Mandatory Disclosure, Asymmetric Information and Liquidity: The Impact of the 1934 Act

2005 ◽  
Author(s):  
Charles M. Jones ◽  
Robert Daines
Keyword(s):  
Asymmetric Information ◽  
Mandatory Disclosure ◽  
The Impact

scholarly journals Does Governance Affect Compliance with IFRS 7?

2021 ◽  
Vol 14 (6) ◽  
pp. 239
Author(s):  
Amal Yamani ◽  
Khaled Hussainey ◽  
Khaldoon Albitar
Keyword(s):  
Corporate Governance ◽  
Voluntary Disclosure ◽  
Audit Committee ◽  
Banking Sector ◽  
Mandatory Disclosure ◽  
Disclosure Requirements ◽  
Corporate Governance Codes ◽  
Ifrs 7 ◽  
Enforcement Mechanisms ◽  
The Impact

Although there has been considerable research on the impact of corporate governance on corporate voluntary disclosure, empirical evidence on how governance affects compliance with mandatory disclosure requirements is limited. We contribute to governance and disclosure literature by examining the impact of corporate governance on compliance with IFRS 7 for the banking sector in Gulf Cooperation Council (GCC). We use a self-constructed disclosure index to measure compliance with IFRS 7. We use regression analyses to examine the impact of board characteristics, audit committee characteristics and ownership structure on compliance with IFRS 7. Using a sample of 335 bank-year observations for GCC listed banks over the period 2011–2017, we report evidence that corporate governance variables affect compliance with IFRS 7. However, the significance of these variables depends on the type of the regression model used. Our findings suggest that governance matters for mandatory disclosure requirements. So to improve the level of compliance, regulators, official authorities, and policymakers should intensify their efforts toward improving corporate governance codes, following up their implementation and enhancing the enforcement mechanisms.

scholarly journals Earnings Quality, Asymmetric Information, and Market Response : Insights from Indonesia

2020 ◽  
pp. 377-395
Author(s):  
Puji Wibowo ◽  
Etty Murwaningsari
Keyword(s):  
Asymmetric Information ◽  
Good Governance ◽  
Stock Exchange ◽  
Earnings Quality ◽  
Fixed Effect Model ◽  
Least Square ◽  
Manufacturing Companies ◽  
Reported Earnings ◽  
Stock Transaction ◽  
The Impact

This study aims to investigate the impact of earnings quality and asymmetric information on market reaction which is proxied by cumulative abnormal return (CAR). This study also attempts to analyze whether good governance is playing an important role in moderating the effects of those two independent variables on CAR. By using purposive sampling method, this study covers 125 manufacturing companies listed on Indonesian Stock Exchange for 2017-2018 period to reveal above agenda. By using generalize least square (GLS) fixed effect model, it is found that reported earnings on financial statement have meaningful information for investors. By this, investors could expect stock return by relying on this earning information. Meanwhile, asymmetric information also matters for investors to make decisions regarding stock transaction. However, independence commissioner which is predicted to have an important role for stock performance, is not proved as moderating variable in this study.

scholarly journals Incentive Contract Design for the Water-Rail-Road Intermodal Transportation with Travel Time Uncertainty: A Stackelberg Game Approach

Entropy ◽  
2019 ◽  
Vol 21 (2) ◽  
pp. 161
Author(s):  
Wenying Zhang ◽  
Xifu Wang ◽  
Kai Yang
Keyword(s):  
Asymmetric Information ◽  
Travel Time ◽  
Design Problem ◽  
Stackelberg Game ◽  
Contract Design ◽  
Incentive Contracts ◽  
Optimal Time ◽  
Incentive Contract ◽  
Intermodal Transportation ◽  
The Impact

In the management of intermodal transportation, incentive contract design problem has significant impacts on the benefit of a multimodal transport operator (MTO). In this paper, we analyze a typical water-rail-road (WRR) intermodal transportation that is composed of three serial transportation stages: water, rail and road. In particular, the entire transportation process is planned, organized, and funded by an MTO that outsources the transportation task at each stage to independent carriers (subcontracts). Due to the variability of transportation conditions, the travel time of each transportation stage depending on the respective carrier’s effort level is unknown (asymmetric information) and characterized as an uncertain variable via the experts’ estimations. Considering the decentralized decision-making process, we interpret the incentive contract design problem for the WRR intermodal transportation as a Stackelberg game in which the risk-neutral MTO serves as the leader and the risk-averse carriers serve as the followers. Within the framework of uncertainty theory, we formulate an uncertain bi-level programming model for the incentive contract design problem under expectation and entropy decision criteria. Subsequently, we provide the analytical results of the proposed model and analyze the optimal time-based incentive contracts by developing a hybrid solution method which combines a decomposition approach and an iterative algorithm. Finally, we give a simulation example to investigate the impact of asymmetric information on the optimal time-based incentive contracts and to identify the value of information for WRR intermodal transportation.

Assessment of Asymmetric Information Cost in Indian Stock Market: A Sectoral Approach

2020 ◽  
pp. 097215091986508
Author(s):  
Aritra Pan ◽  
Arun Kumar Misra
Keyword(s):  
Asymmetric Information ◽  
Stock Prices ◽  
Trading Volume ◽  
Share Price ◽  
Return Volatility ◽  
Information Cost ◽  
Market Conditions ◽  
Price Variation ◽  
Bid Ask Spread ◽  
The Impact

Bid-ask spread, along with profit, also encompass the impact of asymmetric information cost and order processing cost. Asymmetric information influences stock prices with varying degree of investors’ perception. Estimation of asymmetric information cost and its determinants have been explored significantly under low-frequency trading. The literature hardly attempts to study asymmetric information cost under high-frequency trading (HFT). Asymmetric information cost significantly influences bid-ask spread, and hence the nature of its impact under different market conditions needs to be analyzed under HFT. The study attempts to estimate asymmetric information cost in HFT and analyze its determinants under different industry sectors and market conditions. The study followed Affleck-Graves et al. (1994 , The Journal of Finance, 49(4), 1471–1488) model to estimate the asymmetric information cost using 5 minutes interval data for a period of 82 trading days. Information gets reflected in equity through the movement in price, variation in trading volume, and return volatility. The study has found share price, traded volume, return volatility and trading frequency as the major determinants of asymmetric information cost in different market conditions. The findings of the study have significant implications for market microstructure for trading, lowering information asymmetry in market and enhancing market quality.

scholarly journals Research on Closed-Loop Supply Chain with Competing Retailers under Government Reward-Penalty Mechanism and Asymmetric Information

2020 ◽  
Vol 2020 ◽  
pp. 1-20 ◽  
Author(s):  
Xiao-qing Zhang ◽  
Xi-gang Yuan ◽  
Da-lin Zhang
Keyword(s):  
Supply Chain ◽  
Asymmetric Information ◽  
Recovery Rate ◽  
Carbon Emission ◽  
Closed Loop ◽  
Retail Price ◽  
Closed Loop Supply Chain ◽  
Weee Recycling ◽  
The Impact ◽  
Decentralized Model

In manufacturer-led closed-loop supply chain (CLSC) with two competing retailers, the retailer-1 recycles WEEE whose fixed recycling cost is asymmetric information. Using dynamics game theory and principal-agent theory, three dynamic game models are built including (1) benchmark model without reward-penalty mechanism (RPM); (2) decentralized model with carbon emission RPM; (3) decentralized model with carbon emission RPM and recovery rate RPM. This paper discusses the influence of RPM and retailers competition on the CLSC and members benefits. The results show that (1) the carbon emission RPM increases retail price, but decreases the WEEE recycling motivation usually. On the contrary, the recovery rate RPM guides WEEE recycling and lowers the retail price effectively. (2) In any case, the retailer-1’s profit is higher than that of the retailer-2; apparently it suggests that the retailer recycling WEEE gains competitive advantages. Furthermore, both the recovery rate RPM and retailers competition are beneficial to improve the competitive advantage. The relationship between two retailers’ retail price is affected by many complicated factors. (3) The WEEE buyback price and WEEE recovery rate with high fixed recycling cost (H-type) are always higher than that of low fixed recycling cost (L-type), respectively, which means that the H-type fixed recycling cost has scale advantages; the greater the reward-penalty intensity and the fiercer the competition, the more obvious the scale advantages under certain condition. (4) The retailers’ competition can not only guide WEEE recycling but also improve retailers’ profits. Meanwhile, the impact of competition on the manufacturer is related to RPM, but the fierce competition decreases the manufacturer’s profit.

Does gender diversity on boards reduce information asymmetry problems? Empirical evidence from the French market

2019 ◽  
Vol 10 (2) ◽  
pp. 144-166
Author(s):  
Nadia Loukil ◽  
Ouidad Yousfi ◽  
Raissa Wend-kuuni Yerbanga
Keyword(s):  
Asymmetric Information ◽  
Stock Market ◽  
Gender Diversity ◽  
Market Liquidity ◽  
Idiosyncratic Volatility ◽  
Independent Directors ◽  
Corporate Boards ◽  
Content Type ◽  
Bid Ask Spread ◽  
The Impact

Purpose The purpose of this paper is to investigate the effect of female members in boards of directors on asymmetric information in the French stock market. Design/methodology/approach The authors use two proxies for asymmetric information: the idiosyncratic volatility and the bid-ask spread. This study is conducted on all listed firms in the SBF 120 index between 2002 and 2012. Findings Results show that gender diversity in boardrooms has a negative effect on the level of private information in stock markets and reduces the bid-ask spread. However, these effects are significant in family-controlled firms: female inside directors significantly increase the idiosyncratic volatility and the bid-ask spread, while female independent directors decrease both proxies for stock market liquidity. Research limitations/implications Our empirical findings contribute to the current debate on the benefits of gender diversity on corporate boards from the market perspective. It shows that, under specific conditions, financial markets could be receptive to the presence of female directors in boardrooms. Practical implications Practitioners and policymakers advocate the benefits of gender diversity on corporate boards. This paper shows that when the protection of minority shareholders is poor, the stock market is receptive to the presence of women independent directors, only in family controlled firms. This is a further argument that could help women to overcome glass-ceiling barriers they usually face to achieve top management positions. Originality/value This paper provides support for the increased attention paid to gender-diverse boards. It addresses the market sensitivity toward the presence of women members in French boardrooms and their positions. This is the first paper, to the best of our knowledge, to address how appointing women to different positions in the boardroom could provide signals to investors in the presence of asymmetric information. French firms are mostly family controlled. Thus, the findings bring valuable information of the impact of board diversity on the stock market considering family and nonfamily firms.

The Impact of Asymmetric Information and Ownership on Nursing Home Access

2005 ◽  
Vol 5 (3) ◽  
pp. 273-297 ◽  
Author(s):  
Eric W. Christensen ◽  
Richard J. Arnould
Keyword(s):  
Nursing Home ◽  
Asymmetric Information ◽  
The Impact

Does asymmetric information affect firm's financing decisions?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad Munir Ahmad ◽  
Ahmed Imran Hunjra ◽  
Faridul Islam ◽  
Qasim Zureigat
Keyword(s):  
Asymmetric Information ◽  
Capital Structure ◽  
Stock Exchange ◽  
Generalized Method Of Moments ◽  
Fixed Effect Model ◽  
Content Type ◽  
Financing Decisions ◽  
Measures Of Asymmetry ◽  
Target Leverage ◽  
The Impact

PurposeThe authors examine the impact of asymmetric information on firm's financing decisions, the feedback effect of changes in capital structure on the level of asymmetric information, and the speed of adjustments in capital structure on its target leverage.Design/methodology/approachThe authors extract the data on 280 non-financial firms listed in the Pakistan Stock Exchange (PSX) from the DataStream. The authors implement the generalized method of moments (GMM), complemented by the fixed effect model (FEM) to estimate the model coefficients.FindingsThe authors find that asymmetric information significantly affects the financing decisions; and that on average, firms adjust 26% of the total debt toward their target capital structure. The negative effect from the difference between the observed and target changes in leverage on asymmetric information confirms that capital structure changes act as a signal for future profitability and helps the management to lower its level of asymmetric information.Originality/valueThe findings offer fresh insight into the effect of asymmetric information on financing decisions, as well as the speed of adjustment of capital structure toward its target leverage, in the context of the firms working in emerging markets like Pakistan. To the authors’ best knowledge, this is the first study to investigate the impact of asymmetric information on financing decisions that incorporate firm's age, size and the global financial crises 2007–2008. The authors construct an asymmetric information index using both accounting and finance measures of asymmetry.

The Impact of Asymmetric Information in Vietnam's Health Insurance: An Empirical Analysis

2012 ◽  
pp. 5-21
Author(s):  
Minh Nguyen Thi ◽  
Phuong Hoang Bich ◽  
Thao Nguyen Thi
Keyword(s):  
Health Care ◽  
Health Insurance ◽  
Asymmetric Information ◽  
Health Care Services ◽  
Health Insurance System ◽  
Insurance Law ◽  
Moral Hazards ◽  
Insurance System ◽  
Care Services ◽  
The Impact

The Vietnam Health Insurance Law in 2008 promulgated universal health care by 2014. To build up a sound and sustainable health insurance system towards this goal, we need to account for the effect of asymmetric information on the use of the health care services, namely moral hazards and adverse selection. This paper uses distinc- tive features of Vietnam's health insurance system to separately estimate the effect of each type. Our results show that the effect of asymmetric information is quite severe and prevalent for old people, and is insignificant for young people. The results can be used for the construction of health insurance policies for Vietnam.

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