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This paper aims to examine the extent to which sell-side analysts efficiently incorporate firms’ corporate social responsibility (CSR) activities into their earnings forecasts. In addition, this paper also investigate the CSR information efficiency of analysts vis-à-vis that of investors.

This paper measures CSR activities by using CSR strength and CSR concern scores from the Morgan Stanley Capital International Environmental, Social and Governance database. This paper uses analysts’ earnings forecast errors and dispersion as proxies for their information efficiency. To compare the CSR information efficiency of analysts to that of investors, this paper uses the Vt/Pt ratio, which is the equity value estimates inferred from analysts’ earnings forecasts (a proxy for analysts’ CSR information efficiency) to the stock price of the focal company (a proxy for investors’ CSR information efficiency).

The regression analysis indicates that analysts’ earnings forecasts are optimistically biased and more dispersed for firms with positive CSR activities. The paper also finds that analysts’ forecasts are more optimistically biased than investors in interpreting CSR activities.

The lack of standardized protocols in CSR reporting and activities has raised the risk of mispricing by analysts, threatening the stability of sustainable investments. This paper suggests that regulators and standard-setters should establish a uniform framework governing firms’ CSR activities, along with their reporting and measurement, to ensure more consistent and reliable evaluations of CSR practices.

Analysts’ mispricing of CSR activities may distort sustainable investing, as it can overly focus on the positive impacts of stakeholder theory, overlooking agency theory’s warnings about managerial self-interest. Investors need to assess CSR efforts with a dual perspective, acknowledging their societal value but also examining their alignment with shareholder interests.

To the best of the authors’ knowledge, this research is the first to assess the efficiency of analysts versus investors in processing CSR information amidst growing sustainable investment interests. Furthermore, building on Dhaliwal et al. (2012), which found that voluntary CSR disclosures correlate with more accurate analyst forecasts, this research provides fresh perspectives on the evolving nature of how analysts assimilate CSR information over time.

Findings in the literature indicate leading financial analysts attract high levels of market attention and provide more accurate earnings forecasts prior to becoming all-star analysts. Furthermore, these analysts significantly impact the investment decisions of other market participants and thus the market price of assets. Therefore, this study examines the information role of leading financial analysts and identifies two significant conclusions. First, the positive outcomes of these analyst leaders are more informative and attract more followers. Second, informational herding by followers of these analysts is not as naïve as suggested in previous studies, as followers who smartly use information from analyst leaders tend to perform better. We also find that analysts who practice smart learning by studying and selectively employing analyst-leader decisions achieve better career outcomes.

The purpose of this study is to examine the interplay between integrated reporting quality (IRQ) and capital markets. More specifically, the authors test the impact of IRQ on stock liquidity, cost of capital and analyst forecast accuracy.

The sample consists of listed firms on the Johannesburg Stock Exchange in South Africa, covering the period from 2012 to 2020. The IRQ measure used in this study is based on data from Ernst and Young. To test the proposed hypotheses, the authors conducted a generalized least squares regression analysis.

The empirical results evince a positive relationship between IRQ and stock liquidity. However, the authors did not find a significant effect of IRQ on the cost of capital and financial analysts’ forecast accuracy. In robustness tests, it was shown that firms with a higher IRQ score exhibit higher liquidity and improved analyst forecast accuracy. Additional analysis indicates a negative association between IRQ and the cost of capital, as well as a positive association between IRQ and financial analyst forecast accuracy for firms with higher IRQ scores (TOP ten, Excellent, Good).

The study stands as one of the initial endeavors to investigate the impact of IRQ on the capital market. It provides valuable insights for managers and policymakers who are interested in enhancing disclosure practices within the financial market. Furthermore, these findings are significant for investors as they make informed investment decisions.

Inflation expectations are an important part of the transmission mechanism of the inflation targeting regime. As such, central bankers must study the inflation expectations of economic agents to anchor them close to the level of the inflation target. However, economic agents are affected by the past and current macroeconomic situation when they form their expectations concerning future inflation. Using survey data on inflation expectations in Czechia, we investigate the macroeconomic determinants of Czech analysts' and managers' inflation expectations. We find that both actual and past inflation have a substantial impact on inflation expectations of the agents surveyed. We also identify backward-looking behaviour among these agents: persistence in inflation expectations of up to two quarters was detected. Moreover, financial analysts formed inflation expectations more in line with economic theory, while company managers evinced expectations similar to those of consumers.

To predict the future of the business and implement successful changes, a credit analyst must make quick decisions about the economics and assets of their clients. Because the marketplace is constantly changing, companies that lack the interpersonal skills necessary to communicate with their customers run the risk of falling behind the competition and becoming obsolete. The objective of this research was to assess whether credit analysts in Peruvian banks that used digital resources also improved their communication and interpersonal skills. The study was quantitative in nature, with an applied and correlational design that lacked an experimental component. The sample consisted of 109 credit analysts from four different Peruvian banks (Interbank, Scotiabank, BBVA, and BCP). Two questionnaires were used in this survey; both were submitted to expert review for validation before being submitted for use, and their reliability was determined using Cronbach's alpha. In terms of use of digital resources (59.5%) and mastery of interpersonal skills (61.3%), credit analysts were at the average. Conclusions the p-value for the correlation between credit analysts' use of digital resources and their soft skills in Peruvian banks was less than 0.05, indicating a direct and strong link between these two factors. The Rho correlation coefficient was 0.738.

Corporate site visits increase labor investment efficiency.

Our empirical model for the baseline analysis follows those of Jung et al. (2014) and Ghaly et al. (2020).

We show that corporate site visits are associated with significantly higher labor investment efficiency; more specifically, site visits reduce both over-hiring and under-hiring of employees. The effect of site visits on labor investment efficiency is more pronounced for firms with higher labor adjustment costs, greater financial constraints, weaker corporate governance and lower financial reporting quality. We also find that site visits mitigate labor cost stickiness.

First, while the literature has suggested how the presence of institutional investors and analysts may affect labor investment decisions, we focus on institutional investors and analysts’ activities and interactions with firm executives. We provide direct evidence that institutional investors and analysts may use corporate site visits to improve labor investment efficiency. Second, our study adds to a line of recent studies on how corporate site visits reduce information asymmetry and agency conflicts. We show that corporate site visits allow institutional investors and analysts to influence labor investment efficiency. We also provide new evidence that corporate site visits reduce labor cost stickiness.

This study aims to contribute to the emerging debate about materiality with novel insights about the signaling effects related to the disclosure of environmental, social and governance (ESG) information using the guidelines released by the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB).

An empirical assessment using panel data analysis was built to evaluate the relationship between sustainability reporting standards and analysts’ forecast accuracy.

The analysis revealed that the proliferation of sustainability reports prepared on mandatory or voluntary basis mitigated the signaling effects related to the disclosure of ESG information by companies. Furthermore, the additional analysis conducted considering sustainability reporting quality and ESG performance revealed the existence of mixed effects on analysts’ forecasts accuracy. Therefore, the insights highlighted the need to consider a cautionary approach in evaluating the contribution of ESG data to financial evaluations.

The practical implications consist of identifying criticisms related to disclosing ESG information by listed companies. In detail, the analysis underlines the need to enhance reporting standards’ interoperability to support the development of more accurate analysis by investors and financial experts.

The analysis reveals increasing attention investors pay to socially responsible initiatives, confirming that financial markets consider sustainability reporting as a strategic driver to engage with stakeholders and investors.

This research represents one of the first attempts to explore differences between GRI and SASB using an empirical approach.

Unlike other types of corporate disclosure, corporate political disclosure (CPD), which is the disclosure of corporate political contributions and the related governing policies and oversight mechanisms, does not provide completely new information to stakeholders. Some of the information disclosed in CPD is available from other public records (e.g. the Federal Election Committee website or OpenSecrets website). Given this unique feature of CPD, it is interesting to investigate the cost and benefit tradeoff for firms of altering their CPD practice in response to policy and political uncertainty.

This study employs recently developed indexes of aggregate economic policy uncertainty (EPU) and a novel dataset of CPD transparency to examine the impact of EPU on CPD transparency and how the proprietary cost of corporate political activities moderates this association. The sample consists of S&P 500 companies from the 2012 to 2019 period.

The authors document that firms mitigate the heightened information asymmetry associated with higher aggregate EPU by increasing CPD transparency. The positive association between EPU and CPD is less pronounced for firms that are more sensitive to EPU, for firms that more actively manage EPU through corporate political contributions or lobbying activities and for firms that are followed by more analysts. The authors also find that more transparent CPD helps to mitigate the information asymmetry caused by heightened EPU. This study’s results hold when the authors control for other types of voluntary corporate disclosure.

This study contributes to the emerging literature on the determinants of CPD transparency by identifying EPU's positive impact on CPD transparency. This study also provides empirical evidence that the proprietary costs arising from the controversial nature of corporate political activities dampen firms' incentives to provide transparent CPD in response to heightened EPU, and that information on corporate political activities gathered and processed by financial analysts seems to lower the marginal benefit to companies of publicizing CPD on their own website.

This paper is motivated by the need to assess the risk profiles associated with the substantial number of items within military supply chains. The scale of supply chain management processes creates difficulties in both the complexity of the analysis and in performing risk assessments that are based on the manual (human analyst) assessment methods. Thus, analysts require methods that can be automated and that can incorporate on-going operational data on a regular basis.

The approach taken to address the identification of supply chain risk within an operational setting is based on aspects of multiobjective decision analysis (MODA). The approach constructs a risk and importance index for supply chain elements based on operational data. These indices are commensurate in value, leading to interpretable measures for decision-making.

Risk and importance indices were developed for the analysis of items within an example supply chain. Using the data on items, individual MODA models were formed and demonstrated using a prototype tool.

To better prepare risk mitigation strategies, analysts require the ability to identify potential sources of risk, especially in times of disruption such as natural disasters.

This paper examines whether technological changes that promote communications between investors and managers help bridge the gap in the cost of equity capital among firms in different regions.

We use the online interaction platforms of listed firms in China and utilize brokerage presence (BP) to capture the geographic distribution of financial factors. We explore whether online interactions would reduce the cost of equity to a greater extent for firms located in low brokerage presence regions (hereafter “low-BP firms”) than those in high brokerage presence regions (hereafter “high-BP firms”).

We find low-BP firms benefit more from an improved information environment created by online interactions. We also find that posts about low-BP firms are more value-relevant and useful in processing corporate disclosures. Further, a higher number of interactions significantly enhances more informational efficiency for low-BP firms, and the effect of reducing the gap in financing costs is more pronounced when corporate information is complex.

We conclude that online interactions alleviate geography-induced information frictions and create a relatively level playing field for firms located in all regions.