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This paper aims to investigate the association between negative tone in annual report narratives and future performance in the UK context. Under the principle-based approach in the UK, managers tend to bias the tone of narrative reports upward, as the reporting regime is more flexible than the rule-based approach in the USA. Consequently, any negative disclosure not mandated by regulators conveys credible information about a firm’s prospects.

This paper uses a sample of UK FTSE all-share non-financial companies from 2010 to 2019. The authors use the textual-analysis approach based on Loughran and McDonald (2011)’s wordlist (LM) to measure the negative tone in UK annual reports.

The results show a significant negative association between negative tone and future performance. Moreover, our further analyses suggest that only the negativity in the executive section of the annual disclosures correlates significantly with future performance. In summary, this study suggests that negativity does matter under the principle-based approach and can be used as an indicator of future performance.

In contrast to the literature arguing that only positivity has the power to affect a firm’s outcomes under the principle-based approach, the authors provide new empirical evidence suggesting that negativity also matters within the UK context and can be used as an indicator for future performance. Also, to the best of the authors’ knowledge, this is the first study to identify which section of the annual report is more informative about a firm’s future performance.

The purpose of this paper is to investigate the association between unemployment insurance (UI) benefits and firms’ future performance as well as the association between UI benefits and volatility of firms’ future performance.

Quantitative analyses are used to perform empirical testing, and the variables in this study have been selected from previous literature. Empirical data consists of UI benefits data published from 2003 to 2012 on the US Department of Labor website, accounting data from Compustat, and stock return data from CRSP.

Unemployment benefits are positively associated with firms’ future earnings and cash flows. Also, unemployment benefits are negatively associated with volatility of firms’ future earnings and cash flows. Finally, the positive association between unemployment benefits and firms’ future performance is more pronounced for firms with larger changes in labor force, and the negative association between unemployment benefits and volatility of firms’ future performance is more pronounced for firms with higher labor force volatility and capital structure volatility.

To the extent that other correlated omitted variables exist, the readers are asked to interpret the findings in this paper with caution.

This study contributes to prior literature on labor economics, finance, and accounting. The findings may be of interest to academic researchers and policy makers.

This paper aims to examine the extent to which real earnings management (REM) is used in Jordan to meet zero or previous year's earnings, and how this impacts the subsequent operating performance of Jordanian firms.

The study used a sample of 98 Jordanian listed firms over the 2010–2018 period. To test the research hypotheses, which are formulated in accordance with both, agency theory and signalling theory, multivariate regression is performed using a pooled OLS estimation. Additionally, a two-step dynamic generalised method of moment (GMM) model has been estimated to address any concerns regarding the potential occurrence of endogeneity issues.

The results show that Jordanian firms that meet zero or last year's earnings tend to exhibit evidence of real activities manipulations. More specifically, suspect firms show unusually low abnormal discretionary expenses and unusually high abnormal production costs. Further, consistent with the signalling earnings management argument, the authors find that abnormal real-based activities intended to meet zero earnings or previous year's earnings potentially improve the subsequent operating performance of Jordanian firms. This implies that REM is not totally opportunistic, but it can be used to enhance the subsequent operating performance of Jordanian firms. Our findings are robust to alternative proxies and endogeneity concerns.

The findings have several implications for policymakers, regulators, audit professionals and investors in their attempts to constrain REM practices to enhance financial reporting quality in Jordan. Managing earnings by reducing discretionary expenses appeared to be the most convenient way to manipulate earnings in Jordan. It provides flexibility in terms of time and the amount of spending. The empirical evidence, therefore, reiterates the crucial necessity to refocus the efforts of internal and external auditors on limiting this type of manipulation to reduce the occurrence of REM activities and enhance the subsequent operating performance of listed firms in Jordan. Drawing on Al-Haddad and Whittington (2019), the evidence also urges regulators and standards setters to develop a more effective enforcement mechanism for corporate governance provisions in Jordan to minimise the likelihood of REM incidence.

This study contributes to the body of the accounting literature by providing the first empirical evidence in the Middle East region overall on the use of REM to meet zero or previous year earnings by Jordanian firms. Moreover, the study is the first to empirically examine the relationship between REM and Jordanian firms' future operating performance.

The temporality of performance measurement systems has been claimed to affect actors’ time orientation, such as that of listed company managers. The purpose of this paper is to explore this view.

The study uses constructivist data gathered from executives in one listed and one non-listed company.

The study shows that the research on performance measurement is based on a linear-quantitative view on time that assumes that humans orient towards the future from one point, the present; this view excludes other time-related constructs, particularly the past, and highlights a choice between the short term and the long term, idealising the long term. It is shown that the performance measurement of non-listed company executives is constructed through past-based, present-based and future-based rationalities: executives acknowledge the past as a basis for present and future performance, present actions as shaping future performance and future plans and performance targets as bases for present actions. Listed company executives’ performance measurement is constructed predominantly through the present-based time rationality.

“The orientation from the present” and the “short” and “long terms” could be enhanced with time rationalities.

The evaluation periods within performance measurement systems do not determine the time orientations of the actors subjected to those systems; time rationalities could be considered when designing such systems.

The paper provides a novel view on performance measurement and time.

Despite the widespread prevalence of share pledging by Indian promoters, this area remains out of the researchers’ purview. This study aims to bridge this research gap by delineating the impact of promoter share pledging on future stock price crash risk and financial performance in India.

A sample of 257 companies listed on the Standard and Poor’s Bombay Stock Exchange 500 (S&P BSE 500) Index has been analysed using panel (fixed-effects) data regression methodology over 2011–2020. Further, alternative proxies for crash risk and financial performance are adopted to ensure that the study’s initial findings are robust. Finally, the instrumental variable with the two-stage least squares (IV-2SLS) method has also been employed to alleviate endogeneity concerns.

The results suggest a significantly positive relationship between promoter share pledging and future stock price crash risk in India. Conversely, this association is significantly negative for future financial performance. Moreover, the results hold, even after including alternative proxies of stock price crash risk and financial performance and addressing endogeneity concerns.

Owing to the sizeable equity shareholdings of the promoters, share pledging has remained a lucrative source of finance in India. Despite the popularity, the findings of this study question the relevance of share pledging by Indian promoters considering its impact on aggravating future stock price crash risk and deteriorating future financial performance.

The relationship between variation in time perspectives and collaborative performance is scarcely explored, and even less is known about the respective mechanisms that lead to varying task performance. Thus, we aim to further the literature on time perspectives and collaborative performance, shedding light on the underlying behavioral patterns.

We report a quasi-experiment analyzing the impact of past, present and future orientation variation in dyads (N = 76) on their quantitative and qualitative performance when confronted with a simple incentivized creative task with constraints. Subsequently, we offer a qualitative analysis of comments given by the participants after the task on the collaboration.

Results indicate that a dyad's elevation of past orientation and diversity in future orientation negatively affect collaborative performance. At the same time, there is a positive effect of elevation of future orientation. The positive effect is driven by clear communication and agreement during the task, while the negative effect arises from work sharing and complementation.

This study provides insights for organizations on composing individuals regarding their temporal focus for collaborative tasks that should be executed rapidly and require creative solutions.

Our study distinguishes by considering the composition of past, present and future time perspectives in dyads and focuses on a creative task setting. Moreover, we explore the mechanisms in the dyads with a substantial elevation of/diversity in future orientation, leading to their stronger/weaker performance.

The purpose of this paper is to analyze the effect of managers’ incentive bonuses on both accrual and real earnings management.

First, the authors investigate the relationship between managers’ bonuses and both accrual earnings management (measured by a modified Jones model) and real earnings management (measured by Roychowdhury proxies). Next, the authors examine whether management has any preferences for earnings management methods to enhance its bonuses. Finally, the authors investigate the possible effects of earnings management on future operating performance. The sample consists of compositional data in the period from 2006 to 2012.

The authors find a negative relationship between real earnings management and managers’ bonuses and detect that managers prefer to use accrual earnings management to earn more bonuses. The results also show that real earnings management will reduce a firm’s performance in future periods, and on the other hand that increasing managers’ bonuses links to improvement of the firm’s future performance. The results suggest that managers are typically aware of the negative effects of real earnings management on the firm’s future performance and thus prefer to improve the firm’s performance in securing their bonuses when their ability to manage accruals is constrained.

The implications of this paper provide further evidence on how managers’ bonuses affect their discretion in using accrual and real earnings management. This finding is important to investors and regulators.

The purpose of this paper is to critically review and synthesize the articles on determinants of international new venture (INV) performance to identify the research gaps in this area and develop a future research agenda.

Adopting a semi-systematic review approach with a fucus on using a vote-counting technique, this paper reviews 99 journal articles published between 1994 and 2019 to assess the determinants of INV performance.

The results indicate that the majority of the INV performance articles employ a clearly specified theoretical foundation, focus on INVs in developed economies and non-service sectors, identify numerous firm-level determinants of INV performance and use advanced statistical methods (e.g. structural equation modeling and panel data models). However, the research of INV performance is still limited by a lack of a broader integration of theories at different levels, inconsistent theoretical predictions and empirical results, knowledge gaps, and estimation biases (e.g. endogeneity).

INV performance has received increasing attention over recent decades, but this area is still characterized by fragmentation and inconsistency. This paper provides a comprehensive and nuanced review that synthesizes and clarifies our current knowledge on the determinants of INV performance, provides further discussion with deeper insights from both theoretical and methodological aspects, and points out some directions for future research.

The purpose of this paper is to simultaneously determine the impact of information technology capabilities on firm performance, future firm performance, and firm value.

The secondary data for 480 matched‐firms are collected from InformationWeek (which provides the IT capabilities ranking) and the Compustat database (which provides financial data).

The results show that IT capabilities positively and significantly influence all three constructs and that the significance level of firm value is higher than that of firm performance and that of future firm performance. That is, IT capabilities are more relevant to firm value, which represents growth opportunities, intangible assets, and innovation, etc.

Based on these empirical findings that IT contributes more to the long‐term influences than to the short‐term influences, firm managers should pay more attention to the strategic positioning that IT provides for firms rather than only enhancing the operational effectiveness.

This study proposes a complete set of constructs, which includes firm performance, future firm performance, and firm value, to measure the different effects of information technology capabilities on firms and to discuss the corresponding managerial implications. Therefore, these three constructs can be further clarified and considered simultaneously. This has not been attempted by previous studies.

The purpose of this study is to refine what is characterized as real earnings management. Research on real earnings management (REM) has expressed concerns that firms deviating from normal business practices may endure a negative impact on future performance. Not all studies have, however, found a negative impact of REM on future performance. As a consequence, a new stream of research is emerging that examines whether actions that would mechanically be identified as REM are truly earnings management or are simply efficient business activities. The authors further this stream of inquiry by identifying factors, i.e. restructurings and expectations of future sales growth, that can be useful in making a distinction between earnings management and “just business”.

To measure REM, the authors rely on two of the proxies of Roychowdhury (2006), abnormal discretionary expenses and abnormal production costs, and regress interactions of these with measures of restructurings and expectations of future sales growth, on future performance.

The authors find that when they control for restructurings, reductions in discretionary expenses that would ordinarily be indicative of REM are instead associated with improved future return-on-assets and security returns. They further find that when they control for future sales growth, overproduction is also associated with improved return on sales as it is with future increases in cost of goods sold.

Together, the results may explain the contradictory results presented in prior research with respect to the impact of REM on future performance – that is, some of what has been identified as REM in prior studies may, in fact, be “just business”.