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The authors provide a comprehensive empirical examination on the impact of earnings quality on stock price crash risk in China.

The authors acknowledge and distinguish two-dimensional proxies for earnings quality – accounting-based (earnings management degree) and market-based (earnings transparency) known in accounting and finance literature.

The authors find that both generally indicate that better earnings quality is associated with less crashes. However, extremely high earnings transparency interacted with insider trading profit can also actually exacerbate stock price crashes.

This study is the first to highlight the pertinence of accounting-based measures to proxy for earnings quality in a fast-growing emerging market environment such as China.

This paper aims to investigate whether corporate social responsibility (CSR), as evidenced in annual financial reports, is associated with a firm’s financial performance in New Zealand.

A word count approach of several key CSR indicators found in the audited financial reports of NZX50 constituent firms is used. Several variables are constructed that measure the presence of CSR within the annual report such as sustainability, responsibility, social, environment, diversity, employee and community, and eight other variables within the annual report that measure the penetration of stakeholder engagement. Control variables and alternative measures of CSR are also included. Descriptive statistics and results of both univariate and multivariate tests are provided.

The findings establish a positive connection between CSR and financial performance. It is shown that firms that are unable to focus their attention on key stakeholders, but instead waste managerial capital on vague social policies and activities, are associated with weaker performance. Firms that consider the protected indigenous peoples as key stakeholders are associated with superior performance, especially when the firm is seeking regulatory approval.

Evidence is provided that CSR and Maori stakeholder engagement is implied by financial reports that have a significant association with corporate financial performance.

The results provide one of the first analyses linking the interplay between CSR, Maori and corporate financial performance using information publicly observable in annual financial reports. Evidence of an association between firms that indicate awareness of their community and higher levels of return on assets (ROA) is provided.

The purpose of this paper is to test an implication of the pecking order theory to explain capital structure decisions among Chinese listed companies during the 2005-2007 NTS Reform transition period.

The authors utilize direct proxies for information asymmetry based on microstructure models including Probability of the arrival of informed trades (PIN), Adverse selection component of the bid-ask spread (λ), Illiquidity ratio (ILLIQ) and liquidity ratio, and Information asymmetry index (InfoAsy) to examine their relation with firms’ debt financing.

Consistent with the prediction of Pecking Order Theory, the authors find that companies for which stock investors are challenged with more severe informational disadvantages are associated with higher degree of leverage use.

The study provides a more direct test on the positive relation between information asymmetry and financial leverage of Chinese firms. In contrast to previous findings by Chen (2004), the results suggest that capital structure choices among Chinese firms progressively conform to conventional finance theories (e.g. Pecking Order Theory) with the decline of non-tradable shares.

This study aims to examine the spillover effects of trans-Atlantic macroeconomic uncertainties on the local stock market returns in the USA and eight selected European countries, namely, Germany, France, Spain, Italy, Greece, Ireland, Sweden and the UK, during the 2000-2019 period.

This paper applies the dynamic conditional correlation multivariate GARCH model (i.e. multivariate generalized autoregressive conditional heteroskedasticity model or DCC MGARCH) to examine the potential existence of the spillover from the uncertainty of the USA to EU stock markets and vice versa. To capture different dynamic relationships between multiple time-series variables following different regimes, this paper applies the Markov switching model to the stock returns of both the USA and the eight major stock markets.

The increases in US uncertainty have significant negative impacts on all EU stock returns, whereas only the increases in the uncertainties of Spain, Ireland, Sweden and the UK have significant negative impacts on US stock returns. Notably, the economic policy uncertainty (EPU) in the USA has a dynamic effect on the European stock markets. In a bear market (State 1), the increases in the EPU of the USA and EU have significant negative impacts on EU stock returns in most cases. However, only the increase in US EPU has significant negative impacts on EU stock returns in bull markets (State 2). Reciprocally, the increases in the EU EPUs of Germany, Spain and the UK have significant impacts on US stock returns in bear market.

The observations challenge the conventional wisdom according to which only larger economies can lead the smaller counterparts. The findings also highlight the stronger dependence of the US stock market on international macroeconomic uncertainty.

This paper provides empirical support for the introduction of cash flow disclosure regulation issued by Australasian accounting bodies, AASB and NZICA (formerly NZSA), between 1987 and 1992.

The empirical analysis uses a long window event study format on a panel of 5,368 firm‐year observations between 1996 and 2005.

The cash flow disclosures required in the regulation are associated with significant abnormal return responses. These effects are robust to the inclusion of other factors linked to abnormal returns such as movements in profitability, size and leverage. We also find support for the proposition that the cash flow effects are conditioned on the quality of the firm, as proxied by q. The market is better and more easily informed with the information required under the revised reporting regime.

The analysis would have been improved with better access to pre‐reform period data.

There is no other study on Australasian markets which looks at the value impacts of cash flow information in relation to this regulatory change. Such a study has also never been done on New Zealand companies.