Global Financial Crisis, Institutional Ownership, and the Earnings Informativeness of Income Smoothing

2017 ◽  
Vol 35 (1) ◽  
pp. 53-78 ◽  
Author(s):  
Ching-Lung Chen ◽  
Pei-Yu Weng ◽  
Yu-Chih Lin
Keyword(s):  
Panel Data ◽  
Financial Crisis ◽  
Institutional Investors ◽  
Global Financial Crisis ◽  
Institutional Ownership ◽  
Income Smoothing ◽  
Earnings Informativeness ◽  
The Global Financial Crisis ◽  
Unbalanced Panel Data

This study uses unbalanced panel data to construct the empirical regressions, and examines the role of the global financial crisis and institutional ownership on the earnings informativeness of firm with income smoothing. The result reveals that the earnings informativeness of income smoothing decreased after the occurrence of the crisis. High institutional ownership also reduces the informativeness of earnings for firms with income smoothing and supports the institutional investors’ opportunism hypothesis. Yet, this result is prominent when the institutional ownership is held by the qualified foreign rather than local institutional investors. This study implements several diagnostic checks and demonstrates that the results are robust to various specifications.

Leverage, investment, and recovery from a financial crisis: the role of debt overhang

2019 ◽  
Vol 37 (1) ◽  
pp. 143-159
Author(s):  
Andreas Kuchler
Keyword(s):  
Panel Data ◽  
Financial Crisis ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Slow Recovery ◽  
Content Type ◽  
Debt Overhang ◽  
Macroeconomic Volatility ◽  
The Global Financial Crisis

Purpose Private investment in advanced economies contracted sharply during the downturn that followed the global financial crisis. A substantial debt overhang has been one proposed explanation for this development. This paper evaluates the role of debt overhang for the slow recovery in investment in Denmark, a country in which levels of private debt rapidly increased before the crisis. Design/methodology/approach Based on firm-level panel data, this paper evaluates the links between debt and investment dynamics for individual firms during the downturn that followed the global financial crisis. Findings High leverage contributed to a slow recovery in investment during the downturn that followed the financial crisis, in particular for small and medium-sized enterprises. The effect cannot solely be attributed to mean reversion in investment. Research limitations/implications Results point to the existence of a separate leverage or “balance sheet” channel with implications for macroeconomic volatility and financial stability. Practical implications Macroprudential or microprudential measures to counteract the build-up of excess leverage during upswings may contribute to reducing macroeconomic volatility and improving financial stability. Originality/value In contrast to previous studies, the panel dimension of data is used to take mean reversion in investment into account. The large, nationally representative panel data set allows to assess the macroeconomic relevance of the results, as well as enables subsample splits which are used to gain insights into potential mechanisms through which debt overhang impacts investment.

Transparency Regulation in Financial Markets – Moving into the Surveillance Age?

2011 ◽  
Vol 2 (3) ◽  
pp. 305-321
Author(s):  
Iris H-Y Chiu
Keyword(s):  
Financial Crisis ◽  
Financial Markets ◽  
Financial Regulation ◽  
Global Financial Crisis ◽  
Financial Sector ◽  
Regulatory Control ◽  
Legal Reforms ◽  
The Global Financial Crisis ◽  
Risk Oversight

In the wake of the global financial crisis, the trajectory of legal reforms is likely to turn towards more transparency regulation. This article argues that transparency regulation will take on a new role of surveillance as intelligence and data mining expand in the wholesale financial sector, supporting the creation of designated systemic risk oversight regulators.The role of market discipline, which has been acknowledged to be weak leading up to the financial crisis, is likely to be eclipsed by a more technocratic governance in the financial sector. In this article, however, concerns are raised about the expansion of technocratic surveillance and whether financial sector participants would internalise the discipline of regulatory control. Certain endemic features of the financial sector will pose challenges for financial regulation even in the surveillance age.

The impact of the global financial crisis on Millennium Development Goal attainment in Africa

2017 ◽  
Author(s):  
Leah McMillan Polonenko
Keyword(s):  
Financial Crisis ◽  
Goal Attainment ◽  
Global Financial Crisis ◽  
Adequate Funding ◽  
Development Goals ◽  
Education In Ghana ◽  
The Global Financial Crisis ◽  
The Impact ◽  
Global Initiatives

This chapter examines the challenges involved in attaining the Millennium Development Goals (MDGs) in Africa in the wake of the 2008 global financial crisis and highlights important lessons for future financing of global initiatives. The 2008 global financial crisis provided a very important caution: global initiatives are only as good as their global conditions. The crisis had very real consequences for the education sector, particularly through the reduction of adequate funding. The chapter first considers the consequences of the global financial crisis to education, taking into account the role of foreign aid, before discussing the cases of primary education in Ghana and Zimbabwe. It concludes by suggesting some best practices for learning from the failures to education from the 2008 agenda.

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