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Author: Enas Abdullah Hassan
Publisher:
ISBN:
Category :
Languages : en
Pages : 362
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Book Description
This thesis examines the association between stock exchange monitoring and both firm performance and the quality of reported earnings for publicly listed firms from 16 economies across the Middle East and North Africa region (MENA). Agency theory suggests that efficient monitoring mechanisms have an important role to play in enhancing operating performance and the quality of reported earnings. Like other external mechanisms (i.e. takeovers, analysts following, banks, and institutional ownership), stock exchanges, as external monitors, perform monitoring activities that increase shareholders' ability to evaluate managerial performance, and put in place effective managerial incentive schemes that are designed to motivate managers to act in the best interests of the shareholders, improve firm performance and enhance the quality of reported earnings. This suggests that the significant monitoring role of stock exchanges enhances market efficiency. Thus, it builds upon the association between stock exchanges monitoring and efficiency; as stock exchange monitoring improves, stock exchange efficiency increases. Using 15,295 (firm performance model) and 8,383 (earnings quality model) firm-year observations between 2001 and 2010 indicate that stock exchange efficiency is positively associated with firm performance, and negatively associated with the absolute value of abnormal accruals (a proxy of earnings quality). Additional tests comparing the results of more efficient exchanges with less efficient exchanges suggests that firms listed on more efficient stock exchanges have better performance and higher earnings quality (lower accruals) than their counterparts listed on less efficient stock exchanges. Additional analyses is performed to examine whether the association suggested by the main results continue to be evident in the presence of other factors shown in prior research to impact on firm performance or earnings quality (i.e. investor protection, legal origin, internal mechanisms, regional attributes, and the instability of economic and political events). Overall, empirical evidence supports the expectations, implying that the association between stock exchange efficiency and firm performance becomes stronger in countries with greater investor protection, a common law tradition, and high income levels. In contrast, the association between stock exchange efficiency and performance appears not to be influenced by the strength of internal governance and whether the firm operates in the oil sector. With regard to earnings quality, however, the results indicate that the association between stock exchange efficiency as an external monitoring mechanism and earnings quality is not affected by other factors. Fundamentally, the results of this thesis are consistent with the extant literature that suggests associations between monitoring mechanisms in general, external mechanisms in particular and both firm performance and earnings quality. This indicates that as stock exchange monitoring efficiency increases, firm performance and earnings quality improves. This thesis contributes to the extant literature on the significant role of stock exchange monitoring. Examining stock exchange monitoring adds another dimension to stock exchange efficiency. Further, it expands our understanding of the effectiveness of stock exchange monitoring role as an external mechanism in mitigating agency problems leading to improved firm performance and earnings quality.
Author: Enas Abdullah Hassan
Publisher:
ISBN:
Category :
Languages : en
Pages : 362
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Book Description
This thesis examines the association between stock exchange monitoring and both firm performance and the quality of reported earnings for publicly listed firms from 16 economies across the Middle East and North Africa region (MENA). Agency theory suggests that efficient monitoring mechanisms have an important role to play in enhancing operating performance and the quality of reported earnings. Like other external mechanisms (i.e. takeovers, analysts following, banks, and institutional ownership), stock exchanges, as external monitors, perform monitoring activities that increase shareholders' ability to evaluate managerial performance, and put in place effective managerial incentive schemes that are designed to motivate managers to act in the best interests of the shareholders, improve firm performance and enhance the quality of reported earnings. This suggests that the significant monitoring role of stock exchanges enhances market efficiency. Thus, it builds upon the association between stock exchanges monitoring and efficiency; as stock exchange monitoring improves, stock exchange efficiency increases. Using 15,295 (firm performance model) and 8,383 (earnings quality model) firm-year observations between 2001 and 2010 indicate that stock exchange efficiency is positively associated with firm performance, and negatively associated with the absolute value of abnormal accruals (a proxy of earnings quality). Additional tests comparing the results of more efficient exchanges with less efficient exchanges suggests that firms listed on more efficient stock exchanges have better performance and higher earnings quality (lower accruals) than their counterparts listed on less efficient stock exchanges. Additional analyses is performed to examine whether the association suggested by the main results continue to be evident in the presence of other factors shown in prior research to impact on firm performance or earnings quality (i.e. investor protection, legal origin, internal mechanisms, regional attributes, and the instability of economic and political events). Overall, empirical evidence supports the expectations, implying that the association between stock exchange efficiency and firm performance becomes stronger in countries with greater investor protection, a common law tradition, and high income levels. In contrast, the association between stock exchange efficiency and performance appears not to be influenced by the strength of internal governance and whether the firm operates in the oil sector. With regard to earnings quality, however, the results indicate that the association between stock exchange efficiency as an external monitoring mechanism and earnings quality is not affected by other factors. Fundamentally, the results of this thesis are consistent with the extant literature that suggests associations between monitoring mechanisms in general, external mechanisms in particular and both firm performance and earnings quality. This indicates that as stock exchange monitoring efficiency increases, firm performance and earnings quality improves. This thesis contributes to the extant literature on the significant role of stock exchange monitoring. Examining stock exchange monitoring adds another dimension to stock exchange efficiency. Further, it expands our understanding of the effectiveness of stock exchange monitoring role as an external mechanism in mitigating agency problems leading to improved firm performance and earnings quality.
Author: Simon M. Keane
Publisher: Philip Allan
ISBN:
Category : Business enterprises
Languages : en
Pages : 200
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Book Description
Author: Enas Abdullah Hassn
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
This paper examines the corporate governance role of stock exchanges by investigating the effect of stock exchange monitoring on the firm performance. The main analysis suggests that a firm's performance improves as the strength of stock exchange monitoring increases. The strength of stock exchange monitoring is measured as the average score of quartile rankings of seven variables for stock exchange monitoring, turnover velocity, exchange age, concentration of domestic shares, demutualization, hybrid exchange, insider trading rules index, rank of exchange. These results imply that stock exchange monitoring plays an important role in the corporate governance of U.S. listed firms. Additional analyses show that U.S. firms' performances are more likely to be influenced by U.S. stock exchange monitoring than non-U.S. stock exchanges. Further, the results indicate that cross-listed firms are less likely to be influenced by U.S. stock exchange monitoring than matched U.S. firms Additionally, SOX crowds out the impact of stock exchange as a monitor on firm performance. The results of this study are robust to potential endogeneity concerns relating to correlated omitted variable bias, and reverse causality. The study contributes to the extant literature on the significant role of stock exchange monitoring, by adding another dimension to stock exchange efficiency.
Author: O. P. Gupta
Publisher:
ISBN:
Category : Efficient market theory
Languages : en
Pages : 408
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Book Description
Author: Robert A. Schwartz
Publisher: Springer
ISBN: 9783319103518
Category : Business & Economics
Languages : en
Pages : 129
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Book Description
In recent years, exchanges on both sides of the Atlantic have been extensively reengineered, and their organizational structures have changed from non-profit, membership organizations to for-profit, demutualized organizations. Concurrently, new alternative trading systems have emerged and the traditional functions of broker/dealer firms have evolved. How have these changes affected the delivery of that mission? How has the efficiency of capital raising in the IPO market been impacted? These are among the key questions addressed in this book, titled after the Baruch College Conference, The Economic Function of a Stock Market. Featuring contributions from a panel of scholars, academicians, policymakers, and industry leaders, this volume examines current issues affecting market quality, including challenges in the marketplace, growth opportunities, and IPO capital raising in the global economy. The Zicklin School of Business Financial Markets Series presents the insights emerging from a sequence of conferences hosted by the Zicklin School at Baruch College for industry professionals, regulators, and scholars. Much more than historical documents, the transcripts from the conferences are edited for clarity, perspective and context; material and comments from subsequent interviews with the panelists and speakers are integrated for a complete thematic presentation. Each book is focused on a well delineated topic, but all deliver broader insights into the quality and efficiency of the U.S. equity markets and the dynamic forces changing them.
Author: Jennifer Francis
Publisher: Now Publishers Inc
ISBN: 1601981147
Category : Business & Economics
Languages : en
Pages : 97
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Book Description
This review lays out a research perspective on earnings quality. We provide an overview of alternative definitions and measures of earnings quality and a discussion of research design choices encountered in earnings quality research. Throughout, we focus on a capital markets setting, as opposed, for example, to a contracting or stewardship setting. Our reason for this choice stems from the view that the capital market uses of accounting information are fundamental, in the sense of providing a basis for other uses, such as stewardship. Because resource allocations are ex ante decisions while contracting/stewardship assessments are ex post evaluations of outcomes, evidence on whether, how and to what degree earnings quality influences capital market resource allocation decisions is fundamental to understanding why and how accounting matters to investors and others, including those charged with stewardship responsibilities. Demonstrating a link between earnings quality and, for example, the costs of equity and debt capital implies a basic economic role in capital allocation decisions for accounting information; this role has only recently been documented in the accounting literature. We focus on how the precision of financial information in capturing one or more underlying valuation-relevant constructs affects the assessment and use of that information by capital market participants. We emphasize that the choice of constructs to be measured is typically contextual. Our main focus is on the precision of earnings, which we view as a summary indicator of the overall quality of financial reporting. Our intent in discussing research that evaluates the capital market effects of earnings quality is both to stimulate further research in this area and to encourage research on related topics, including, for example, the role of earnings quality in contracting and stewardship.
Author: Michael Arthur Firth
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 202
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Book Description
Author: Frederic S. Mishkin
Publisher: University of Chicago Press
ISBN: 0226531929
Category : Business & Economics
Languages : en
Pages : 184
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Book Description
A Rational Expectations Approach to Macroeconometrics pursues a rational expectations approach to the estimation of a class of models widely discussed in the macroeconomics and finance literature: those which emphasize the effects from unanticipated, rather than anticipated, movements in variables. In this volume, Fredrick S. Mishkin first theoretically develops and discusses a unified econometric treatment of these models and then shows how to estimate them with an annotated computer program.
Author: Randall K. Morck
Publisher: University of Chicago Press
ISBN: 0226536823
Category : Business & Economics
Languages : en
Pages : 404
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Book Description
Standard economic models assume that many small investors own firms. This is so in most large U.S. firms, but wealthy individuals or families generally hold controlling blocks in smaller U.S. firms and in all firms in most other countries. Given this, the lack of theoretical and empirical work on tightly held firms is surprising. What corporate governance problems arise in tightly held firms? How do these differ from corporate governance problems in widely held firms? How do control blocks arise and how are they maintained? How does concentrated ownership affect economic growth? How should we regulate tightly held firms? Drawing together leading scholars from law, economics, and finance, this volume examines the economic and legal issues of concentrated ownership and their impact on a shifting global economy.
Author: Wing-Keung Wong
Publisher: Mdpi AG
ISBN: 9783036530802
Category : Business & Economics
Languages : en
Pages : 232
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Book Description
The Efficient Market Hypothesis believes that it is impossible for an investor to outperform the market because all available information is already built into stock prices. However, some anomalies could persist in stock markets while some other anomalies could appear, disappear and re-appear again without any warning. A Special Issue on "Efficiency and Anomalies in Stock Markets" will be devoted to advancements in the theoretical development of market efficiency and anomaly in the Stock Market, as well as applications in Stock Market efficiency and anomalies.
