Accounting and Finance - Doctoral Theses

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An empirical investigation into the use of Lean Six Sigma in a complex, resource constrained environment
(University College Cork, 2017) Healy, Joseph O.; Hutchinson, Mark; O'Kane, Tom
This dissertation examines the use Lean Six Sigma (LSS) in a Complex Resource Constrained Environment. In particular, three distinct research topics are analysed: the impact on Stakeholder Theory and LSS when operating in an environment where customer needs are not the most salient; the impact on LSS when operating in a complex environment and; the impact on LSS when operating in a resource constrained environment. The research findings show that customer needs will only be fully satisfied by LSS project outcomes where customer needs are more salient that that of other stakeholders. The findings also show that in a complex environment there is a role for the use of both simpler, useful and familiar LSS tools and techniques as well as more complex and advanced tools and techniques. The research classifies these tools and techniques and identifies the tools and techniques used in a LSS project aimed at implementing a financial system. A project roadmap in this regard is also provided. The research shows the role of tools and techniques associated with the Implement and Control phases when utilising a Design for Lean Six Sigma (DfLSS) approach. It highlights three key enablers for successful deployment in such projects; a structured approach, good communication and a clear customer focus. The research shows the appropriateness of Public Service organisations deploying LSS. The findings show that resource constraints affect the execution of LSS projects and impact on LSS Project outcomes. LSS practitioners must employ upfront, open and honest communication to set expectations. In addition, the findings show that in resource constrained environments, practitioners should focus on achieving the best LSS outcomes given the resource constraints. The research also contributes to the expansion of the Theory of Constraints into the Public Sector in the context of the execution of a LSS project.
Evaluating the impacts of legacy infrastructure and stranded assets on energy markets and utilities in low carbon energy systems
(University College Cork, 2020) Hickey, Conor; O'Gallachoir, Brian; O'Brien, John; Environmental Protection Agency; Science Foundation Ireland
This thesis contributes improvements to the modelling methods and evidence base for developing low-carbon policy measures and investment strategy. Techno-economic energy system models are integrated into investment appraisal frameworks to support policy and investment analysis. Beginning with a review of the literature on stranded assets; risks to gas infrastructure, subsequent impacts on energy markets and methods of measuring stranded assets, particularly the impacts of stranded assets on corporate debt, are highlighted as areas for further research. Consequently, gas infrastructure is analysed in two parts and at a national and European level. The first part questions whether there is a role for a gas network in a low carbon energy system by analysing its expected utilisation and subsequent tariffs. Next, both gas-fired power plants and gas transmission networks are evaluated based on their impacts on the harmonisation objectives of energy markets in Europe in 2030. Finally, the utilities operating this infrastructure are assessed under a novel investment framework. This framework measures the financial capacity that utilities have to transition to European net zero carbon targets, by proxy of their credit rating. Concluding that in all instances the financial risks arising from these fossil fuel infrastructures and climate policy targets could be mitigated if timely prudent management of these assets was pursued.
An evaluation of the implications of the best interests of the child principle in the context of same-sex parenting in Ireland
(University College Cork, 2016) Bracken, Lydia L.; O'Mahony, Conor; Department of Children and Youth Affairs, Ireland; Law, College of Business and Law, University College Cork
Same-sex parenting is by no means a new phenomenon but the legal recognition and acceptance of gay and lesbian couples as parents is a relatively recent development in most countries. Traditionally, such recognition has been opposed on the basis of the claim that the best interests of children could not be met by gay and lesbian parents. This thesis examines the validity of this argument and it explores the true implications of the best interests principle in this context. The objective is to move away from subjective or moral conceptions of the best interests principle to an understanding which is informed by relevant sociological and psychological data and which is guided by reference to the rights contained in the UN Convention on the Rights of the Child. Using this perspective, the thesis addresses the overarching issue of whether the law should offer legal recognition and protection to gay and lesbian families and the more discrete matter of how legal protection should be provided. It is argued that the best interests principle can be used to demand that same-sex parenting arrangements should be afforded legal recognition and protection. Suggestions are also presented as to the most appropriate manner of providing for this recognition. In this regard, guidance is drawn from the English and South African experience in this area. Overall, the objective is to assess the current laws from the perspective of the best interests principle so as to ensure that the law operates in a manner which adheres to the rights and interests of children.
An examination of the mutual relationship between information & communications technology and democracy
(University College Cork, 2016) Hayes, Martin; Murphy, Ciaran; Dockstader, Jason
There is a widely held view that information and communications technology (ICT) has the potential to enhance democracy by enabling all citizens to participate actively in public affairs. Many theorists suggest that the drive to maximise participation in politics could lead to totalitarianism, while a certain level of apathy can provide political stability. Democracy is a middle way between totalitarianism and anarchy and pushing it too far in any of its attributes is likely to lead to its collapse. There is a complex web of relationships between bureaucracy, government and citizens with democracy and ICT weaving through them as they each take on different roles in society. The overreach of bureaucracy is becoming a major threat to the future of democracy today. Politics is about compromise and transforming conflict into cooperation. This is best achieved through face-to-face embodied interaction rather than through virtual channels although the latter can be valuable when used to support face-to-face meetings rather than as a substitute for them. With the possible exception of electricity, no other technology has transformed our society to the extent that ICT has done. Since the technology has such a strong impact on our lives and on society generally, we should have a say in its design and distribution. Even if we refuse to actively use the technology, it nevertheless affects our social environment and it is impossible to avoid becoming passive users. The question then arises as to whether ICT is a neutral, deterministic or an autonomous technology. Some theorists have proposed ways in which people could have a democratic input to the development of technology but it is difficult to find any who have focused on the disingenuous business model which ICT industry has adopted and which leaves no room for democratic input from users.
An exploratory study of the financial and non-financial performance impacts of interactions between ecosystem actors of the FinTech revolution
(University College Cork, 2022) Browne, Oliver; Hutchinson, Mark; O'Reilly, Philip
FinTech is an abbreviation of financial technology, characterised by start-ups and emerging technologies that have the potential to transform traditional financial services by making transactions and processes less expensive, more convenient, and more secure. This thesis conducts three studies on FinTech firms at various corporate life cycle stages. These studies explore the financial and non-financial impacts of interactions between incumbents, new entrants, and regulators as key FinTech ecosystem actors. The first study seeks to understand the barriers to technology adoption for an incumbent multinational systemically important financial institution. This study explores emerging financial technologies as a potential solution to issues of historic myopic investment in information technology. Second, this thesis examines new FinTech ventures and their decision-making process around accelerator programmes, exploring whether high-quality ventures choose to participate in accelerators and their impact on performance and external capital. Third, this thesis seeks to understand the relationship between board diversity and performance for a sample of private FinTech firms. Incumbent FS firms encounter legacy information system (LIS) issues and competing priorities for the provision of internal investment resources. Many incumbents’ labyrinth of legacy systems are prone to lacking documentation, poor data quality and manual processes. At the same time, routine rigidity persists due to fears of system downtime affecting core customers. The first study in this thesis describes the design and development of a novel ontology-based framework to illustrate how ontologies can interface with existing distributed data sources. The framework is then tested using a survey instrument and an integrated research model of user satisfaction and technology acceptance. The results reveal a significant reduction in manual processes, increased data quality, and improved data aggregation from employing the framework. In contrast to incumbents, new ventures often have limited resources and may seek external investment to survive. However, private firms face significant competition for scarce resources and information asymmetries between investors and new entrants. To reduce information asymmetry, new entrants may seek certification from accelerators as a signal of venture quality. The second study in this thesis uses a handcollected dataset of 1,253 private UK firms to explore the impact of accelerator participation on firm performance. This study shows that firms that participate in an accelerator raise greater amounts of capital than a matched sample of non-accelerator FinTech firms. However, these firms, in turn, exhibit poorer financial performance. This finding indicates that accelerators do not attract the highest quality firms, and high-quality firms may choose to avoid participating in accelerators as a countersignal of venture quality. In contrast, evidence suggests that regulatory accelerator participation may signal venture quality. The final study assesses the effect of board characteristics on firm performance in a sample of 189 UK registered FinTech firms as new ventures may signal quality through cultivating a large, more diverse, or prestigious board. The final empirical chapter provides evidence that increased female board representation contributes to improved performance in early-stage private FinTech firms. Furthermore, more than half of firms have no female board representation, and only one-in-ten directors are female. FinTech is characterised by increased start-up activity and innovations that threaten to disrupt incumbent processes. This thesis contributes to assessing the efficacy of FinTech firms’ efforts to signal venture quality, the impact of board characteristics on private firm performance, and incumbents’ response to FinTech. This thesis, therefore, provides significant contributions to the FinTech domain through advancing science and knowledge. It creates value for those operating accelerator programmes, incumbent organisations seeking to integrate new financial technologies with legacy information systems, and for effective governance of FinTech firms towards optimum performance.
Exploring distributed collaboration and the potential of blockchain as an enabling technology
(University College Cork, 2019) O'Leary, Kevin; O'Reilly, Philip; Feller, Joseph; Gleasure, Rob
Since the emergence of the internet, the growth and development of communication technologies have presented new opportunities for collaboration. Practitioners in almost every industry can now collaborate with the skilled personnel across a range of fields, regardless of their geographic location. This contemporary working arrangement is referred to as Distributed Collaboration, which I define as the pursuit of a shared objective by groups that include non-proximate members, whose participation is facilitated by ICT. However, Distributed Collaboration is not without drawbacks. The dispersed and volatile nature of numerous participants makes these groups vulnerable to many challenges, primarily, free-riding, production blocking, evaluation apprehension, and perceptions of fairness. Meanwhile, Blockchain technology has emerged over the last decade, initially to facilitate the cryptocurrency market. However, research interest has recently focused on its potential to support non-financial use-cases such as the ability to track assets, both digital and physical, in a secure, transparent, and immutable manner. These technological capabilities of Blockchain would suggest it has the potential to support Distributed Collaboration by tracking individual contributions across a distributed ledger. Therefore, the objective of this thesis is to explore Distributed Collaboration and the potential of Blockchain as an enabling technology. This research was initiated by examining the potential of Blockchain to enable Distributed Collaboration from a macro-level perspective through the lens of the cryptocurrency market. The market can be considered a network of distributed participants, communicating to evaluate Blockchain as a technology. The findings show that in the absence of established factors and methods to evaluate cryptocurrencies, market participants rely on social cues to evaluate the assets. Next, I conducted a first iteration of Design Science Research (DSR) by exploring the potential for Blockchain to address the issue of free-riding in cross-functional groups. This endeavour found that there was potential. However, a more comprehensive understanding of the components of this research was required in order to extract theoretical and practical contributions. Therefore, a systematic literature review was performed to synthesise a comprehensive definition of Distributed Collaboration, as well as developing an understanding of the factors which lead to the success of these groups. Following this, qualitative interview data were gathered and analysed from practitioners operating in Distributed Collaboration to develop an understanding of the challenges faced when operating in this environment and the necessary components for a potential system to alleviate these issues. Finally, I completed a second iteration of DSR to rigorously investigate the potential of Blockchain to support Distributed Collaboration. A Blockchain-enabled system was developed, implementing the design construct of Creative Ancestry to improve perceptions of fairness in Distributed Collaboration. Findings show that Blockchain increases perceptions of fairness and thus improves overall collaboration. My research has implications for theory, practice, and future research. I provide a core model for successful Distributed Collaboration and detail how to implement a Blockchain-enabled system that addresses key issues. I also illustrate the presence of herding behaviour in the cryptocurrency market and how market participants are prone to amplified reactions to changes in the price of assets. These findings and their implications are discussed at length in the final chapter.
Financial incentives for low-carbon transition: from citizens to professional investors
(University College Cork, 2019) Curtin, Joseph; Mcinerney, Celine; Ó Gallachóir, Brian P.
Decarbonisation of the global economy requires an energy transition of exceptional scope, depth and speed, and a doubling of the current level of investment in low-carbon technologies. However, the risk perception of individual market participants—a key determinant of the pace at which these technologies will be deployed—is an under-addressed theme in the academic literature. In this thesis the risk-return preferences and investment attributes that are attractive to different types of investors are investigated, with a view to informing the design of financial incentives introduced by Governments. In Chapter 2 the literature assessing the impact of technology-specific financial incentives on the levels of investment in low carbon technologies from local citizen investors is evaluated. It is concluded that feed in tariffs, grants and tax incentives can be successful in mobilising greater levels of investment from non-traditional investors, but that soft loans are less effective as a stand-alone instrument. In the following chapter, a novel analytical approach is introduced to explore the use of financial incentives in key jurisdictions to overcome barriers to investment from local citizen actors. The importance of instrument design over instrument choice emerged from this analysis. The requirement for incentives at feasibility and development stages of renewable projects also emerged as a distinguishing feature of projects with citizen involvement, reflecting the high risk-aversion of these actors, as well as their inability to manage risk across a portfolio of projects. At later project stages, market-independent supports (feed in tariffs, grants and tax incentives) were found to have been effectively deployed, however, more market-based instruments (feed in premiums and quota schemes) were also found to be effective if tailored to the specific needs of citizen investors. In Chapter 4 the risk-return preferences of a representative sample of citizen investors in Ireland—a market with no citizen investment tradition—were explored using a choice experiment. A high level of interest in investing in wind, solar, biomass and waste-to-energy projects was uncovered, however, a majority of citizens were found to be highly risk-averse, and investment amounts were low compared to equity required for larger projects. These findings suggest that greater levels of investment capital could be mobilized from citizen investors using specifically tailored incentives. However, these actors can only make a limited overall contribution, and promoting greater levels of investment from professional investors is crucial if climate objectives are to be met. In Chapter 5, semi-structured interviews and an on-line survey were therefore used to compare attitudes to stranding risk for investors in power generation assets with investors in financial assets. Asset stranding risk was found to be a more prominent issue for the former cohort, suggesting that as you move along the investment chain—away from physical assets and towards financial assets—far less is known about climate risk, and it becomes increasingly challenging for investors to manage it. Managing the risks face by different investor cohorts emerges as an important means of mobilising greater levels of investment and reducing the cost of capital for low-carbon technologies, which in turn has the potential to increase the speed of energy transition. Understanding the risk-return preferences of different cohorts of investors, however, remains both understudied and underappreciated in the climate policy and climate finance literature. The findings from this study both address this literature gap and uncover several themes meriting further analysis and investigation.
Health insurance in Saudi Arabia: funding options to manage the risk of government healthcare spending
(University College Cork, 2019) Al Mustanyir, Salem; Mulcahy, Mark; Turner, Brian
The Saudi Ministry of Health’s budgets demonstrated a sharp continuous increase in the period from 2006 to 2015, putting high burdens on the government at a time when the economy suffered slow growth as a result of the plummet in oil prices. This research was conducted to provide a solution for the Saudi government to ensure the sustainability of the Saudi public healthcare sector. This research started by investigating the major causes of the sharp increases in the Ministry of Health budgets, then explored the possible funding options existing in other economies to find the most suitable options that meet the Saudi context. Afterwards, this research investigated the attitudes of Saudi residents towards paying for their healthcare services, and the most preferred method to pay through. Finally, this research estimated the maximum value that people in Saudi Arabia are willing to pay for their healthcare services. This research collected data from the Saudi Ministry of Health books, the Saudi Central Bank, the Saudi General Authority for Statistics, and reports from the Saudi Ministry of Finance. Also this research collected survey data from a subset of the population of Saudi Arabia from different areas, and at different times. This research found that the weak strategy used by the Saudi Ministry of Health for estimating the necessary budgets was the main reason for the continuous increase in the Ministry of Health budgets. Moreover, it was found that Taxation, Medical Savings Accounts, and Private Health Insurance are the most suitable funding options according to the Saudi setting and needs. When people’s decision to participate was investigated, the majority were willing to take part, and it was found that nationality, the possession of Private Health Insurance and the eligibility to healthcare influenced people’s decisions. Moreover, it was found that the majority prefer to pay via Private Health Insurance or Medical Savings Accounts, and it was found that gender, health status, education, and the available access to healthcare affected people’s preferences. Finally, when people’s maximum willingness to pay was examined, it was found that the majority are willing to pay 2.7% on average from their total income, and it was found that gender, nationality, employment, education, chronic diseases, age, marital status, having Private Health Insurance, and the access to healthcare services influenced people’s willingness to pay. This research suggests that the population of Saudi Arabia participate in funding their own healthcare services through either Private Health Insurance or Medical Savings Accounts at percentages which meet their willingness to pay.
How placement in accounting degree programmes influences developing professional identities: an empirical analysis
(University College Cork, 2021-02-01) Dempsey, Julia Sylvia; Healy, Margaret; Linehan, Carol
The growing popularity of placement as part of undergraduate degree programmes suggests that placement is a valued element of undergraduate education for students. Literature exploring the value of placement for students focuses on identifying or measuring specific outcomes post-placement for students. However, the same level of attention has not been given to students’ placement experiences. The objective of this study is to gain an understanding of and to document how students make sense of their placement experiences. To fulfil this objective, two key sets of literature are considered. Situated learning literature provides a holistic way of exploring students’ experiences of overlapping membership of the communities in which they find themselves. Professional identity (PI) literature provides a way of exploring the nuanced sensemaking by students of who they see themselves becoming in organisations. To gain access to the subjective worlds of students, and capture their experiences, forty students who completed placement in accounting roles are interviewed at three points in time (pre-, during and post-placement). Modes of identification (Wenger 1998; E. Wenger-Trayner and B. Wenger-Trayner 2015) from situated learning literature provide theoretical lenses to investigate, in different ways, students’ experiences of multi-membership of university and the workplace. Using thematic analysis, the themes created point to emerging PIs from students’ experiences of reducing uncertainty around what could be required of them in accounting roles and who they see themselves becoming. Using insights from interpretivists in the PI literature, such as Covaleski et al. (1998), Ibarra (1999), Ashforth and Johnson (2001), Reid (2015) and Ashforth and Schinoff (2016), further thematic analysis facilitates a more nuanced exploration of the ongoing positioning and repositioning by students of their identities. Drawing from both situated learning literature and PI literature, analysis of the data in this study positions sensemaking of placement experiences by students as influencing their developing PIs. This study contributes to placement literature by advancing understanding of placement from achievement of disparate outcomes to a more holistic and nuanced view of placement experiences influencing developing PIs. A framework for understanding how placement experiences influence developing PIs is presented. This framework captures experiences of making sense of multiple possibilities as future accounting professionals and constructing differing forms of fit with these possibilities. Personal fit, reflected fit, projected fit and absence of fit are identified, and how these are constructed is described. Feeling, feigning or forsaking developing PIs are presented as legitimate beneficial experiences from placement, as each involves reducing uncertainty around possible future selves. The framework presented in this study adds to the placement literature by collectively capturing and documenting placement experiences, bringing pre-placement uncertainty and imagining and reimagining possible future selves in association with placement to the fore. The framework presented can be used by others to better understand processes of developing PIs in placement in other fields of study and processes of developing PIs in other periods of transition.
Initial losses, corporate governance and earnings management
(University College Cork, 2013) Mulcahy, Mark Brendan; Donnelly, Raymond
This thesis examines the relationship between initial loss events and the corporate governance and earnings management behaviour of these firms. This is done using four years of corporate governance information spanning the report of an initial loss for companies listed on the UK Stock Exchange. An industry- and sizematched control sample is used in a difference-in-difference analysis to isolate the impact of the initial loss event during the period. It is reported that, in general, an initial loss motivates an improvement in corporate governance in those loss firms where a relative weakness existed prior to the loss and that these changes mainly occur before the initial loss is announced. Firms with stronger (i.e. better quality) corporate governance have less need to alter it in response to the loss. It is also reported that initial loss firms use positive abnormal accruals in the year before the loss in an attempt to defer/avoid the loss — the weaker corporate governance the more likely is it that loss firms manage earnings in this manner. Abnormal accruals are also found to be predictive of an initial loss and when used as a conditioning variable, the quality of corporate governance is an important mitigating factor in this regard. Once the loss is reported, loss firms unwind these abnormal accruals although no evidence of big-bath behaviour is found. The extent to which these abnormal accruals are subsequently unwound are also found to be a function of both the quality of corporate governance as well as the severity of the initial loss.
Insights from financial data - old and new
(University College Cork, 2020) Nguyen, Quang Minh Nhi; Hutchinson, Mark; Mulcahy, Mark; Vietnamese Government Scholarship; UCC-Vied MoA
This thesis investigates financial data — the backbone of empirical research in finance — to provide insights into the importance of precisely interpreting existing data as well as the power of findings from new data. Specifically, the first study in this thesis examines the impact of event-day misspecification on the market reaction to FDA new drug approval announcements granted by NYSE listed firms. The second study uses an entirely new dataset of company filings from hedge fund management companies registered in the UK to investigate the true profitability of investment companies which manage hedge funds and to explain why it varies across firms over time. The last study utilizes the same new hedge fund manager filings dataset to investigate whether the hedge fund compensation contract effectively aligns managerial incentives with investor interests. Previous research has offered the attention-grabbing hypothesis as a behavioural explanation for abnormal returns in the day after FDA approval announcements. The first empirical study shows that when the precise timing of announcements is properly identified (i.e. existing data is precisely interpreted), the market reaction is centred on the event day and the increase in firm value is driven by after-market-close approval announcements. The second study shows that hedge fund management companies generated incredibly high profitability and revenue growth prior to 2008. With the onset of the global financial crisis, profitability and growth rates dropped. Analysis of cross-sectional variability in hedge fund management firm profitability finds that the key determinant is firm size. That is, larger firms generate significantly higher profitability and this relationship is particularly severe during the financial crisis period. Existing evidence shows that the standard hedge fund compensation contract incentivises the manager to grow the fund assets they manage, even if it deteriorates investment performance. Facilitated by the novel hedge fund dataset in this thesis, firms which are entirely focused on hedge fund management are distinguished from diversified firms (which generate a relatively small proportion of compensation from hedge funds). The third empirical chapter in this study confirms that the actual compensation of hedge fund only firms increases as fund assets grow, despite the increased cost and performance diseconomies of scale. This result also holds for diversified firms, even though there is a weaker alignment between managerial incentives and fund performance within these firms. Hedge funds managed by diversified firms have a markedly lower performance.
An investigation into the underlying causes of information systems failure and success: case of a national clinical system in Ireland
(University College Cork, 2019) O'Riordan, Gerard Daniel; Adam, Frederic; Dempsey, Eugene M.
This thesis investigates the underlying causes of failures / successes in disruptive information systems (IS). The literature reveals that IS failure rates are high despite available knowledge and guidelines on how to implement an IS successfully. However, such knowledge is varied, and there is no agreement on the causes of such a phenomenon. A paradox exists within IS, in that some succeed, and others fail even when best practices are employed in both cases. The objective of this research is to investigate the underlying mechanisms, perceptions and behaviours pertaining to IS failure and success in order to increase the understanding of this phenomenon and to make suggestions to improve system adoption thereby increasing the chances of IS success. Four key Research Questions are posed in order to operationalise this Objective. Initially, the context or situational circumstances in which an IS can be implemented are discussed. The knowledge contextualised by people is then assessed in terms of how it influences their appraisal and adaptation behaviours towards an IS. The second question focuses on how people assess an IS when they first encounter it. This assessment is said to affect how they behave subsequently, towards the IS. The third question investigates peoples’ adaptation behaviours towards IS and assesses how they cope with such a new initiative. The last question explores the outcomes of the IS and is said to relate to the previous constructs of context, assessments and behaviours. The emotional responses of people are assessed throughout Research Questions two, three and four, given the human emphasis in this Research. The theoretical lens used in this Research is Interpretivist in nature with a Critical Realist perspective. It emphasises the social process by which IS are implemented. The approach taken to investigating the social dimensions of IS is therefore qualitative, recognising the need to complement other more qualitative methods of enquiry. The theoretical model used for investigation is the Coping Model of User Adaptation (CMUA). This model is based on the theories of coping and adaptation. It was extended by this Research to incorporate the constructs of context and emotions. While an interpretative approach to its work has been adapted, it has also sought to establish causal mechanisms that lie behind the phenomena of IS failure / success. The Research has identified emerging properties beyond CMUA. In this sense, the work tends more towards a critical realism viewpoint. The focus of this research is on individuals’ responses to the introduction of an IS in a particular setting and how these relate to its failure or success. A case study approach was chosen therefore, as a means to gaining an in-depth understanding of the social dynamics in an individual setting. The case in question involved the recent implementation of a largescale disruptive IS in a large hospital. The findings of this research are summarised in the following points: • Context is an important consideration in implementing an IS and can have both supportive and negative effects on appraisals, behaviours and outcomes. • Human assessments of IS are not dichotomous. Rather it is a matter of degree of perception of failure or success and such perceptions can vary over time. Furthermore, informed assessments of IS are a function of the level of knowledge and relevant experience of individuals. • The real value of investigating adaptation behaviours lies not in assessments at a point in time, but in the identification of underlying mechanisms that influence such behaviour over the life-cycle of an IS. • Stated benefits of disruptive IS are not fully realised in the short term. Benefits of such systems are medium to long term goals. Expectations that they can be delivered at the point of go-live of the IS are misleading. However, once the IS stabilises, a critical juncture emerges where decisions emerge as to whether efforts will continue to maximise the full benefits of the IS, to be satisfied with what has been achieved up to that point or perhaps in extremis, to abandon the initiative. This research has made contributions to Methodology by developing a Research Protocol that is based on CMUA but provides for extensions and emerging properties that resulted from learning during the research process. The contribution to practice from this Research is encapsulated in the idea that the implementation of a disruptive IS is a collaborative effort, between IS specialists and people involved in its use. IS have a strong technical element but they also involve people and other social dimensions which can prove to be the ultimate determinant of their success of failure.
Investment incentives and valuation of power sector infrastructure assets with increasing interconnection, intermittency and decarbonisation
(University College Cork, 2014) McInerney, Celine; Murphy, Ciaran; Bunn, Derek
This dissertation applies a variety of quantitative methods to electricity and carbon market data, utility company accounts data, capital and operating costs to analyse some of the challenges associated with investment in energy assets. In particular, three distinct research topics are analysed within this general theme: the efficiency of interconnector trading, the optimal sizing of intermittent wind facilities and the impact of carbon pricing on the cost of capital for investors are researched in successive sections.
Leveraging lessons learned in organizations through implementing practice-based organizational learning and performance improvement - An opportunity for context-based intelligent assistant support (CIAS)
(University College Cork, 2013) Hegarty, Garrett John; Adam, Frédéric; Brézillon, Patrick
Organizations that leverage lessons learned from their experience in the practice of complex real-world activities are faced with five difficult problems. First, how to represent the learning situation in a recognizable way. Second, how to represent what was actually done in terms of repeatable actions. Third, how to assess performance taking account of the particular circumstances. Fourth, how to abstract lessons learned that are re-usable on future occasions. Fifth, how to determine whether to pursue practice maturity or strategic relevance of activities. Here, organizational learning and performance improvement are investigated in a field study using the Context-based Intelligent Assistant Support (CIAS) approach. A new conceptual framework for practice-based organizational learning and performance improvement is presented that supports researchers and practitioners address the problems evoked and contributes to a practice-based approach to activity management. The novelty of the research lies in the simultaneous study of the different levels involved in the activity. Route selection in light rail infrastructure projects involves practices at both the strategic and operational levels; it is part managerial/political and part engineering. Aspectual comparison of practices represented in Contextual Graphs constitutes a new approach to the selection of Key Performance Indicators (KPIs). This approach is free from causality assumptions and forms the basis of a new approach to practice-based organizational learning and performance improvement. The evolution of practices in contextual graphs is shown to be an objective and measurable expression of organizational learning. This diachronic representation is interpreted using a practice-based organizational learning novelty typology. This dissertation shows how lessons learned when effectively leveraged by an organization lead to practice maturity. The practice maturity level of an activity in combination with an assessment of an activity’s strategic relevance can be used by management to prioritize improvement effort.
The quality of financial information in the extractive industries: a value relevance analysis
(University College Cork, 2016) Power, Sean; Cleary, Peter; Donnelly, Raymond
The extractive industry is characterized by high levels of risk and uncertainty. These attributes create challenges when applying traditional accounting concepts (such as the revenue recognition and matching concepts) to the preparation of financial statements in the industry. The International Accounting Standards Board (2010) states that the objective of general purpose financial statements is to provide useful financial information to assist the capital allocation decisions of existing and potential providers of capital. The usefulness of information is defined as being relevant and faithfully represented so as to best aid in the investment decisions of capital providers. Value relevance research utilizes adaptations of the Ohlson (1995) to assess the attribute of value relevance which is one part of the attributes resulting in useful information. This study firstly examines the value relevance of the financial information disclosed in the financial reports of extractive firms. The findings reveal that the value relevance of information disclosed in the financial reports depends on the circumstances of the firm including sector, size and profitability. Traditional accounting concepts such as the matching concept can be ineffective when applied to small firms who are primarily engaged in nonproduction activities that involve significant levels of uncertainty such as exploration activities or the development of sites. Standard setting bodies such as the International Accounting Standards Board and the Financial Accounting Standards Board have addressed the financial reporting challenges in the extractive industry by allowing a significant amount of accounting flexibility in industryspecific accounting standards, particularly in relation to the accounting treatment of exploration and evaluation expenditure. Therefore, secondly this study examines whether the choice of exploration accounting policy has an effect on the value relevance of information disclosed in the financial reports. The findings show that, in general, the Successful Efforts method produces value relevant information in the financial reports of profitable extractive firms. However, specifically in the oil & gas sector, the Full Cost method produces value relevant asset disclosures if the firm is lossmaking. This indicates that investors in production and non-production orientated firms have different information needs and these needs cannot be simultaneously fulfilled by a single accounting policy. In the mining sector, a preference by large profitable mining companies towards a more conservative policy than either the Full Cost or Successful Efforts methods does not result in more value relevant information being disclosed in the financial reports. This finding supports the fact that the qualitative characteristic of prudence is a form of bias which has a downward effect on asset values. The third aspect of this study is an examination of the effect of corporate governance on the value relevance of disclosures made in the financial reports of extractive firms. The findings show that the key factor influencing the value relevance of financial information is the ability of the directors to select accounting policies which reflect the economic substance of the particular circumstances facing the firms in an effective way. Corporate governance is found to have an effect on value relevance, particularly in the oil & gas sector. However, there is no significant difference between the exploration accounting policy choices made by directors of firms with good systems of corporate governance and those with weak systems of corporate governance.
Reflective capacity, auditors and professional scepticism: an empirical analysis
(University College Cork, 2020-08) O'Sullivan Rochford, Claire P. R.; Donnelly, Raymond; Healy, Margaret
Professional scepticism (PS) can be described as an ability to question and critically assess evidence. The literature provides an established measure for trait scepticism but recognises a state component. A comprehensive measure encompassing both is timely. The study posits that including a capacity for Reflection is the key to unlocking state scepticism, thereby establishing a new Reflective Scepticism Scale (RSS), combining trait and state components. In addition, the study examines experience as a determinant of PS and contributes to this ongoing debate within the literature. Data is gathered from a survey of 392 professional Irish auditors, of all career grades from trainee to partner, to include all the largest audit firms. The new comprehensive RSS is designed and tested using Factor Analysis, while experience as a determinant of PS is assessed through a series of regression analyses. Clear evidence is provided that PS increases with experience and confirms that PS changes throughout an auditor’s career, which has implications for recruitment, training and regulation.
Reversal of impairment losses, firm performance and reporting incentives: Evidence from Malaysia
(University College Cork, 2013) Shaari, Hasnah; Donnelly, Raymond; Cao, Tong Yu; Ministry of Education, Malaysia; Universiti Utara Malaysia
Malaysian Financial Reporting Standard (FRS) No. 136, Impairment of Assets, was issued in 2005. The standard requires public listed companies to report their non-current assets at no more than their recoverable amount. When the value of impaired assets is recovered, or partly recovered, FRS 136 requires the impairment charges to be reversed to its new recoverable amount. This study tests whether the reversal of impairment losses by Malaysian firms is more closely associated with economic reasons or reporting incentives. The sample of this study consists of 182 public companies listed on Bursa Malaysia (formerly known as the Kuala Lumpur Stock Exchange) that reported reversals of their impairment charges during the period 2006-2009. These firms are matched with firms which do not reverse impairment on the basis of industrial classification and size. In the year of reversal, this study finds that the reversal firms are more profitable (before reversals) than their matched firms. On average, the Malaysian stock market values the reversals of impairment losses positively. These results suggest that the reversals generally reflect increases in the value of the previously impaired assets. After partitioning firms that are likely to manage earnings and those that are not, this study finds that there are some Malaysian firms which reverse the impairment charges to manage earnings. Their reversals are not value-relevant, and are negatively associated with future firm performance. On the other hand, the reversals of firms which are deemed not to be earnings managers are positively associated with both future firm performance and current stock price performance, and this is the dominant motivation for the reversal of impairment charges in Malaysia. In further analysis, this study provides evidence that the opportunistic reversals are also associated with other earnings management manifestations, namely abnormal working capital accruals and the motivation to avoid earnings declines. In general, the findings suggest that the fair value measurement in impairment standard provides useful information to the users of financial statements.
The sustainability of public-private partnership in Ireland
(University College Cork, 2019) Sheppard, Gail; Beck, Matthias; Healy, Margaret
Despite a lack of transparency and a failure to report value for money in the public domain, PPP has continued as a public procurement policy in Ireland. Its use commenced during the so-called Celtic Tiger years when other forms of public procurement may have been possible. There has been limited publication of the reasons for the decision to procure through PPP, thereby making public scrutiny and assessment of the sustainability of this policy difficult. Major reforms to the policy were introduced in 2012, and now in 2018 this research reviews these policy reforms to assess the sustainability of this policy. Adopting a critical realist position and, by attempting to understand the forces at work in the introduction and operation of PPP in Ireland, whether observable of themselves or by their effects, this study evaluates the policy and makes recommendations to improve on the status quo. If the observable performance can be objectively measured against an accepted framework, the forces at work can be made explicit, the performance of PPP can be evaluated and improvements, if any, can be recommended. Influences on the adoption of PPP in Ireland are examined using Dolowitz and Marsh (1996 and 2000). The performance of PPP is evaluated using a framework based on the Jooste, Levitt and Scott (2009) framework which seeks to examine the extent to which institutional environments have been adapted to enable a sustainable PPP policy and an environment where legitimacy, trust and capacity in the policy exist. A pilot study encompassing interviews and a document analysis was completed in 2013, and informed an extended study was carried out in 2016. Data is analysed using thematic analysis and Nvivo software is used to organise the data for analysis purposes. The findings of this research generate unique insights into the nature of policy transfer, particularly the impediments to the natural evolution of a policy during a period of uncertainty. Ireland has been purposefully selective in embracing only some of the measures which would increase the legitimacy of the policy. Ireland’s PPP policy has evolved and it now relies on learning from its own experience and less from other countries. The research shows that there are weaknesses in the policy, in particular, the role of the National Development Finance Agency, the transparency of the policy, the role of stakeholders and political commitment to the policy. Further to this, as the policy has evolved in Ireland, there has been a de-politicisation of PPP. A greater politicisation of PPP in Ireland would bring with it an obligation for more transparency, regulation, accountability and post-project reviews. Weak political support for PPP exemplifies a culture of satisficing where PPP in Ireland appears to be a useful procurement method, but only meets the minimum requirements of legitimacy, trust and capacity. The research argues that there needs to be clarity around risk transfer as well as a strong legal and regulatory framework in Ireland to ensure the long-term sustainability of PPP.
Time series momentum: theory and practice
(University College Cork, 2017) O'Brien, John; Hutchinson, Mark; Murphy, Ciaran
Time series momentum (TSM) is a significant component of many investment strategies, both explicitly and implicitly. While academic studies have confirmed long run excess return, other aspects of the strategy have received less attention. This research focuses on performance variations across economic conditions and on the return drivers of TSM and associated investment funds. The performance record is extend back to 1925, confirming long run performance and providing a large sample to analyse its relationship with economic conditions, with a number of links demonstrated. TSM underperforms for periods of up to four years immediately after financial crises, with returns at less than half the level of normal periods. A breakdown in market structure is associated with this. Serial auto-correlation of asset returns, found in all markets at horizons of up to twelve months, is absent in the years following a crisis. Further evidence links the strategy to the business cycle, demonstrating underperformance in periods of recession and high economic uncertainty. A decomposition of returns of individual asset into systematic (macro-economic factor related) and idiosyncratic components shows that TSM generates profits from both components. The exposure of TSM to economic factors can explain part of the excess returns in an efficient market/arbitrage pricing theory framework. The performance of the commodity trading advisor (CTA) sector, closely associated with TSM, is analysed using a sample of 3,419 CTAs. A novel methodology eliminates biases and generates a reliable performance index back to 1987. This exhibits consistent excess returns over the period. Eight different CTA sub-strategies identified, exposed to a variety of risk premia in addition to TSM. Explanatory power is low with less than half of the returns associated with risk exposure. Three of the eight sub-strategies (representing half the funds) show exposure to TSM, each generating a statistically significant Sharpe ratio.

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