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Article
Publication date: 5 October 2021

Omar Farooq

This paper documents the effect of different types of information on the value of financial analysts.

Abstract

Purpose

This paper documents the effect of different types of information on the value of financial analysts.

Design/methodology/approach

The authors use the pooled OLS regression and the data of nonfinancial firms from France to test our hypotheses. The data covers the period between 1997 and 2019.

Findings

The results show that analysts are more likely to cover those firms that incorporated greater proportion of market-wide information in their prices. Consistent with the economies of scale view, the authors argue that analysts specialize in the interpretation market-wide information. By doing so, they are able to cover relatively large number of firms simultaneously. The results also show that the value of analyst coverage (measured as the impact of analyst coverage on firm value, probability of stock price crash and probability of stock price jump) is a function of the extent to which different types of information are incorporated in prices. The authors’ results suggest that the impact of analyst coverage on firm value and on probability of crash is less pronounced in firms that incorporate greater proportion of market-wide information. In case of probability of jump, the results show that the impact of analyst coverage is more pronounced firms that incorporate greater proportion of market-wide information.

Originality/value

The major contribution of this paper is to document the impact of different types of information on the extent of analyst coverage. Furthermore, this paper also uses various measures (the impact of analyst coverage on firm value, probability of stock price crash and probability of stock price jump) to show how different types of information affects the value of analyst coverage.

Details

Journal of Economic and Administrative Sciences, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1026-4116

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Article
Publication date: 7 October 2021

Xuebing Dong, Xin Wen, Kui Wang and Chuangneng Cai

Negative media coverage has important impacts on firm financial performance, but existing studies have inconsistent views of this relationship and lack a unified…

Abstract

Purpose

Negative media coverage has important impacts on firm financial performance, but existing studies have inconsistent views of this relationship and lack a unified theoretical framework to explain how such impacts arise. This study aims to bridge this gap in the literature.

Design/methodology/approach

This study uses two sets of data encompassing publicly listed companies in Shanghai and Shenzhen stock exchanges from 2013 to 2019, which are covered by the China Stock Market and Accounting Research Database.

Findings

This study finds that the number of negative news coverages has an inverted U-shaped relationship with firm financial performance; this relationship is weakened by the proportion of shares held by institutional investors and strengthened by advertising intensity.

Practical implications

This study suggests that corporate executives should be aware of the potential value of a limited amount of negative news coverage and react with tolerance and caution when their companies encounter it.

Originality/value

This study uses two different routes provided in the elaboration likelihood model theory to fully explain the processes underlying changes in investors’ attitudes toward firms experiencing negative media coverage.

Details

Journal of Business & Industrial Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 31 August 2021

Omar Farooq, Harit Satt and Fatimazahra Bendriouch

This paper aims to document the relationship between advertising expenditures and analyst coverage in a sample of Indian firms during the period between 2000 and 2019.

Abstract

Purpose

This paper aims to document the relationship between advertising expenditures and analyst coverage in a sample of Indian firms during the period between 2000 and 2019.

Design/methodology/approach

In order to test the effect of advertising expenditures on the extent of analyst coverage, the authors estimate various versions of pooled ordinary least squares (OLS) regression. The dependent variable (ANALYST) measures the total number of analysts covering a firm in a given year. The main independent variable of interest in this paper represents the advertising activity. The authors define the extent of advertising activity (ADVERT) as the ratio of total advertising expenditures and total assets.

Findings

The study’s results show that advertising expenditures have a significantly positive impact on the extent of analyst coverage and are robust across various proxies of the key variables and various estimation procedures.

Practical implications

There are a number of key takeaways from our study. First, firms that expend more resources on advertising are more likely to be followed by analysts which is associated with better performance, lower information asymmetries associated and high advertising expenditures. Second, stock prices with more information embedded in them may signify that these firms receive more attention from investors and have lower information asymmetries. And finally the impact of advertising on the decision of an analyst to cover a firm becomes more pronounced for firms with high stock price synchronicity. All these three main conclusions are giving investors a clear insight on analyst coverage, advertising expenditure and the link between the two.

Originality/value

The results are consistent with the argument that advertising expenditures induces analysts to cover firms because firms with high advertising activities are more likely to have better performance, lower information asymmetries and increased attention from investors. All of these factors are supposed to facilitate the analyst coverage.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 14 September 2021

Radwan Hussien Alkebsee and Ahsan Habib

Drawing on the premise that the media play a vital corporate governance role, this paper aims to investigate the association between media coverage and financial report…

Abstract

Purpose

Drawing on the premise that the media play a vital corporate governance role, this paper aims to investigate the association between media coverage and financial report restatements.

Design/methodology/approach

Based on a sample of Chinese listed companies over the period 2011–2015, the authors use ordinary least squares regression as well as a number of additional tests. To mitigate the endogeneity issue, the authors use a two-stage Heckman test and a propensity score matching model.

Findings

The authors document a negative and significant association between media coverage and restatements, suggesting that firms with high media coverage engage less in financial restatements. The authors further explore the moderating effects of internal control quality and state ownership on the association between media coverage and restatements. Regression results reveal that the governance role of the media is more pronounced for state-owned enterprises than for private firms. However, no significant difference in the disciplining effect of media coverage is found for firms with high, versus low, internal control quality.

Originality/value

The role of the media in corporate governance and financial reporting quality has been well documented. In emerging economies, such a role has been overlooked. As a result, the purpose of this study is to fill that void. Furthermore, prior research ignores the impacts of state ownership and the internal control environment on the media's governance role.

Details

Asian Review of Accounting, vol. 29 no. 4
Type: Research Article
ISSN: 1321-7348

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Article
Publication date: 5 September 2021

Li Gao, Jinnan Song, Jianxiao Guo and Jiajuan Liang

Share pledge is a popular way to raise funds in China, but it aggravates information asymmetry. As an indispensable information intermediary in the financial market, media…

Abstract

Purpose

Share pledge is a popular way to raise funds in China, but it aggravates information asymmetry. As an indispensable information intermediary in the financial market, media coverage affects asset price and pricing efficiency and impacts information asymmetry. This study aims to explore the governance role of media coverage as an information intermediary in the share pledge context in China.

Design/methodology/approach

Moderating effect and mediating effect analyses are the primary methods used to test the governance role of media coverage. The ordinary least squares model was used to test the relationship between share pledge and market performance and then proved the moderating effect of media coverage toward the corporate market value of pledge firms. Accounting earnings value relevance models were explored to test the path of media coverage on firm market value by mediating effect analysis. At last, subgroup tests were used to verify the heterogeneity of the moderating effect of media coverage.

Findings

In the context of share pledge in China, the higher the share pledge ratio, the higher is the market value of listed firms, which verifies the motivation of controlling shareholders to avoid the transfer of control right and the motivation to tunneling. Media coverage has a significant negative moderating effect on the relationship between share pledge rate and corporate value and has a significant impact on the accounting earnings value relevance of share pledge firms. From the perspective of long-term earnings, media coverage reduces the market performance of share pledge firms by reducing the value correlation of accounting earnings information. From the short-term price point of view, media coverage reduces the market performance of share pledge firms by improving the value correlation of accounting earnings information. Furthermore, media coverage has a more significant moderating effect in state-owned share pledge firms and low information transparency and low information disclosure quality firms.

Research limitations/implications

This paper does not distinguish the mode difference of spreading news and the impact of non-pledge media coverage. Also, this paper does not consider factors other than accounting information value relevance when exploring how media coverage affects the corporate market value. Share pledge firms should use media for publicity and play a role in media governance and should actively improve their information disclosure quality, strengthen communication with investors and reduce information asymmetry fundamentally.

Practical implications

This paper diversify the governance choices for share pledge firms and has important implications for firms, investors, information intermediaries and regulators. Media reports play an increasingly important role today, and any reports and predictions of major events may profoundly affect investors’ decisions. Although media reports can make up for the weakness of accounting information disclosure of equity pledge companies in some sense, it is still not a long-term strategy. Equity pledge companies should not only make use of media for publicity and play a role of media governance but also actively improve their information disclosure quality.

Originality/value

This paper focuses on share pledge firms to carry out in-depth research. Based on exploring the influence mechanism of share pledges, the authors find the importance of media governance. This paper expands the literature about the economic consequences of share pledges and provides empirical data for media governance of share pledge firms. This paper innovatively proves the governance role of media coverage from the view of accounting information value relevance. The main innovation point is the long and short-term perspective analysis of the influence of media coverage on the correlation of accounting earnings value. The heterogeneity effect analysis of media coverage also reflects the depth and strong practical guiding significance of this study.

Details

Chinese Management Studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1750-614X

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Article
Publication date: 25 August 2021

Clayton P. Michaud

This paper examines the effect of overconfident yield forecasting (optimism bias) on crop insurance coverage level choices across both yield and revenue insurance.

Abstract

Purpose

This paper examines the effect of overconfident yield forecasting (optimism bias) on crop insurance coverage level choices across both yield and revenue insurance.

Design/methodology/approach

This study simulates a representative producer’s preferred coverage level for both yield and revenue insurance under three potential models of decision-making and four potential manifestations of overconfident yield forecasting. The study then uses this framework to examine how coverage level choices change as overconfidence increases (decreases).

Findings

As overconfidence increases, producers prefer lower levels of crop insurance coverage than they would otherwise prefer, with extreme overconfidence inducing farmers to buy no insurance at all. While overconfidence affects cross-coverage demand for revenue and yield insurance similarly, this effect is more pronounced for yield insurance. Cross-coverage level demand for revenue insurance is relatively stable across changes in the correlation between prices and yields.

Practical implications

This research has important implications for crop insurance subsidy design and crop insurance demand modeling.

Originality/value

There is a growing body of literature suggesting that producers are overconfident with regard to their future yield risk and that this bias reduces their willingness to pay for risk management tools such as crop insurance. This is the first study to look at how such overconfidence affects cross-coverage level demand for crop insurance.

Details

Agricultural Finance Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0002-1466

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Article
Publication date: 11 June 2021

David Lynn Painter, Brittani Sahm and Paul Schattschneider

This investigation's purpose is to compare coverage of the corporate social responsibility (CSR) behaviors of the National Women's Soccer League (NWSL) and Major League…

Abstract

Purpose

This investigation's purpose is to compare coverage of the corporate social responsibility (CSR) behaviors of the National Women's Soccer League (NWSL) and Major League Soccer (MLS). The goals are (1) to extend CSR analyses beyond organizational reports and (2) to compare coverage of professional sports teams' CSR behaviors across genders.

Design/methodology/approach

Specifically, this quantitative content analysis compared local newspaper coverage of the socially responsible behaviors of the three NWSL and MLS teams owned and operated by the same organizations in Portland, Houston and Orlando.

Findings

The NWSL teams received significantly less and more negative coverage than the MLS teams. Moreover, the NWSL coverage was more individualistic, more focused on ethics and quoted individual team players more frequently, while the MLS coverage was more collective, focused on philanthropy and quoted team organization members more frequently.

Research limitations/implications

Although intentionally based on a sample of six teams, this study's results suggest the biases in coverage of women's sports teams extend beyond the playing field to their corporate social responsibility behaviors, reporting and news coverage.

Originality/value

As one of the first studies to analyze media coverage of professional sports team's CSR activities and to compare their socially responsible behaviors across genders, the results provide compelling implications for CSR scholars and practitioners, especially in the sports industry.

Details

Corporate Communications: An International Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1356-3289

Keywords

Content available
Article
Publication date: 18 June 2021

Thang Ngoc Bach, Hung Ly Dai, Viet Hung Nguyen and Thanh Le

This paper examines the effects of sub-national union coverage on the youth's labor market outcomes.

Abstract

Purpose

This paper examines the effects of sub-national union coverage on the youth's labor market outcomes.

Design/methodology/approach

In the context of the private business sector in Vietnam, this study link individual labor market data with union coverage at provincial level in the period 2013–2016 to investigate the effects of sub-national union coverage on the youth's labor market outcomes. Contingent on the outcome variable, we use the OLS and probit model that control for diverse individual characteristics, year- and industry-fixed effects, and particularly control for selection bias in the labor market.

Findings

The empirical results show that the union coverage is positively associated with a wide range of the youth's labor market outcomes, including employment status, wage rate, work hour, and job formality. Also, the coverage is complementary to individual labor contract in determining the youth's wage rate.

Originality/value

This study provides an in-depth study on the interplay between trade union and the youth's labor market outcomes that contributes to the literature of labor market institutions and youth employment policies in a dynamic transitional economy of Vietnam.

Details

Journal of Economics and Development, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1859-0020

Keywords

Content available
Article
Publication date: 28 June 2021

Moirangthem Hemanta Meitei and Haobijam Bonny Singh

The paper aims to analyze the coverage of health insurance and its correlates in the north-eastern region of India.

Abstract

Purpose

The paper aims to analyze the coverage of health insurance and its correlates in the north-eastern region of India.

Design/methodology/approach

The study accessed the raw data of the National Family Health Survey (NFHS-4) (2015–16), which was an extensive, multiround survey conducted in a representative sample of households throughout India, which included socioeconomic, demographic and information on coverage of health insurance of any member of the household. The multivariate analysis of logistic regression was adopted to find the correlates of health insurance for all the eight (8) north-eastern states of India.

Findings

The results observed that among the north-eastern states, the coverage of health insurance was highest in Arunachal Pradesh (59%) followed by Tripura (58%), Mizoram (47%) surpassing the all India level of 27%, whereas the lowest was in Manipur (4%) followed by Nagaland (6%) and Assam (10%). The multivariate analysis of logistic regression found that the socioeconomic and demographic factors, households with a bank account and below poverty line (BPL) cardholders played a significant role in the coverage of health insurance in the north-eastern states of India.

Research limitations/implications

The study focuses only on the coverage and correlates of health insurance. Further evaluation studies on each scheme of the social health insurance are needed for proper assessment of the health insurance schemes in the region.

Practical implications

There has been evidence around the world (South Korea, Taiwan and Thailand) that health insurance could be a protective shield from the entrapment into poverty due to high health expenditure. The NFHS-4 put up the finding that in the north-eastern part of India, the coverage of health insurance had been low. This implied that the region could fall into poverty due to high medical expenses on health. Taking account of multiple health insurance providers, risk pooling and consolidation of health insurance providers have become the need of the hour.

Originality/value

The study is different from other studies of health insurance since it covered all the eight (8) north-eastern states of India, which are ethnically, culturally and historically distinct from the rest of India in general and within the region and states in particular and examines the impact of each of the independent variables with the dependent variables. The study has shown that the variation in health insurance coverage associated with socioeconomic and other household-level demographic attributes (although not very strong).

Details

Journal of Health Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0857-4421

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Article
Publication date: 17 June 2021

Yang Ji, Erhua Zhou and Wenbo Guo

Anchored in the role of a social arbiter, the purpose of this study is to examine whether and how media coverage has an impact on CEO overconfidence and further explore…

Abstract

Purpose

Anchored in the role of a social arbiter, the purpose of this study is to examine whether and how media coverage has an impact on CEO overconfidence and further explore how media ownership and Confucianism affect the relationship in the Chinese context.

Design/methodology/approach

Using a sample of 1,492 Chinese listed companies from 2010 to 2015, the study adopts random effects models to empirically analyze the effect of media coverage on CEO overconfidence and the roles of media ownership and Confucianism.

Findings

The paper finds that media coverage is significantly and positively associated with CEO overconfidence, and the positive relationship between media coverage and CEO overconfidence becomes stronger for state-controlled media. What is more, the influence of media coverage on CEO overconfidence is attenuated for those firms located in stronger Confucianism atmosphere. A further analysis reveals that different tenors of media coverage yield asymmetric effects.

Originality/value

The paper provides a new and solid support for the argument that media praise stimulates CEO overconfidence and increases the knowledge about under what conditions CEO overconfidence varies, broadly speaking which fosters the development of upper echelons theory (UET). Meanwhile, the results extend the literature on media effect and information processing. The findings are also beneficial to improve corporate decisions and government regulation on Chinese media systems.

Details

Cross Cultural & Strategic Management, vol. 28 no. 4
Type: Research Article
ISSN: 2059-5794

Keywords

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