Disclosure Practices of Foreign Companies Interacting with U.S. Markets

Tarun   Khanna; Krishna G. Palepu; Suraj  Srinivasan

Article | Journal of Accounting Research | May 2004

Disclosure Practices of Foreign Companies Interacting with U.S. Markets

by Tarun Khanna, Krishna G. Palepu and Suraj Srinivasan

Abstract

We analyze the disclosure practices of companies as a function of their interaction with the U.S. markets for a group of 794 firms from 24 countries in Asia-Pacific and Europe. Our analysis uses the Transparency and Disclosure scores developed recently by Standard & Poor's. These scores rate the disclosure of companies from around the world using U.S. disclosure practices as an implicit benchmark. Results show a positive association between these disclosure scores and a variety of market interaction measures, including US Listing, US investment flows, export to and operations in the US. Trade with US, however, has an insignificant relationship with the disclosure scores. Our empirical analysis controls for the previously documented association between disclosure and firm size, performance, and country legal origin. Our results are broadly consistent with the hypothesis that cross-border economic interactions are associated with similarities in disclosure and governance practices.

Keywords: Management Practices and Processes; Markets; Investment; Size; Performance; Cross-Cultural and Cross-Border Issues; Corporate Governance; Corporate Disclosure; Trade; United States; Asia; Europe;

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Khanna, Tarun, Krishna G. Palepu, and Suraj Srinivasan. "Disclosure Practices of Foreign Companies Interacting with U.S. Markets." Journal of Accounting Research 42, no. 2 (May 2004).

Case | HBS Case Collection | July 2020 (Revised September 2020)

Property Finder’s Strategy for Online Classifieds in the MENA Region

Krishna G. Palepu, Gamze Yucaoglu and Fares Khrais

The case opens in 2020 as Michael Lahyani, founder and CEO of Property Finder, Dubai’s leading online real estate classifieds portal, contemplates the company’s five-year growth strategy.
Since its founding in 2005 in the United Arab Emirates (UAE), Property Finder had secured multiple rounds of investments and expanded into countries in the Middle East and North Africa. The business grew following a proven business model revolving around monthly flat subscription fees paid by real estate brokers for packages of listings, while remaining free for end-customers to browse. By 2020, Property Finder had reached profitability in the UAE, Bahrain, and Qatar, which it considered its core markets, and had done significant brand building in newer markets of Saudi Arabia (KSA), Egypt, Morocco, Lebanon, and Turkey.
In 2020, Lahyani needed to decide on the company’s growth strategy to increase profitability. Property Finder could focus on its core markets and switch to segmented pricing, lure in more developers to post first hand property directly, and create new revenue channels. Alternatively or in parallel, the company could tailor its business model to suit the dynamics of each of its newer markets. All the while, Lahyani had just onboarded a new executive team that was busy adjusting the organizational structure and institutionalizing procedures and processes. As a result, company resources were spread thin and Lahyani found himself at a crossroads; should the company focus its efforts on bolstering its position in incumbent markets and thus forego growth abroad, or should it pursue new markets and risk tarnishing its reputation in its core markets in case of a failure?

Keywords: General Business; real estate; Entrepreneurship; Strategy; Emerging Markets; Growth Management; Real Estate Industry; Technology Industry; United Arab Emirates; Saudi Arabia; Egypt; Turkey;

Citation:

Palepu, Krishna G., Gamze Yucaoglu, and Fares Khrais. "Property Finder’s Strategy for Online Classifieds in the MENA Region." Harvard Business School Case 321-009, July 2020. (Revised September 2020.) View Details

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While there is evidence about labor market discrimination based on race, religion, and gender, we know little about whether physical appearance leads to discrimination in labor market outcomes. We deploy a randomized experiment on 1,000 respondents in India between April and May 2020 to investigate how “looks” affect labor market outcomes. Using machine learning and computer face rendering techniques, we simulate North, South, and Northeastern Indian faces and randomize two waves of treatments where we attach faces with otherwise identical CVs. However, the second wave also contains a vignette where we provide respondents with information about the incidence of discrimination. We focus on Northeastern Indian faces that resemble those in China to focus on the potential for discrimination that has historically been present in anecdotal accounts. While we do not find evidence of discrimination against Northeastern faces in the first wave, we do so in the second among those who do not see the vignette. We provide suggestive evidence that these results are consistent with the presence of homophily under limited attention.

This case explores a new board director who asks a detailed question about a footnote in the lengthy board packet distributed to directors by management. The case allows for discussion about the amount of information and level of detail provided by management, the level of preparation directors engage in prior to board meetings, and the appropriate strategic focus of the board. This case is part of a series of vignettes that capture different dilemmas faced by directors as they join boards of companies and understand the dynamics of the new boards that they join.

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Disclosure Practices of Foreign Companies Interacting with U.S. Markets

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