Information environment and stock price synchronicity: Evidence from auditor characteristics

ABSTRACT Ownership structure, an important feature of corporate governance, acts as a determinant of the opacity of firms. This study penetrates the “black box” of the ownership structures of Russian corporations, identifies their salient features, and examines the effects of those features on the information environment (stock price synchronicity) of the corporations. Examining a sample of companies listed on the Moscow Exchange, we find that stock price synchronicity is: (1) positively associated with divergence between control and cash-flow rights of the ultimate owner; (2) negatively associated with the ownership concentration of the ultimate owner; (3) negatively associated with companies controlled indirectly by the state through holding corporations with the presence of oligarchs; and (4) negatively associated with firms with transparent oligarchs. Analyzing the economic impact of the results, we find the presence of non-transparent oligarchs and foreign-offshore holdings has the most adverse effect on stock price synchronicity.

Download Full-text

Stock Price Synchronicity and Information Environment

Business & Economic Review ◽

10.22547/ber/9.4.10 ◽

2017 ◽

Vol 9 (4) ◽

pp. 215-234

Author(s):

Ahmad Fraz ◽

Arshad Hassan

Keyword(s):

Stock Price ◽

Information Environment ◽

Stock Price Synchronicity

Download Full-text

Fair Value Reporting, Information Environment and Stock Price Synchronicity

SSRN Electronic Journal ◽

10.2139/ssrn.2051067 ◽

2012 ◽

Author(s):

Mohamed A. Elbannan

Keyword(s):

Stock Price ◽

Fair Value ◽

Information Environment ◽

Stock Price Synchronicity ◽

Value Reporting

Download Full-text

Large Shareholders and Stock Price Synchronicity: Evidence from Vietnam

Global Business Review ◽

10.1177/09721509211005673 ◽

2021 ◽

pp. 097215092110056

Author(s):

Anh Tho To ◽

Trung Dao Le ◽

Quoc Tuan Tran ◽

Thanh Lam Nguyen ◽

Thi Thu Hong Ho

Keyword(s):

Stock Price ◽

Fixed Effects ◽

State Ownership ◽

Information Environment ◽

Standard Errors ◽

Stock Exchanges ◽

Firm Level ◽

Stock Price Synchronicity ◽

Listed Firms ◽

Large Shareholders

This article aims to investigate how large shareholders affect the information environment, as measured by stock price synchronicity, of listed firms in the Vietnam stock exchanges. Upon applying fixed effects and instrumental variables fixed effects with firm-level clustered standard errors for a sample of 160 listed firms in the Vietnam stock exchanges over the period 2008–2017, the results show that stock price synchronicity is negatively associated with the two largest shareholders’ ownership and positively related to state ownership. The findings support that non-state large ownership plays an important role in improving the information environment in emerging markets where investor protection laws are relatively weak.

Download Full-text

Does stock price synchronicity effect information content of reported earnings? Evidence from the MENA region

Risk Governance and Control Financial Markets & Institutions ◽

10.22495/rcgv6i3c1art5 ◽

2016 ◽

Vol 6 (3) ◽

pp. 43-49 ◽

Cited By ~ 2

Author(s):

Omar Farooq ◽

Khondker Aktaruzzaman

Keyword(s):

Information Content ◽

Stock Price ◽

Value Relevance ◽

Information Environment ◽

Governance Mechanisms ◽

Mena Region ◽

High Quality ◽

Stock Price Synchronicity ◽

Reported Earnings ◽

Traditional Governance

This paper documents the effect of stock price synchronicity on the value relevance of reported earnings in the MENA region during the period between 2009 and 2013. Our results show that the information content of reported earnings increases with increase in stock price synchronicity. We document higher impact of earnings on returns for firms with higher stock price synchronicity. We argue that firms with high synchronicity have better information environment. As a result, these firms disclose information that is of high quality. We also show that information conveyed through stock price synchronicity is more important than information conveyed through traditional governance mechanisms.

Download Full-text

Simultaneous Determination Of Stock Price Synchronicity And Dividend Payout Ratios: Evidence From The MENA Region

Journal of Applied Business Research (JABR) ◽

10.19030/jabr.v32i4.9718 ◽

2016 ◽

Vol 32 (4) ◽

pp. 1025-1032 ◽

Cited By ~ 1

Author(s):

Omar M. Farooq ◽

Mona A. ElBannan

Keyword(s):

Simultaneous Determination ◽

Stock Price ◽

Information Environment ◽

System Of Equations ◽

Information Asymmetries ◽

Mena Region ◽

Cross Sectional ◽

Stock Price Synchronicity ◽

Dividend Payout

This paper examines the determinants of cross-sectional differences in stock price synchronicity and dividend payout ratio in the MENA region during the period between 2003 and 2013. These variables are related not only directly, but also indirectly, through their relationship with information environment of firms. To distinguish these effects, we examine the determinants of both variables within a system of equations. Our results indicate that both of these variables affect each other negatively. We argue that higher information asymmetries associated with firms exhibiting high synchronicity leads to lower payout ratios, while lower information asymmetries that accompany firms paying high dividends lead to lower synchronicity.

Download Full-text