The primary objective of the thesis is to investigate whether African banks use loans loss provisions estimates to smooth reported earnings, and to determine the factors that influence the extent of earnings smoothing among African banks. Earnings smoothing via loan loss provision has been examined in several regions, but the case of Africa remain unexplored in the literature. In the thesis, earnings smoothing is viewed as an earnings management practice while loan loss provisions estimate is considered to be the tool used by African banks to smooth reported earnings. Using African bank data obtained from Bankscope database, I test the earnings smoothing hypothesis for 370 African banks during the 2002 to 2014 period using the specific-accrual approach. The specific-accrual approach estimates a specific discretionary accrual as a function of its non-discretionary determinants and other factors that influence the manipulation of the specific accrual. The model specification expresses discretionary loan loss provisions as a function of earnings before provisions and tax, its non-discretionary determinants and other factors that influence the decision regarding the level of bank provisions for each period. The findings indicate that African banks manipulate loan loss provisions estimates to smooth reported earnings and this behaviour is influenced by bank differences, accounting disclosure differences and institutional differences across African countries. The primary contribution to knowledge of the thesis is its extension of our understanding of the role of discretionary accruals in the bank financial reporting, focusing on African banks - a context that has not been extensively examined in the literature. Also, the thesis extends the bank earnings smoothing debate to the African context and the findings of this study are useful to bank regulators in Africa in their evaluation of whether bank loan loss provisions solely reflect credit risk considerations or whether bank loan loss provisions estimates reflect opportunistic considerations of African bank managers. Finally, the findings are useful to local accounting standard setters in the region in their evaluation of several accounting numbers that bank managers might use to manipulate reported earnings.

Government debt management, as a distinct policy, with a clear objective of managing risks and cost minimisation first started among the industrialised economies in the late 1980s. The need to improve government debt management arose with rising debt levels, caused by macro-economic imbalances especially in the mid-1970s and 1980s. In sub-Saharan Africa however, debt management as a strategy was undeveloped or lacking completely. A research in the area of debt management is significant to the economic growth and development of the sub – Saharan Africa. The significance of debt management is supported by empirical studies showing that effective public debt management could go a long way in protecting both low and middle income countries against the negative impact of the financial crisis. This research focus specifically on the choice between short and long term, domestic and external debts and how the process affects the economy as measured by per capita income and debt ratio or level of indebtedness. The work also looked at the extent of implementation of debt management among the SSAs especially as contained in the World Bank and IMF debt management performance guidelines. The research adopted the quantitative approach to answer questions raised in relation to the effect of government borrowing; the choice of debt maturity, and how sovereign debt and its management affect economic growth. It was found that debt is related negatively to economic growth; and the phenomenon of debt overhang actually exists. Debt management however was found to be relevant; where it was observed that the entire process of debt management is vital to economic growth and the development of a country. In particular, countries in sub-Saharan Africa need to put in place an effective and sound debt management strategy that would aid in promoting the needed stability, reduce risks in borrowing and guide in the prudent management of borrowed resources. The work contribute to both theoretical and empirical aspects of debt and its management.

This thesis investigates four interrelated research issues in the context of takeover likelihood modelling. These include: (1) the determinants of target firms’ takeover likelihood, (2) the extent to which targets can be predicted using publicly available information, (3) whether target prediction can form the basis of a profitable investment strategy, and – if not – (4) why investing in predicted targets is a suboptimal investment strategy. The research employs a UK sample of 32,363 firm-year observations (consisting of 1,635 target and 31,737 non-target firm-year observations) between 1988 and 2010. Prior literature relies on eight (old) hypotheses for modelling takeover likelihood – determinants of takeover likelihood. Consistent with prior studies, I find that takeover likelihood increases with the availability of free cash flow (Powell (1997, 2001, 2004)), the level of tangible assets (Ambrose and Megginson (1992)) and management inefficiency (Palepu (1986)), but decreases with firm age (Brar et al. (2009)). The empirical evidence lends no support to the firm undervaluation, industry disturbance, growth-resource mismatch or firm size hypotheses (Palepu (1986)). I extend prior research by developing eleven (new) hypotheses for target prediction. Consistent with the new hypotheses, I find evidence that takeover likelihood is an inverse U-shaped function of firm size, leverage and payroll burden. Takeover likelihood also increases with share repurchase activity, market liquidity and stock market performance and decreases with industry concentration. As anticipated, the new hypotheses improve the within-sample classification and out-of-sample predictive abilities of prior takeover prediction models. This study also contributes to the literature by exploring the effects of different methodological choices on the performance of takeover prediction models. The analyses reveal that the performance of prediction models is moderated by different modelling choices. For example, I find evidence that the use of longer estimation windows (e.g., a recursive model), as well as, portfolio selection techniques which yield larger holdout samples (deciles and quintiles) generally result in more optimal model performance. Importantly, I show that some of the methodological choices of prior researchers (e.g., a one-year holdout period and a matched-sampling methodology) either directly biases research findings or results in suboptimal model performance. Additionally, there is no evidence that model parameters go stale, at least not over a ten-year out-of-sample test period. Hence, the parameters developed in this study can be employed by researchers and practitioners to ascribe takeover probabilities to UK firms. Despite the new model’s success in predicting targets, I find that, consistent with the market efficiency hypothesis, predicted target portfolios do not consistently earn significant positive abnormal returns in the long run. That is, despite the high target concentrations achieved, the portfolios generate long run abnormal returns which are not statistically different from zero. I extend prior literature by showing that these portfolios are likely to achieve lower than expected returns for five reasons. First, a substantial proportion of each predicted target portfolio constitutes type II errors (i.e., non-targets) which, on average, do not earn significant positive abnormal returns. Second, the portfolios tend to hold a high number of firms that go bankrupt leading to a substantial decline in portfolio returns. Third, the presence of poorly-performing small firms within the portfolios further dilutes its returns. Fourth, targets perform poorly prior to takeover bids and this period of poor performance coincides with the portfolio holding period. Fifth, targets that can be successfully predicted tend to earn lower-than-expected holding period returns, perhaps, due to market-wide anticipation. Overall, this study contributes to the literature by developing new hypotheses for takeover prediction, by advancing a more robust methodological framework for developing and testing prediction models and by empirically explaining why takeover prediction as an investment strategy is, perhaps, a suboptimal strategy.

This thesis employed a case study approach to explore the rules and routines that have evolved within the Investor Relations (IR) functions of a large Canadian public company (ABC) from the inception of their IR website in 1997 to 2010. Utilizing weblog analysis, institutional theory (specifically, the Burns and Scapens (2000) institutional framework), and a detailed case study analysis of the interviews undertaken, the findings of this study illustrate that rules and routines of operation within an IR web team are likely to be dynamic and will evolve at a quick pace if the business is actively seeking to employ best practice in its IR website strategy. The results also show how both internal and various external influences are likely to play key roles in altering the rules and routines of IR websites operation. Within the case study presented, five distinct stages of institutionalization were recognized. The analysis framework used provided an effective tool to analyze the internal aspects of these stages. However, it was also enlarged to incorporate specific external influences to show how they play a parallel part in affecting activity in this domain specifically. The findings further show that there is minimal normative isomorphism occurring in this domain. It is proposed that the lack of formalized education in the IR website management and operation area may be playing a key role in constraining the further development of this. Further, the thesis concludes by highlighting the critical need for senior management ‘buy-in’, identification and development of a suitable lead for this activity within the company, and the right context in which they can be allowed freedom to innovate and explore best practices applicable to the online IR function, where-ever they may be found. These features must then be balanced with the overall strategic placement of the IR website as a best practice driver, or follower, to ensure a successful, strategically aligned operation in this domain. While these issues individually have been found to be important in other rapidly innovating business domains, this thesis illustrates and explores their need for the first time, in the IR field in the context of a recognized leader in its field.