1,720,968 research outputs found
Bankruptcy probability changes and the differential informativeness of bond upgrades and downgrades
Get PDFPrior studies have found that stock returns around announcements of bond upgrades are insignificant, but that stock prices respond negatively to announcements of bond downgrades. This asymmetric stock market reaction suggests either that bond downgrades are timelier than upgrades, or that voluntary disclosures by managers preempt upgrades but not downgrades. This study investigates these conjectures by examining changes in firms\u27 probabilities of bankruptcy (assessed using bankruptcy prediction models) and voluntary disclosure activity around rating change announcements. The results indicate that the assessed probability of bankruptcy decreases before bond upgrades, but not after. By contrast, the assessed probability of bankruptcy increases both before and after bond downgrades. We also find that controlling for potential wealth-transfer related rating actions, which can impact stock returns differently, does not alter our results. Tests of press releases and earnings forecasts issued by firms suggest that the differential informativeness of upgrades and downgrades is not caused by differences in pre-rating change voluntary disclosures by upgraded and downgraded firms. The results support the hypothesis that downgrades are timelier than upgrades. JEL classification G30; G33; M4
Does the converged revenue recognition standard improve revenue recognition comparability between U.S. GAAP and IFRS?
No full textThis study examines whether the new revenue recognition standard, converged between U.S. GAAP and IFRS (hereafter, New Standard), improves revenue recognition comparability between U.S. GAAP and IFRS. Using a difference-in-difference design to compare U.S. firms and IFRS foreign firms that report in the U.S. market, I find that post-adoption, revenue recognition comparability improves in key industries expected to be most-affected by the New Standard under the correlation comparability measure. Specifically, comparability improvement is evident in the telecommunication and computer software industries. However, I find earnings comparability, measured with a stock return-based proxy, decreases in non-key industries and industries with low pre-convergence comparability. Further, I find that comparability improves among U.S. firms, yet does not change among IFRS ADR firms. This study contributes to the literature by being the first to examine comparability improvement in the context of the converged New Standard's adoption, and benefits stakeholders interested in the comparability of financial information across seemingly converged standards in the global market
Top Management Team Diversity and Acquisition Quality
No full textThis research study investigates the impact of top management team diversity (TMT) on the quality of acquisition decisions as reflected in announcement returns to acquirer shareholders. Firms pursue acquisitions with the strategic rationale of increasing shareholder value, improving market share, and achieving economies of scale. Despite these compelling motivations, acquisitions have not always yielded the desired results in terms of increasing shareholder value. This is generally attributed to poor decision making on the part of the TMT. Upper Echelons Theory suggests that TMT decision quality is enhanced when team members come from diverse backgrounds as they bring diversity of opinions and resource knowledge which allow for a more robust sharing of ideas and viable alternatives. Therefore, this study focuses on TMT diversity traits the dimensions of gender diversity, age diversity, job diversity, cultural diversity, tenure diversity, and political affiliation diversity and how these diversity traits impact the decision making process as reflected in the announcement returns of acquirer. I use announcement period returns to acquirer shareholders as my measure of acquisition decision quality due to its extensive use in the finance literature to assess the efficacy corporate policies including investment decisions (Guiso et al., 2008; Bottazzi et al., 2010), cash holdings (Chen et al., 2015) and cost of capital (Gray et al., 2013).I find that age diversity, political diversity, current tenure diversity, and cultural diversity have significant effect on acquisition quality. This means that the shareholders of acquiring firms overall can expect to earn higher abnormal returns when these aforementioned diversity characteristics are present at the TMT level of the firm. Additionally, I find that the impact of these diversity characteristics on acquirer returns are more profound when the deal value of the acquisition is at least 20% of the acquiring firm's size. Furthermore, I also find that TMT diversity characteristics such as gender diversity and total tenure diversity do not have significant effect on acquisition quality as reflected in the announcement returns of the acquirer. Thus, not all diversity characteristics appear to enhance acquisition decision quality. In conclusion, TMT diversity overall promotes better decision making
Going Beyond Counting First Authors in Author Co-citation Analysis
Get PDFThe present study examines one of the fundamental aspects of author co-citation analysis (ACA) - the way co-citation
counts are defined. Co-citation counting provides the data on which all subsequent statistical analyses and mappings
are based, and we compare ACA results based on two different types of co-citation counting - the traditional type that
only counts the first one among a cited work's authors on the one hand and a non-traditional type that takes into
account the first 5 authors of a cited work on the other hand. Results indicate that the picture produced through this non-traditional author co-citation counting contains more coherent author groups and is therefore considerably clearer. However, this picture represents fewer specialties in the research field being studied than that produced through the traditional first-author co-citation counting when the same number of top-ranked authors is selected and analyzed. Reasons for these effects are discussed
Variations on the Author
Get PDF“Variations on the Author” discusses two of Eduardo Coutinho’s recent films (Um Dia na Vida, from 2010, and Últimas Conversas, posthumously released in 2015) and their contribution to the general question of documentary authorship. The director’s filmography is characterized by a consistent yet self-effacing form of authorial self-inscription: Coutinho often features as an interviewer that rather than express opinions propels discourses; an interviewer that is good at listening. This mode of self-inscription characterizes him as an author who is not expressive but who is nonetheless markedly present on the screen. In Um Dia na Vida, however, Coutinho is completely absent form the image, while Últimas Conversas, on the contrary, includes a confessional prologue that moves the director from the margins to the center of his films. This article examines the ways in which these works stand out in the filmography of a director who offers new insights into the notion of cinematic authorship
Earnings quality and CFO financial expertise
No full textScope and Method of Study: Financial reporting is a central issue in the capital markets. As financial reporting is mainly the responsibility of chief financial officers (CFOs), the characteristics of a CFO potentially affect the quality of financial reporting in general, and the quality of earnings in particular. This study investigates if there is an association between earnings quality and CFO financial expertise. Using a sample of the S&P 1500 firms in the year 2005, this study examines if the presence of CFOs with a CPA license, an advanced degree in business, and more CFO experience affects the attributes of earnings.Findings and Conclusions: This study finds that when hiring a CFO, larger firms put more emphasize on the importance of an advanced degree in business, while smaller firms are more likely to hire a CFO with a CPA license. Recently appointed CFOs are more likely to be a CPA and/or have an advanced degree in business, confirming claims that following the Sarbanes-Oxley Act (SOX), the recent trend is for public firms to hire CFOs with better financial expertise. CFOs with a CPA tend to be younger than those without the certification. Among the expertise variables, CPA is the one with the strongest effects on earnings quality. The results show that the variable CPA improves earnings persistence and earnings informativeness, and reduces earnings conservatism
Impact of investor relations on M&A outcomes
Get PDFPer Marston (1996, p. 477), investor relations (IR) is "the link between a company and the financial community, providing information to help the financial community and the investing public to evaluate a company." Through IR activities such as company presentations to and meetings with investors, firms provide information about their strategies, results, and prospects to their investor base. Research has identified that IR impacts positively a variety of dependent variables, including valuation, analyst coverage, and corporate reputation. However, IR has been less successful in impacting valuation in times when investor confidence is low. As the announcement of M&A activity may be associated with significant investor uncertainty in a company's updated prospects for the period following the deal, I examine whether (1) the quantity of IR activities prior to the announcement of a deal, (2) investor rankings of company IR quality, or (3) the presence or absence of a conference call with investors in conjunction with the announcement of a deal impact (a) the cumulative abnormal returns of acquiring companies' shares in the immediate period surrounding the announcement of the deal, or (b) the likelihood that the potential acquiring company is able to close the deal successfully. I find a positive relationship between a conference call after an acquisition announcement and the likelihood that a company would complete the deal but did not find a significant positive relationship between IR efforts and acquiring company stock returns surrounding an acquisition announcement
Appropriate Similarity Measures for Author Cocitation Analysis
Get PDFWe provide a number of new insights into the methodological discussion about author cocitation analysis. We first argue that the use of the Pearson correlation for measuring the similarity between authors’ cocitation profiles is not very satisfactory. We then discuss what kind of similarity measures may be used as an alternative to the Pearson correlation. We consider three similarity measures in particular. One is the well-known cosine. The other two similarity measures have not been used before in the bibliometric literature. Finally, we show by means of an example that our findings have a high practical relevance.information science;Pearson correlation;cosine;similarity measure;author cocitation analysis
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