Capital Market Consequences of Managers' Voluntary Disclosure Styles PDF Download
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Author: Holly Yang
Publisher:
ISBN:
Category :
Languages : en
Pages : 50
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Book Description
This paper studies the capital market consequences of managers establishing an individual forecasting style. Using a manager-firm matched panel dataset, I examine whether and when manager-specific credibility matters. If managers' forecasting styles affect their perceived credibility, then the stock price reaction to forecast news should increase with managers' prior forecasting accuracy. Consistent with this prediction, I find that the stock price reaction to management forecast news is stronger when information uncertainty is high and when the manager has a history of issuing more accurate forecasts, indicating that individual managers benefit from establishing a personal disclosure reputation.
Author: Holly Yang
Publisher:
ISBN:
Category :
Languages : en
Pages : 50
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Book Description
This paper studies the capital market consequences of managers establishing an individual forecasting style. Using a manager-firm matched panel dataset, I examine whether and when manager-specific credibility matters. If managers' forecasting styles affect their perceived credibility, then the stock price reaction to forecast news should increase with managers' prior forecasting accuracy. Consistent with this prediction, I find that the stock price reaction to management forecast news is stronger when information uncertainty is high and when the manager has a history of issuing more accurate forecasts, indicating that individual managers benefit from establishing a personal disclosure reputation.
Author: Linda Smith Bamber
Publisher:
ISBN:
Category :
Languages : en
Pages : 58
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Book Description
Prior research in finance and accounting generally posits a limited role for idiosyncratic manager-specific attributes in explaining accounting and disclosure choices. In contrast, upper echelons theory, originating in the strategic management literature, suggests that differences among individuals can affect corporate outcomes. Extant research in voluntary disclosure follows the traditional financial economics perspective, yet even the most comprehensive empirical models leave most of the cross-sectional variation in disclosure unexplained. This prompts us to investigate whether these models are missing a major component: Do idiosyncratic differences among individual managers play a significant incremental role in voluntary corporate financial disclosure? We build a data set that tracks managers over time, which allows us to isolate manager-specific fixed effects after controlling for firm effects. We find that top executives do exhibit unique individual-specific and economically significant disclosure styles. That is, our evidence suggests that individual managers significantly influence attributes of their firms' voluntary disclosures, even after controlling for techno-economic determinants of disclosure identified in prior research, and firm- and time-specific effects. The collective magnitude of these manager-specific fixed effects is large: Manager-specific effects explain roughly as much or more of the variation in disclosure as the known techno-economic determinants combined. We then investigate whether managers' unique fixed effects are associated with observable characteristics of their own personal backgrounds. We find that managers promoted from finance, accounting, and legal career tracks, managers born before World War II, and managers holding MBAs tend to exhibit more conservative disclosure styles. These associations between our estimates of managers' fixed effects and distinctive (permanent) characteristics of their own personal backgrounds provide evidence confirming that our estimated manager fixed effects capture systematic long-lived differences in managers' unique disclosure styles. Our results suggest that individual-specific effects play an important - yet heretofore largely unexplored - role in voluntary financial disclosure. Further investigation of the role unique individual characteristics play in explaining corporate financial reporting is potentially a fruitful direction for future research.
Author: Jinqiu Yan
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
This dissertation examines how managerial incentives in contested takeovers affect voluntary disclosure strategies. I study characteristics of voluntary disclosure around contested takeovers, based on the conjecture that good news in earnings forecasts serves as a defensive strategy to resist a takeover and/or to negotiate a higher offer price. To gauge the relation of voluntary disclosure on takeover consequences, I examine the association between voluntary disclosure and target premiums as well as the length of time to resolve the acquisition. Using a difference-in-differences research design, I find that relative to friendly targets, target management in contested target firms alters the timing of normal information flows by forecasting more good news during the takeover. Managers also manipulate the content of information by releasing optimistically biased forecasts during the takeover to favorably influence the market. Further investigations indicate that target firms adopt voluntary disclosure and alter strategies at the time of contested takeover as a means to convey favorable inside information. The stock market responds positively to optimistic forecasts issued during the contested takeover. Moreover, voluntary disclosure influences contested takeovers by helping target firms negotiate better offers and postpone the M&A process. As a whole, this study demonstrates that target firms adopt voluntary disclosure and alter their strategies under the threat of contested takeover to reveal their true worth and enhance their bargaining power. Unlike prior literature that documents value-destroying managerial entrenchment resistance, voluntary disclosure by targets with favorable information induces information leakage and is one of the resistance tactics that potentially benefits target shareholders.
Author: Ayman Elias Haddad
Publisher:
ISBN:
Category : Disclosure in accounting
Languages : en
Pages :
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Book Description
Author: Li Li
Publisher:
ISBN:
Category :
Languages : en
Pages : 30
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Book Description
This study examines the relationship between Internet-based disclosure and capital market risk. Based on prior research, an index of 49 items is developed to evaluate the level of Internet-based voluntary disclosure in France. Three measures are used to present the capital market risk: total risk is measured by the standard deviation of stock returns, and systematic risk and idiosyncratic risk are the beta and standard deviation of the residuals generated from the market model, respectively. A series of corporate governance factors are also introduced in order to analyze their effect on capital market risk. The results show that total risk and idiosyncratic risk vary inversely with the strength of Internet disclosure. This indicates that improved online disclosure can reduce investors' uncertainty in the capital market. However, systematic risk is not influenced by the disclosure practice. Furthermore, capital concentration and board size are negatively associated with total and idiosyncratic risk.
Author: Gill North
Publisher: Kluwer Law International B.V.
ISBN: 9041168184
Category : Law
Languages : en
Pages : 386
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Book Description
Effective corporate reporting and disclosure are critical in financial markets to promote vigorous competition, optimal performance, and transparency. This book examines whether existing disclosure frameworks in eight countries with the world's most significant securities exchanges achieve these objectives, and then, drawing on extensive empirical findings, identifies the policies and practices that contribute most to improving the overall quality of listed company reporting and communication. Contending that public disclosure of listed company information is an essential precondition to the long-term efficient operation of financial markets, the book provides analysis of such issues and topics as the following: - arguments for and against mandatory disclosure regimes; - key principles of periodic and continuous disclosure regulation; - tensions between direct and indirect investment in financial markets; - assumptions concerning the need to maintain a privileged role for financial intermediaries; - intermediary, analyst, and research incentives; - protection of individual investors; - selective disclosure; - disclosure of bad news; - the role of accounting standards; - public access to company briefings; - long term performance reporting and analysis; and - company reporting developments. A significant portion of the book provides an overview of disclosure regulation and practice in the United States, Canada, Germany, the United Kingdom, Japan, Hong Kong, Australia, and Singapore. A highly informative survey looks at company reports, disclosures, and websites of large listed companies, including Microsoft, Citigroup, Teck Resources, Deutsche Bank, BP, Sony, PetroChina Company, BHP Billiton, and Singapore Telecommunications. The book discusses common disclosure issues that arise across jurisdictions, provides valuable insights on the efficacy of existing disclosure regulation and practice, and highlights the important principles, processes, and practices that underpin best practice company disclosure frameworks. It will be welcomed by company boards and executives and their counsel, as well as by policymakers and scholars in the areas of corporate, securities, banking and financial law, accounting, economics and finance.
Author: Cristiano Busco
Publisher: Springer Science & Business Media
ISBN: 3319021680
Category : Business & Economics
Languages : en
Pages : 354
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Book Description
This book focuses on Integrated Reporting as a contemporary social and managerial innovation where a number of initiatives, organizations and individuals began to converge in response to the need for a consistent, collaborative and internationally accepted approach to redesign corporate reporting. Integrated Reporting is a process that results in communication of the annual “integrated report” which describes value creation over time. An integrated report is a concise communication about how an organization’s strategy, governance, performance and prospects lead to the creation of value over the short, medium and long term. This book offers a fresh perspective with expert contributions focusing on both the theoretical underpinnings and the practical challenges for the future of corporate reporting.
Author: Jong Chool Park
Publisher:
ISBN:
Category :
Languages : en
Pages : 87
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Book Description
Author: Khrystyna Bochkay
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
In this paper, we examine how the emergence of voluntary disclosure standards can alter the nature of information available to capital market participants. Using industry-specific dictionaries of sustainability terms contained in voluntary disclosure standards developed by the Sustainability Accounting Standards Board (SASB), we find a significant increase in earnings call sustainability disclosures following the release of SASB standards, particularly for firms that had little or no coverage of sustainability issues historically. This trend begins around the time when SASB released a provisional disclosure standard for a given company's industry and continues in the years after. We also find a stronger impact of SASB standards on sustainability disclosures of firms operating in industries with high uncertainty around sustainability reporting. Overall, these results inform our understanding of the conditions under which standards created in response to market forces are likely to affect voluntary disclosures and communication norms.
Author: Sudarshan Jayaraman
Publisher:
ISBN:
Category :
Languages : en
Pages : 53
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Book Description
We explore the use of voluntary disclosure by managers to solicit market-feedback. Using managerial capital expenditure forecasts, we find that managers adjust annual capital expenditures upward (downward) in response to positive (negative) stock market reactions to capital expenditure forecasts, but only for those forecast announcements that stimulate rather than discourage informed trading. These capex adjustments motivated by market feedback correlate with higher future performance and are stronger (weaker) when outsiders (managers) are more informed. Finally, we show that managers are more likely to issue and learn from capex forecasts when pre-disclosure stock prices are affected by transitory non-fundamental shocks.
