return during the crisis? And, which is the impact of the gender factor? Literature doesn’t answer these questions completely, so we intend to address it in our paper. Using a sample of 53 publicly listed banks from EMU countries, the main results suggest that banks whose executive directors are older and have more professional experience had better return during the crisis. Also, independence gains significance when combined with the gender factor.
- What we (do not) know about research on innovation in hotels: a bibliometric analysisPublication . Fernandes, Catarina; Pires, Rui A.R.This chapter performs a bibliometric analysis on innovation in hotels field. More specifically, it maps the current research front on innovation in hotels field based on 287 papers published in refereed journals indexed to the Scopus database. Using the VOSviewer software and the bibliographic coupling method, it was possible to identify and systematize the main research streams of this field: 1) technological innovation, 2) sustainable innovation, 3) innovative work behavior, 4) market orientation’ role in promoting innovation, 5) knowledge-based resources as a driver of innovation and performance as an outcome of innovation, 6) service innovation, 7) knowledge sharing and management as a key factor for innovation, 8) innovation ambidexterity, 9) innovation in time of crisis, and 10) learning approach as a source of innovation. The findings presented in this chapter will enable future authors studying innovation in hotels to focus their studies more effectively.
- Bank governance and performance: a survey of the literaturePublication . Fernandes, Catarina; Farinha, Jorge; Martins, Francisco Vitorino; Mateus, CesárioThis paper seeks to review the theoretical and empirical literature on the relationship between bank governance and performance, providing a comprehensive understanding of the existing research and offering guidance for investors and regulators on the major points of consensus and disagreement among researchers on this issue. Although the question of what determines the levels of firms’ performance, with special emphasis on the role of the corporate governance, has long been the subject of substantial academic research, it gained increased attention in the banking industry in the last decade due to a series of financial scandals and, more recently, to the global financial crisis. In fact, in the wake of the 2007–2008 financial crisis, bank corporate governance mechanisms received heightened attention, accompanied by the renewed interest in the degree of effectiveness of such mechanisms, and their impact on performance. Given the vast number of influences on corporate performance, such as the numerous characteristics of the board of directors, there is an abundant literature on the determinants of performance. Thus, this paper tries to bring together this diverse body of knowledge into a coherent whole. Banks have unique attributes that interfere with the way in which the usual corporate governance mechanisms work. Thus, the main differences between banks and non-financial firms, which justify that some of the regularities found in the literature on the relationship between a set of corporate governance mechanisms and performance do not hold for banks, are also analysed. Then, we extensively review the literature on the board of directors and its impact on performance in the financial crisis and non-financial crisis periods. Finally, we also survey the (very) scarce research on the relationship between board characteristics and bank failures.
- The impact of board characteristics and CEO power on banks’ risk-taking: stable versus crisis periodsPublication . Fernandes, Catarina; Farinha, Jorge; Martins, Francisco Vitorino; Mateus, CesárioWe examine the impact of board structure, CEO power and other bank-specific factors on bank risk-taking for a sample of 72 publicly listed European banks in both stable and crisis periods. Using a simultaneous equations approach, our main findings indicate that the proportion of independent directors, the board size, and Chief Executive Officer (CEO) power affected bank risk-taking negatively during the recent financial crisis. On the contrary, institutional shareholder ownership and the presence of an ex-CEO as Chairman influenced bank risk-taking positively. Additionally, we separately analyse stable and crisis periods and observe that in the pre-crisis period only board independence and institutional ownership keep the same impact on risk while CEO power has no influence and the existence of an ex-CEO as Chairman reduces risk-taking by banks. We conclude that different governance characteristics have different relevance for banks’ risk-taking contingent on the economic environment being one of stability or crisis.
- The usefulness of accounting information and management accounting practices under environmental uncertaintyPublication . Pires, Rui A.R.; Alves, Maria C.G.; Fernandes, CatarinaThe purpose of this paper is twofold. Firstly, we aim to investigate the relationships among environmental uncertainty, broad-scope and timely management accounting information usefulness, and (traditional and contemporary) management accounting practices (MAPs) usage. Secondly, we intend to explore how these relationships influence decision-makers’ satisfaction with management accounting information. Survey data were obtained through an online questionnaire from 114 large manufacturing companies operating in Portugal. The findings indicate a positive relationship between environmental uncertainty and timely management accounting information usefulness and between (broad-scope and timely) management accounting information usefulness and (traditional and contemporary) MAPs usage. The findings also show that decision-makers’ satisfaction with management accounting information improves when there is a good fit between environmental uncertainty, broad-scope and timely management accounting information usefulness, and MAPs usage. In this way, organisations need to adjust the implementation and usage of MAPs to contextual factors, using both contemporary and traditional MAPs, to achieve greater decision-makers’ satisfaction with management accounting information. Thus, the results achieved in this study are useful for both theory and practice and have several implications for professionals engaged in MAPs implementation and decision-making activities.
- Technological innovation in hotels: open the “black box” using a systematic literature reviewPublication . Fernandes, Catarina; Pires, Rui A.R.The goal of this paper is to perform a systematic literature review (SLR) on technological innovation research in hotels. Based on 47 papers published in refereed journals indexed to the Scopus database, it was possible to identify, explore and systematize the main themes of the topic technological innovation: 1) Information and communication technologies (ICT) in general; 2) Internet usage (clients vs managers/hoteliers); 3) Mobile technologies (e.g., mobile apps and mobile devices); 4) Automation/self-service technologies (SST); 5) Mix of technological innovations; 6) In room technologies (e.g., music system, video gaming console and satellite TV); 7) Radio frequency identification (RFID); 8) Biometric technologies; 9) Sustainable management technologies (efficient technologies); 10) Intelligent agent technology (IAT); 11) Teleconferencing and 12) Technology revenue management system (TRM). The analysis shows a significant lack of scientific papers on biometric technologies and green/ sustainable technologies, which represent important opportunities for further research.
- Unpacking the “black box” of innovativeness and innovation: focus on tourism researchPublication . Fernandes, Catarina; Pires, Rui A.R.The main purpose of this paper is to provide a comprehensive analysis of innovativeness and innovation, differences and relationship, with particular focus on tourism research. The terms innovativeness and innovation are frequently used as synonyms, although they substantially differ, which leads studies to provide inconsistent and sometimes contradictory results. Innovation is an outcome of a firm´s permanent endeavor to explore and exploit new ideas. Therefore, innovativeness is a precondition for innovation. None of the previous studies, to the best of our knowledge, has provided a clear examination of them. Also, we go further and extend the analysis to the tourism industry and propose an integrative conceptual model for the study of innovativeness and innovation.