DO POOR AND GOOD PERFORMING COMPANIES REPORT DIFFERENTLY? THE READABILITY AND IMPRESSION MANAGEMENT IN CORPORATE NARRATIVE DOCUMENTS: EVIDENCE FROM NORTHERN EUROPE

The purpose of this paper is to assess the effect of financial performance on textual features of the CEO’s statement. Specifically, given the incentives of poorly performed companies engage in impression management, the study investigates whether companies’ reporting strategy hinges on its financial performance. The research questions are tested through analysis of a variety of textual features in the CEO’s statement of 30 good and 30 poor performed companies listed on NASDAQ OMX Stockholm. We apply a range of textual characteristics drawn mostly from prior studies in given realm to the specific research of impression management in the CEO’s report. Overall our findings do not corroborate impression management claim, as six out of seven our results run counter to assertions made by impression management research. We found although evidence that poorly performed companies more focused on future compared with good performed companies. Finally, we conclude by discussing our results and outlining some avenues for further research.

SIZE PRECEDENCE AND SHARE VOLUME: THE CASE OF THE PSX EXCHANGE

Most equity exchanges operate with a price-time priority market structure. Using a natural experiment, this study examines the ability of an exchange to attract share volume when size is the secondary precedence rule. In 2010, the NASDAQ OMX Group, Inc. and the Philadelphia Exchange launched the PSX equity exchange with a price-size pro-rata allocation market model. When operating under a pro-rata allocation algorithm, PSX is able to attract more volume than during a price-time regime. Systemic factors are imperative, as there is substantial evidence that the PSX attracts volume in times of heightened market volatility, but PSX volume decreases when market returns are positive. Competition is increasingly important in a fragmented market. There is evidence that order routing fees and the prevalence of off-exchange trading are significant factors in the ability of the PSX to capture market share. The results are of interest to market participants, regulators, and exchange officials.

Corporate dreams – Appropriate aspirations and the building of trust in annual reports

This paper argues that the corporate annual report is not only a document comprising retrospective accounts of financial position and performance, but also a text that points to the future by means of presenting dreams, aspirations and fantasies. However, these dreams are not to be seen as irrational deviations from the rationalistically oriented discourse of accounting. Quite to the contrary, the three corporate dreams identified in this study – the colonial dream, the evolutionary dream and the efficiency dream – are part of the ongoing self-narration of the company, in which it tries to display an allegiance to a set of appropriate aspirations that are considered legitimate in contemporary global capitalism. Drawing upon ideas from narrative theory, annual reports from 2005 to 2010 collected from NASDAQ OMX Stockholm have been analyzed with the purpose of understanding how corporate dreams are used in financial communication. These corporate dreams contribute, the paper argues, to the construction of legitimacy and trust.

How Does Learning and Education Help to Overcome the Disposition Effect?*

The paper assesses how intelligence, education, and learning affect the disposition effect using our exhaustive NASDAQ OMX Tallinn dataset. We employ survival analysis to show that higher intelligence and stronger learning abilities as measured by education level and the type of education lessen the disposition effect. More highly educated and intelligent investors also learn faster by trading. We find that mathematical abilities are beneficial for overcoming the disposition effect and propose that learning ability is one of the most important components of intelligence in affecting the disposition effect.

Research on Impact of Listed Companies Sustainable Development on Company’s Value

In the paper, based on theoretical sources and empirical research data analysis, was studied sustainable development and its impact on the value created of listed companies. It is likely that the companies involved in sustainable development will increase the company's value by improving operating efficiency, competing in both Lithuanian and international markets and contributing to improving people’s quality of life. Main purpose of this paper is to evaluate what impact sustainable development has to the value of listed companies. Thesis theoretical part analyses listed companies’ sustainable development impact for enterprises value theoretic aspects, investigates sustainable development and value-creating relations. According to analysis results, hypotheses were raised. Methodological paper part analyses EVA, company value and EBITDA ratio, market capitalization and ROE rate theoretical aspects. The practical part of this paper evaluates sustainable development companies which are in listed NASDAQ OMX BALTIC stock exchange and joined UN Global Compact organization. Analysis covers what impact sustainable development has to the value of listed companies in 2011-2015 period. The results are interpreted, summarized and conclusions with recommendations are presented.

Writing write-downs: the rhetoric of goodwill impairment

Purpose The aim of this paper is to study the rhetoric of goodwill impairment, more specifically rhetoric, as it is constructed in the form of accounts (i.e. statements that explain unanticipated or untoward behavior). The authors argue that goodwill impairment is not only a technical matter but also a rhetorical practice by means of which external scrutiny is responded to. Design/methodology/approach The data corpus consists of explanations provided by corporations regarding impairment of goodwill. Data were collected from annual reports from companies quoted on NASDAQ OMX Stockholm, Sweden. The impairment explanations were analyzed according to a taxonomy of account types. The explanations were subjected to close reading to discern the potential rhetorical functions of the different accounts. Findings Seven account types are identified and discussed, namely, excuse, justification, refocusing, concession, mystification, silence and wordification. Research limitations/implications There is a need for further research that explores the process of authorship (i.e. writing, editing, negotiating and revising) through which the texts of financial communication are produced. Practical implications The findings have implications for the future formulations of standards regarding qualitative explanations in financial reporting in general and explanations of goodwill impairment in particular. Originality/value The paper contributes to the knowledge about the use of natural language and rhetoric in financial communication.

ĮMONIŲ INTELEKTINIO KAPITALO IR VEIKLOS RODIKLIŲ RYŠIO ANALIZĖ

Informacijos, susijusios su intelektiniu kapitalu atskleidimas nėra privalomas ir reglamentuotas, tačiau siekiant konkurencinio pranašumo, vis daugiau įmonių atskleidžia tokio pobūdžio informaciją. Viena dar nepakankamai išanalizuotų problemų yra informacijos apie intelektinį kapitalą atskleidimo ryšys su įmonės veiklos rodikliais. Todėl siekiant užpildyti tokio tipo tyrimo spragą Lietuvoje, šio straipsnio objektas yra informacijos apie įmonės intelektinį kapitalą atskleidimas, o tikslas – išanalizavus ir susisteminus atliktus tyrimus, ištirti informacijos apie intelektinį kapitalą atskleidimo ryšį su įmonės veiklos rodikliais. Analizuojant teorinius intelektinio kapitalo sampratos ir reikšmės įmonei aspektus, darbe naudojamas bendramokslinis tyrimo metodas – lyginamoji mokslinės literatūros analizė, nagrinėjamų duomenų sintezė, abstrahavimas ir klasifikavimas. Atliekant empirinį tyrimą naudojami turinio analizės bei kiekybiniai tyrimo metodai – koreliacinė - regresinė analizė ir aprašomoji statistika, kurie įgalina nustatyti ryšius tarp informacijos apie intelektinį kapitalą atskleidimo lygio ir įmonės veiklos rodiklių ir, juos apibendrinus bei susisteminus, sudaryti intelektinio kapitalo atskleidimo modelį. Atliktus 14 NASDAQ OMX Baltijos vertybinių popierių biržoje listinguojamų įmonių 2011–2015 metų finansinių ataskaitų turinio analizę, nustatyta, jog bendras informacijos apie intelektinį kapitalą atskleidimo lygis nebuvo nuoseklus: Lietuvoje neprivalomos informacijos atskleidimo lygis kasmet augo, o Estijoje ir Latvijoje mažėjo. Atlikus koreliacinę – regresinę analizę, nustatyta, jog didžiausia priklausomybė egzistuoja tarp informacijos apie intelektinį kapitalą atskleidimo lygio ir įmonės dydžio, įmonės nuosavybės koncentracijos lygio bei audito įmonės pasirinkimo. Pastebėta neigiama koreliacija tarp informacijos apie intelektinį kapitalą atskleidimo ir informacijos asimetrijos lygio bei įmonių finansinio sverto rodiklio.