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1 – 10 of over 98000Marna De Klerk, Charl de Villiers and Chris van Staden
The purpose of this paper is to examine the association between share prices and the level of corporate social responsibility (CSR) disclosure of large UK companies, using CSR…
Abstract
Purpose
The purpose of this paper is to examine the association between share prices and the level of corporate social responsibility (CSR) disclosure of large UK companies, using CSR data from an independent firm and a time period and setting (the UK) that coincides with increased legislation and increased public awareness of corporate social and environmental issues. Against a background of increased interest by investors in CSR disclosure, prior mixed results on the association between CSR disclosure and share prices suggest the need for further research that overcome some of the identified limitations of the extant literature.
Design/methodology/approach
A modified Ohlson (1995) model is used to examine the relationship between CSR disclosure and share prices among the 100 largest UK companies. Three different measures of CSR disclosure are used to ensure robustness of results.
Findings
The paper finds that higher levels of CSR disclosure are associated with higher share prices. Furthermore, the paper provides evidence that CSR disclosure by companies operating in environmentally sensitive industries show a stronger association with share prices than CSR disclosure by companies operating in other industries. The paper concludes that CSR disclosure provides incremental value-relevant information to investors beyond financial accounting information.
Originality/value
To the best of our knowledge, this is the first paper to provide evidence of the incremental value of CSR disclosure to share price determination in the UK, a country where CSR disclosure is high on the agenda. Our findings provide evidence that CSR disclosures by companies and, in particular, disclosures following the global reporting initiative(GRI) guidelines, are useful to investors and shareholders, as it is related to share price information.
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Pham Duc Tai, Malcolm Ringland Anderson, Truong Ton Hien Duc, Tung Quang Thai and Xue-Ming Yuan
Information sharing is one of essential collaboration methods for building effective system-level disruption responses and communication for supply chain resilience. However…
Abstract
Purpose
Information sharing is one of essential collaboration methods for building effective system-level disruption responses and communication for supply chain resilience. However, supply chain members are often reluctant to share the members' business information for fear of losing competitiveness. To facilitate the cooperation among these members, the supply chain members' should be made aware of the value of information. As a result, the purpose of this paper is to quantify the benefit of information sharing and evaluate its magnitude under various factors.
Design/methodology/approach
In this paper, information sharing is measured in a two-stage supply chain containing a manufacturer and a retailer. A demand function is constructed as a linear combination of a first-order autoregressive [AR(1)] process, the retail and reference prices. The values of information sharing are quantified for four scenarios: (1) no information sharing, (2) full information sharing, (3) limited information sharing and (4) partial information sharing. Based on the four scenarios, the conditions for valuable information sharing are determined. In addition, the impact of several demand parameters on the usefulness of information sharing is analyzed.
Findings
When the demand function is a pure AR(1) process (i.e. there is no impact from the retail and reference prices), information sharing is always valuable regardless of the autoregressive coefficient. Under the influence of the retail price and consumer behavior via the reference price, information sharing is not always beneficial. The boundaries for useful information sharing are analytically constructed. In addition to full information sharing, this study also quantifies the value of information under a partial sharing scheme. The results indicate that the information is more valuable as long as the information is inducible.
Originality/value
This study highlights several specific conditions for a beneficial information sharing agreement in consideration of consumer behaviors. These conditions enable supply chain members to design a sustainable partnership.
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Nan Chen, Jianfeng Cai, Devika Kannan and Kannan Govindan
The rapid development of the Internet has led to an increasingly significant role for E-commerce business. This study examines how the green supply chain (GSC) operates on the…
Abstract
Purpose
The rapid development of the Internet has led to an increasingly significant role for E-commerce business. This study examines how the green supply chain (GSC) operates on the E-commerce online channel (resell mode and agency mode) and the traditional offline channel with information sharing under demand uncertainty.
Design/methodology/approach
This study builds a multistage game model that considers the manufacturer selling green products through different channels. On the traditional offline channel, the competing retailers decide whether to share demand signals. Regarding the resale mode of E-commerce online channel, just E-tailer 1 determines whether to share information and decides the retail price. In the agency mode, the manufacturer decides the retail price directly, and E-tailer 2 sets the platform rate.
Findings
This study reveals that information accuracy is conducive to information value and profits on both channels. Interestingly, the platform fee rate in agency mode will inhibit the effect of a positive demand signal. Information sharing will cause double marginal effects, and price competition behavior will mitigate such effects. Additionally, when the platform fee rate is low, the manufacturer will select the E-commerce online channel for operation, but the retailers' profit is the highest in the traditional channel.
Originality/value
This research explores the interplay between different channel structures and information sharing in a GSC, considering price competition and demand uncertainty. Besides, we also considered what behaviors and factors will amplify or transfer the effect of double marginalization.
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Abdul Quadir, Alok Raj and Anupam Agrawal
The purpose of this paper is to investigate the impact of demand information sharing on products’ greening levels with downstream competition. Specifically, this study examine two…
Abstract
Purpose
The purpose of this paper is to investigate the impact of demand information sharing on products’ greening levels with downstream competition. Specifically, this study examine two types of green products, “development-intensive” (DI) and “marginal-cost intensive” (MI), in a two-echelon supply chain where the manufacturer produces substitutable products, and competing retailers operate in a market with uncertain demand.
Design/methodology/approach
The authors adopt the manufacturer-led Stackelberg game-theoretic framework and consider a multistage game. This study consider how retailers receive private signals about uncertain demand and decide whether to share this information with the manufacturer, who then decides whether to acquire this information at a certain given cost. This paper considers backward induction and Bayesian Nash equilibrium to solve the model.
Findings
The authors find that in the absence of competition, information sharing is the only equilibrium and improves the greening level under DI, whereas no-information sharing is the only equilibrium and improves the greening level under MI, an increase in downstream competition drives higher investment in greening efforts by the manufacturer in both DI and MI and the manufacturer needs to offer a payment to the retailers to obtain demand information under both simultaneous and sequential contract schemes.
Originality/value
This paper contributes to the literature by examining how the nature of products (margin intensive green product or development intensive green product) influences green supply chain decisions under information asymmetry and downstream competition.
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Ruiliang Yan, Chris Anthony Myers and John Wang
The purpose of this paper is to provide a framework to help the manufacturers to find the optimal decisions regarding the choice of channel member for information sharing.
Abstract
Purpose
The purpose of this paper is to provide a framework to help the manufacturers to find the optimal decisions regarding the choice of channel member for information sharing.
Design/methodology/approach
A game‐theoretical model plus Bayesian forecasting is developed to determine the optimal decisions for the manufacturer.
Findings
The results show that the optimal strategy for the manufacturer is to engage in information sharing with one small retailer exclusively, such that the manufacturer can gain the most benefit from information sharing arrangement in a marketing channel with a dominant retailer.
Research limitations/implications
The present study is analyzed by a theoretical model. Future research can explore the same study by collecting data to engage in an empirical test.
Practical implications
This paper provides a useful model framework and pricing strategy for upstream manufacturers who are engaging or planning to engage in information sharing with their retailers.
Originality/value
This paper provides practical and solid advice and examples demonstrating the optimal decisions regarding the choice of channel member for information sharing to best benefit of the manufacturer.
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Sees the objective of teaching financial management to be to helpmanagers and potential managers to make sensible investment andfinancing decisions. Acknowledges that financial…
Abstract
Sees the objective of teaching financial management to be to help managers and potential managers to make sensible investment and financing decisions. Acknowledges that financial theory teaches that investment and financing decisions should be based on cash flow and risk. Provides information on payback period; return on capital employed, earnings per share effect, working capital, profit planning, standard costing, financial statement planning and ratio analysis. Seeks to combine the practical rules of thumb of the traditionalists with the ideas of the financial theorists to form a balanced approach to practical financial management for MBA students, financial managers and undergraduates.
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Dhiaa Shamki and Azhar Abdul Rahman
The paper aims to examine the influence of financial disclosure (FD) level and time on the value relevance of earnings, book value, and cash flows relative to three share price…
Abstract
Purpose
The paper aims to examine the influence of financial disclosure (FD) level and time on the value relevance of earnings, book value, and cash flows relative to three share price proxies, namely average annual share price, annual closing share price, and share price after a three-month period following the financial year-end for Jordanian companies.
Design/methodology/approach
The paper employs price model to examine the influence of FD level and time on the value relevance of three accounting variables relative to three share price proxies for 91 Jordanian companies (consisting of 5,460 observations) within 2004-2009.
Findings
Relative to three share price proxies, the findings proved that FD level and time have a significant influence on the value relevance of book value, but not for cash flows. Also, FD level and time have a significant influence on the value relevance of earnings relative to annual closing share price, while they are not relative to share price after a three-month period following the financial year-end. FD time has a significant influence on the value relevance of earnings relative to the average annual share price. Annual closing share price is the most reliable in indicating value relevance of accounting information.
Originality/value
The paper confirms that there is a shift away from earnings towards book value as the basis for firm valuation. Market participants might be able to conclude the firm value through the value relevance of accounting information influenced by company's FD.
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Chelsea Liu, Graeme Gould and Barry Burgan
The Chinese capital markets are divided into two segments comprising of A-shares (traded by domestic investors) and B-shares (traded by foreign investors). Firms issuing A-shares…
Abstract
Purpose
The Chinese capital markets are divided into two segments comprising of A-shares (traded by domestic investors) and B-shares (traded by foreign investors). Firms issuing A-shares are required to produce accounting reports under the Chinese Accounting Standards (CAS) and firms issuing B-shares are required to report under the International Accounting Standards (IAS). The purpose of this paper is to investigate the comparative value-relevance of accounting information in the Chinese capital markets, in particular whether the value-relevance associated IAS exceeds that of CAS.
Design/methodology/approach
This study undertakes a capital market research approach. Two statistical models are employed to test the value-relevance of competing accounting information on share prices: the Price Model and the Return Model. This study takes advantage of the parallel reporting frameworks governing the A-share and B-share markets buy using the same firms which issue both A-shares and B-shares.
Findings
The analysis supporting the study demonstrates that both CAS and IAS information is value relevant to investors in the Chinese capital markets but that IAS provide more useful information. Additionally it is observed that reconciliation variables (representing the discrepancy between IAS- and CAS-based accounting figures) are not significant in explaining market valuation or returns on stock.
Research limitations/implications
This study provides evidence of value-relevance of accounting reports on the Chinese capital markets for the period of 1999-2005. The period under investigation captures the significant development in China's accounting regulations which took place in 1998 and 2001. The recent shift in accounting regulations in China from CAS to IAS is expected to improve the dissemination of financial information by publicly listed Chinese firms.
Practical implications
This study investigates the reporting requirements on the Chinese capital markets during a period in which accounting reporting requirements underwent a significant change as part of the internationalization of accounting standards. Both A- and B-share markets were investigated simultaneously in order to provide an objective analysis and avoid sampling selection bias present in other studies.
Social implications
The recent shift in accounting regulations in China from CAS to IAS is expected to improve the dissemination of financial information by publicly listed Chinese firms.
Originality/value
This paper extends previous research on value-relevance of accounting reports in the Chinese capital markets by capturing the period in which the reporting requirements had experienced significant change. This paper also takes advantage of the dual reporting framework in order to mitigate potential sampling bias present in previous studies and employs a reconciliation variables not previously used.
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Dennis Chan and M. Ariff
Builds on the work of Damodaran (1993) and Brisley and Theobald (19967) on measuring the speed with which stock markets convert information into price changes by using a simpler…
Abstract
Builds on the work of Damodaran (1993) and Brisley and Theobald (19967) on measuring the speed with which stock markets convert information into price changes by using a simpler model of the price adjustment coefficient and applying it to 1988‐1966 data from the Hong Kong, US and Japanese markets and the Morgan Stanley Capital International indexes. Explains the methodology and presents the detailed results, which show that the Hong Kong adjustment is similar to the US and Japan for systematic and for all information; although the range of adjustment speeds depends on the sector and composition of the indexes. Makes many comparisons between the three markets and suggests that this method of describing market efficiency could provide a more consistent and objective ranking of worlds capital markets.
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As one of the main purposes of financial statements is to provide relevant information for investors, relationships between share prices and accounting variables have been widely…
Abstract
Purpose
As one of the main purposes of financial statements is to provide relevant information for investors, relationships between share prices and accounting variables have been widely researched. Early studies focus mainly on earnings, but attention has turned in recent years to valuation models that include the book value of the equity. Many of these studies cite the residual income model as their theoretical base and, with the growing emphasis on shareholder value, residual income measures are more commonly used in the business community to track financial performance. Given such trends, the purpose of this paper is to review the theoretical background of the residual income model and discuss results of empirical studies that use it.
Design/methodology/approach
The study seeks an understanding of how published accounting information relates to share prices in the developed market in Asia, outside Japan. More specifically, the study aims to extend the international literature in market based accounting research by examining empirical evidence on relationships between share prices and the two summary accounting variables of equity book value and earnings for firms listed on the stock exchange in Malaysia.
Findings
The findings imply that, the two accounting variables summarising the balance sheet and the income statement, respectively, are significant factors in the valuation process, and that managers are justified in using the accounting system as a primary source of information for monitoring financial performance.
Originality/value
These findings should be of interest to other researchers, and to managers and investors who currently use or are planning to use residual income to monitor business performance.
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