To Reveal or Not to Reveal? The Influence of Cultural Secrecy on Discretionary Disclosure Decisions

2020 ◽  
Vol 55 (03) ◽  
pp. 2050012
Author(s):  
Max Göttsche ◽  
Stephan Küster ◽  
Tobias Steindl
Keyword(s):  
Capital Market ◽  
Private Information ◽  
Cultural Influence ◽  
Managerial Incentives ◽  
Relative Importance ◽  
Disclosure Decisions ◽  
Discretionary Disclosure ◽  
The Relationship ◽  
The Capital Market

Prior studies on the relationship between culture and discretionary disclosure fail to account for concurrent managerial incentives to reveal private information to the capital market. Our study extends the literature by investigating whether these managerial incentives offset the cultural influence on managers’ discretionary disclosure decisions. To this end, we exploit a setting in which managers have the discretion to influence both the quantity and quality of disclosure and can thereby either conceal or reveal private information. For a sample of European firms, we find that despite incentives to reveal private information, managers’ culturally determined preference for secrecy leads them to provide a low quantity as well as a lower quality of disclosure. Our results are robust to several sensitivity checks and demonstrate the relative importance of cultural influence on discretionary disclosure decisions.

scholarly journals An Analysis of Differences in Firms’ Perception of Banks based on Sectors and Number of Monthly Transactions

2011 ◽  
Author(s):  
İbrahim Halil Ekşi ◽  
Yavuz Akçi
Keyword(s):  
Customer Satisfaction ◽  
Capital Market ◽  
Banking Services ◽  
Face To Face ◽  
Service Sectors ◽  
The Relationship ◽  
The Capital Market

In this study, it was aimed to put forward the perception differences of banks, one of the most important tool of the capital market which is a political tool to develop financial improvement on owners and managers of firms. The data was collected by means of face to face meetings with the managers of 520 companies from manufacturing, trading and service sectors, randomly selected from Adana, Mersin and Gaziantep provinces. The relationship between the perception of banking services and the number of monthly transactions and provinces with the banks with which their firms have business activities was studied by analyzing the collected data and doing the frequency, percentage and ANOVA tests. According to the results of the analysis, even though there was no difference in terms of sectors, there was seen an important difference in terms of the number of monthly transactions and provinces. The satisfaction of different products and services for the firms having relatively fewer number of monthly transactions is also crucial today, when the customer satisfaction is of great importance.

scholarly journals Disclosure Dynamics and Investor Learning

2020 ◽  
Author(s):  
Frank S. Zhou
Keyword(s):  
Capital Market ◽  
Earnings Forecast ◽  
Management Forecast ◽  
Disclosure Decisions ◽  
Forecast Data ◽  
The Mean ◽  
Investor Learning ◽  
Market Consequences ◽  
Period Model ◽  
The Capital Market

This paper examines whether investor learning about profitability (i.e., the mean of earnings distribution) leads to persistence in disclosure decisions. A repeated single-period model shows that persistent investor beliefs about profitability lead to persistent disclosure decisions. Using earnings forecast data, I structurally estimate the model and perform several counterfactual analyses. I find that, when investors are assumed to know profitability, the persistence of management forecast decisions significantly declines by 17%–27%. About 24% of firms would have disclosed differently, resulting in 3.9% net change in the amount of information (i.e., posterior variance) provided to the capital market. Collectively, the results indicate the importance of learning profitability in understanding disclosure decisions and the capital market consequences of disclosures. This paper was accepted by Shiva Rajgopal, accounting.

scholarly journals Effects Of Voluntary Disclosure Of The Schedule Of Manufacturing Cost On Analysts’ Earnings Forecasts: Evidence From Korea

2017 ◽  
Vol 33 (3) ◽  
pp. 623-636
Author(s):  
Hyunmin Oh ◽  
Sambock Park ◽  
Heungjoo Jeon
Keyword(s):  
Capital Market ◽  
Voluntary Disclosure ◽  
Earnings Forecasts ◽  
Manufacturing Cost ◽  
Positive Direction ◽  
Negative Direction ◽  
Supervisory Authority ◽  
Set Up ◽  
The Relationship ◽  
The Capital Market

We provide the effects of voluntary disclosure of the schedule of manufacturing cost on analysts’ earnings forecasts. We set up and analyze the disclosure of the schedule of manufacturing cost as a proxy for voluntary disclosure. Specifically, we examine the associations between voluntary disclosure of it and the accuracy of analysts’ earnings forecasts and bias in earnings forecasts. The results of our study are as follows. First, the relationship between voluntary disclosure of the schedule of manufacturing cost and the accuracy of analysts’ earnings forecasts is significant in the positive (+) direction. This means that the accuracy of analysts’ earnings forecasts is higher in the case of the firms that voluntarily disclosed the schedule of manufacturing cost, as compared to other firms. Second, the relationship between voluntary disclosure of the schedule of manufacturing cost and analysts’ bias in earnings forecasts is significant in the negative (-) direction. This means that analysts underestimate earnings in the case of the firms that voluntarily disclose the schedule of manufacturing cost, as compared to other firms. Since the schedule of manufacturing cost is still an interesting item and useful information in the capital market, the results of our study provide important implications not only to managers, but also to investors and supervisory authority. Limitations of our study include the fact that not all diverse variables that affect voluntary disclosure and analysts’ forecasts are considered. 

scholarly journals Quality of corporate governance: Contribution to improving companies performance in Bosnia and Herzegovina

2021 ◽  
Vol 9 (2) ◽  
pp. 19-33
Author(s):  
Slobodan Marin ◽  
Rade Tešić ◽  
Milan Šušić
Keyword(s):  
Corporate Governance ◽  
Bosnia And Herzegovina ◽  
Capital Market ◽  
Business Performance ◽  
Business Environment ◽  
Governance System ◽  
Corporate Governance System ◽  
Business Conditions ◽  
The Capital Market

A quality corporate governance system is a basic prerequisite for a sustainable growth economy, more easily increasing the efficiency of the economic system and guaranteeing access to external sources of capital. The level of quality of corporate governance can be defined as the degree of fulfillment of set standards of corporate governance defined at the international and national institutional level. In the new, modern business conditions, with strong dynamic changes in the social and business environment, modern corporate companies, ie their management bodies, are taking on new characteristics, adapting to new requirements and challenges. In this sense, the new demanding business conditions require continuous improvement of corporate governance potential. Based on previous theoretical and empirical knowledge, Bosnia and Herzegovina has the characteristics of a closed corporate governance system in both entities, so, as a basis for developing models for measuring the level of corporate governance, selected models that measure corporate governance in countries with typical closed corporate governance systems. A significant number of studies show that corporations that achieve higher standards and better corporate governance practices also have better business performance results and thus greater value in the capital market. This means that corporations with a higher level of corporate governance also have better financial operating results, easier access to financial capital, and greater value in the capital market. The main purpose of the research is to determine the level of influence of the quality of corporate governance on business performance, ie to determine whether corporations that had good corporate governance had higher business liquidity and vice versa. The main goal of the research is to establish the link and relationship between quality and corporate performance management indicators of the corporation's business.

Language and Communication Skills A child's competence withlanguage is highly likely to affect the extent and quality of her/his social relationships. As significant conversational ability develops at approximately 2Vi years, social interaction increases simultaneously (Holmberg, Note 2). Children whose language and comprehension skills are limited may be hampered in their ability to communicate and interact with •their peers. Certainly, the relationship between language com-petence and competence in other areas has been documented (Ap-pleton, Clifton, & Goldberg, 1975). Social play requires at least some level of adequate communi-cation skills (Asher, Oden, & Gottman, 1977), e.g., the ability to share a theme of an activity and develop it (Garvey, 1976). Little is known yet about the relative importance of deficits in specific com-munication skills, and further, few effects have been noted as a function of training. It is probable that children with less verbal ability, e.g., younger or handicapped, are less likely to profit from skills training involving verbal instruction or complex language per-formance. And. whereas language skills may not be related to social competence among prelingual toddlers, as the child develops, lan-guage may play a more crucial role. Preliminary analyses of our data show a significant but low correlation between measures of listener vocabulary and knowledge of basic concepts in preschool children and both teacher ratings of social behavior and peer popularity. It appears, then, that language has some role to play in a child's social competence, and the practitioner would be wise to consider the socially withdrawn child's language capabilities before at-tempting remediations which otherwise may prove ineffective. Motor Skills A series of studies of elementary school children from 4th through 7th grades found consistent and significant relationships between their performance on physical measures and social status as measured by socio-metrics (Broekhoff, 1976, 1977, in press). Com-parisons of high and low status contrast groups indicated that signifi-cant differences were maintained over the three years on physical fitness and indices of muscular strength. Thus, it seems logical to

2014 ◽  
pp. 45-50
Keyword(s):  
Social Competence ◽  
Language Skills ◽  
Verbal Ability ◽  
Skills Training ◽  
Relative Importance ◽  
Significant Relationships ◽  
Comprehension Skills ◽  
Peer Popularity ◽  
The Relationship

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.

scholarly journals Investment Training Moderates the Effect of Financial Literacy, Return and Risk on Investment Interest in Capital Markets

2020 ◽  
Vol 9 (1) ◽  
pp. 102-112
Author(s):  
Anhar Fadli ◽  
Andhi Wijayanto
Keyword(s):  
Structural Equation Model ◽  
Capital Markets ◽  
Capital Market ◽  
Financial Literacy ◽  
Structural Equation ◽  
Model Analysis ◽  
Equation Model ◽  
The Relationship ◽  
Positive Effect ◽  
The Capital Market

This study aims to analyze the effect of financial literacy, return and risk on investment interests in the capital market members of Forum KSPM Kota Semarang with investment research as a moderating variable. This research uses structural equation model analysis with WarpPLS 6.0 to evaluate the relationship between variables and the effect of moderation on investor investment training with financial literacy, return, risk, and investment interest by conducting a survey of 113 respondents who were successfully collected. The results of this study confirm previous findings that financial literacy has a positive effect on investment interest, returns have a positive effect on investment interest, and risk has a positive effect on investment interest. Researchers also found that investment training could not moderate the effect of financial literacy on investment interest, but investment training could moderate the effect of return and risk on investment training.

scholarly journals Manajemen Risiko Reputasi Dalam Pasar Modal Syariah

2019 ◽  
Vol 8 (2) ◽  
pp. 270-282
Author(s):  
Sri Rahmani
Keyword(s):  
Capital Market ◽  
The State ◽  
Human Beings ◽  
Legal Basis ◽  
The Government ◽  
First Time ◽  
The Relationship ◽  
The Capital Market

The application of sharia principles in the capital market certainly comes from the Qur'an and the Hadith of the Prophet Muhammad. Both of these sources made the scholars interpret later called the science of jurisprudence. One of the discussions in the science of jurisprudence is a discussion about muamalah, namely the relationship between human beings related to commerce. Based on that Islamic capital market activities are developed on the basis of muamalah fiqh. There are muamalah fiqh rules which state that basically, all forms of muamalah are permissible unless there is an argument which forbids it. This concept is the principle of the Sharia Capital Market in Indonesia. The development of the Sharia Capital Market reached a new milestone with the enactment of Law Number 19 of 2008 concerning Government Sharia Securities on May 7, 2008. This law is needed as a legal basis for the issuance of state sharia securities or state Sukuk. On August 26, 2008, for the first time, the Government of Indonesia issued the State Sharia Securities series IFR0001 and IFR0002.

The New Role of the Capital Market in Russia

2003 ◽  
pp. 44-56 ◽  
Author(s):  
Yu. Danilov
Keyword(s):  
Capital Market ◽  
Russian Economy ◽  
Qualitative Characteristics ◽  
The Capital Market

The article is devoted to the new role of the capital market in the Russian economy. New qualitative characteristics of the Russian capital market are described, which make it possible to carry out its macroeconomic functions, including the function of transferring savings into investments as a main one. The author analyses the processes, which have lead to this new quality of the capital market. It is affirmed that the сhange of its role has taken place as a result of consequent abandoning and weakening of the restrictions that have been inherent to all participants of the market - investors, issuers and intermediaries.

Sign in / Sign up

Export Citation Format

Share Document