Developing a framework for carbon accounting disclosure strategies: a strategic reference points (SRP) matrix-based analysis

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mehdi Vaseyee Charmahali ◽  
Hasan Valiyan ◽  
Mohammadreza Abdoli
Keyword(s):  
Capital Market ◽  
Environmental Sustainability ◽  
Vertical Axis ◽  
Reference Points ◽  
Carbon Accounting ◽  
Content Type ◽  
Corporate Strategies ◽  
Institutional Pressure ◽  
Disclosure Strategy ◽  
The Capital Market

Purpose During the current century, environmental sustainability and waste reduction processes have always been subject to scrutiny in developed societies. Developed communities have gained considerable momentum by investing in environmental infrastructure and integrating corporate performance disclosure and less developed communities are involved with it. Carbon disclosure is one of the aspects of green accounting in “corporate strategies,” especially those operating across the capital market. Adherence to the disclosure of facts can facilitate sustainable development in societies. This study aims to present strategic reference points matrix-based model to develop a framework for carbon disclosure strategies through institutional and stakeholder pressures throughout the capital market. Design/methodology/approach As a case study, by reviewing similar research on carbon disclosure, this study seeks to illustrate various carbon disclosure aspects and strategies in a matrix based on institutional (vertical axis) and stakeholder (horizontal axis) pressures Findings The study attempts to states that carbon disclosure is affected solely by the company because of the presence of agency gaps between external stakeholders and corporate executives. Originality/value However, the firm’s decision to adopt a carbon disclosure strategy depends on the performance of stakeholder pressure (stakeholder salience level) and managers’ perceptions of institutional pressure (institutional pressure centrality level).

Investors will greet Saudi IPOs -- and look to Aramco

2021 ◽  
Keyword(s):  
Stock Market ◽  
Capital Market ◽  
Energy Demand ◽  
Public Investment ◽  
Oil Prices ◽  
Investment Fund ◽  
Global Energy ◽  
Content Type ◽  
Regional Projects ◽  
The Capital Market

Significance Investor appetite for Saudi equities has been demonstrated in the huge over-subscription in the IPO of 20% of an internet affiliate of Saudi Telecom Company, which raised almost USD1bn. The Capital Market Authority has also approved Almunajem Foods Company’s request to sell 18 million shares, representing 30% of its capital. Impacts The proceeds of the recent stock market flotations will be used to invest in new domestic and regional projects and acquisitions. The increasingly dominant Public Investment Fund (PIF) would be able to boost its finances through a fresh sale of Aramco shares. Despite the benefits of higher oil prices, there remains a risk that the current surge will damage global energy demand.

What sustainability assurance services do institutional investors demand and what value do they give them?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Isabel-María García-Sánchez ◽  
Beatriz Aibar-Guzmán ◽  
Cristina Aibar-Guzmán
Keyword(s):  
Stock Market ◽  
Capital Market ◽  
Institutional Investors ◽  
Institutional Pressures ◽  
Investment Horizon ◽  
Content Type ◽  
Sustainability Disclosure ◽  
Assurance Services ◽  
The Capital Market

Purpose The purpose of this study is to analyse the role played by institutional investors in a firm’s decision to hire sustainability assurance services and to determine the benefits of sustainability assurance for the functioning of the capital market. This analysis is complemented by examining the quality of the sustainability assurance service that institutional investors demand. Design/methodology/approach The authors selected a sample of 1,564 multinational firms from 2002 to 2017. Panel data logit and generalised method of moments (GMM) regressions were estimated to consider decisions about hiring sustainability assurance services or not, and the assurance quality indexes constructed by a checklist based on the academic literature, respectively. Findings Institutional pressures associated with the environmental and social impacts of a firm’s activities lead to the convergence of institutional investor attitudes towards corporate sustainability, so that, regardless of their investment horizon, they promote the hiring of sustainability assurance services by corporate boards, which favours analyst precision and a reduction in the cost of capital. Long-term (LT) institutional investors exert influence through a selection mechanism, whereas short-term (ST) institutional investors exert influence through their presence on the board. Once the company has decided to provide assurance about its sustainability report, both types of institutional investors promote a higher quality of such service, although this is not well valued by the stock market. Research limitations/implications This paper extends research on the monitoring role of institutional investors into the sustainability assurance context. Researchers may benefit from this paper’s findings when they examine the factors that drive the hiring of sustainability assurance services and their characteristics. This paper also shows that sustainability assurance services are a significant weakness due to the lack of standardisation in comparison with financial auditing, which complicates the assessment of their quality by stock market participants, thereby penalising those companies that provide more complete sustainability assurance reports. Practical implications Considering this paper’s findings, it seems advisable that regulators establish a normative framework to standardise sustainability assurance processes. The results can also be used as an orientation for both companies, to design their sustainability disclosure policies and regulators, to improve the running of the capital market. Social implications Sustainability assurance services have a positive effect on the running of the capital market and improve external stakeholder decision-making by providing more reliable information, which, in turn, will favour the implementation of more sustainable actions that contribute to the attainment of sustainable development goals. Originality/value This is one of the first papers to analyse the effect of institutional ownership on a firm’s decision to hire sustainability assurance services and consider the effect of the institutional investors’ investment horizon – LT versus ST – and the channel – selection methods and/or active engagement – used by them to exert their influence. The authors also propose several measures of sustainability assurance quality to demonstrate the relevance of the contents of the assurance statement for the capital market in general and the institutional investors in particular.

The pricing of corporate real estate holdings on the UK capital market

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Julian Seger ◽  
Kristina Stoner ◽  
Andreas Pfnuer
Keyword(s):  
Real Estate ◽  
Capital Market ◽  
Service Industries ◽  
Content Type ◽  
Balance Sheets ◽  
Corporate Real Estate ◽  
The Uk ◽  
Real Estate Assets ◽  
Estate Ownership ◽  
The Capital Market

Purpose The purpose of this study is to find out if corporate real estate ownership is priced into the capital market performance of non-property companies in the UK. This is of particular interest because ownership still represents a significant weight on the balance sheets and is predominantly considered unfavourable due to its bulkiness and difficult revisability in the event of changes in space demand. This draws attention to the UK as one of the most important European economies that have been exposed to strong uncertainties and dynamics, for example, due to the withdrawal voting of the United Kingdom from the European Union (BREXIT). Design/methodology/approach A first look at the real estate assets reported in balance sheets provides insight into possible changes in ownership strategy. This serves as a basis for subdividing companies based on their real estate assets using a portfolio-based approach and that are then analysed using the Fama and French multi-factor model with regard to their influence on capital market returns. Findings In general, the share of real estate assets has fallen over the past 10 years, although coinciding with BREXIT voting, some industries such as manufacturing show a turnaround. At the same time, ownership is priced in as a factor on the capital market, which applies to a sample across industries, as well as to separately considered sectors in the manufacturing and service industries. The pricing also shows a counter-cyclical pattern. Practical implications Corporate real estate management should be aware of the negative influence of ownership, especially against the background of economic fluctuations. The reduction of ownership can reduce the associated cost of capital and increase company success. Originality/value Previous UK-related studies mostly refer to a period before the global economic crisis in 2008, and therefore, are too old to reflect a changed view on corporate real estate ownership because of new corporate environmental conditions, based on inaccurate proxies or mainly refer to the retail segment. This research gap is closed.

International cooperation to combat money laundering in the capital market: Indonesia and Australia experience

2020 ◽  
Vol 21 (4) ◽  
pp. 263-276
Author(s):  
Sutarno Bintoro ◽  
Sjamsiar Sjamsuddin ◽  
Ratih Nur Pratiwi ◽  
Hermawan
Keyword(s):  
International Cooperation ◽  
Money Laundering ◽  
Capital Market ◽  
Design Methodology ◽  
Best Practice ◽  
Business Processes ◽  
Secondary Data ◽  
Content Type ◽  
Combat Money Laundering ◽  
The Capital Market

Purpose To introduce new initiatives in combating money laundering and related corruption in the capital market sector through international cooperation between Indonesia and Australia. Design/methodology/approach This study used qualitative research methods. Data were obtained through observation, interviews and secondary data analysis. Primary and secondary data were then analyzed with an interactive model. Findings The Indonesian capital market is at high risk of being used as a means of laundering corrupt money. Our analysis found a major obstacle when investigators and prosecutors have handled money laundering cases conducted in the capital market because they have not had enough knowledge related to the capital market and its business processes. Originality/value This article is expected to add to the literature on handling money laundering from corruption carried out in the capital market. It describes best-practice efforts undertaken by Indonesia and Australia.

Capital market development and bank efficiency: a cross-country analysis

2019 ◽  
Vol 15 (4) ◽  
pp. 478-491 ◽  
Author(s):  
Thanh Ngo ◽  
Tu Le
Keyword(s):  
Causal Relationship ◽  
Capital Market ◽  
Banking System ◽  
Market Development ◽  
Banking Efficiency ◽  
Content Type ◽  
Banking Systems ◽  
Global Banking ◽  
The World ◽  
The Capital Market

Purpose The purpose of this paper is to empirically investigate the causal relationship between banking efficiency and capital market development in 86 countries between 2006 and 2011. Design/methodology/approach The authors follow the two-stage framework: data envelopment analysis (DEA) with the use of financial ratios is used to arrive at efficiency scores of the banks in the first stage. Thereafter, those efficiency scores will be linked with the development level of the capital markets of the corresponding country in the second stage using the generalised method of moments in a simultaneous equations model. Findings The authors found that banking systems around the world were still inefficient, suggesting that it would take time for the global banking system to recover after the global financial crisis 2007/2008. More importantly, the findings demonstrated that the larger the capital market is, the less efficient its banking system would be. In contrast, banking efficiency can positively influence the development of the capital market. Research limitations/implications The data are unbalanced and limited to 86 countries; the study did not analyse the productivity change over time of those banking systems; and it would be useful to test the first-stage DEA with different sets of variables as well as different assumptions. Practical implications The paper suggests that for any economy around the world, an improvement in banking performance and efficiency rather than capital market development should be a priority, alongside with monitoring inflation. Originality/value The paper provides an unbiased analysis of the causal relationship between the banking sector and the capital market.

Corporate voluntary carbon disclosure strategy and carbon performance in the USA

2019 ◽  
Vol 32 (3) ◽  
pp. 417-435 ◽  
Author(s):  
Ragini Rina Datt ◽  
Le Luo ◽  
Qingliang Tang
Keyword(s):  
Ghg Emissions ◽  
Carbon Accounting ◽  
Content Type ◽  
Goods And Services ◽  
Mandatory Requirement ◽  
Different Types ◽  
Signalling Theory ◽  
The Usa ◽  
Carbon Performance ◽  
Disclosure Strategy

Purpose This study aims to examine whether good carbon performers disclose more carbon information overall than poor performers, and if yes, how firms select different types of carbon information to signal their genuine superior carbon performance. Design/methodology/approach The level of disclosure is measured based on content analysis of Carbon Disclosure Project (CDP) reports. The study sample consists of 487 US companies that voluntarily participated in the CDP survey from 2011 to 2012. The authors use the t-test and multiple regression models for analyses. Findings The results consistently indicate that firms with better carbon performance disclose a greater amount of overall carbon information, supporting the signalling theory. In addition, in contrast to previous studies that merely consider the overall disclosure level, the authors also investigate disclosure of each major aspect of carbon activities. The results show that good carbon performers disclose more key carbon items, such as goods and services that avoid greenhouse gas (GHG) emissions, external verification and carbon accounting, to signal their true type. Research limitations/implications This study has some limitations. The authors rely on CDP reports for analysis and focus on the largest companies in the USA. Caution should be exercised when generalising the results to other countries, smaller firms or voluntary carbon information disclosed in other communications channels. Practical implications Because carbon disclosure has already been moving from a voluntary to mandatory requirement in many jurisdictions, the format and content of CDP reports might be considered for a formal standalone GHG statement. Based on the results, the authors believe that there should be industry-specific disclosure guidelines, and more disclosure should be made at the project level. Originality/value In the context of climate change, this study provides support for the signalling theory by utilising the relationship between voluntary carbon disclosure and performance. The study also provides empirical evidence on how companies may use different types of carbon information to signal their underlying carbon performance.

Do voluntary positive earnings forecasts of Chinese listed companies benefit publicly or privately?

2018 ◽  
Vol 9 (1) ◽  
pp. 78-98
Author(s):  
Jing Zhang ◽  
Guihua Lu ◽  
Baoliang Liu
Keyword(s):  
Insider Trading ◽  
Capital Market ◽  
Information Disclosure ◽  
Stock Exchange ◽  
Scientific Evidence ◽  
Earnings Forecasts ◽  
Listed Companies ◽  
Security Market ◽  
Content Type ◽  
The Capital Market

Purpose According to the Chinese Stock Exchange rules, the listed companies’ management earnings forecasts (MEFs) are divided into mandatory and voluntary earnings forecasts. Different information disclosure mechanisms may bring different economic consequences. Compared with the former, when, how frequently and what kind of voluntary earnings forecasts are disclosed almost entirely depends on the discretion of managers and the major shareholders[1]. The purpose of this paper is to examine whether listed companies’ voluntary earnings forecasts have self-benefited motives before the major shareholders’ selling of original non-tradable shares and how the capital market reacts in China. Design/methodology/approach This paper uses multiple regression analyses to examine the influence of the major shareholders’ non-tradable shares selling motives on MEFs’ type and frequency of A-share listed companies and makes robust tests using the difference in difference model (DID). Findings In the paper, it is found that before the major shareholders’ selling of original non-tradable shares, managers of listed companies are prone to release positive voluntary MEFs; during the shares reduction year of the major shareholders, the disclosure frequency of MEFs is much higher; these forecasts before the major stockholders’ selling have significant higher excess market returns. The evidence suggests that voluntary positive MEFs are for the major shareholders’ self-interested motive rather than for the open, fair and just disclosure purpose that damages the allocation efficiency of the capital market. Originality/value This paper enriches the understanding of voluntary MEFs’ incentives literature and provides scientific evidence to improve the supervision of information disclosure and insider trading in Chinese security market.

scholarly journals Capital market and economic growth in Malaysia: the role of ṣukūk and other sub-components

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yan-Ling Tan ◽  
Roslina Mohamad Shafi
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Capital Market ◽  
Market Liquidity ◽  
Content Type ◽  
Stock Market Development ◽  
Distributed Lag ◽  
Long Run ◽  
The Capital Market

Purpose The purpose of this paper is to explore the effects of the capital market on economic growth by considering the role of ṣukūk (Islamic investment certificates) and other capital market sub-components in Malaysia between 1998 and 2018. Design/methodology/approach The empirical investigation is based on the autoregressive distributed lag (ARDL) cointegration bounds test. Findings The results reveal the prevalence of a long-run equilibrium relationship between capital market variables and economic growth. As expected, bond market components (ṣukūk and conventional bonds) have a positive, albeit insignificant influence on economic growth. In contrast, in the long-term, stock market development – regardless of the indicator used on economic growth – is shown to have a significant and positive effect. The study suggests that stock market sub-components affect Malaysia’s economic growth the most. Research limitations/implications The primary limitation of this study is that only corporate ṣukūk were considered, while government ṣukūk were excluded from the estimation due to a lack of requisite information, resources and data. Practical implications A strategic framework should be established, especially in pricing efficiencies. Furthermore, there is a need to create more awareness on the benefits of ṣukūk investment among conventional bond investors, including retail investors. Thus, there will be more players in the ṣukūk market, and this will help to improve market liquidity. Originality/value Apart from conventional capital market sub-components, this study takes into account ṣukūk as a sub-component in the capital market on economic growth using the ARDL framework. Also, this study particularly concentrates on the world’s largest ṣukūk issuer, Malaysia, rather than focusing on other ṣukūk-issuing countries.

Auditors’ assessment of the capital market liability of foreignness

2018 ◽  
Vol 17 (1) ◽  
pp. 109-129 ◽  
Author(s):  
Deborah Drummond Smith ◽  
Kimberly C. Gleason ◽  
Joan Wiggenhorn ◽  
Yezen H. Kannan
Keyword(s):  
Information Asymmetry ◽  
Capital Market ◽  
Cultural Difference ◽  
Audit Fees ◽  
Institutional Distance ◽  
Foreign Firms ◽  
Liability Of Foreignness ◽  
Specific Level ◽  
Content Type ◽  
The Capital Market

Purpose This paper aims to apply the Capital Market Liability of Foreignness (CMLOF) framework to the audit fees of a sample of foreign firms listed on US exchanges to examine whether American auditors price foreignness. Design/methodology/approach The four components of the CMLOF are institutional distance (civil versus common law system and enforcement), information asymmetry (disclosures and mandatory IFRS adoption), unfamiliarity (exports, English language and geographical distance) and cultural difference [Hofstede (1980) dimensions of culture]. These variables are examined in a regression model that explains audit fees to determine the auditor perception of risk associated with the CMLOF. Findings Examining the factors that mitigate perceived agency costs, this investigation determines that auditors price risk according to each component of the liability of foreignness. Audit fees are higher for shareholders of firms headquartered in countries exhibiting greater institutional distance, unfamiliarity and cultural distance. Audit fees are higher for firms when their home country requires additional disclosures or the adoption of IFRS to reduce information asymmetry. Practical implications CMLOF is costly for capital market participants and has implications for auditors, shareholders of foreign firms and managers considering listing in the US Auditors, and investors should carefully assess this risk for pricing and valuation, and managers should take action, to the extent possible, to reduce the firm-specific level of unfamiliarity and increase transparency. Originality/value This paper is the first to apply the CMLOF to examine whether auditors price aspects of foreignness of their non-US-headquartered clients.

Stock price reaction on ISO 9001 certification announcement: evidence from Indonesia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kiryanto Kiryanto ◽  
Indri Kartika ◽  
Zaenudin Zaenudin
Keyword(s):  
Stock Market ◽  
Stock Returns ◽  
Capital Market ◽  
Quality Management System ◽  
Abnormal Returns ◽  
Iso 9001 ◽  
Content Type ◽  
Before And After ◽  
The Impact ◽  
The Capital Market

PurposeCertification information published by a company will be responded by the market. Therefore, the purpose of this study is to examine the impact of ISO 9001 certification on the stock market reaction as indicated by stock returns reaction of companies in Indonesia.Design/methodology/approachThis study used event study method with the period of 13 days. It consists of 6 days before and after ISO 9001 certification announcement and 1 day at the time of the event. It analyzed by using pair sample t-test and one sample t-test. The stock return data is obtained from companies that are ISO 9001 certified and it tested for their stock reactions before and after the certification.FindingsThe results of empirical research showed that the average and companies cumulative abnormal returns in Indonesia react quickly and positively on the first day after ISO 9001 certification announcement. This study proved the differences between abnormal returns before and after the ISO 9001 certification announcement period.Research limitations/implicationsThe company's success in implementing ISO 9001 will have an impact on investment in the capital market with a positive response from stock market players. The implication of this study is the further research can examine directly the impact of ISO 9001 implementation on investor behavior in the capital market.Originality/valueBased on the development of the literature review, this is the first study which examined the impact of ISO 9001 certification announcement on investor reactions in the short term. Therefore, companies in Indonesia need to implement a quality management system for investors in Indonesia.

Sign in / Sign up

Export Citation Format

Share Document