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This paper aims to examine the impact of stock market liquidity on the value of reported earnings in Egypt, proxied by the earnings–return relationship, during the period between 2006 and 2015.

To achieve this objective, this paper uses a sample including all active firms listed on the Egyptian Stock Exchange. This study employs multivariate panel data regression analysis with fixed effects estimated using robust standard errors, and control for other variables. All financial, accounting and stock market data are collected from the Thomson Reuters Worldscope and Datastream databases.

The empirical results report a significant positive relation between liquidity and earnings informativeness. This study argues that in environments with high information asymmetries, reported earnings are informative conditional on stock liquidity. All results remain valid when using heteroscedasticity-robust standard errors clustered across firms, alternative measures of liquidity, sub-groups of different sizes and estimating quantile regressions.

This paper identifies stock price liquidity as a significant determinant of stock price informativeness of earnings in Egypt. In particular, stock liquidity reduces agency conflicts and information asymmetries between managers and market investors, and thereby decreases managerial incentives to misreport earnings. This consequently enhances the quality of reported earnings and the informativeness of prices.

This paper examines the dividend smoothing (DS) behaviour in the Gulf Cooperation Council (GCC) countries in emerging markets where the response to news and the economic environment are different from those of developed countries.

The authors examine the effect of share price informativeness on DS in the GCC markets using unbalanced panel data for a sample of 628 GCC-listed firms during 1994–2016. For the regression analysis, the hypotheses are tested using panel regressions and generalised method of moments (GMM) estimation.

First, the Lintner model shows that the DS degree in GCC firms is comparable to that of a developed market. Second, and importantly, the results reveal that the DS in GCC firms is sensitive to private information of share prices. Finally, the findings indicate that information asymmetry (IA) and agency-based models affect the tendency to smooth dividends in the GCC markets.

This study is the first study to measure the degree of DS using data for all GCC countries. The authors also identify other determinants of DS behaviour and test the agency and IA explanations for DS in GCC-listed firms. The findings are highly recommended to financial managers and analysts dealing with the GCC markets. This study helps financial analysts to use the share price informativeness as an indicator for the presence of the IA. The study results are beneficial to researchers in understanding the relationship between DS and share price informativeness.

The purpose of this paper is to investigate the effect of corporate governance and ownership structures on earnings quality in China both prior and subsequent to two important corporate reforms: the code of corporate governance (CCG) in 2002 and the split share structure reform (SSR) in 2005.

This study utilises informativeness of earnings (earnings response coefficient), conditional accounting conservatism and managerial discretionary accruals to assess earnings quality using 12,267 firm-year observations over 11 years from 2000 to 2010. Further, two dummy variables for measuring the changes of CCG and SSR are employed to estimate the effects of CCG and SSR reforms on earnings quality via OLS regression.

This study finds that the promulgation of the CCG in 2002 has had a positive impact, but the SSR reform in 2005 has had little effect on listed firms’ earnings quality in China. These results hold good after controlling for a number of ownership, governance and other variables and estimating models with multiple measures of earnings’ quality.

Future research could focus on how western style corporate governance mechanisms have been constrained by the old management systems and governmental dominated ownership structures in Chinese listed firms. The conclusion is that simply coping Western corporate governance model is not suitable for every country.

The results will assist Chinese regulators in improving reporting quality, ownership structure and governance mechanisms in China. The results will help international investors better understand quality of financial information in China.

This is the first to our knowledge that addresses the effects of major governance and ownership reforms together on accounting earnings quality and, thus, makes a significant contribution on understanding the effect of regulatory reforms on improving earnings quality. In doing so, it also indirectly assesses the effectiveness of western-style corporate governance mechanisms introduced in China.

The study intends to shed lights on whether the risk factors disclosed in the initial public offering (IPO) prospectus in Malaysia are able to reflect the actual risks of stocks once they are traded on the exchange. In other words, the purpose of this paper is to explore whether prospective investors will be able to benefit, in terms of the more accurate risk information, from the risk disclosures in the IPO-prospectus.

Using data obtained from 118 IPO prospectuses of Malaysian companies that issued shares on Bursa Malaysia in the period from 2009 to 2016, the authors investigated whether the “risk factor” section in the IPO prospectuses provides sufficient risk-relevant information to investors. To determine whether companies disclose risk-relevant information, a detailed content analysis of the risk sections was carried out to obtain an aggregate measure of risk disclosure.

The findings revealed that the aggregate measures of risk extracted from these texts did not successfully predict the following outcomes: the volatility of companies’ future stock prices, the sensitivity of future stock prices to market-wide fluctuations and the severe declines in future stock prices.

As indicated by the findings, the authors, therefore, deduce that the IPO prospectuses of Malaysian companies do not provide sufficient risk-relevant information in the risk factor section. The findings imply that overall the management of Malaysian companies would neither be able nor willing to disclose the right and relevant information to the public via IPO prospectus.

Many corporate risk disclosure studies focus primarily on the disclosures of annual reports of companies. The study intends to fill the gap by focusing on the risk disclosure in the IPO-prospectus. Risk disclosures in IPO-prospectus are farmore extensive than annual reports and, therefore, provide a richness of information that will not be available in the annual reports.

This paper aims to explore how fund managers (FMs) deal with major problems of ignorance and uncertainty in stock selection and in asset allocation decisions.

Interviews were conducted with 40 fund managers in the period October 1997 to January 2000. A seven stage approach was adopted to sift through and process the large volumes of case data. The interview case data formed the basis for identifying common patterns and themes across the cases.

The case data revealed the nature of this private information agenda concerning intellectual capital or intangibles and the dynamic connections between these variables in the value creation process. The case data provided insight into how the book value and market value gap arose and the special role of information on intangibles and intellectual capital in valuing the company.

The fund management behaviour has important implications for regulatory policy issues on insider information, on corporate disclosure, the corporate governance role of financial institutions, and for the governance of financial institutions.

The paper focuses on issues of importance in an increasingly concentrated and global FM industry.

This study aims to examine the effects of investor protection (PROT), internal and external corporate governance (CG) on private information-based trading (PIBT).

This study uses a sample of 3,438 firms from 42 countries for the period 2002–2015 to examine the effects of the broad and specific measures of PROT, internal CG and external CG (product market competition and block ownership [BOWN]) on a more accurate measure of PIBT using regression analysis.

The results show that PROT and BOWN are effective in reducing PIBT. However, the specific measure of PROT (strength of PROT) is not significant in emerging markets and civil law countries. The internal CG is also significant but has a positive effect on PIBT.

The results suggest that PROT law matters in the efforts to prevent PIBT. Policymakers and securities market regulators, particularly in emerging markets and civil law countries, should focus more on refining existing securities laws and enacting detailed securities rules that explicitly prevent specific market manipulation and PIBT.

This study provides evidence for the importance of specific and detailed securities rules in different market and legal environments. Furthermore, this study uses the segregated private information-based speculative trading component to accurately measure the PIBT.

Explores the central role that private information on corporate intangibles plays in the private corporate governance role of financial institutions (FIs). The institutional fund managers’ (FMs) private understanding of many qualitative or intellectual capital factors driving corporate performance was the basis for wide‐ranging corporate governance influence concerning financial performance and conventional Cadbury‐style corporate governance issues. This was primarily a private, implicit corporate governance process by FIs and their FMs during good corporate performance. Also reveals how the nature of FM corporate governance influence became more interventionist with adverse changes in corporate performance factors, in FI‐side influence factors and in environmental circumstances. The qualitative intangible factors, especially board and top management qualities, were central to this more proactive form of intervention. Finally, discusses the case results within the research literature on the corporate governance role of FIs, identifies new directions for research and discusses policy implications briefly.

The purpose of the study is to examine the influence of corporate governance on the flow of firm-specific information in an emerging market.

Synchronicity is estimated under assumptions of contemporaneous and non-contemporaneous relationship between individual stock returns and the market return. Possible thin-trading effect is also corrected using the Dimson’s Beta approach to estimate synchronicity. In the main empirical model, both the Panel-Corrected Standard Errors and the Generalized Least Square estimations were used to provided robust evidence of governance influencing transparency.

Corporate governance was found to broadly influence the release of firm-specific information in a relatively opaque market through the information environment. However, no evidence in support of the “auditor-reputation effects” theory was found. As well, CEO duality does not create an individual powerful enough to reduce the monitoring role of boards. We further document the presence of noise trading on the Ghana Stock Exchange.

This study suggests that specific corporate mechanism practices have implications for stock selection in a relatively high information asymmetry Capital Market. Investors require transparency; hence, firms with governance mechanisms that elicit such transparency are likely to attract investors.

This study is the first to examine the relationship between governance and transparency while using stock return synchronicity as a proxy for transparency in an emerging Ghanaian Capital Market.

The purpose of this study is to examine the impact of controlling shareholders’ share pledging on goodwill impairment.

This study empirically investigates the effect of controlling shareholders’ share pledging on both the decision and amount of goodwill impairment for Chinese listed firms from 2007 to 2017.

This study finds that the proportion of controlling shareholders’ share pledging is negatively related to both impairment decisions and amounts; these negative relationships are intensified when firms face high stock price crash risks. In addition, the empirical results show that firms with larger share pledging are less likely to recognize goodwill impairment or are likely to record relatively smaller impairment amounts when they are followed by fewer financial analysts.

Most of the relevant literature has focused on managers’ behaviors toward goodwill impairments, while less attention has been given to goodwill impairments from the perspective of controlling shareholders. In fact, controlling shareholders may have strong incentives to protect their control rights when they exercise disproportionate control rights, especially in China. Given the high ownership concentration, prior studies may not have adequately explained the agency problem of controlling shareholders in goodwill impairment. This study uses share pledging as a case to fill this gap. Specifically, it investigates whether both goodwill impairment decisions and amounts are affected by controlling shareholders’ share pledging.