Search results

1 – 10 of over 10000
Click here to view access options
Article
Publication date: 5 October 2015

Liang Song

This study aims to examine the effects of firms’ accounting disclosure policies on stock price synchronicity and stock crash risk, using a sample including 13 emerging…

Downloads
2935

Abstract

Purpose

This study aims to examine the effects of firms’ accounting disclosure policies on stock price synchronicity and stock crash risk, using a sample including 13 emerging markets. Furthermore, this research investigates how these relationships are affected by country-level investor protection and firm-level governance rankings.

Design/methodology/approach

This paper uses accounting disclosure measures constructed based on survey questions by Credit Lyonnais Securities Asia (2001, CLSA). The accounting disclosure measure is used to explain the two dependent variables, stock price synchronicity and stock crash risk. The stock price synchronicity measure is defined as the logistic transformation of R2 following Hutton et al. (2009) and Jin and Myers (2006). R2 is taken from the estimation of an extended market model. The stock crash risk variable is measured as the frequency difference between extremely negative and positive stock return residues following Jin and Myers (2006). These stock return residues are taken from the estimation of an extended market model. Because the CLSA firm-level disclosure data are from 2000, this paper matches other data taken from the same year, for consistency. The final sample includes 204 observations in 13 emerging countries.

Findings

This paper finds that firms’ stocks are less synchronized with the entire market and have less crash risk if firms have superior accounting disclosure policies. These results suggest that the cost to collect firm-specific information may be decreased for investors if firms are more transparent. Thus, these firms’ stocks have more firm-specific information content. These results also suggest that management is less likely to hide some negative information and release such negative information suddenly in the future if firms have higher levels of accounting disclosure. Thus, these firms’ stocks are less likely to crash. In addition, the influences of firms’ accounting disclosure policies on stock price synchronicity and crash risk are more significant for firms with superior country-level investor protection and firm-level governance rankings. These results imply that external investors place more value on accounting disclosure by well-governed firms because firms with superior governance standards are less likely to intentionally disclose misleading information. Thus, these firms’ stocks can incorporate more firm-specific information and have less crash risk.

Originality/value

The current study is the first to show that the effects of accounting disclosure on stock price synchronicity and crash risk are more pronounced for firms with superior country-level investor protection and firm-level governance standards. Thus, this research extends the literature by providing a comprehensive picture of the influences of accounting disclosure on stock markets. In addition, the existing literature (Chen et al., 2006; Durnev et al., 2004) shows that firms with lower stock price synchronicity are associated with higher investment efficiency because managers invest based on the information in stock prices. Obviously, higher stock crash risk is highly related to higher bankruptcy risk for firms. Thus, examining the effects of accounting disclosure on stock price synchronicity and stock crash risk is of obvious importance to policy makers.

Details

International Journal of Accounting & Information Management, vol. 23 no. 4
Type: Research Article
ISSN: 1834-7649

Keywords

Click here to view access options
Article
Publication date: 26 October 2021

Xin Jin, Shangkun Liang and Junli Yu

This study provides empirical support for the cultural economics model between executive team and firm performance and offers important implications for policy selection…

Abstract

Purpose

This study provides empirical support for the cultural economics model between executive team and firm performance and offers important implications for policy selection and appointment of managers in China.

Design/methodology/approach

From the perspective of relationship embeddedness, the authors explore the impact of management geographical proximity (GP) on stock price crash risk in China. Using archival data from China's unique dataset about birthplace culture, the authors find that management GP experiences a large increase in corporate stock price crash risk for the period 2009–2018.

Findings

The impact of management GP on stock price crash risk is more pronounced when the company is located in areas with weaker formal legal environment and stronger Confucian culture. Furthermore, the impact has a significant links with firm characteristics such as information transparency, over-investment and tax aggressiveness.

Originality/value

First, the research extends the literature on the empirical determinants of stock price crash risk. These studies focus on formal institution, not on informal institution, such as relational culture. Second, the research provides evidence for economic consequences on relational governance from executive birthplace culture to explore the economic consequences of geographical relational governance but takes stock price crash risk to present executives' behavior strategies and market reaction via exploring asymmetrical variation of market stock price. Finally, the paper provides reference to corporate governance arrangement and executive appointment.

Details

China Finance Review International, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2044-1398

Keywords

Click here to view access options
Book part
Publication date: 17 November 2000

Patrick McCarthy

Abstract

Details

Structural Road Accident Models
Type: Book
ISBN: 978-0-08-043061-4

Click here to view access options
Book part
Publication date: 18 April 2018

Dominique Lord and Srinivas Reddy Geedipally

Purpose – This chapter provides an overview of issues related to analysing crash data characterised by excess zero responses and/or long tails and how to overcome these…

Abstract

Purpose – This chapter provides an overview of issues related to analysing crash data characterised by excess zero responses and/or long tails and how to overcome these problems. Factors affecting excess zeros and/or long tails are discussed, as well as how they can bias the results when traditional distributions or models are used. Recently introduced multi-parameter distributions and models developed specifically for such datasets are described. The chapter is intended to guide readers on how to properly analyse crash datasets with excess zeros and long or heavy tails.

Methodology – Key references from the literature are summarised and discussed, and two examples detailing how multi-parameter distributions and models compare with the negative binomial distribution and model are presented.

Findings – In the event that the characteristics of the crash dataset cannot be changed or modified, recently introduced multi-parameter distributions and models can be used efficiently to analyse datasets characterised by excess zero responses and/or long tails. They offer a simpler way to interpret the relationship between crashes and explanatory variables, while providing better statistical performance in terms of goodness-of-fit and predictive capabilities.

Research implications – Multi-parameter models are expected to become the next series of traditional distributions and models. The research on these models is still ongoing.

Practical implications – With the advancement of computing power and Bayesian simulation methods, multi-parameter models can now be easily coded and applied to analyse crash datasets characterised by excess zero responses and/or long tails.

Details

Safe Mobility: Challenges, Methodology and Solutions
Type: Book
ISBN: 978-1-78635-223-1

Keywords

Click here to view access options
Book part
Publication date: 20 June 2017

David Shinar

Abstract

Details

Traffic Safety and Human Behavior
Type: Book
ISBN: 978-1-78635-222-4

Click here to view access options
Book part
Publication date: 18 April 2018

Simon Washington, Amir Pooyan Afghari and Mohammed Mazharul Haque

Purpose – The purpose of this chapter is to review the methodological and empirical underpinnings of transport network screening, or management, as it relates to improving…

Abstract

Purpose – The purpose of this chapter is to review the methodological and empirical underpinnings of transport network screening, or management, as it relates to improving road safety. As jurisdictions around the world are charged with transport network management in order to reduce externalities associated with road crashes, identifying potential blackspots or hotspots is an important if not critical function and responsibility of transport agencies.

Methodology – Key references from within the literature are summarised and discussed, along with a discussion of the evolution of thinking around hotspot identification and management. The theoretical developments that correspond with the evolution in thinking are provided, sprinkled with examples along the way.

Findings – Hotspot identification methodologies have evolved considerably over the past 30 or so years, correcting for methodological deficiencies along the way. Despite vast and significant advancements, identifying hotspots remains a reactive approach to managing road safety – relying on crashes to accrue in order to mitigate their occurrence. The most fruitful directions for future research will be in the establishment of reliable relationships between surrogate measures of road safety – such as ‘near misses’ – and actual crashes – so that safety can be proactively managed without the need for crashes to accrue.

Research implications – Research in hotspot identification will continue; however, it is likely to shift over time to both closer to ‘real-time’ crash risk detection and considering safety improvements using surrogate measures of road safety – described in Chapter 17.

Practical implications – There are two types of errors made in hotspot detection – identifying a ‘risky’ site as ‘safe’ and identifying a ‘safe’ site as ‘risky’. In the former case no investments will be made to improve safety, while in the latter case ineffective or inefficient safety improvements could be made. To minimise these errors, transport network safety managers should be applying the current state of the practice methods for hotspot detection. Moreover, transport network safety managers should be eager to transition to proactive methods of network safety management to avoid the need for crashes to occur. While in its infancy, the use of surrogate measures of safety holds significant promise for the future.

Details

Safe Mobility: Challenges, Methodology and Solutions
Type: Book
ISBN: 978-1-78635-223-1

Keywords

Click here to view access options

Abstract

Details

The Handbook of Road Safety Measures
Type: Book
ISBN: 978-1-84855-250-0

Click here to view access options

Abstract

Details

Traffic Safety and Human Behavior
Type: Book
ISBN: 978-1-78635-222-4

Click here to view access options
Book part
Publication date: 5 October 2007

David Shinar

Abstract

Details

Traffic Safety and Human Behavior
Type: Book
ISBN: 978-0-08-045029-2

Click here to view access options
Book part
Publication date: 5 October 2007

David Shinar

Abstract

Details

Traffic Safety and Human Behavior
Type: Book
ISBN: 978-0-08-045029-2

1 – 10 of over 10000