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Author: Tamer Elshandidy Publisher: ISBN: Category : Languages : en Pages : 27
Book Description
Purpose: Few studies have focused on emerging markets owing to difficulties in identifying the real effect of disclosures on these economies. To fill this gap, this paper investigates the main drivers for risk disclosure quality for Chinese financial firms, and further studies the impact of such disclosure on market liquidity.Design/methodology/approach: The sample comprises all financial firms listed in the Shanghai A-shares market for the period 2013-2015. By relying on manual content analysis of annual reports, the risk disclosure quality is measured through a multidimensional approach which encompasses three factors: quantity of disclosure, coverage of disclosure, and the semantic properties of depth and outlook. The findings of this paper are based on ordinary least squares (OLS) and fixed-effects estimations.Findings: Our findings suggest that firm characteristics (especially size) influence risk disclosure practices of Chinese financial companies. Furthermore, we found that risk disclosure quality has an impact on market liquidity, and when we analysed each year we noticed that the results were driven by the year 2013; moreover, we noticed no or little significance from the period of the emerging financial crisis.Research limitations/implications: The sample of this paper is limited to financial firms in China. The usage of manual content analysis limits our ability to investigate risk reporting drivers and its impact on market liquidity on a large scale.Practical implications: The importance of this paper stems from documenting several reporting incentives concerning not only firms' quantity, but also firms' quality of risk reporting. Collectively, our findings support activism for reforms and the enhancement of regulations in China in order to make the market more efficient.Originality/value: This paper provides new evidence for financial companies in China on the principal drivers for risk disclosure quality and highlights how the quality of such disclosure impacts market liquidity. Furthermore, this paper confirms previous findings on the Chinese market (Ball et al., 2000; Zou and Adams, 2008) in which, given a decreasing but still strong state presence, there is higher stock volatility and weak corporate governance.
Author: Tamer Elshandidy Publisher: ISBN: Category : Languages : en Pages : 27
Book Description
Purpose: Few studies have focused on emerging markets owing to difficulties in identifying the real effect of disclosures on these economies. To fill this gap, this paper investigates the main drivers for risk disclosure quality for Chinese financial firms, and further studies the impact of such disclosure on market liquidity.Design/methodology/approach: The sample comprises all financial firms listed in the Shanghai A-shares market for the period 2013-2015. By relying on manual content analysis of annual reports, the risk disclosure quality is measured through a multidimensional approach which encompasses three factors: quantity of disclosure, coverage of disclosure, and the semantic properties of depth and outlook. The findings of this paper are based on ordinary least squares (OLS) and fixed-effects estimations.Findings: Our findings suggest that firm characteristics (especially size) influence risk disclosure practices of Chinese financial companies. Furthermore, we found that risk disclosure quality has an impact on market liquidity, and when we analysed each year we noticed that the results were driven by the year 2013; moreover, we noticed no or little significance from the period of the emerging financial crisis.Research limitations/implications: The sample of this paper is limited to financial firms in China. The usage of manual content analysis limits our ability to investigate risk reporting drivers and its impact on market liquidity on a large scale.Practical implications: The importance of this paper stems from documenting several reporting incentives concerning not only firms' quantity, but also firms' quality of risk reporting. Collectively, our findings support activism for reforms and the enhancement of regulations in China in order to make the market more efficient.Originality/value: This paper provides new evidence for financial companies in China on the principal drivers for risk disclosure quality and highlights how the quality of such disclosure impacts market liquidity. Furthermore, this paper confirms previous findings on the Chinese market (Ball et al., 2000; Zou and Adams, 2008) in which, given a decreasing but still strong state presence, there is higher stock volatility and weak corporate governance.
Author: Monica Hernandez-Madrigal Publisher: ISBN: Category : Languages : en Pages : 2
Book Description
This paper empirically examines the risk disclosure practices of a sample of listed Spanish firms. Using the content analysis technique, the amount and quality of the information on corporate risks disclosed in corporate governance reports during 2009 were analyzed. Specifically, the main objective is to identify the main factors which may have significant influence on such disclosures. The results show a positive evolution of the quantity and quality of risk information disclosed by Spanish companies, highlighting the financial and property sector as the one disclosing more information about risks. Moreover, sector, size and risk level are positively related to the extent of corporate risk disclosure.
Author: Yi Dong Publisher: ISBN: Category : Languages : en Pages : 50
Book Description
This paper examines the determinants and economic consequences of nonfinancial disclosure quality, which is measured according to the ratings of corporate social responsibility (CSR) disclosure provided by the Ministry of Economic Affairs in the Netherlands. We find that firms with better CSR performance, greater external financing needs, and stronger corporate governance tend to provide higher quality CSR disclosures. In return, these firms gain greater analyst coverage, higher levels of institutional ownership, greater stock liquidity, higher valuations in SEOs, and lower yields to maturity in bond issuances. These benefits apply largely to firms with strong CSR performance. Collectively, our findings suggest that higher quality CSR disclosures deliver economic benefits.
Author: Nooraisah Katmun Publisher: ISBN: Category : Languages : en Pages :
Book Description
This study consists of three main projects covering (i) the relationship between disclosure quality and earnings management and (ii) the relationship between corporate governance and disclosure quality. Disclosure quality is measures using the IR Magazine Award, the forward looking information in the annual report, and the analyst forecast accuracy. Match-paired samples comprised of the winners and non-winners of the IR Magazine Award during the years from 2005-2008 were employed in this study. Simultaneity bias in all projects was remedied by the use of a simultaneous system of equation, which was estimated using two-stage least square regression (2SLS). This study provides several interesting findings. With regard to the first project, disclosure quality and earnings management, it is shown that all disclosure quality proxies are consistently reported significant negative relationship with earnings management in the OLS regression. However, audit committee characteristics and board characteristics reveal insignificant relationship with earnings management, except audit committee meeting which reported positive association. Concerning the potential complementary and substitutive effect of internal governance and disclosure quality in deterring earnings management, result of the interaction terms revealed that there is a complementary relationship between audit committee quality and disclosure quality (measured using Investor Relation Magazine Award) in deterring earnings management. When disclosure quality and earnings management are treated as endogenous, this study reveals that there is a significant bi-directional relationship between disclosure quality and earnings management, highlighting that causality can run in both directions. This suggests that future research should control for disclosure quality factors when examining the impact of corporate governance and earnings management and that the potential simultaneity between disclosure quality and earnings management should be considered in future models. With respect to the second project, corporate governance and disclosure quality, this study reveals that audit committee effectiveness, board meeting and board independent are significantly positively related to disclosure quality (measured using IR Magazine Award and the number of forward looking items in the annual report). With regard to the potential complementary or substitutive effect between board and audit committee characteristics in improving firm disclosure quality, this study reveal that there is a substitutive effect between board quality and audit quality in enhancing disclosure quality (measured using analyst forecast accuracy). If disclosure quality and board independence are treated as endogenous, there is a significant positive bi-directional relationship between them when disclosure quality is measured using the number of forward looking items. However, there is a negative bi-directional relationship and an insignificant bi-directional relationship shown when disclosure quality is measured using analyst forecast accuracy and the IR Magazine Award respectively.
Author: Jennifer Francis Publisher: Now Publishers Inc ISBN: 1601981147 Category : Business & Economics Languages : en Pages : 97
Book Description
This review lays out a research perspective on earnings quality. We provide an overview of alternative definitions and measures of earnings quality and a discussion of research design choices encountered in earnings quality research. Throughout, we focus on a capital markets setting, as opposed, for example, to a contracting or stewardship setting. Our reason for this choice stems from the view that the capital market uses of accounting information are fundamental, in the sense of providing a basis for other uses, such as stewardship. Because resource allocations are ex ante decisions while contracting/stewardship assessments are ex post evaluations of outcomes, evidence on whether, how and to what degree earnings quality influences capital market resource allocation decisions is fundamental to understanding why and how accounting matters to investors and others, including those charged with stewardship responsibilities. Demonstrating a link between earnings quality and, for example, the costs of equity and debt capital implies a basic economic role in capital allocation decisions for accounting information; this role has only recently been documented in the accounting literature. We focus on how the precision of financial information in capturing one or more underlying valuation-relevant constructs affects the assessment and use of that information by capital market participants. We emphasize that the choice of constructs to be measured is typically contextual. Our main focus is on the precision of earnings, which we view as a summary indicator of the overall quality of financial reporting. Our intent in discussing research that evaluates the capital market effects of earnings quality is both to stimulate further research in this area and to encourage research on related topics, including, for example, the role of earnings quality in contracting and stewardship.
Author: Tamer Elshandidy
Author: Tamer Elshandidy
Author: Monica Hernandez-Madrigal
Author: Yi Dong
Author: Ramzi Suliman Alzead
Author: Nooraisah Katmun
Author: Aisha Kadyrbaeva
Author: Jiayuan Xin
Author: Bassam Rajab
Author: Jennifer Francis
Author: Xiaohua Fang