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Article
Publication date: 8 May 2017

Dimitrios V. Kousenidis

This paper aims to examine whether the release of news about policy interventions by the troika [European Union (EU)/the European Central Bank (ECB)/International Monetary…

Abstract

Purpose

This paper aims to examine whether the release of news about policy interventions by the troika [European Union (EU)/the European Central Bank (ECB)/International Monetary Fund (IMF)] in the crisis-affected EU countries (Cyprus, Greece, Ireland, Italy, Portugal and Spain) and whether the policy responses of these countries’ governments had impacts on the return and risk of stocks in the financial and real-economy sectors of these countries.

Design/methodology/approach

The paper uses a broad set of news announcements concerning the troika authorities’ policy interventions and the policy responses of the affected Eurozone states’ governments. To test for the risk and return effects of these announcements during the crisis period, a set of regression equations is estimated under a difference-in-difference approach using intercept and slope dummy variables for news releases from troika authorities and from the national governments of the six EU countries. This enables unraveling the effects of the crisis (first difference) and the effects of news announcements (second difference).

Findings

The results indicate that the involvement of the troika managed to reverse some of the unfavourable market effects of the crisis. Moreover, the policy response of national governments was found to have stronger favourable effects in the markets of the affected countries implying that investors likely waited for the response of the national governments before they reacted to the policy actions of the troika. The simultaneous release of news from the troika and from national governments had adverse effects on the returns and risk of the firms in the real economy sectors, suggesting that cross-news announcements conveyed negative information in the markets.

Originality/value

The paper provides evidence on the effects of policy-related news announcements on the development of the recent sovereign debt crisis in Europe. This issue is highly important, as it can reveal the effectiveness of the IMF’s and EU authorities’ policy interventions in affected Eurozone member states during the first major crisis in Europe since the monetary union.

Abstract

Details

Managerial Finance, vol. 31 no. 2
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 1 August 2006

Dimitrios V. Kousenidis

This paper reports an attempt to design a free cash flow version of the cash flow statement. In specific, the paper relates the comprehensive income concept to the…

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6919

Abstract

Purpose

This paper reports an attempt to design a free cash flow version of the cash flow statement. In specific, the paper relates the comprehensive income concept to the definition of free cash flows and shows how free cash flows and residual income can be calculated from the cash flow statement.

Design/methodology/approach

This paper exhibits how this different version of the cash flow statement can be reported by illustrating the differences with the form of the statement required by the regulatory accounting bodies.

Findings

This paper shows that the cash flows resulting from operating and investing activities are exactly equal to the cash flows received by debt and equity holders (financing activities) by using a simple definition of a company's free cash flow.

Practical implications

The method used requires a different version of a cash flow statement in which all financing related cash flows, such as interest expense is not included in the cash flow from operating activities. This version of the cash flow statement can be used in order to evaluate and appreciate financial policy formulation.

Originality/value

The paper provides to the shareholders and all the parties who are interested in firm and its operation (managers, lenders etc) with information about the company's ability to distribute dividends, to issue new debt and in general the company's ability to meet its obligations.

Details

Managerial Finance, vol. 32 no. 8
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 1 August 2006

Dimitrios V. Kousenidis, Christos I. Negakis and Iordanis N. Floropoulos

– To review the disclosure requirements for cash flow reporting in Greece and the willingness of Greek companies to voluntarily disclose cash flow information.

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2439

Abstract

Purpose

To review the disclosure requirements for cash flow reporting in Greece and the willingness of Greek companies to voluntarily disclose cash flow information.

Design/methodology/approach

The empirical research was conducted on a sample of 97 Greek firms listed in the Athens Stock Exchange by examining the relation between cash flows and other measures of profitability for year 1994 when IAS No. 7 was set in effect.

Findings

The results show that despite the fact that cash flows are more informative than an accruals definition of profits, in deciding about financial policy issues Greek companies show an increased preference to funds flows defined in terms of working capital.

Practical implications

The publication of a cash flow statement may reveal that many listed companies in Greece are not as robust as the balance sheet and the income statement potentially indicates. Thus, the main conclusion of the paper is that publication of the cash flow statement in Greece should become mandatory.

Originality/value

The present study shows that, despite the desire of the regulatory authorities that investors receive adequate and relevant information, voluntarily cash flow disclosure is not apparent in Greece because cash flows reveal financial problems that other measures of performance do not. Thus, it provides directions for standard setters in making mandatory the publication of cash flow statement in Greece.

Details

Managerial Finance, vol. 32 no. 8
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 16 March 2012

Panagiotis E. Dimitropoulos, Dimitrios Asteriou and Costas Siriopoulos

The purpose of this paper is to consider the impact of the drachma's replacement by the euro on the quality of accounting information published by Greek listed firms.

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1855

Abstract

Purpose

The purpose of this paper is to consider the impact of the drachma's replacement by the euro on the quality of accounting information published by Greek listed firms.

Design/methodology/approach

The authors examined how the adoption of the euro currency impacted on the timeliness of income recognition and the relevance of accounting information during the pre and post euro adoption periods using a sample of 176 listed firms over the period 1995‐2008.

Findings

Convincing evidence was found that the euro contributed to a decrease on the value relevance of accounting information, an increase in the conservatism of financial statements and finally a reduction in the earnings management behavior of managers.

Practical implications

By considering the impact of the common currency on the quality of accounting information, analysts are more able to provide accurate estimates on firms' future prospects, thus contributing to less information asymmetries among stock market participants.

Social implications

The results could be proved useful to regulators since they indicate that financial accounting information prepared after the adoption of the euro currency has inferior value relevance. Therefore, if regulators want to develop an efficient financial market they need to address this effect by developing relative legislation that promotes the quality of accounting information.

Originality/value

The majority of studies on the issue of the euro have focused on matters of macroeconomic stability, corporate investments and valuation and market integration. No research until now has studied the impact of euro adoption on the quality of accounting information and how accounting quality is perceived by market participants during the pre and post‐euro adoption periods.

Details

Managerial Auditing Journal, vol. 27 no. 3
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 10 May 2018

Dimitrios Kyrkilis, Athanasios Koulakiotis, Vassilios Babalos and Maria Kyriakou

The purpose of this paper is to examine the hypothesis of feedback trading along with the short-term return dynamics of three size-based stock portfolios of Athens Stock…

Abstract

Purpose

The purpose of this paper is to examine the hypothesis of feedback trading along with the short-term return dynamics of three size-based stock portfolios of Athens Stock Exchange during the Greek debt crisis period.

Design/methodology/approach

To this end, the authors employ for the first time in the literature two well-known models while the variance equation is modeled by means of a multivariate EGARCH specification. As a robustness test an innovative nested-EGARCH model is also employed.

Findings

The assumption that positive feedback trading is an important component of the short-term return movements across the three stock portfolios receives significant support. Moreover, the volatility interdependence, both in magnitude and sign, is almost similar across the three models. Finally, bad news originating from the portfolio of small stock appears to have a higher impact on the volatility of large and medium size stock returns than good news during the Greek debt crisis period.

Originality/value

The methodology is innovative and the authors test for the first time the feedback trading hypothesis across different size stocks. The authors believe that the results might entail significant policy implications for investors and market regulators.

Details

International Journal of Managerial Finance, vol. 14 no. 5
Type: Research Article
ISSN: 1743-9132

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Article
Publication date: 31 December 2020

Antonios Chantziaras, Emmanouil Dedoulis, Vassiliki Grougiou and Stergios Leventis

Corporate social responsibility (CSR) reporting has been theorized as a key communication device and an integral part of a broader stakeholder integration management…

Abstract

Purpose

Corporate social responsibility (CSR) reporting has been theorized as a key communication device and an integral part of a broader stakeholder integration management strategy. This paper aims to examine the relationship between CSR disclosures and organized labor, an important internal stakeholder, whose institutional role in dynamically advancing employee interests creates opportunities and challenges for strategic management and firm sustainability.

Design/methodology/approach

By using a sample of 2,526 US firm-year observations for the period 2002–2015, the authors demonstrate that managers in unionized contexts are more likely to issue CSR reports than managers in firms, where labor is not organized.

Findings

The authors demonstrate that managers in unionized contexts are more likely to issue CSR reports than managers in firms where labor is not organized. Considering stakeholder theory, they argue that, in unionized contexts, managers more intensively resort to CSR disclosures to form an alignment of interests, develop collaborative bonds with unions and smoothen relationships with external financial stakeholders. This effect is more prominent in areas where corporate spatial clustering and the prevailing political ideology facilitate the role of unions.

Research limitations/implications

First, the data refer to USA, which may limit the generalization of the results. Hence, researchers could use cross-country datasets to overcome this limitation. Second, it would be important to know what benefits are enjoyed by the unionized companies that issue CSR reports. Third, they acknowledge that there is useful qualitative information they do not analyze. This analysis could potentially relate specific CSR information to unions’ needs and demands. Further, there are alternative channels through which companies disclose relevant information such as 10-K filings, annual reports, firm websites, media, public announcements, etc. These are not captured by the data.

Practical implications

Managers could benefit from the empirical analysis, which suggests that through the initiation of CSR reports a dialogue with unions is greatly facilitated. Managers should consider that CSR reports reduce information asymmetries and may attract the interest of investors. Unionists should be aware that CSR reports constitute an opportunity to identify mutual interests and align goals. Business analysts, investors and shareholders should be aware that standalone CSR reports are used by managers to reduce information asymmetries and disparities with unions and to communicate an investment-friendly context. So, market participants should factor such policies by unionized firms into their investment analyses.

Social implications

The authors offer implications for managers, labor unionists and market participants.

Originality/value

This paper examines the relationship between CSR disclosures and organized labor, an important internal stakeholder, whose institutional role in dynamically advancing employee interests creates opportunities and challenges for strategic management and firm sustainability.

Details

Sustainability Accounting, Management and Policy Journal, vol. 12 no. 2
Type: Research Article
ISSN: 2040-8021

Keywords

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