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1 – 10 of over 1000Baojun Ma, Jingxia He, Hui Yuan, Jian Zhang and Chi Zhang
Corporate social responsibility (CSR) is significant in the financial market. Despite plenty of existing research on CSR, few studies have quantified the fine-grained aspects of…
Abstract
Purpose
Corporate social responsibility (CSR) is significant in the financial market. Despite plenty of existing research on CSR, few studies have quantified the fine-grained aspects of CSR and examined how diverse CSR aspects are associated with firms' trade credit. Based on the released CSR reports, this paper strives to measure the CSR fulfillment of firms and examine the relationships between CSR and trade credit in terms of textual features presented in these reports.
Design/methodology/approach
This research proposes a natural language processing-based framework to extract the overall readability and the sentiment of fine-grained aspects from CSR reports, which can signal the performance of firms' CSR in diverse aspects. Furthermore, this paper explores how the textual features are associated with trade credit through partial dependence plots (PDPs), and PDPs can generate both linear and nonlinear relationships.
Findings
The study’s results reveal that the overall readability of the reports is positively associated with trade credit, while the performance of the fine-grained CSR aspects mentioned in the CSR reports matters differently. The performance of the environment has a positive impact on trade credit; the performance of creditors, suppliers and information disclosure, shows a U-shaped influence on trade credit; while the performance of the government and customers is negatively associated with trade credit.
Originality/value
This study expands the scope of research on CSR and trade credit by investigating fine-grained aspects covered in CSR reports. It also offers some managerial implications in the allocation of CSR resources and the presentation of CSR reports.
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Ranjan Dasgupta and Sandip Chattopadhyay
The determinants of investors’ sentiment based on secondary stock market proxies in many empirical studies are reported. However, to the best of our knowledge, no study undertakes…
Abstract
Purpose
The determinants of investors’ sentiment based on secondary stock market proxies in many empirical studies are reported. However, to the best of our knowledge, no study undertakes investor sentiment drivers developed from primary survey measures by constructing an investor sentiment index (ISI) in relation to market drivers to date. This study aims to fill this research gap by first developing the ISI for the Indian retail investors and then examining which of the stock market drivers impacts such sentiment.
Design/methodology/approach
The ISI is constructed using the mean scores of eight statements as formulated based on popular direct investor sentiment surveys undertaken across the world. Then, we use the multiple regression approach overall and for top 33.33% (high-sentiment) and bottom 33.33% (low-sentiment) investors based on the responses of 576 respondents on 18 statements (proxying eight study hypotheses) collected in 2016. Moreover, the demography-based classification based investors’ sentiment is examined to make our results more robust and in-depth.
Findings
On an overall basis, the IPO activities/issues and information certainty, trading volume and momentum and institutional investors’ investment activities market drivers significantly and positively impact retail investors is examined. However, only IPO activities/issues and information certainty influences both high- and low-sentiment investors. It is intriguing to report that nature of the stock markets show conflicting results for high- (negative significant) and low- (positive significant) sentiment investors.
Originality/value
The construction of the ISI from primary survey measure is for the first time in Indian context in relation to investigating the stock market drivers influential to retail investors’ sentiment. In addition, hypothesized market drivers are also unique, each representing different fundamental and technical characteristics associated with the Indian market.
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Yousra Trichilli, Mouna Boujelbène Abbes and Sabrine Zouari
This paper examines the impact of political instability on the investors' behavior, measured by Google search queries, and on the dynamics of stock market returns.
Abstract
Purpose
This paper examines the impact of political instability on the investors' behavior, measured by Google search queries, and on the dynamics of stock market returns.
Design/methodology/approach
First, by using the DCC-GARCH model, the authors examine the effect of investor sentiment on the Tunisian stock market return. Second, the authors employ the fully modified dynamic ordinary least square method (FMOL) to estimate the long-term relationship between investor sentiment and Tunisian stock market return. Finally, the authors use the wavelet coherence model to test the co-movement between investor sentiment measured by Google Trends and Tunisian stock market return.
Findings
Using the dynamic conditional correlation (DCC), the authors find that Google search queries index has the ability to reflect political events especially the Tunisian revolution. In addition, empirical results of fully modified ordinary least square (FMOLS) method reveal that Google search queries index has a slightly higher effect on Tunindex return after the Tunisian revolution than before this revolution. Furthermore, by employing wavelet coherence model, the authors find strong comovement between Google search queries index and return index during the period of the Tunisian revolution political instability. Moreover, in the frequency domain, strong coherence can be found in less than four months and in 16–32 months during the Tunisian revolution which show that the Google search queries measure was leading over Tunindex return. In fact, wavelet coherence analysis confirms the result of DCC that Google search queries index has the ability to detect the behavior of Tunisian investors especially during the period of political instability.
Research limitations/implications
This study provides empirical evidence to portfolio managers that may use Google search queries index as a robust measure of investor's sentiment to select a suitable investment and to make an optimal investments decisions.
Originality/value
The important research question of how political instability affects stock market dynamics has been neglected by scholars. This paper attempts principally to fill this void by investigating the time-varying interactions between market returns, volatility and Google search based index, especially during Tunisian revolution.
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James Lappeman, Michaela Franco, Victoria Warner and Lara Sierra-Rubia
This study aims to investigate the factors that influence South African customers to potentially switch from one bank to another. Instead of using established models and survey…
Abstract
Purpose
This study aims to investigate the factors that influence South African customers to potentially switch from one bank to another. Instead of using established models and survey techniques, the research measured social media sentiment to measure threats to switch.
Design/methodology/approach
The research involved a 12-month analysis of social media sentiment, specifically customer threats to switch banks (churn). These threats were then analysed for co-occurring themes to provide data on the reasons customers were making these threats. The study used over 1.7 million social media posts and focused on all five major South African retail banks (essentially the entire sector).
Findings
This study concluded that seven factors are most significant in understanding the underlying causes of churn. These are turnaround time, accusations of unethical behaviour, billing or payments, telephonic interactions, branches or stores, fraud or scams and unresponsiveness.
Originality/value
This study is unique in its measurement of unsolicited social media sentiment as opposed to most churn-related research that uses survey- or customer-data-based methods. In addition, this study observed the sentiment of customers from all major retail banks across 12 months. To date, no studies on retail bank churn theory have provided such an extensive perspective. The findings contribute to Susan Keaveney’s churn theory and provide a new measurement of switching threat through social media sentiment analysis.
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Ryan R. Peterson and Robin B. DiPietro
Building on tourism crisis studies and behavioral economics, this study describes a national survey conducted among 439 Aruban tourism and nontourism employees.
Abstract
Purpose
Building on tourism crisis studies and behavioral economics, this study describes a national survey conducted among 439 Aruban tourism and nontourism employees.
Design/methodology/approach
Regression analysis was subsequently conducted to analyze the relationship between experienced well-being, crisis duration and tourism and nontourism employee sentiments.
Findings
The findings indicate that tourism employee sentiments are generally, and significantly, more negative and their concerns about the future are significantly more pessimistic than nontourism employees. The results show that the experienced well-being and expected duration of the COVID-19 crisis have a significant negative effect on tourism employees' sentiments. The paper provides several policies and industry recommendations for strengthening tourism employee well-being and economic resilience. Several avenues for future research are presented.
Originality/value
The current study contributes to this literature by showing that the increased pessimism and negativity of the tourism employees as compared to nontourism employees during the current pandemic influence their thoughts about future income and earnings as well as future purchases.
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Paulo Fernando Marschner and Paulo Sergio Ceretta
The purpose of this study is to analyze how sentiment affects economic activity in Brazil.
Abstract
Purpose
The purpose of this study is to analyze how sentiment affects economic activity in Brazil.
Design/methodology/approach
Based on a nonlinear autoregressive distributed lag (NARDL) model, this study examines in detail the short-term and long-term asymmetric impacts between the variables during the period from January 2007 to December 2020.
Findings
There are three main results of this study. First, sentiment is an important factor for economic activity in Brazil, and its effect possibly occurs through the channels of consumption and investment, which are the two main components of economic growth. Second, sentiment affects economic activity in different ways in the short and the long term: in Brazil, although in the short-term, immediate shocks of sentiment may be confusing, the negative shocks from previous periods have a negative impact on economic activity. Third, the effect of shocks of optimism and pessimism on economic activity is asymmetric, and in the long run, only shocks of optimism have a significant and positive impact.
Originality/value
The relationship between sentiment and economic activity is still a controversial issue in the literature and this study seeks to advance its understanding in Brazil.
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This study investigates the influence of corporate culture on financial reporting transparency within Iranian firms.
Abstract
Purpose
This study investigates the influence of corporate culture on financial reporting transparency within Iranian firms.
Design/methodology/approach
Leveraging a dataset of 1,480 firm-year observations from the Tehran Stock Exchange spanning from 2013 to 2022, the study employs text mining to quantify linguistic features of corporate culture and transparency, specifically readability and tone, within annual financial statements and Management Discussion and Analysis (MD&A) reports.
Findings
Our results confirm a positive and significant relationship between corporate culture and financial reporting transparency. The distinct dimensions of corporate culture — Creativity, Competition, Control, and Collaboration — each uniquely enhance financial transparency. Robustness tests including firm fixed-effects, entropy balancing, Generalized Method of Moments (GMM), and Propensity Score Matching (PSM) validate the profound influence of corporate culture on transparency. Additionally, our analysis shows that corporate culture significantly affects the disclosure of business, operational, and financial risks, with varying impacts across risk categories. Cross-sectional analysis further reveals how the impact of corporate culture on transparency varies significantly across different industries and firm sizes.
Research limitations/implications
The study’s scope, while focused on Iran, opens avenues for comparative research in different cultural and regulatory environments. Its reliance on text mining could be complemented by qualitative methods to capture more nuanced linguistic subtleties.
Practical implications
Findings underscore the strategic importance of cultivating a transparent corporate culture for enhancing financial reporting practices and stakeholder trust, particularly in emerging economies with similar dynamics to Iran.
Originality/value
This research is pioneering in its quantitative analysis of the textual features of corporate culture and its impact on transparency within Iranian corporate reports, integrating foundational theoretical perspectives with empirical evidence.
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Kingstone Nyakurukwa and Yudhvir Seetharam
The authors examine the contemporaneous and causal association between tweet features (bullishness, message volume and investor agreement) and market features (stock returns…
Abstract
Purpose
The authors examine the contemporaneous and causal association between tweet features (bullishness, message volume and investor agreement) and market features (stock returns, trading volume and volatility) using 140 South African companies and a dataset of firm-level Twitter messages extracted from Bloomberg for the period 1 January 2015 to 31 March 2020.
Design/methodology/approach
Panel regressions with ticker fixed-effects are used to examine the contemporaneous link between tweet features and market features. To examine the link between the magnitude of tweet features and stock market features, the study uses quantile regression.
Findings
No monotonic relationship is found between the magnitude of tweet features and the magnitude of market features. The authors find no evidence that past values of tweet features can predict forthcoming stock returns using daily data while weekly and monthly data shows that past values of tweet features contain useful information that can predict the future values of stock returns.
Originality/value
The study is among the earlier to examine the association between textual sentiment from social media and market features in a South African context. The exploration of the relationship across the distribution of the stock market features gives new insights away from the traditional approaches which investigate the relationship at the mean.
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Petros Kalantonis, Christos Kallandranis and Marios Sotiropoulos
The goal of this paper is twofold. First, to examine the role of expectations in shaping agents' behaviour within an extended time frame which incorporates a prolonged harsh…
Abstract
Purpose
The goal of this paper is twofold. First, to examine the role of expectations in shaping agents' behaviour within an extended time frame which incorporates a prolonged harsh downturn of economic activity. Therefore, the authors allow for an indirect impact of economy-wide expectations operating via their coexistence with firms' balance sheet factors. Second, it is tested whether the behaviour of listed firms as regards to debt follows the pecking order theory.
Design/methodology/approach
The authors use the panel data methodology in the estimation of the financial structure models since unobservable heterogeneity is an important determinant towards the target leverage. A fixed effects estimation procedure, with robust intercepts allowed to vary across firms, was employed to examine the relationship between leverage and performance.
Findings
The findings offer evidence of patterns of pecking order behaviour and thus for the necessity of internal financing over external debt. The authors also extended the set of determinants by investigating the effect of macroeconomic conditions on the debt decision of firms. Contrary to the authors’ expectations, short-run beliefs of economic agents appear to play a negative role in leverage.
Originality/value
This paper contributes to the literature in a number of ways. First, following the growing literature of loan dynamics, the findings provide useful insights into corporate capital structure decisions in an economy in which businesses were almost excluded from external financing for over a decade. Second, in order to better understand corporate financing decisions, it is necessary to consider the overall economic framework in which companies and especially the listed ones operate.
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Amit Rohilla, Neeta Tripathi and Varun Bhandari
In a first of its kind, this paper tries to explore the long-run relationship between investors' sentiment and selected industries' returns over the period January 2010 to…
Abstract
Purpose
In a first of its kind, this paper tries to explore the long-run relationship between investors' sentiment and selected industries' returns over the period January 2010 to December 2021.
Design/methodology/approach
The paper uses 23 market and macroeconomic proxies to measure investor sentiment. Principal component analysis has been used to create sentiment sub-indices that represent investor sentiment. The autoregressive distributed lag (ARDL) model and other sophisticated econometric techniques such as the unit root test, the cumulative sum (CUSUM) stability test, regression, etc. have been used to achieve the objectives of the study.
Findings
The authors find that there is a significant relationship between sentiment sub-indices and industries' returns over the period of study. Market and economic variables, market ratios, advance-decline ratio, high-low index, price-to-book value ratio and liquidity in the economy are some of the significant sub-indices explaining industries' returns.
Research limitations/implications
The study has relevant implications for retail investors, policy-makers and other decision-makers in the Indian stock market. Results are helpful for the investor in improving their decision-making and identifying those sentiment sub-indices and the variables therein that are relevant in explaining the return of a particular industry.
Originality/value
The study contributes to the existing literature by exploring the relationship between sentiment and industries' returns in the Indian stock market and by identifying relevant sentiment sub-indices. Also, the study supports the investors' irrationality, which arises due to a plethora of behavioral biases as enshrined in classical finance.
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