Voluntary information disclosure and sell-side analyst coverage intensity

2017 ◽  
Vol 16 (2) ◽  
pp. 260-280 ◽  
Author(s):  
Amal Hamrouni ◽  
Ramzi Benkraiem ◽  
Majdi Karmani
Keyword(s):  
Voluntary Disclosure ◽  
Information Disclosure ◽  
Stock Exchange ◽  
Annual Reports ◽  
Analyst Coverage ◽  
Content Type ◽  
Corporate Managers ◽  
Financial Firms ◽  
High Level ◽  
The Relationship

Purpose This paper aims to investigate whether a high level of voluntary disclosure attracts sell-side analysts. In other words, the authors check whether the number of analysts following a given firm increases with the extent of voluntary information that corporate managers provide in annual reports. Design/methodology/approach The paper relies on regression analyses to study the relationship between the level of coverage by sell-side analysts and the extent of voluntary disclosure for a sample of 155 non-financial firms listed on the Euronext Paris stock exchange and members of the SBF 250 index. Findings The empirical results show that the number of analysts following a given firm increases with the extent of voluntary disclosure. Consequently, the authors conclude that analysts are interested in the volume of information provided voluntarily by corporate managers. Their interest varies across the voluntary-information categories (strategic, financial, non-financial and governance) disclosed in annual reports. Originality/value This study extends previous research by investigating sell-side analysts’ preferences in terms of voluntary-information categories in annual reports. A better understanding of the effects of sub-categories of voluntary information is useful to corporate managers wishing to meet market expectations and attract sell-side analysts. In fact, the authors verify how each category of disclosed information (strategic, financial, non-financial and governance) affects the analyst coverage intensity. In addition, the authors apply our study in the rather interesting empirical setting that is France, which is characterized by a low investor protection and a large number of active analysts.

scholarly journals The relationship between intellectual capital information and firms’ market value: a study from an emerging economy

2019 ◽  
Vol 24 (1) ◽  
pp. 39-51
Author(s):  
A.A. Ousama ◽  
Mashael Thaar Al-Mutairi ◽  
A.H. Fatima
Keyword(s):  
Intellectual Capital ◽  
Firm Value ◽  
Stock Exchange ◽  
Market Value ◽  
Total Sample ◽  
Emerging Economy ◽  
Annual Reports ◽  
Content Type ◽  
Knowledge Based Economy ◽  
The Relationship

Purpose The purpose of this paper is to investigate the relationship between the intellectual capital (IC) information reported in the annual reports and market value of the companies listed on the Qatar Stock Exchange. Design/methodology/approach The study is based on a panel data collected from the annual reports and Bloomberg database for six years, specifically the periods 2010-2012 and 2016-2018. The total sample consists of 252 observations. The theoretical framework was developed in reference to the resource-based theory. The regression model is based on Ohlson’s model, which has been modified by including IC information. Findings The study found that there is a significant relationship between IC information and firm market value. This finding indicates that companies report their IC to help the stakeholders (e.g. shareholders, investors) to understand the real value of the company (which includes IC values). Practical implications The shift to a knowledge-based economy (KBE) has made knowledge a driver for economic growth, and it has become more important than capital, land and labour. This shift makes IC and resources vital for companies to create wealth, value and gain competitive advantage. The State of Qatar plans to transform its economy to a KBE in its “Qatar Vision 2030”. The findings of the study show that the companies have started to depend more on IC to contribute to transforming Qatar’s economy to a KBE. Originality/value This study could be considered a pioneer study to examine the association of IC disclosure and firm value in Qatar. Furthermore, prior literature has mixed findings, which justifies further investigation of IC’s effect on market value, particularly in the emerging economy of Qatar.

The extent of voluntary corporate disclosure in the Egyptian Stock Exchange

2017 ◽  
Vol 7 (2) ◽  
pp. 266-291 ◽  
Author(s):  
Hany Kamel ◽  
Emad Awadallah
Keyword(s):  
Earnings Management ◽  
Voluntary Disclosure ◽  
Management Practices ◽  
Developing Economies ◽  
Stock Exchange ◽  
Related Factor ◽  
Corporate Disclosure ◽  
Content Type ◽  
The Relationship ◽  
Egyptian Stock Exchange

Purpose The purpose of this paper is to investigate the current level of voluntary corporate disclosure in the Egyptian Stock Exchange. In addition, it explores the factors influencing the extensiveness of voluntary disclosure and examines the potential consequences of such disclosure in regards to the phenomenon of earnings management. Design/methodology/approach A relevant disclosure index to the Egyptian context was adopted to assess the level of voluntary disclosure in the 2010 annual reports of the most actively traded companies listed on the Egyptian Stock Exchange. The relationship between the extent of voluntary disclosure and each specific-related factor was examined using unranked and ranked OLS regression models. Meanwhile, a system of simultaneous equations was performed using a two-stage least squares regression model in order to investigate whether companies with higher levels of voluntary disclosure exhibit lower levels of earnings management practices. Findings The results indicate that the level of voluntary disclosure is positively responsive to specific corporate attributes, namely, the type of auditing firm and the two industries of Healthcare and Pharmaceuticals, and Chemicals. However, no significant indications were found that firm size, leverage, profitability and liquidity are important determinants of corporate disclosure. Also, the results show no evidence to support the prior anticipation that a higher level of voluntary disclosure reduces the ability of managers to make use of earnings management. On the contrary, it was found that leverage and the tendency of firms to avoid reporting declines in earnings are the main drivers of the phenomenon of earnings management in Egypt. Practical implications This paper has important implications for both domestic and overseas investors in Egypt as well as the regulatory authorities in the developing economies. Originality/value The main contribution of this paper is its focus on the extent of voluntary disclosure in a developing country such as Egypt, which has a high potential for economic growth in the near future. Besides, this paper is the first to examine the relationship between the level of voluntary disclosure and the phenomenon of earnings management in the Egyptian context.

Board diversity and corporate social responsibility: the moderating role of Shariah compliance

2019 ◽  
Vol 19 (6) ◽  
pp. 1274-1288 ◽  
Author(s):  
Muhammad Azam ◽  
Muhammed Usman Khalid ◽  
Syeda Zinnaira Zia
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Stock Exchange ◽  
Well Being ◽  
Board Diversity ◽  
Financial Reports ◽  
Content Type ◽  
High Level ◽  
Corporate Social ◽  
The Relationship

Purpose The purpose of this study is to investigate the effect of board diversity on corporate social responsibility (CSR) practices and the interaction effect of Shariah compliance of firms with religious and ethical principles. Design/methodology/approach A total of 65 firms listed on the Pakistan Stock Exchange (PSX) were selected. The data were collected from the companies’ financial reports from 2012 to 2018 (n = 455). The data were analyzed using fixed and random effects regression models to test the effect of board diversity on firms’ CSR activities, while hierarchical moderated regression analysis was used to determine the moderating effects of Shariah compliance. Findings The study found evidence for a moderating effect of Shariah compliance on the relationship between board diversity and CSR activities. The findings suggest that a high level of Shariah compliance together with diverse educational backgrounds and presence of both genders among corporate members significantly promoted CSR activities. Research limitations/implications The present study included the demographic variables, gender, ethnicity and education; but excluded language and culture. The results suggest that the Security and Exchange Commission of Pakistan should attach more importance to Shariah compliance by firms in developing their CSR policies to improve social development and human well-being. Policy-makers should encourage more women to become directors on company boards and to increase philanthropic and charitable activities. These findings possess important implications for many Islamic countries irrespective of whether they are developed or developing. Originality/value To the best of the authors’ knowledge, this study provides the first empirical analysis of the relationship between CSR and board diversity from the perspective of Islamic Shariah law. The findings will contribute both theoretically and empirically to the existing body of knowledge.

Social responsibility-related governance disclosure: exploration of managerial perspective in a developing country

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yousuf Kamal
Keyword(s):  
Social Responsibility ◽  
Information Disclosure ◽  
Annual Reports ◽  
Corporate Accountability ◽  
Content Type ◽  
Corporate Managers ◽  
Corporate Executives ◽  
Audit Reports ◽  
Corporate Social ◽  
Societal Expectations

Purpose This study aims to explore corporate managers’ perspectives regarding the disclosure (non-disclosure) of social- and environment-related governance information. Design/methodology/approach Insights into corporate managers’ perspectives are explored by conducting in-depth personal interviews with senior corporate executives of textile and garment companies in Bangladesh. Findings This study establishes that the use of traditional media, such as corporate annual reports, for corporate social responsibility (CSR)-related governance information disclosure can be limited in particular situations, including the case of garment companies, wherein the provision of extensive governance information is necessary, and the information users find special purpose reports, e.g. social audit reports, more comprehensive, credible, and beneficial than annual reports. The results reveal that corporate managers of Bangladeshi supply companies are motivated by financial returns, and they aspire to ensure that buyers (powerful stakeholders) obtain the required CSR-related governance information; this is neither driven by corporate accountability nor transparency. Upon using the managerial branch of the stakeholder theory, the result of this study shows that corporate managers are influenced by powerful stakeholders when they make decisions vis-à-vis the provision of CSR-related governance information. Originality/value This study provides an implication for academics and practitioners toward understanding that corporate managers often provide substantive disclosures of CSR-related governance information through alternative media that have not been previously documented in the literature. Herein, a metaphor – veil – is used to illustrate the visibility gap between societal expectations and managers’ perspectives.

Implications of Shariah on the voluntary disclosure of Indonesian listed companies

2014 ◽  
Vol 12 (1) ◽  
pp. 76-98 ◽  
Author(s):  
Peni Nugraheni ◽  
Hairul Azlan Anuar
Keyword(s):  
Voluntary Disclosure ◽  
Annual Report ◽  
Quality Measurement ◽  
Annual Reports ◽  
Company Size ◽  
Religious Activities ◽  
Content Type ◽  
Significant Difference ◽  
The Relationship

Purpose – The purpose of this paper is to investigate and compare the extent of voluntary disclosure in the annual reports of Shariah- and non–Shariah-compliant companies in Indonesia. Further, the study examines the relationship between voluntary disclosure and company characteristics (i.e. size of company, profitability, type of auditor, type of industry and ownership structure). Design/methodology/approach – Voluntary disclosure was measured using a disclosure index with 30 items and content analysis of the 2009 annual report. Statistical analysis included descriptive, Mann–Whitney U and regression. Findings – The result revealed that there is a statistically significant difference in the quantity and quality of voluntary disclosure value of Shariah- and non–Shariah-compliant companies. For regression results, the company size significantly influences the quantity of voluntary disclosure while the quality of voluntary disclosure is affected by company size and type of industry. Research limitations/implications – Although this study only analyses voluntary disclosure in the annual report for a single year (2009), it is hoped to provide a description of the voluntary disclosure in Shariah- and non–Shariah-compliant companies. Practical implications – The findings might be used by regulators to set regulations that encourage the quantity and quality of disclosure practice of Shariah-compliant companies to expand the scope of disclosure related to religious activities. Originality/value – This study measures voluntary disclosure using the disclosure index based on Indonesian regulations and the quantity and quality measurement of Shariah-compliant companies, which may differ from previous Indonesian studies.

scholarly journals Family-owned banks in Jordan: do they perform better?

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Zaid Saidat ◽  
Abdel Razzaq Alrababa'a ◽  
Claire Seaman
Keyword(s):  
Stock Exchange ◽  
Annual Reports ◽  
Family Ownership ◽  
Negative Consequences ◽  
Content Type ◽  
Return On Equity ◽  
Level Of Involvement ◽  
Domestic Banks ◽  
High Level ◽  
The Impact

PurposeFamily ownership is very common for Jordanian businesses, leading to a high level of involvement of family members in company management. There continues to be intense discussion on the pros and cons of family ownership, particularly as it focuses corporate control within a small family group. The purpose of this paper is to examine the performance of family- and non-family-owned banks that appear on the Amman Stock Exchange over the 2016 to 2020 period.Design/methodology/approachThe research on Jordanian domestic banks is based on data from the annual reports of banks listed on their websites which offers comprehensive data on finances, ownership and the board. Family-owned and non-family banks were analysed using multiple regression technique to identify any variations in their performance.FindingsUsing a sample of 16 domestic banks with 75 bank-year observations over the 2016 to 2020 period, the study supports other research in finding that family ownership is negatively related to bank performance. This is true for accounting-based and market-based performance measures, including return on assets (ROA), return on equity (ROE) and Tobin's Q test results. Additionally, analysis identifies greater negative consequences for performance within family-owned banks by board of directors.Originality/valueThis paper extends previous research on family businesses by investigating the impact of family ownership on the financial performance in the Jordanian bank sector. This research determined that devaluation is a consequence of higher levels of ownership concentration for domestic banks in Jordan.

Voluntary disclosure and complexity of reporting in Egypt: the roles of profitability and earnings management

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mai Mohammed Alm El-Din ◽  
Atef Mohammed El-Awam ◽  
Farid Moharram Ibrahim ◽  
Ahmed Hassanein
Keyword(s):  
Earnings Management ◽  
Voluntary Disclosure ◽  
Management Practices ◽  
Annual Report ◽  
Management Practice ◽  
Poor Performance ◽  
Annual Reports ◽  
Content Type ◽  
Nonfinancial Firms ◽  
The Relationship

PurposeThe study explores the relationship between information overloading and the complexity of reporting. In particular, it investigates whether voluntary information in a firm annual report is associated with its readability. Likewise, it examines how a firm's profitability and earnings management practices impact the nexus of voluntary disclosure and readability.Design/methodology/approachIt uses the annual reports of the Egyptian nonfinancial firms listed in the EGX 100 index from 2010 to 2018. The readability of the annual report is measured automatically using the LIX index, and a predeveloped voluntary disclosure index is used to measure the level of voluntary disclosure in the annual reports.FindingsThe results reveal that the readability of annual reports is a negative function of voluntary disclosure, suggesting that Egyptian firms with more voluntary disclosure are likely to have more complex (i.e. less readable) annual reports. Likewise, less profitable firms and firms with earning management practices increase voluntary information in their annual reports, resulting in an adverse impact on their reporting readability.Research limitations/implicationsIt focuses only on the annual reports of Egyptian firms and considers a firm’s overall voluntary information rather than a particular area of voluntary disclosure. It introduces a code to measure the readability of Arabic-written texts, which can be applied to different areas of disclosure.Practical implicationsPolicymakers in Egypt are encouraged to develop enforceable regulations to control voluntary disclosure in annual reports. Egyptian investors should view the practice of higher voluntary disclosure skeptically as its aim may be to divert attention from a firm's poor performance and earnings management practice.Originality/valueThe study is the first evidence from Egypt on the effect of information overloading, proxied by voluntary disclosure, on the readability of reporting. Likewise, it contributes to methodological development in measuring the readability of Arabic-written annual reports.

Determinants of capital structure of Islamic and conventional commercial banks

2017 ◽  
Vol 10 (1) ◽  
pp. 24-41 ◽  
Author(s):  
Nadeem Ahmed Sheikh ◽  
Muhammad Azeem Qureshi
Keyword(s):  
Capital Structure ◽  
Commercial Banks ◽  
Fixed Effects ◽  
Stock Exchange ◽  
Ordinary Least Squares ◽  
Annual Reports ◽  
Content Type ◽  
Earnings Volatility ◽  
Financial Firms ◽  
The Capital Structure

Purpose The purpose of this paper is to investigate how conventional and Islamic commercial banks in Pakistan choose their capital structure and what are the most significant factors that affect their choice of capital structure. Design/methodology/approach The authors collected the data from the annual reports of commercial banks listed on Karachi Stock Exchange Pakistan during 2004-2014. Panel data techniques, namely, pooled ordinary least squares, fixed effects and random effects, were used to estimate the relationship between book leverage and bank-specific variables such as profitability, size, growth, tangibility and earnings volatility. Findings Descriptive statistics indicate that conventional commercial banks are more levered than Islamic commercial banks. Moreover, conventional commercial banks are larger, profitable and have relatively safe earnings than Islamic commercial banks. In contrast, Islamic commercial banks have relatively more fixed operating assets and growth in total assets compared to the conventional commercial banks. Regression results indicate that profitability, growth and tangibility are negatively, whereas bank size and earnings volatility are positively, related to book leverage of conventional commercial banks. On the other hand, only three variables, namely, profitability, bank size and tangibility, have material effects on capital structure choice of Islamic commercial banks. Profitability and tangibility are negatively while bank size is positively related to book leverage of the Islamic banks. In sum, results of the study indicate that Islamic and conventional commercial banks have their own way to choose the capital structure than the non-financial firms; however, their choice is affected by the similar variables as identified for non-financial firms in Pakistan. Practical implications Results of this study provide support to bank managers to understand the effects of bank-specific variables on capital structure and make them able to determine a balanced capital structure considering the regulations framed by the central bank of the country. Originality/value This is the first study that investigates the factors that affect the capital structure of conventional and Islamic commercial banks in Pakistan. Moreover, findings of this study lay some foundation upon which a more detail analysis of capital structure of banks could be based.

scholarly journals Board and auditor interlocks and voluntary disclosure in annual reports

2014 ◽  
Vol 12 (2) ◽  
pp. 135-160 ◽  
Author(s):  
Geert Braam ◽  
Lex Borghans
Keyword(s):  
Voluntary Disclosure ◽  
Information Exchange ◽  
Stock Exchange ◽  
Ordinary Least Squares ◽  
Annual Reports ◽  
Voluntary Disclosures ◽  
Content Type ◽  
External Auditors ◽  
External Auditor ◽  
The Cross

Purpose – The purpose of this study is to explore whether interlock ties between the board of directors and the external auditors facilitate the cross-firm diffusion of voluntary disclosures in annual reports. Design/methodology/approach – Using a sample of 149 non-financial companies publicly listed on the New York Stock Exchange (NYSE) Euronext Amsterdam, we use ordinary least squares (OLS) regression analysis to examine the relationships between the incidence of financial and non-financial voluntary disclosures in the focal firms’ annual reports and the annual reports of other companies to which the firms are related via the interlock ties of its board members and external auditor. Findings – The results show significant associations between financial and non-financial voluntary disclosures in the focal and related firms’ annual reports when there were board interlocks. Differences in the diffusion of specific types of disclosures are found depending on the type of interlocking director. The results also show that interlock ties of the external auditors positively influence the associations with voluntary financial disclosures in the annual reports. Practical implications – We find clear indications that board and auditor interlocks form important sources of inter-organisational information exchange that can drive changes in voluntary disclosure practices in annual reports. The networks of social relationships between firms may play a significant incremental role in the cross-firm diffusion of corporate voluntary disclosure practices, particularly in complex and ambiguous situations. Originality/value – This paper is the first empirical study to investigate how board and external auditor interlock ties are related to the levels of financial and non-financial voluntary disclosures in the focal and related firms’ annual reports.

Disclosure quantity and the efficiency of price discovery

2016 ◽  
Vol 15 (2) ◽  
pp. 122-143 ◽  
Author(s):  
Dennis Chung ◽  
Karel Hrazdil ◽  
Nattavut Suwanyangyuan
Keyword(s):  
Information Disclosure ◽  
Price Discovery ◽  
Stock Exchange ◽  
Empirical Support ◽  
Return Predictability ◽  
Annual Reports ◽  
Toronto Stock Exchange ◽  
Content Type ◽  
Short Horizon ◽  
Available Information

Purpose The purpose of this paper is to investigate the effect of the information disclosure quantity on the pricing efficiency of stocks. Design/methodology/approach Using a sample of large and actively traded Canadian companies listed on the Toronto Stock Exchange, the authors utilize annual reports filed on system for electronic document analysis and retrieval (SEDAR) between 2003 and 2013 to estimate the amount of publicly available information and find that the length and size of annual reports are important determinants of short-horizon return predictability from historical order flows, which is an inverse indicator of market efficiency. Findings The results show that longer and larger annual reports are associated with reduced information asymmetry, lower cost of immediacy, higher trading activity, and an overall improvement in the efficiency of price discovery. The results are robust to the inclusion of controls for various determinants of short-horizon return predictability, such as trading costs, volatility, informational effects and other firm-specific characteristics. Research Limitations/implications Collectively, the findings provide empirical support for the benefits of detailed corporate disclosure in Canada. Originality/value This is the first study to utilize the short-horizon return predictability approach to evaluate the efficiency of price discovery in relation to the amount of information disclosure.

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