scholarly journals Retraction: Capital Market Pressure, Disclosure Frequency-Induced Earnings/Cash Flow Conflict, and Managerial Myopia

2015 ◽  
Vol 90 (4) ◽  
pp. 1715-1715
Author(s):  
Sanjeev Bhojraj ◽  
Robert Libby
Keyword(s):  
Cash Flow ◽  
Capital Market ◽  
Managerial Myopia ◽  
Market Pressure

Capital Market Pressure, Disclosure Frequency-Induced Earnings/Cash Flow Conflict, and Managerial Myopia (Retracted)

2005 ◽  
Vol 80 (1) ◽  
pp. 1-20 ◽  
Author(s):  
Sanjeev Bhojraj ◽  
Robert Libby
Keyword(s):  
Stock Market ◽  
Cash Flow ◽  
Capital Market ◽  
Cash Flows ◽  
Mandatory Reporting ◽  
Managerial Myopia ◽  
Near Term ◽  
The Impact ◽  
Market Pressures ◽  
Market Pressure

We examine the effects of increased capital market pressure and disclosure frequency-induced earnings/cash flow conflict on myopic behavior. In our experiments, experienced financial managers choose between projects where a conflict exists between near-term earnings and total cash flow. Managers more often choose projects that they believe will maximize short-term earnings (and price) as opposed to total cash flows in response to increased capital market pressure resulting from a pending stock issuance, holding constant agency frictions and other stock market pressures. When faced with increased capital market pressure, changes in disclosure frequency cause managers to behave more or less myopically depending on the impact of the change on the pattern of earnings and the resulting earnings/cash flow conflict. Our study provides insights into managers' beliefs about stock market pressures, mandatory reporting, and the availability of alternative communications channels, and contributes to literature on managerial myopia and earnings management, as well as current debates over disclosure frequency.

Organized Labor and Inventory Stockpiling

2021 ◽  
Author(s):  
Sophia J.W. Hamm ◽  
Boo Chun Jung ◽  
Woo-Jong Lee ◽  
Daniel G. Yang
Keyword(s):  
Capital Market ◽  
Bargaining Power ◽  
Investment Decision ◽  
Organized Labor ◽  
Costs And Benefits ◽  
Investment Decision Making ◽  
Major Stakeholder ◽  
Information Spillover ◽  
Labor Negotiations ◽  
Market Pressure

We document that managers stockpile excess inventory to mitigate the operational risk posed by labor unions and to maintain bargaining power in labor negotiations. Inventory levels are higher for union firms and are incrementally higher preceding the renegotiation of collective bargaining agreements with unions. Inventory stockpiling at union firms is more salient when capital market pressure for transparency or information spillover from peers constrains managers from using disclosure strategies. We further show that managers weigh the costs and benefits of inventory stockpiling, as holding excess inventory due to the presence of a union is negatively associated with future profitability but provides the benefits of avoiding a stockout and mitigating negative outcomes from a strike. Our findings highlight the importance of a major stakeholder, i.e., labor, in managers' investment decision-making.

scholarly journals Pengaruh Free Cash Flow, Leverage, Net Profit Margin dan Pertumbuhan Perusahaan terhadap Dividen Payout Ratio Perusahaan Property Real and Estate yang Terdaftar di Bursa Efek Indonesia

2019 ◽  
Vol 2 (2) ◽  
pp. 363-371
Author(s):  
Kevin Kevin ◽  
Nerlia Nerlia ◽  
Annisa Nauli Sinaga ◽  
Thomas Firdaus Hutahean ◽  
Siti Tiffanny Guci
Keyword(s):  
Cash Flow ◽  
Capital Market ◽  
Stock Price ◽  
Linear Regression Analysis ◽  
Multiple Linear Regression Analysis ◽  
Free Cash Flow ◽  
Profit Margin ◽  
Analysis Model ◽  
Stock Trading ◽  
Net Profit

IDX is one of the places for stock trading transactions of various companies in Indonesia. This study aims to analyze the factors that affect the company’s stock price in Indonesian capital market especially in Property Real and Estate. The variables used in this study is Free Cash Flow, Leverage, Growth Company, and dividen policy. This study uses a quantitative approach with multiple linear regression analysis model. This study uses the period 2013-2016. The number of observations used in this study were 14 observations. The results showed that the variable Free Cash Flow, Leverage, Net profit margin and Growth Company has  not significantly effect Dividen Policy. Keywords: Free Cash Flow, Leverage, Net Profit Margin, Growth Company

Sources of origin of operating cash flows in Polish listed companies

2017 ◽  
Vol 45 (4) ◽  
pp. 69-76
Author(s):  
Edyta Mioduchowska-Jaroszewicz
Keyword(s):  
Cash Flow ◽  
Capital Market ◽  
Intangible Assets ◽  
Listed Companies ◽  
Cash Flows ◽  
Investment Expenditure ◽  
Research Hypothesis ◽  
Operating Cash Flows

The aim of the article was to conduct a research on the origin of operating cash flows in Polish listed companies. The main objective of the article was to investigate the level of depreciation and its use in the operating cash flows of companies operating on the Polish capital market. The first was to examine and analyse that depreciation is the main source of the cash flow from businesses. The second hypothesis was a complement to the first hypothesis and concerned the examination of whether 100% of the depreciation was transferred to the investment expenditure. The results of the study presented in the article on depreciation in operating cash flows as the main source of operating cash have been positively confirmed. The average depreciation level ranges from 31% to 47%. The rela-tionship between investment expenditures and depreciation was also examined. Research shows that depreciation is wholly attributable to investment expenditures related to the acquisition of property, plant and equipment and intangible assets, or its value exceeds expenditure. This situation positively confirms the second research hypothesis that depre-ciation is used as investment expenditure.

scholarly journals The Influence Of Public Equity Ownership On Earnings Management Through The Manipulation Of Operational Activities

2014 ◽  
Vol 30 (6) ◽  
pp. 1847
Author(s):  
Yura Kim
Keyword(s):  
Earnings Management ◽  
Capital Market ◽  
Public Debt ◽  
Private Equity ◽  
Real Earnings Management ◽  
Operational Activities ◽  
Public Equity ◽  
Reported Earnings ◽  
The Impact ◽  
Market Pressure

This paper examines whether public equity firms and private equity firms with public debt exhibit different degrees of real earnings management, defined as the manipulation of operational activities in order to influence reported earnings. Public equity firms face intense capital market scrutiny that their private equity counterparts do not. Therefore, this studys comparison of the two types of firms provides insight on the impact of capital market pressure on real earnings management behaviors. My results show that public equity firms are more likely than private equity firms to opportunistically alter normal operations to improve earnings by pushing sales through discounts and promotions, and by lowering costs of sales through overproduction. I find no difference in abnormal discretionary expenses between public equity and private equity firms. Although private equity firms with public debt do not face the same capital market pressure that public equity firms face, they are not immune from incentives to engage in real earnings management. Specifically, I find that private equity firms with public debt engage in real earnings management as their debt moves closer to default. Moreover, private equity firms with public debt that do engage in real earnings management appear to emphasize the zero earnings benchmark, consistent with prior research, suggesting that this benchmark is of primary importance to creditors.

scholarly journals Does cash flow affect investment? Evidence from the romanian capital market.

2013 ◽  
Vol 1 (1) ◽  
Author(s):  
Andriana Putintica ◽  
Carmen Giorgiana Bonaci
Keyword(s):  
Least Squares ◽  
Cash Flow ◽  
Capital Market ◽  
Fixed Effects ◽  
Listed Companies ◽  
Corporate Investments ◽  
Flow Fluctuation

Our paper addresses the relation between corporate investments and cash flow. While literature agrees upon the existence of a correlation between the two, its interpretation continues to generate intense debates. We use data from a sample of 125 Romanian listed companies for the 2005-2011 period. Using a fixed effects least squares model we document a positive significant association between investments and cash flow. The results show that a 1% cash flow fluctuation leads to a 0.27% alteration of the planned investments. We therefore add to the literature on a widely debated topic by bringing evidence in the case of Romanian listed companies.

scholarly journals THE FREE CASH-FLOW THEORY VERSUS FINANCIAL CONSTRAINTS, INVESTMENTS, CORPORATE GOVERNANCE AND SOFT BUDGETING PROBLEMS

2001 ◽  
Vol 51 (4) ◽  
pp. 489-512
Author(s):  
P. HARBULA
Keyword(s):  
Cash Flow ◽  
Capital Market ◽  
Financial Constraints ◽  
Flow Theory ◽  
Conclusive Evidence ◽  
Free Cash Flow ◽  
Capital Market Imperfections ◽  
Special Cases ◽  
Theory Versus ◽  
Made In

The supposed preference of firms for internal financial sources to fund their investments can be explained by either the free cash-flow or the financial constraints theories, both relying on asymmetric information. Neither theory was found fully valid by recent research. Using a French data panel, conclusive evidence will be made in favour of the free cash-flow theory in special cases. The validity of the free cash-flow theory in special cases will bring new issues to light with the introduction of a new definition: soft budgeting problem of capital. Through this analysis, the possible interaction between capital market imperfections and general equilibrium will also gain new dimension.

Sign in / Sign up

Export Citation Format

Share Document