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The aim of this paper is to investigate the effect of management earnings forecasts on the level of information asymmetry around subsequent earnings announcement.

Employing the adverse selection cost method suggested by George et al., the paper compares for each sample firm the adverse selection cost around earnings announcement in forecasting years with that in non‐forecasting years.

Consistent with Diamond and Verrecchia is the finding that the earnings announcement in non‐forecasting years decreases information asymmetry during a three‐day announcement period and increases in a post‐announcement period up to seven days. No significant change in information asymmetry between pre‐ and post‐announcement periods when firms released a “good” news forecast is found. The firms that previously released a “bad” news forecast experience a significantly lower information asymmetry than those that did not forecast during announcement or post‐announcement days, and experience a decrease in information asymmetry in a five to seven‐day post‐announcement period.

This paper provides the first empirical reports on the different information asymmetry changes around earnings announcements followed by a “good” news management forecast from those followed by a “bad” news forecast.

The gift-giving literature has documented several cases in which givers and recipients do not see eye-to-eye in gift-giving decisions. To help integrate this considerable segment of the gifting literature, this paper aims to develop a social norms-based framework for understanding and predicting giver-recipient asymmetries in gift selection.

Five experimental studies test the hypotheses. Participants in these studies evaluate gifts used in previous research, choose between gifts as either gift-givers or gift-recipients, and/or indicate their level of discomfort with choosing different kinds of gifts. The gifts vary in ways that allow the authors to test the social norms-based framework.

Gift-giving asymmetries tend to occur when one of the gifts under consideration is less descriptively, but not less injunctively, normative than the other. This theme holds for both asymmetries recorded in the gift-giving literature and novel ones. Indeed, the authors document new asymmetries in cases where the framework would expect asymmetries to occur and, providing critical support for the framework, the absence of asymmetries in cases where the framework would not expect asymmetries to emerge. Moreover, the authors explain these asymmetries, and lack thereof, using a mechanism that is novel to the literature on gift-giving mismatches: feelings of discomfort.

This research has multiple theoretical implications for the literatures studying gift-giving and social norms. A limitation of this work is that it left some (secondary) predictions of its model untested. Future research could test some of these predictions.

Billions of dollars are spent on gifts each year, making gift-giving a research topic of great practical importance. In addition, the research offers suggestions to consumers giving gifts, consumers receiving gifts, as well as marketers.

The research is original in that it creates a novel framework that predicts both the presence and absence of gift-giving asymmetries, introduces a psychological mechanism to the literature on giver-recipient gift choice asymmetries, and unifies many of the mismatches previously documented in this literature.

This paper aims to study the impact of geopolitical uncertainty on corporate cost of debt and the moderating role of information asymmetry between creditors and borrowing firms.

This study uses 5,223 firm-quarter observations on German-listed firms spanning 2010:Q1–2021:Q4. This study regresses the cost of debt financing on the geopolitical risk, accounting quality and other control variables. Information asymmetry is measured using the performance-matched Jones-model discretionary accrual and the stock bid-ask spread. It uses interaction terms to check if information asymmetry moderates the impact of geopolitical uncertainty on the cost of debts and control for the moderating role of business risk. For the sake of robustness check, it uses long-term cost of debt and bond spread as alternative dependent variables. In addition, this study executes instrumental variables regression and propension score matching to control for potential endogeneity problems.

Estimation results show that geopolitical uncertainty exerts a positive impact on the cost of debt. This impact is found to be more important on the cost of long-term debts. Information asymmetry is found to exacerbate the positive impact of geopolitical risk on the cost of debt. These results are robust to the change of the dependent variable and to the mitigation of potential endogeneity. At high levels of information asymmetry, this impact is more important for firms belonging to “Transportation”, “Automobiles and auto parts”, “Chemicals”, “Industrial and commercial services”, “Software and IT services” and “Industrial goods” business sectors.

Geopolitical uncertainty should be seriously considered when setting strategies for corporate financial management in Germany and similar economies that are directly exposed to geopolitical risks. Corporate managers should design a comprehensive set of corporate policies to improve their transparency and accountability during increasing uncertainty. Policymakers are required to implement innovative monetary and fiscal policies that take into consideration the heterogeneous impact of geopolitical uncertainty and information transparency in order to contain their incidence on German business sectors.

Despite its relevance to corporate financing conditions, little is known about the impact of geopolitical uncertainty on the cost of debt financing. To the best of the authors’ knowledge, there is still no empirical evidence on how information asymmetry between creditors and borrowing firms shapes the impact of geopolitical uncertainty on the cost of debt. This paper tries to fill this gap by interacting two measures of information asymmetry with geopolitical uncertainty. In contrast with previous studies, this study shows that the impact of geopolitical uncertainty on the cost of debt is non-linear and heterogeneous. The results show that the impact of geopolitical uncertainty does not exert the same impact on the cost of debt instruments with different maturities. This impact is found to be heterogeneous across business sectors and to depend on the level of information asymmetry.

Mean absolute percentage error (MAPE) is the primary forecast evaluation metric in hospitality and tourism research; however its main shortcoming is that it is asymmetric. The asymmetry occurs due to over or under forecasts that introduce bias into forecast evaluation. This study aims to explore the nature of asymmetry and designs a new measure, one that reduces the asymmetric properties while maintaining MAPE’s scale-free and intuitive interpretation characteristics.

The study proposes and tests a new forecasting accuracy measure for hospitality revenue management (RM). A computer simulation is used to assess and demonstrate the problem of asymmetry when forecasting with MAPE, and the new measures’ (MSapeMER, that is, Mean of Selectively applied Absolute Percentage Error or Magnitude of Error Relative to the estimate) ability to reduce it. The MSapeMER’s effectiveness is empirically validated by using a large set of hotel forecasts.

The study demonstrates the ability of the MSapeMER to reduce the asymmetry bias generated by MAPE. Furthermore, this study demonstrates that MSapeMER is more effective than previous attempts to correct for asymmetry bias. The results show via simulation and empirical investigation that the error metric is more stable and less swayed by the presence of over and under forecasts.

It is recommended that hospitality RM researchers and professionals adopt MSapeMER when using MAPE to evaluate forecasting performance. The MSapeMER removes the potential bias that MAPE invites due to its calculation and presence of over and under forecasts. Therefore, forecasting evaluations may be less affected by the presence of over and under forecasts and their ability to bias forecasting results.

Hospitality RM should adopt this measure when MAPE is used, to reduce biased decisions driven by the “asymmetry of MAPE.”

The MAPE error metric exhibits an asymmetry problem, and this paper proposes a more effective solution to reduce biased results with two major methodological contributions. It is first to systematically study the characteristics of MAPE’s asymmetry, while proposing and testing a measure that considerably reduces the amount of asymmetry. This is a critical contribution because MAPE is the primary forecasting metric in hospitality and tourism studies. The second methodological contribution is a procedure developed to “quantify” the asymmetry. The approach is demonstrated and allows future research to compare asymmetric characteristics among various accuracy measures.

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.

Credibility concerns regarding integrated reports can harm the intended decrease of information asymmetry between a firm and its investors. Therefore, it is crucial to examine whether voluntary third-party assurance enhances the credibility of integrated reports and, thus, decreases information asymmetry. Furthermore, this study aims to investigate the interaction effect between assurance quality and the disclosed connectivity of the capitals, a distinguishing feature of integrated reports.

Content analysis is performed of the 176 assurance statements included in the 269 integrated reports of Forbes Global 2000 firms disclosed from 2013 to 2015 and the 269 integrated reports themselves. Regression analyzes are applied to examine the associations between assurance, the disclosed connectivity of the capitals and information asymmetry.

The presence of an assurance statement in an integrated report significantly decreases information asymmetry. Surprisingly, assurance quality is not significantly associated with information asymmetry. However, an interaction analysis reveals that combining high assurance quality with high disclosed connectivity of the capitals allows a significant decrease in information asymmetry.

The paper demonstrates that the connectivity of the capitals of integrated reports and assurance quality are connected and together are associated with information asymmetry.

The results imply, both for report preparers and standard setters, that assurance quality is advantageous only when combined with disclosed connectivity of the capitals.

More information on non-financial information measured by the connectivity of the capitals of integrated reporting has an interaction effect together with assurance quality on information asymmetry.

This paper builds on a unique data set derived from the contents of integrated reports and accompanying assurance statements. Furthermore, it extends the integrated reporting literature by investigating the interaction between assurance quality and the disclosed connectivity of the capitals, which had not previously been examined in combination.

The purpose of this paper is to empirically investigate the effects of cooperation history on contractual governance and the moderating effects of dependence asymmetry on those relationships from the perspective of a weaker firm in emergent economies. Drawing from resource dependence theory and contingency theory, this paper develops a conceptual model to investigate the impact of cooperation history on contractual governance.

The authors use data from 188 buyer–supplier relationships in China

The authors find that cooperation history is positively associated with contractual governance when dependence asymmetry is high but negatively associated with contractual governance when dependence asymmetry is low. Furthermore, the negative moderating effect of dependence asymmetry on the relationship between cooperation history and contractual complexity is stronger than the relationship between cooperation history and contract enforcement.

This study contributes to a better understanding of how cooperation history affects contractual governance with respect to the various levels of dependence on partners by incorporating a contingency view. This study also advances the literature on interfirm governance by distinguishing contractual governance into contractual complexity and contract enforcement.

The purpose of this paper is to investigate the effect of independent directors in reducing firms’ information asymmetry. Moreover, the authors enrich this investigation by differentiating the effectiveness of independent directors in an intriguing comparative setting of family vs non-family firms. Family firms are used to represent an interesting environment where controlling insiders (i.e. firms’ founding families) have dominant control over corporate decisions. This study addresses the question of whether controlling-insiders dominate independent directors.

The authors manually collect firms’ founder information to identify family firm status in a sample of S&P 500 firms. Following a large literature in capital market research, the authors proxy information asymmetry by trading volume, bid-ask spread and price volatility. The authors employ multivariate regression with two-stage least square analysis, instrumental variable method, Heckman selection model and Hausman–Taylor model to address the issue of endogenous selection of board of director and family firm status.

The authors find a negative relation between the board independence and information asymmetry, suggesting independent directors are effective in reducing information asymmetry. Furthermore, the authors find this negative relation is stronger in family firms. These results are robust after controlling for the endogenous issues using various models.

Our results suggest that independent directors in family-controlled firms are more successful in reducing information asymmetry than their counterparts in non-family firms. The authors provide direct evidence to support the existing theoretical arguments from Rediker and Seth (1995) and Anderson and Reeb (2004) that founding families and independent boards might be a powerful combination for aligning the interest of insider and diffused shareholders. The findings ease a prevalent concern that the role of independent directors might be compromised in an environment with controlling shareholders, and advocate regulations promoting board independence for various business practices.

A number of studies concentrate on the practice of corporate disclosure of firm’s performance and governance and how corporate disclosure mitigates information asymmetry (Leuz and Verrecchia, 2000; Ali et al., 2007; Chen et al., 2008). To the best of our knowledge, this study is the first to examine the impact of independent directors in reducing information asymmetry. The research adds to understanding the incentives of board members and supports recent findings that different types of investors have heterogeneous incentives for corporate disclosure (Srinidhi et al., 2014).

This paper seeks to investigate and provide empirical evidence of the interrelationships among network externalities, e‐business adoption and information asymmetry.

A conceptual model was proposed and tested using 307 completed interview cases selected from a database of 2,075 Chinese international trading companies published by the Beijing Municipal Bureau of Commerce for this study.

The results indicated that network externalities significantly influenced e‐business adoption and information asymmetry, and e‐business adoption influenced information asymmetry through information sharing and collection. A split sample analysis showed that cultural contexts significantly moderated the interrelationships among network externalities, e‐business adoption, and information asymmetry.

Data for this study were collected only from mainland China, therefore, non‐Chinese companies (foreign‐owned) operating in China may have been influenced by Chinese cultures and some of them have been localizing their operations in China. The influences of network externalities on business performance and decision making remain unclear. In addition, data were collected from self‐reported questionnaires, and thus may be subject to self‐reporting bias. Future studies should use more objective measurements to reduce the potential for self‐reporting bias.

This study contributes significantly to the literature by providing empirical evidence on interrelationships among network externalities, e‐business adoption, and information asymmetry. The findings in this study also provide valuable insights for managers to better understand the influence of network externalities on e‐business adoption.

This study contributes significantly to the literature by providing empirical evidence of the interrelationships among network externalities, e‐business adoption, and information asymmetry. The findings also provide managers with valuable insight into better understanding of the nature of these interrelationships.

This paper seeks to examine the potential for regulation to reduce information asymmetries between firm insiders and outside investors.

Extensive prior research has established that there are substantial effects of information asymmetry in seasoned equity offers (SEOs). The paper tests for a mitigating effect of regulation on such information asymmetries by examining differences in long‐run operating performance, changes in that performance, and announcement‐period stock returns between unregulated industrial firms and regulated utilities that issue seasoned equity. The authors also segment the samples by firm size, since smaller firms are likely to have greater asymmetries.

Consistent with regulated utility firms having lower levels of information asymmetry, they have superior changes in abnormal operating performance than industrial firms pre‐ to post‐issue and their announcement period returns are significantly less negative. These findings are most pronounced for the smallest firms, firms likely to have the greatest information asymmetries and where regulation could have its greatest effect.

The paper does not examine costs of regulation. Thus, future research could seek to measure the cost/benefit trade‐off of regulation in reducing information asymmetry. Also, future research could examine cross‐sectional differences between different industries and regulated utilities.

Regulation reduces information asymmetry. Thus, regulation or mandated disclosure may be appropriate in industries/markets where information asymmetry is severe.

This paper is the first to compare the operating performance of regulated and unregulated SEO firms.