Search results

The purpose of this paper is to investigate the relationship between voluntary disclosure of intangibles and financial analysts’ earnings forecasts properties.

Disclosures about intangible assets were hand-collected through content analysis of annual reports of a sample of US non-financial firms, while analysts’ earnings forecasts properties were collected from Bloomberg Professional database. The authors relied on correlation and multivariate regression analyses to test the research hypotheses.

The results show that increased intangible disclosures affect analysts’ earnings forecasts accuracy, dispersion, and favourable consensus recommendations. However, this effect varies according to the nature of intangible assets.

The results may be of interest to different market participants such as corporate managers, financial analysts, and standards setting bodies that recently published guidelines on voluntary disclosure of intangibles.

This study develops a new comprehensive index to measure the content of narrative disclosures about a large number of intangibles, such as human, structural, and relational assets. The findings contribute to the current debate on the value-relevance of narrative disclosures on intangibles to investors and financial analysts.

This study aims to better understand the effects of speeches as a valuable communication tool for central banks. It extends the analysis of the effects of public speeches on jumps to determine whether individual speakers matter partly because of their name, position or institution.

This study detects intraday jumps using a robust-to-jump volatility estimator that accounts for deterministic seasonality. As a result, this study removes spurious jumps that occur when volatility is high and consider the relatively small jumps that occur when volatility is low. After identifying jumps, this study examines their reactions to senior official speeches and macroeconomic news surrounding the US and European Union (EU) financial crises.

Despite having the most influential individual speakers, this study finds that the impact of the Federal Reserve (Fed) and European Central Bank (ECB) is mitigated because the two institutions have a relatively small impact on currency jumps. This finding shows that the speaker’s name is more important than his or her institution affiliation. While the Federal Reserve Bank President and Chief Executive, as well as ECB board members, significantly reduce jump sizes, particularly during the EU crisis period, both the Fed Chairman and the ECB President increase the magnitude of the jump in both the US crisis and noncrisis periods, contributing to market instability.

The implications of the results include international portfolio management, currency derivatives pricing and hedging, risk management and market efficiency.

The findings contribute to a better understanding of the effects of senior official speech attributes on currency jumps in various economic states. The results raise questions about the speaker’s name, institution and position’s effectiveness in calming markets and reducing uncertainty.

The purpose of this paper is to reflect on how climate change risk reporting might evolve in various world regions in the post COVID-19 pandemic era.

Using a multiple-case study approach and adopting an institutional theory lens, we assess whether the pandemic is likely to strengthen or weaken institutional pressures for climate change risk disclosures and predict how climate-related risk reporting will evolve post-pandemic.

The authors find that climate change risk reporting is likely to evolve differently according to geographical location. The authors predict that disclosure levels will increase in regions with ambitious climate policy and where economic stimulus packages support sustainable economic recovery. Where there has been a weakening of environmental commitments and economic stimulus packages support resource intensive business, climate change risk reporting will stagnate or even decline. The authors discuss the scenarios for climate change risk reporting expected to play out in different parts of the world.

The authors contribute to the nascent literature on climate change risk disclosure and identify future directions in the wake of the COVID-19 pandemic.

Forecasting the future movement of yield curves contains valuable information for both academic and practical issues such as bonding pricing, portfolio management, and government policies. The purpose of this paper is to develop a dynamic factor approach that can provide more precise and consistent forecasting results under various yield curve dynamics.

The paper develops a unified dynamic factor model based on Diebold and Li (2006) and Nelson and Siegel (1987) three-factor model to forecast the future movement yield curves. The authors apply the state-space model and the Kalman filter to estimate parameters and extract factors from the US yield curve data.

The authors compare both in-sample and out-of-sample performance of the dynamic approach with various existing models in the literature, and find that the dynamic factor model produces the best in-sample fit, and it dominates existing models in medium- and long-horizon yield curve forecasting performance.

The authors find that the dynamic factor model and the Kalman filter technique should be used with caution when forecasting short maturity yields on a short time horizon, in which the Kalman filter is prone to trade off out-of-sample robustness to maintain its in-sample efficiency.

Bond analysts and portfolio managers can use the dynamic approach to do a more accurate forecast of yield curve movements.

The enhanced forecasting approach also equips the government with a valuable tool in setting macroeconomic policies.

The dynamic factor approach is original in capturing the level, slope, and curvature of yield curves in that the decay rate is set as a free parameter to be estimated from yield curve data, instead of setting it to be a fixed rate as in the existing literature. The difference range of estimated decay rate provides richer yield curve dynamics and is the key to stronger forecasting performance.

Applying the stimulus–organism–response model, the purpose of this paper is to analyse the influence of design aesthetics (stimulus) on adoption and recommendation intentions (response) of mobile banking applications through the mediating role of perceived usefulness and trust (organism). Importantly, this research further examines the moderating effect of persuasion knowledge, which attenuates the effects of design aesthetics on perceived usefulness and trust.

A survey is conducted with the help of panellist among a sample of 213 bank customers who are not yet users of mobile banking. Data are analysed using the PROCESS macro.

The results show that design aesthetics positively influence perceived usefulness and trust. These variables, in turn, positively affect adoption and recommendation intentions of mobile banking applications. Interestingly, the findings also demonstrate that persuasion knowledge moderates the effects of design aesthetics on perceived usefulness and trust, as well as their mediating effect.

Because the results demonstrate that persuasion knowledge weakens the effects of design aesthetics on perceived usefulness and trust, the originality of this research rests upon its reconsideration of the “what is beautiful is good” effect and the questioning of the supremacy of this effect. These results provide insights for academics to better explain and increase adoption and recommendation intentions. Moreover, the results can help banking practitioners to improve their policies and strategies pertaining to mobile banking applications.

This paper aims to investigate the relationship between board of directors' independence and executive compensation disclosures transparency.

The paper examines compensation disclosure practices of a sample of 181 firms listed on the Toronto Stock Exchange. Board independence from management is assessed through an aggregate score which takes into account the proportion of independent directors, board leadership structure (i.e. CEO is the board chairperson), and the existence and independence of board committees. A cross‐sectional regression analysis is used to examine the relationship between board independence and the extent of compensation disclosure.

The paper finds that board independence from management is positively related to the transparency of executive compensation‐related information. In addition, this study documents a positive (negative) relation between firm size, US cross‐listing, growth opportunities (leverage) and the extent of executive compensation disclosure.

The study's results provide support to the managerial opportunism hypothesis in executive compensation. These findings highlight the importance of the board of directors as an effective governance mechanism which limits managerial rent‐seeking in the design as well as the disclosure of executive compensation practices.

This paper extends prior disclosure studies by examining the impact of board characteristics on the transparency of executive compensation disclosures in a principles‐based governance regime. Furthermore, executive compensation disclosure provides an interesting setting in which to examine the ability of the directors to act independently from managers in a conflict of interests situation.

Accounting research has emphasized target and bidder managers' incentives to manipulate earnings during corporate control contests. However, prior studies examining earnings management by takeover targets have obtained mixed results. Moreover, the existing evidence is mainly based on US data and hostile mergers and acquisitions (M&A) transactions. The purpose of this study is to examine earnings management by friendly takeover targets in the year preceding the deal announcement in Switzerland.

The paper examines earnings management practices of a sample of 50 Swiss firms that were targets of a friendly takeover proposition during the period 1990‐2002. Discretionary accruals are used as a measure of earnings management. It uses a matching approach and a cross‐sectional regression analysis to test the hypothesis of earnings management by takeover targets.

The paper expands and provides further international insights to the existing literature through the investigation of earnings management by takeover targets managers in a European setting and in a friendly corporate control environment.

These empirical findings document the existence of a significant downward earnings management during the year preceding the transaction. These results suggest that earnings management incentives may differ between negotiated friendly and hostile disciplinary transactions.

The purpose of this paper is to investigate the link between ownership structure, earnings management (EM) preceding mergers and acquisitions (M&A) and the acquiring firm's subsequent long‐term market performance.

The authors measure the magnitude of discretionary current accruals using two methodologies, that of Teoh et al. and that of Kothari et al. The latter methodology is used to control for the presence of extreme performance prior to the event. The calendar‐time Fama‐French three‐factor model was used to evaluate long‐term stock performance and to minimize potential problems related to the cross‐sectional dependence of the returns.

It was found that firms using stock as a financing medium exhibit significant positive discretionary accruals during the year preceding the M&A and during the year of the acquisition. It was also documented that voting right concentration and control‐enhancing mechanisms are not associated with any significant level of earnings management. Finally, a negative association was found between EM and abnormal stock returns over a three‐year period following the acquisition.

These results suggest that the concentrated ownership alignment effect dominates the entrenchment motives and acts as a deterrent mechanism to prevent controlling shareholders from managing earnings in stock‐financed M&A.

The authors’ results highlight the importance of maintaining good legal and extra‐legal protection of minority shareholders. Regulators can play an important role in preventing dominant shareholders from engaging in opportunistic EM in stock‐financed M&A.

The paper extends prior literature by taking a closer look at dominant shareholders’ motivations to manage earnings in stock‐financed M&A. Large shareholders have strong incentives to manage earnings upward prior to stock‐financed transactions to limit the dilution of their controlling position.

The generally accepted method of presentation with respect to going-concern reporting in a global context is to modify the auditor’s report with an explanatory paragraph in addition to having a separate note to the financial statements. In Canada, however, the auditor’s report is clean, and the going concern uncertainty is restricted to the endnotes. This research, using Canadian students as subjects and conducted as a between-subjects experiment, examines unsophisticated investor’s behavior to the signal conveyed by different reporting formats by auditors (U.S. versus Canadian). The results indicate that the form of the auditor’s report does significantly influence subjects’ decisions to invest and their perception of risk.