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The purpose of this study is to examine the impact of a recent innovation in the uranium market, the Global X Uranium Exchange-Traded Fund (URA), on the trading characteristics of constituent and non-constituent stocks.

The authors analyse bid-ask spread measures, relative effective spreads and adverse selection costs to assess changes in information asymmetry among uranium stocks. The authors also study abnormal returns to assess the impact of URA on the market.

Over a three-month period, following the introduction of URA, the authors find uranium stocks display decreased bid-ask spread measures, driven by reductions in information asymmetry. Relative effective spreads decrease by 36% after the introduction of URA, and adverse selection costs decline by 24% over the same period. Uranium stocks experience a significant positive abnormal return of 5.0% the day after the introduction of URA with subsequent price reversals. These suggest that the introduction of URA prompted uninformed traders to rebalance portfolios and migrate to the less information-sensitive Exchange-Traded Fund (ETF), causing temporary deviations in trading characteristics.

The authors demonstrate that the introduction of new financial securities to the market can have a significant impact on the trading characteristics of related equities. As URA is the only ETF in the uranium sector, the authors thereby avoid the influence of multiple ETFs that may have impacted previous studies.

Audit rotation (AR) is a key policy initiative implemented in global jurisdictions to deal with concerns about audit quality. Auditing financial reports involves communicating attested value-relevant company information to investors, and hence audit quality plays a role in the quality of financial reporting information. This paper aims to investigate whether AR affects the degree of information asymmetry (IS) between investors. It further aims to examine whether voluntary AR results in less asymmetric information compared to mandatory AR. Additionally, it examines whether political connections moderate the association between AR and IS.

The authors use data from publicly traded banks across the Gulf Cooperation Council (GCC) for the period 2010–2018. The authors include several variables to control for corporate governance and other firm-specific characteristics by using country-year fixed-effects regression model.

The authors find higher IS for banks that periodically rotate auditor, while banks voluntarily choose to rotate auditors obtain high-quality audits, which results in higher trading volume and lower stock return volatility, hence lower IS. The results suggest that when banks voluntarily choose to rotate auditors, investors perceive these banks as more committed to obtaining high-quality audits relative to mandatory AR. Providing higher quality audits enhances the credibility of reported information and thus reduce the level of IS. Moreover, IS following AR is higher for politically connected banks than for similar but politically unconnected banks. Finally, investors perceive voluntary AR as a disciplining tool, which mitigates IS. This mitigating role is not affected by bank political connectedness.

This study has limitations as the definition of AR could be interpreted as binary or too narrow, and hence it may not be appropriate to generalize findings to different contexts. Nonetheless, this study casts light on a new perspective to reconcile the existing mixed evidence on the influence of AR on IS and the moderating role of political connections. A further limitation is that because of data unavailability, the authors were unable to use other proxies (e.g. bid-ask spreads and analyst forecast dispersion) of IS.

The present findings provide insight to regulators, policymakers and standard setters on the potential adverse effect of political connections on the role of AR in mitigating IS. The results underscore the importance of voluntary AR, and suggest that regulators, policymakers and standard setters encourage firms to rotate their auditors periodically.

This study provides evidence in a setting that is unique at the economic, social and regulatory levels. Prior literature is lacking and has been centered on developed countries or focusing on single-country specifications. The data set of this study is unique and allows us to examine the interplay between political influence that arises through ownership and management roles of influential members of state.

This study aims to examine the effect of corporate risk disclosure on investment efficiency. This study also seeks to contribute to existing literature of corporate risk disclosure by investigating voluntary and mandatory risk disclosure and its effect on the investment efficiency.

This study used two measures of corporate risk disclosure, level and quantity of corporate risk disclosure. A content analysis approach is adopted for non-financial Malaysian firms over the period 2010–2018.

The empirical results show that level of corporate risk disclosure leads toward efficient investment, whereas quantity of corporate risk disclosure causes inefficient investment when firms disclose more voluntary risks. Further, categorizing corporate risk disclosure into mandatory and voluntary risk disclosure, this study finds that voluntary risk disclosure tends to have higher investment inefficiency, while no evidence was found for mandatory risk disclosure.

This paper contributes to narrow stream of research investigating corporate risk disclosure through level and quantity contributing to the understanding of the level and quantity of risk disclosure in determining organizational investment efficiency.

The purpose of this paper is to investigate whether information asymmetry mediates the relationship between disclosure and cost of equity.

The study is based on a sample of 500 companies listed in Bombay Stock Exchange for a period of six years from 2015 to 2021. Panel data regression is applied to analyze the relationship between voluntary disclosure, cost of equity and information asymmetry. Mediation effect of information asymmetry is tested with the help of Barron and Kenny’s (1986) approach.

Findings suggest that in case of Indian companies, disclosure reduces cost of equity directly and indirectly through mediation of information asymmetry. Indian investors value credible information for better estimation of future returns, supporting the validity of estimation risk and stock market liquidity hypothesis, which proposes an inverse relationship between disclosure and cost of equity.

Managers can use the findings to strategize their disclosure policy and secure funds at lower cost. Shareholders can monitor managerial actions by demanding credible disclosures. Government too can encourage voluntary disclosure by providing special incentives to the firms.

This study is a pioneering research that investigates the mediating influence of information asymmetry between disclosure and cost of equity with reference to the Indian corporate landscape.

The purpose of this study aims to examine the effect of fintech on pre- and post-financing credit risks faced by the Islamic banks.

This research uses primary data for fintech awareness and adoption and secondary data of various financial and economic variables from 2009 to 2021. It uses baseline regression to identify moderation of fintech controlling gross domestic products, size, return on assets and leverage. The findings are confirmed using robustness against key variable bias. It also uses a dynamic panel two-stage generalized method of moments for endogeneity.

The study finds that the fintech awareness and adoption are not the same across all Islamic countries. The Asia Pacific region is far ahead of the other two regions where Indonesia is ahead in terms of fintech awareness and adoption, and Malaysia is ahead in terms of reaping its benefits in credit risk management. Fintech affects prefinancing credit risk significantly more than postfinancing credit risk. Also, the study finds that Islamic banks suffer from the problem of “Adverse selection under Shariah compliance.”

This research invites regulators to introduce fintech in Islamic banks on war footing. Similar studies can be conducted on the role of other risks such as operational and market risks. Fintech will also help in improving the risk profile and stability of Islamic banks against systemic risks and financial crises.

This research has variety of originalities. First, it is the pioneering study that addresses the effect of fintech pre- and post-financing credit risks in Islamic banks. Second, it identifies “Adverse selection under Shariah compliance” for Islamic banks. Third, it helps identify how fintech can be useful in reducing credit risk that will help in reducing capital charge for regulatory capital.

Family businesses are essential to the global economy but often grapple with family-related issues, especially during succession. This study explores how governance tools like the family protocol (FP) mitigate conflicts by setting standards for family firm management and continuity. Pioneering the use of game theory and adverse selection setups in family business governance, this research uncovers FP determinants.

This research employs game theory and adverse selection setups to delve into the strategic decision-making processes of stakeholders in family firms. The authors break new ground by applying principal–agent theory (PAT) to family business governance structures. This innovative approach uncovers the determinants of the FP, enhancing the authors’ understanding of family firm dynamics.

The authors emphasize the importance of custom governance structures, such as the FP, in managing complex family-business interactions. These structures mitigate conflicts and promote smoother transitions during succession, ensuring family firm continuity. This study identifies key determinants, and these results will aid founders, families and practitioners in achieving smoother transitions, ensuring family firm continuity.

This research pioneers game theory and PAT applications in family business governance, shedding light on the effectiveness of customized governance mechanisms. By identifying FP determinants, the authors contribute to a deeper understanding of family firm dynamics. The findings have practical implications for founders, families, practitioners and consultants, promoting the long-term success and harmony of family firms in the global economy.

The study aims to investigate the impact of indirectly evoked incentives, in the form of supervisor’s preferences, on the decision about accounting policy regarding depreciation method selection and to examine subsequent post-decision distortion by evaluating the depreciation method.

The authors conducted two experiments with control and treatment groups, manipulating the supervisor’s indirectly evoked preferences. In Study 2, the authors also measured the evaluation of both depreciation methods to investigate post-decisional distortion regarding the assessment of the depreciation method chosen in a decision task. Study 1 was conducted among 85 accounting students, while Study 2 consisted of 200 accountants.

Both studies revealed the significant impact of supervisor’s indirectly evoked preferences on accounting policy decisions. Participants who were aware of supervisors’ preferences were more likely to choose the depreciation method that was consistent with those preferences. The authors also found that those participants attached a higher value to the depreciation method, providing evidence that adherence to the supervisor’s preferences results in a distorted assessment of the depreciation methods.

First, this study shows that indirectly evoked supervisors’ preferences may lead to a departure from substantive criteria resulting in low-quality accounting outcomes. Second, the assessment of the depreciation method is inseparable from the situational context, as the evaluation of the depreciation method is interdependent upon the preferences of the choice of a depreciation method and the fulfillment of those preferences.

Based on dual information asymmetry, the two-stage segmented compensation mechanism for technological innovation of civilian enterprises’ participation in military (CEPIM) has been discussed.

On the basis of the traditional principal-agent problems, the incentive compatibility condition is introduced as well as the hybrid incentive compensation model is established, to solve optimal solution of the compensation parameters under the dynamic contract condition and the validity is verified by numerical simulation.

The results show that: (1) The two-stage segmented compensation mechanism has the functions of “self-selection” and “stimulus to the strong”, (2) It promotes the civilian enterprises to obtain more innovation benefit compensation through the second stage, (3) There is an inverted U-shaped relationship between government compensation effectiveness and the innovation ability of compensation objects and (4) The “compensable threshold” and “optimal compensation threshold” should be set, respectively, to assess the applicability and priority of compensation.

In this paper, through numerical simulation, the optimal solution for two-stage segmented compensation, segmented compensation coefficient, expected returns for all parties and excess expected returns have been verified under various information asymmetry. The results show that the mechanism of two-stage segmented compensation can improve the expected returns for both civilian enterprises and the government. However, under dual information asymmetry, for innovation ability of the intended compensation candidates, a “compensation threshold” should be set to determine whether the compensation should be carried out, furthermore an “optimal compensation threshold” should be set to determine the compensation priority.

This study investigates the combined influence of corporate governance (CG) and debt maturity (DM) on the investment inefficiency among non-financial 506 NSE-listed firms in India between 2009 and 2022. Additionally, this study also investigates the moderating effect of short-term debt (STD) maturity concerning the relationship between CG and investment inefficiency.

Utilizing the residuals extracted from the Biddle et al. (2009) investment model, three different forms of investment inefficiency (investment inefficiency, overinvestment and underinvestment) were measured. To measure the internal governance of firms, a new corporate governance index (CGI) was developed using 65 new governance stipulations, whereas STD was measured as short-term debt divided by total debt. Interaction effects between CG and DM were also estimated. Employing CGI and STD along with firm-specific control variables, many pooled regression models were estimated. Endogeneity issues were addressed through two-stage least squares. Robustness checks were also conducted using the two-step system GMM, alternative measures of dependent and independent variables.

The findings demonstrate that higher CG and shortened DM increase investment efficiency. This evidence implies that firm-level governance and short-term debt reduce information asymmetry and increase management oversight. Additionally, the evidence suggested that shortened DM and CG complement one another to increase investment efficiency, suggesting companies that utilize STD to a greater (lesser) extent demonstrate a greater (lesser) impact of CG in reducing investment inefficiency.

This work first advocates the establishment and implementation of robust corporate governance mechanisms to control agency conflicts, moral hazard, adverse selection and limit opportunistic behavior of managers for improving investment efficiency. Second, since interaction effects suggest a complementarity between CG and DM, it is advocated that STDs can be used to achieve optimal investment choices to control moral hazards and adverse selection and discourage suboptimal investment levels.

This work provides new evidence concerning the effects of CG and DM on various forms of corporate investment efficiency (investment inefficiency, overinvestment and underinvestment, using alternate measures) in an emerging economy like India having a unique institutional framework and macroeconomic environment using a newly developed firm-specific CG index for a large sample of companies using recent data.

The authors analyzed annuitization preferences when retired people extract cash from their homes. Based on 2,608 viager (home reversion) transactions, the authors study the relations between annuitization, negotiation, cash extraction, age, gender and marital status.

A database comprising 2,608 transactions is used. The three-stage least squares (3SLS) and moderation models are implemented, with a focus on potential adverse selection issues.

The authors found that difficulties in selling a property generally result in increased annuitization. The single men's group endures gender inequality, suffering from limitations in their possibility to extract wealth and annuitize, as well as an additional price discount during negotiation. Young single men, as compared to young single women and young couples, must consent to a substantial price reduction if they prefer a high down payment and limited price reductions if they prefer annuities. Elderly single men, as compared to young single men, have less capacity to negotiate, a concern that is reinforced when they prefer annuities.

Among the home equity conversion products, the academic real estate literature has intensely analyzed the reverse mortgage. The viager is distinct from a mortgage in that it consists of the true sale of a property without bank involvement. This product deserves reinforced attention in an aging continental Europe. It exists in numerous countries (France, Belgium, Germany, Italy, Spain, etc.).