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This study reviews research that examines economic and behavioural consequences of CSR reporting regulations. Specifically, the authors evaluate the impact of CSR reporting regulations on (1) reporting quality, (2) capital-markets and (3) firm behaviour.

The authors first describe the stated objectives and enforcement level of CSR reporting regulations around the world. Second, the authors review over 130 archival studies in accounting, finance, economics, law and management that examine consequences of the regulations.

The stated objectives and enforcement of CSR reporting regulations vary considerably across countries. Empirical research finds no significant changes in reporting quality and generally concludes that CSR reporting continues to be ceremonial rather than substantive after the regulations – consistent with corporate legitimation and “greenwashing” views. In contrast, growing evidence shows both positive and negative capital-market and real effects of the regulations. Overall, the findings from this review indicate that, on balance, there remains a significant number of questions on the net effects of CSR reporting regulations.

The authors offer a comprehensive review of the literature examining consequences of CSR reporting regulations. The authors identify apparent tensions in studies assessing different outcomes after the regulations: between symbolic reporting and positive capital-market outcomes; between profitability and CSR; and between CSR and the welfare of non-shareholder groups. Additionally, we highlight differences in the scope and stated objectives of CSR regulations across countries, with the regulations often reflecting socio-economic development and national interests of implementing countries. Collectively, our review indicates that institutional details are crucial when considering the design or consequences of CSR reporting regulations and/or standards.

The purpose of this paper is to examine the effects of adoption of the mandatory International Financial Reporting Standards (IFRS) on the cost of equity capital in a unique Korean setting. In Korea, individual financial statements were taken as primary financial statements. Before the adoption of IFRS, consolidated financial statements were taken as supplementary financial statements.

The authors measure the cost of equity using the average estimates from the implied cost of capital models proposed by Claus and Thomas (2001), Gebhardt et al. (2001), Easton (2004) and Ohlson and Juettner-Nauroth (2005), using it as the primary dependent variable. Mandatory IFRS adoption, the independent variable in this study, is assigned a value of 1 for the post-adoption period and 0 otherwise.

Using a sample of listed Korean companies during the period from 2000 to 2013, the authors find evidence of a significant reduction in the cost of equity capital in Korean listed companies after mandatory adoption of the IFRS in 2011, after controlling for a set of market variables.

This study is one of a growing body of literature on the relations between mandatory IFRS adoption and the cost of equity capital (Easley and O’Hara 2004; Covrig et al. 2007; Lambert et al. 2007; Daske et al. 2008). According to the results of this study, increased financial disclosure and enhanced information comparability, along with changes in legal and institutional enforcement, seem to have had a joint effect on the cost of equity capital, leading to a large decrease in expected equity returns.

The study aims at reviewing a synthesis of disclosure, transparency, and International Financial Reporting Standards (IFRS) implementation in an attempt to provide directions for future research. Prior research overwhelmingly supports that the IFRS adoption or effective implementation of IFRS will enhance high-quality financial reporting, transparency, enhance the country’s investment environment, and foreign direct investment (FDI) (Dayanandan, Donker, Ivanof, & Karahan, 2016; Gláserová, 2013; Muniandy & Ali, 2012). However, some researchers provide conflicting evidence that developing countries implementing IFRS are probably not going to encounter higher FDI inflows (Gheorghe, 2009; Lasmin, 2012). It has also been argued that the IFRS adoption decreases the management earnings in countries with high levels of financial disclosure. In general, the study indicates that the adoption of IFRS has improved the financial reporting quality. The common law countries have strong rules to protect investors, strict legal enforcement, and high levels of transparency of financial information. From the extensive structured review of literature using the Scopus database tool, the study reviewed 105 articles, and in particular, the topic-related 94 articles were analysed. All 94 articles were retrieved from a range of 59 journals. Most of the articles (77 of 94) were published 2010–2018. The top five journals based on the citations are Journal of Accounting Research (187 citations), Abacus (125 citations), European Accounting Review (107 citations), Journal of Accounting and Economics (78 citations), and Accounting and Business Research (66 citations). The most-cited authors are Daske, Hail, Leuz, and Verdi (2013); Daske and Gebhardt (2006); and Brüggemann, Hitz, and Sellhorn (2013). Surprisingly, 65 of 94 articles did not utilise the theory. In particular, four theories have been used frequently: agency theory (15), economic theory (5), signalling theory (2), and accounting theory (2). The study calls for future research on the theoretical implications and policy-related research on disclosure and transparency which may inform the local and international standard setters.

In this paper we discuss the potential role capital markets will play in health care restructuring. According to theory, agency costs, asymmetric information and strategic interactions cause the cost of capital for nonprofit entities to slope upward. Freestanding nonprofits are particularly disadvantaged in this regard. We conclude that some organizational forms will be less viable due to problems of capital access. Empirical work examines the capital structure of nonprofit entities. Our results indicate that chain hospitals are able to access more debt, both taxable and tax-exempt, than freestanding hospitals. Capital markets also associate for profit market presence with capital risk. We conclude that freestanding hospitals are at a relative disadvantage is accessing capital markets.

Vega et al. (2020) find that incentives in executive compensation result in higher earnings informativeness. The discussion focuses on two areas for improvement. First, the authors could look into additional measures of earnings quality. This further analysis could help us understand whether the enhanced earning informativeness stems from capital market effects or real effects. Second, the authors could consider replacing their main earnings response coefficient (ERC) model with one of the alternative ERC models in the literature. Three different ERC models are discussed.

This paper discusses capital market effects versus real effects and illustrates different ERC models.

The discussed paper could differentiate between capital market effects and real effects and use an alternative ERC model.

An accounting audience could be interested in the discussion on capital market effects versus real effects and the illustration on various ERC models.

This study examines the direct (out‐of‐pocket) flotation costs of new capital issues by bank holding companies between 1980 and 1986 and the total costs including any market effects of security issuance. A regression model is developed that relates the direct selling costs to the type of security being issued, the exchange on which the parent bank holding company is traded, information specific to the issue, and information specific to the firm. The model is highly significant, explaining over 80 percent of the variation in issuing costs. These direct costs, however, are small for equity issues when compared to information effects (stock price responses). When these costs are included, the costs to bank holding companies of issuing equity increase substantially and the direct costs of issuing preferred and debt are, generally, more than offset by positive stock price effects.

The purpose of this paper is to model the volatility of treasury bill (T-bill) rates in five Sub-Saharan capital markets to investigate whether or not differences in capital mobility affect volatility.

Primary data was collected from weekly T-bill auctions in five Sub-Saharan countries and was analysed using a range of Generalised Autoregressive Conditional Heteroscedasticity (GARCH) models in order to determine the volatility characteristics of each of these instruments. Differences in the institutional arrangements for each market are used to interpret the results of the econometric analysis.

Evidence is presented that indicates that the size and financial liberalisation of capital markets affect volatility. While the markets with the greatest exposure to international investors exhibit greater volatility in the long-run, the presence of non-residents in the market appears to contribute to more efficient pricing of these instruments.

The limited sample restricts the ability to generalise these findings, however, the finding that differences exist in the volatility of these markets even though they are geographically similar indicates the value of this methodological approach.

The finding that greater capital mobility may result in increased volatility and greater efficiency has significant policy implications for governments and market regulators who have to weigh the costs and benefits of financial liberalisation.

The paper employs a unique data set to model the volatility characteristics of the selected T-bills to improve the understanding of the behaviour of these important instruments in Sub-Saharan frontier markets. More specifically the study provides a novel empirical approach to addressing the question of whether capital mobility is linked to increased volatility. The finding that capital mobility is linked to greater market efficiency offers a fresh insight to this debate.

Fiscal and monetary policies are essential to the development of a capital market. In this chapter, authors present how fiscal and monetary policy in Poland evolved and adjusted to economic challenges in 1998–2022. It is worth noticing that the Polish economy and financial market have been built from scratch after 45 years of socialism. Hence, it is scientifically interesting to study the relationship between fiscal and monetary policy, and capital market in a developing country, and in a relatively young economy.

Both – the macroeconomic policy mix and development of the capital market – are the subject of analysis how fiscal and monetary policy impacted the capital market. As so the main aim of the chapter is the assessment of the nexus and dependencies between fiscal and monetary policy and the capital market.

In the chapter, multiple linear regression was used for each dependent variable to discover which monetary and fiscal policy parameters significantly predicted selected variables describing the development of the capital market in Poland. Fiscal and monetary policy variables served as descriptors explaining capital market parameters in seven separate models.

Multiple regression models explain 77.3%–95.4% of the volatility of the capital market characteristics. The level of the central bank's reference rate is a variable that influences the capital market the most. In six out of seven models, the interest rate was a significant parameter. The development of the capital market was accompanied by a higher tax-to-GDP ratio. At the same time, a strong negative impact of the tax-to-GDP increase was noticed in domestic institutional investors' stock trading.

The purpose of this paper is to examine whether information on intellectual capital (IC) is value relevant for investors and the role played by the single components of IC (human capital, organizational capital, relational capital) in creating firm value.

The 1995 Ohlson model has been employed to investigate the relationship between the current accounting measures (book value and earnings) and future measures of profitability, proxied by IC. The Value Added Intellectual Coefficient (VAIC™) approach is used to determine the firm's efficiency in using IC resources. The sample analysis analyzed is constituted of financial sector companies listed on the Italian Stock Exchange for the period 2006‐2008.

The findings fully confirm the existence of a positive relationship between accounting values and market value on the one hand and IC components as measured by VAIC™ and market value on the other. Results show that investors attach more value relevance to human capital efficiency (HCE) than to structural capital efficiency (SCE) and that HCE plays an indirect role in the relation between IC and market value.

The paper is focused on one sector (financial) and one country (Italy). The focus on the entire financial sector allows the authors to validate results from an Italian perspective and to extend them for similar banking structures in other countries, and to favor comparisons with other similar studies.

The main implications for financial company managers are that, when developing a strategy aimed at strengthening IC, they should consider that human capital plays an indirect part with regard to the other components and that each investment in one of the IC subcategories should not be evaluated in isolation but in relation to its interactions.

The paper realizes a fusion between value relevance and IC literature. To the best of the authors' knowledge, this is the first paper that examines the relationship between VAIC™ and the market value of the Italian financial sector, using an Ohlson model modified to include IC information, comprehensive of the human capital indirect effect.

The purpose of this study is to investigate the effects of capital market liberalization on audit reporting and pricing. The authors use the announcement of the Shanghai-Hong Kong Stock Connect program in China as a shock to capital market liberalization.

The authors use the difference-in-differences method to study the difference in changes in the frequency of modified audit opinions and audit fees between the treatment group and the control group.

This study finds that capital market liberalization increases reputational and litigation risks for auditors and leads to more conservative audit reports. In addition, capital market liberalization stimulates the management of eligible firms to improve the information environment, helps to reduce information asymmetry and decreases audit fees. Specifically, the authors identify the channels of active foreign institutional investors as a new governance mechanism through which capital market liberalization impacts eligible firm and auditor decisions.

This study complements the literature by showing that capital market liberalization may bring a new and strong governance mechanism for eligible firms and auditors.

This study may provide new references for active foreign institutional shareholders as a new and strong governance mechanism in weak institutional regimes such as China, auditors’ optimization decisions when litigation risks increase and management’s improvements in the information environment under the monitoring of foreign institutional shareholders.

Overall, this study contributes to the literature by showing that capital market liberalization can bring a new governance mechanism for the management of eligible firms and auditors in a weak institutional environment. Foreign institutional shareholders may be superior to the domestic market forces and other corporate governance in the role of monitoring the management of eligible firms and auditors.