Three Essays On Financial Information Disclosure
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Three Essays On Financial Information Disclosure
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Author : Bo Zhang
language : en
Publisher:
Release Date : 2018
Three Essays On Financial Information Disclosure written by Bo Zhang and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
This thesis is comprised of three essays on informational issues that revolve around financial reporting, governance, and disclosure. The first essay focuses on how International Financial Reporting Standards (IFRS) adoption by the Canadian fund industry impacts the funds' reported performance and managers' behavior. When Canada implemented IFRS for publicly accountable enterprises (PAEs) in 2011, it received much attention from international researchers, professionals, and regulators mainly for three reasons: (1) IFRS were more mature when adopted in Canada as nine amendments had been made from 2005 through 2010, and issues and uncertainties faced by earlier adopters such as firms from EU members may or may not exist in Canada; (2) pre-IFRS Canadian accounting standards were very close to that of the US, and thus, the Canadian experience has strong implication to the largest capital market which has not accepted IFRS as primary standards yet; (3) Canadian accounting and financial regulations have been shown to be more effective in controlling risks during the 2008 financial crisis compared to those of other major economies; how IFRS can strengthen such a tight system is to be examined and is important to IFRS proponents and standard setters. In 2014, Canada took the lead by being the first common law jurisdiction mandating IFRS for investment funds while most other countries hold up IFRS adoption in this particular industry due to various complications. This paper shows that IFRS adoption does affect the funds' outcomes and managers' behavior in Canadian closed-end investment funds, and voluntary disclosure of cash flows also strongly affects fund managers' return and valuation discretion. The implication is that if a country is not ready to fully implement IFRS in the fund industry because of complications at the accounting and financial levels, mandatory disclosure of cash flows could lead to better accounting quality as well, since one major difference between IFRS and GAAP is the disclosure of cash flows which constrains manager's discretion on asset appraisals. The second essay studies the implications from outside directors' turnover. Outside directors have been extensively studied as a governance factor, but their behaviors are not well documented in the literature, partly because most agency theory-based research concentrates on the behavior of managers, not that of directors. While the majority of studies in the governance literature analyze characteristics of directors in a static way, I look at this question in a dynamic way which considers directors' behaviors. This paper studies S&P 500 companies that have boardroom turnovers due to outside directors' unexpected departures. The departures of these non-executive directors usually do not trigger investors' concerns. However, our results show that when they do not provide concrete reasons, the firms from which they resigned experience underperformance afterward. This result suggests that directors may have resigned ahead of sub performance because of information they became privy to. The implication is strong to both regulators and investors. While governance regulations require a certain proportion of outside directors on compensation and audit committees with the intention of achieving efficient governance and releasing timely and reliable information, such mechanisms are substantially affected if outside directors do not fulfill their responsibilities when firms face challenges. Investors who take long positions should be alerted about outside directors' unexplained departure, and investors who take short positions may find opportunities when a company has boardroom turnover. The third essay examines a financial question around mergers and acquisitions announcements. In a tender offer, the bidder contacts shareholders of a target firm directly by announcing a public offer to tender their shares. The risk arises because the acquisition may or may not go through. Insiders typically have a better appreciation of the likelihood of a successful acquisition than outsiders, who have very limited access to strategic and private information. As a result, outsiders are at the disadvantageous position during mergers and acquisitions. This paper documents that besides official and public releases, outsiders can also rely on stock returns around announcements to infer private information to reduce information asymmetry. While current regulations and reporting standards do not have effective ways to minimize information asymmetry during mergers and acquisitions, this study highlights an avenue that indirectly mitigates outsiders' information disadvantage.
Three Essays On Corporate Information Communications
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Author : Junqi Liu
language : en
Publisher:
Release Date : 2021
Three Essays On Corporate Information Communications written by Junqi Liu and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021 with categories.
This dissertation consists of three essays that focus on corporate external communication of accounting information. My dissertation's primary goal is to understand better how firms' financial disclosure behaviors change in response to various internal and external forces. To achieve this goal, I use empirical archival methods and employ several unique settings to examine the influences of three particular forces on firms' financial disclosure activities. Specifically, in the first essay, I focus on a firm's internal production function and ask whether labor cost stickiness shapes income smoothing activities. By contrast, the second and third essays explore the influences of two external factors, namely product market competition with existing rivals and the local information environment, respectively, on firms' mandatory and voluntary disclosure behaviors.
Three Essays On Goodwill Impairment Disclosure
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Author : Ionela Andreicovici
language : en
Publisher:
Release Date : 2019
Three Essays On Goodwill Impairment Disclosure written by Ionela Andreicovici and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.
This dissertation is composed of three distinct studies that empirically examine the role of the information disclosed on goodwill impairment for key firm stakeholders (i.e., financial analysts, peer firms, and external auditors). In the first study, I examine the effect of disclosure transparency on disagreement among analysts, and disagreement between analysts and managers, in the context of goodwill impairment. The second study examines whether the reporting of significant goodwill impairment by a firm (impairment firm) affects the corporate investment behavior of other firms in the same industry (peer firms). The third study investigates the impact of the expanded audit report disclosure on firms' financial disclosure decisions. Specifically, I examine whether firms adjust the levels of disclosure on goodwill impairment when auditors flag goodwill impairment as a risk of material misstatements in the expanded audit report. This study contributes to the debate about the usefulness of the expanded audit report by identifying the mechanism through which expanded audit report impacts financial reporting and corporate decisions.
Three Essays On Corporate Disclosure By Small And Medium Entities
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Author : Alessandro Ghio
language : en
Publisher:
Release Date : 2018
Three Essays On Corporate Disclosure By Small And Medium Entities written by Alessandro Ghio and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
This Ph.D. thesis studies the determinants and consequences of information asymmetry between investors and financers on the one hand, and managers on the other, in an uncertain and complex environment. I focus on Small and Medium Entities (SMEs) where the links between the two and the associated agency costs are particularly significant. SMEs are concerned by a whole host of contractual issues. The uncertainties surrounding SMEs' activities also affect investor valuations due to the risk of adverse selection. SMEs' disclosure may play an important part in reducing for market participants the uncertainty surrounding SMEs' activities. My Ph.D. thesis, consisting of a general introduction and three chapters representing three self-contained essays, explores (1) the type of financial information relevant to SMEs' investors and financers; (2) managerial decisions following market expectations about SMEs' disclosure; and (3) the impact of social media on SMEs' disclosure.
Three Essays In Financial Analysts And Corporate Disclosure Using Textual Analysis
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Author : Zhu Chen
language : en
Publisher:
Release Date : 2021
Three Essays In Financial Analysts And Corporate Disclosure Using Textual Analysis written by Zhu Chen and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021 with categories.
"The dissertation consists of two essays in financial analysts and one essay in corporate disclosure, all utilizing textual analysis. In the first essay, I decompose analysts’ estimates of weighted average cost of capital (WACC) into abnormal and expected components using a risk characteristic-based model. I find that the abnormal component predicts future stock returns, especially when combined with EPS and dispersion of EPS forecasts. Additional analysis shows that the abnormal component of WACC predicts underlying firms’ future fundamental performance, particularly for experienced analysts and firms with low information intensity. My findings highlight that the abnormal component of analysts’ WACC estimates is informative. Analysts’ decision process to map their forecast inputs such as EPS forecasts and risk assessment to their investment opinions such as target price and recommendation remains to be a black box in the previous literature. In the second essay, I find that analysts’ estimate of WACC is negatively associated with their target price forecasts. It provides empirical evidence that analysts would rationalize the DCF model. From the investor’s perspective, I find that investors generally overreact to the information in WACC estimates when evaluating analysts’ target price forecasts. The extent of the overreaction depends on whether target price changes are conflicted by WACC changes. In light of psychological theories, I provide empirical evidence that when the investors' optimistic verifiable expectation is rejected, they switch to the unverifiable component - WACC for information. At last, I show similar empirical evidence for analyst recommendation.In the third essay, using 4,262 Form 20-F filings from 37 countries, we find that corporate risk-taking is positively associated with managerial expectation as measured by forward-looking statement (FLS) tone, particularly for firms from countries with strong institutions and for FLS tone related to macroeconomics. Our study advances the measure of overall managerial expectations and links it to corporate risk-taking in an international setting"--
Three Essays On Information Disclosure
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Author : Mohammad Erfan Danesh Jafari
language : en
Publisher:
Release Date : 2016
Three Essays On Information Disclosure written by Mohammad Erfan Danesh Jafari and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
My thesis consists of three chapters and each chapter studies a different aspect of how information is generated and diffused among different market participants. Chapter 1 and 2 study the impact of timing of 13(f) disclosures. Section 13(f) of SEC regulation requires any financial institution with \$100 million or more in assets to disclose its holdings on a quarterly basis within 45 days after the quarter end. Recently, the SEC was petitioned to shorten this 45-day period. In Chapter 1, I develop a model to examine the impacts of a shortened reporting period. Among other results, I demonstrate that a shorter reporting period results in more liquid markets albeit at the expense of reducing price informativeness. In chapter 2 we look at 14 years of form 13F filings between 1999 and 2012. We demonstrate that active institutions tend to file their holding disclosures with longer delays. We show that concerns about copycat investors do not cause the financial institutions to delay their filings; however, fears of presence of front-runners prompt the financial institutions to file their disclosures with longer delays. We also look at financial institutions' decision to delay around important corporate events for stocks in the institutions' portfolio and document that institutions delay their filings around these events possibly to hide their true voting powers. Chapter 3 studies the implications of SFAS No. 14 and SFAS No. 131, which require firms to disclose the existence of sales to individual customers representing more than 10\% of total firm revenues. We document that firms gain visibility by disclosing economic relationships with reputable trading partners. We find that supplier firms enjoy a boost in news coverage and a subsequent reduction in advertising expense when they disclose trading relationships with well-known customer firms. After relationship establishment, supplier firms are more likely to be held by the same institutional investor and covered by the same analyst following their customer firms. Our findings highlight the role of product-market network as an important channel through which small and young firms gain investor recognition and improve their operating environment.
Three Essays On Corporate Governance And Financial Disclosure
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Author : Qiang Wu
language : en
Publisher:
Release Date : 2000
Three Essays On Corporate Governance And Financial Disclosure written by Qiang Wu and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2000 with categories.
Essays On Corporate Finance And Disclosure
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Author : Brian Gibbons
language : en
Publisher:
Release Date : 2021
Essays On Corporate Finance And Disclosure written by Brian Gibbons and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021 with categories.
This dissertation contains three essays. In the first essay, I document that disclosure of financially immaterial environmental and social (E&S) information has material effects on firms' investment and financing decisions using the staggered introduction of 87 country-level regulations that mandate firms report such information. Firms domiciled in countries that mandate E&S transparency increase R&D expenditures and patenting activity after disclosing. Transparent non-financial disclosure reduces financing frictions, resulting in more innovation for equity-dependent firms and increased reliance on external equity. It also improves shareholders' contracting and monitoring abilities, incentivizing managers to invest in innovation. Fixed capital investment, which is less sensitive to information frictions, does not change following E&S disclosure. Additionally, I only observe changes to investment and financing decisions when E&S disclosure is mandatory--highlighting the unique value of consistent and comparable disclosure. In the second essay, I study venture capital firms (VCs) use of public market information and how attention to this information relates to their private market investment outcomes. I link web traffic to public disclosure filings hosted on the Security and Exchange Commission's (SEC's) EDGAR server to individual VCs. VCs analyze public information before most deals. An increase in EDGAR filing views relates positively to the probability of an exit through acquisition, suggesting that public information helps identify paths to acquisition. The effect is stronger when the VC has less access to private information. I conclude that policymakers should consider spillover effects on private markets when setting public disclosure requirements. In the third essay, we identify analysts' information acquisition patterns by linking EDGAR server activity to analysts' brokerage houses. Analysts rely on EDGAR in 24% of their estimate updates, with an average of eight filings viewed. We document that analysts' attention to public disclosure is driven by the demand for information and the analysts' incentives and career concerns. We find that information acquisition via EDGAR is associated with a significant reduction in analysts' forecasting error relative to their peers. This relationship is likewise present when we focus on the intensity of analyst research. Attention to public information further enables analysts to provide forecasts for more time periods and more financial metrics. Informed recommendation updates are associated with substantial and persistent abnormal returns, even when the analyst accesses historical filings. Analysts' use of EDGAR is associated with longer and more informative analyses within recommendation reports.
Three Essays On The Voluntary Disclosure And Managerial Incentive
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Author : Ling Tuo
language : en
Publisher:
Release Date : 2015
Three Essays On The Voluntary Disclosure And Managerial Incentive written by Ling Tuo and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
The importance of an effective corporate communication with all stakeholders including shareholders has been extensively debated in the business literature in the aftermath of 2007-2009 global financial crisis. The key indicator of business value have shifted from accounting profits and stock market performance, formerly, to firm reputation and sustainability performance, currently. Therefore, the transparency and value-relevance of conventional financial reporting has been questioned in terms of its capability to satisfy increasing information needs of all stakeholders. Many doubt whether those traditional financial metrics derived from financial statements can appropriately capture firm & rsquo;s long-term value creation ability. In recent years, users of corporate reports are demanding more relevant financial and non-financial on key performance indicators and forward looking information above and beyond conventional financial statements. To satisfy the demands of information users and decision makers, companies are expected to not only increase their reporting transparency in conventional financial statements but also disclose more inside information to outside public through different types of voluntary disclosure. The first dissertation investigates the role of sustainability report through examining the associations among voluntary disclosure, earnings quality and audit fee. Recently more and more firms begin to release sustainability reports, one important channel of voluntary disclosure, to satisfy the needs of information users and increase the transparency of financial reporting. In this paper, I especially examine the effect of voluntary disclosure quality on those associations. Through Difference-in-Difference test, I find that the release of sustainability report is positively correlated with innate earnings quality and negatively correlated with discretionary earnings quality. Moreover, the positive (negative) correlation between sustainability report and innate (discretionary) earnings quality is more (less) pronounced when the voluntary disclosure quality is high. I also find that the release of sustainability report is associated with higher audit fees and thus it suggests that the sustainability report cannot substitute the traditional financial statement. My conclusions are robust through additional tests of OLS regressions. This paper has important political, academic and industry application. The second dissertation investigates how the firm & rsquo;s cost stickiness strategy is associated with the firm & rsquo;s management earnings forecast (MEF). I conjecture that the managerial incentive regarding the cost strategy and voluntary disclosure strategy are interdependent. When managers choose their cost management, they will also choose the corresponding management earnings forecast strategy to align their interests. Through the empirical tests with a sample between year 2005 and 2011, I find that the firm & rsquo;s level of sticky cost is positively associated with the firm & rsquo;s propensity to issue MEF and the frequency of MEF. Moreover, I find that the firm & rsquo;s level of sticky cost is associated with more good earnings news forecasted by managers. Finally, I find that the relation between cost stickiness and MEF behaviors is more pronounced when the MEF is long-horizon oriented and when the firm efficiency is high. My research builds a link between financial accounting information and managerial accounting information, and also provides new evidence to understand the managerial incentives behind each strategy chosen by managers. This third dissertation investigates how industry peer firms tend to influence the specific firm & rsquo;s voluntary disclosure strategy. Through examining the empirical example of management earnings forecast between 2005 and 2011 and implementing the 2SLS regressions, I find that the specific firm & rsquo;s disclosure frequency, disclosure horizon and the disclosure of bad news are significantly influenced by its peers firms & rsquo; disclosure behaviors. Specifically, the increase in the peers & rsquo; disclosure frequency, disclosure horizon and disclosure of bad news tend to encourage the specific firm to increase its disclosure frequency, disclosure horizon and disclosure of bad news. Moreover, certain firms (such as firms with S & P credit rating, higher profit, larger size or higher market-to-book ratio) tend to be more sensitive to their peer firms & rsquo; voluntary disclosure strategy. Finally, I find that the specific leader-follower relation doesn & rsquo;t exist in the peer effects of disclosure strategy and thus the signaling theory, litigation risk and CEO reputation are more major reasons than herding theory and free rider theory in explaining this phenomenon.
Three Essays On Public Finance And Public Policy
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Author : Jinhai Yu
language : en
Publisher:
Release Date : 2018
Three Essays On Public Finance And Public Policy written by Jinhai Yu and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.