We investigate how rounded (e.g., 10 percent) versus unrounded (e.g., 9.73 percent, 10.00 percent, or 10.27 percent) sales growth forecasts impact investor judgment. We hypothesize that investors are more willing to invest in a company when the degree of rounding matches the amount of forecast uncertainty (i.e., rounded forecasts in more uncertain environments and unrounded forecasts in less uncertain environments). We also hypothesize that managers can offset the negative impact of a mismatch between forecast rounding and forecast uncertainty by using more immediate language in their forecasts. In a first experiment using M.B.A. students as investors, we find a combination of support and partial support for our hypotheses. However, in a second experiment using online workers and a third experiment using M.B.A. students, we fail to find support for our hypotheses. Overall, we fail to find replicable effects of forecast rounding, forecast uncertainty, and language immediacy on investors’ judgments.
{"title":"Forecast Rounding, Forecast Uncertainty, Managers’ Language, and Investors’ Judgments","authors":"Jessica L. Buchanan, M. D. Piercey","doi":"10.2308/jfr-2020-002","DOIUrl":"https://doi.org/10.2308/jfr-2020-002","url":null,"abstract":"\u0000 We investigate how rounded (e.g., 10 percent) versus unrounded (e.g., 9.73 percent, 10.00 percent, or 10.27 percent) sales growth forecasts impact investor judgment. We hypothesize that investors are more willing to invest in a company when the degree of rounding matches the amount of forecast uncertainty (i.e., rounded forecasts in more uncertain environments and unrounded forecasts in less uncertain environments). We also hypothesize that managers can offset the negative impact of a mismatch between forecast rounding and forecast uncertainty by using more immediate language in their forecasts. In a first experiment using M.B.A. students as investors, we find a combination of support and partial support for our hypotheses. However, in a second experiment using online workers and a third experiment using M.B.A. students, we fail to find support for our hypotheses. Overall, we fail to find replicable effects of forecast rounding, forecast uncertainty, and language immediacy on investors’ judgments.","PeriodicalId":42044,"journal":{"name":"Journal of Financial Reporting","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2023-08-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83960198","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Katharine Adame, Jennifer L. Koski, Katie Lem, Sarah E. McVay
More companies are disclosing free cash flow in their earnings announcements. Companies choose a range of definitions, almost none of which correspond to the theoretical finance definition. The most common definition (in 40 percent of free cash flow disclosures) is operating cash flow minus gross capital expenditures. From discussions with managers, this definition is chosen largely to keep things simple, especially given the lack of time to explain subtle complexities to investors. There is evidence of both opportunistic and information motives in the choice to disclose. Information variables, such as capital intensity and low-quality earnings, explain at least as much of the disclosure decision as opportunism variables in all estimations. Opportunism is relatively more evident within initial disclosures, which are more likely when earnings decline and free cash flow is positive or increasing.
{"title":"Free Cash Flow Disclosure in Earnings Announcements","authors":"Katharine Adame, Jennifer L. Koski, Katie Lem, Sarah E. McVay","doi":"10.2308/jfr-2020-010","DOIUrl":"https://doi.org/10.2308/jfr-2020-010","url":null,"abstract":"\u0000 More companies are disclosing free cash flow in their earnings announcements. Companies choose a range of definitions, almost none of which correspond to the theoretical finance definition. The most common definition (in 40 percent of free cash flow disclosures) is operating cash flow minus gross capital expenditures. From discussions with managers, this definition is chosen largely to keep things simple, especially given the lack of time to explain subtle complexities to investors. There is evidence of both opportunistic and information motives in the choice to disclose. Information variables, such as capital intensity and low-quality earnings, explain at least as much of the disclosure decision as opportunism variables in all estimations. Opportunism is relatively more evident within initial disclosures, which are more likely when earnings decline and free cash flow is positive or increasing.","PeriodicalId":42044,"journal":{"name":"Journal of Financial Reporting","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2023-08-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73830593","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
E. dehaan, James R. Moon, Jonathan E. Shipman, Quinn T. Swanquist, Robert L. Whited
Accounting studies often examine whether the relation between X and Y varies with a moderating variable, M, by including an interactive term, X × M, in a regression. We provide plain-English guidance on why, how, and when to use control variables, Z, in interaction tests. A simulation and simple descriptions demonstrate how interacted controls affect coefficient estimates and interpretations. In particular, we demonstrate how controlling for Z without an accompanying interaction of X × Z and/or M × Z generally does not eliminate the confounding effect of Z on X × M. We conclude with guidance for future research. Data Availability: Stata code to produce the simulations in this paper is available, as linked in the text. JEL Classifications: M40; M41; C01; C18.
{"title":"Control Variables in Interactive Models","authors":"E. dehaan, James R. Moon, Jonathan E. Shipman, Quinn T. Swanquist, Robert L. Whited","doi":"10.2308/jfr-2021-023","DOIUrl":"https://doi.org/10.2308/jfr-2021-023","url":null,"abstract":"\u0000 Accounting studies often examine whether the relation between X and Y varies with a moderating variable, M, by including an interactive term, X × M, in a regression. We provide plain-English guidance on why, how, and when to use control variables, Z, in interaction tests. A simulation and simple descriptions demonstrate how interacted controls affect coefficient estimates and interpretations. In particular, we demonstrate how controlling for Z without an accompanying interaction of X × Z and/or M × Z generally does not eliminate the confounding effect of Z on X × M. We conclude with guidance for future research.\u0000 Data Availability: Stata code to produce the simulations in this paper is available, as linked in the text.\u0000 JEL Classifications: M40; M41; C01; C18.","PeriodicalId":42044,"journal":{"name":"Journal of Financial Reporting","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2023-08-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79477703","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper provides descriptive evidence about how startup firms communicate with investors on their Regulation Crowdfunding offering page. I find evidence, consistent with prior theory about processing costs and information salience, that a firm’s prior revenues relate strongly to the discussion of financial information on its offering page. This runs counter to indications from Reg CF founders that they think financial information is of less importance to these investors than other information about the company. Consistent with founder beliefs that investors place little weight on firm financials, I find no consistent relation between financial disclosure and a firm meeting its offering goal. Offering success appears more closely related to other elements of disclosure that tell the “story” of the company. The results of this paper can help inform future research in the crowdfunding space, as well as contribute to the literature on how investors process information and disclosure. Data Availability: Publicly available from Regulation Crowdfunding filings on SEC Edgar. JEL Classifications: G23; G24; M13; M41.
{"title":"Equity Crowdfunding and Offering Page Disclosure","authors":"John M. Aland","doi":"10.2308/jfr-2021-011","DOIUrl":"https://doi.org/10.2308/jfr-2021-011","url":null,"abstract":"\u0000 This paper provides descriptive evidence about how startup firms communicate with investors on their Regulation Crowdfunding offering page. I find evidence, consistent with prior theory about processing costs and information salience, that a firm’s prior revenues relate strongly to the discussion of financial information on its offering page. This runs counter to indications from Reg CF founders that they think financial information is of less importance to these investors than other information about the company. Consistent with founder beliefs that investors place little weight on firm financials, I find no consistent relation between financial disclosure and a firm meeting its offering goal. Offering success appears more closely related to other elements of disclosure that tell the “story” of the company. The results of this paper can help inform future research in the crowdfunding space, as well as contribute to the literature on how investors process information and disclosure.\u0000 Data Availability: Publicly available from Regulation Crowdfunding filings on SEC Edgar.\u0000 JEL Classifications: G23; G24; M13; M41.","PeriodicalId":42044,"journal":{"name":"Journal of Financial Reporting","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2023-07-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88247782","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Purpose: This article focuses on cyber risk as an emerging issue within the risk management process and the internal control system in the financial sector. It in-vestigates whether cyber risk management (CRM) is (dis)integrated into traditional enterprise risk management (ERM) and analyzes the external dynamics affecting the CRM design. Design/methodology/approach: This article draws upon institutional theory and the concept of boundary objects. The research examines a listed Italian bank and gathers the data from semi-structured interviews, direct observations, meet-ings, and archival sources. Findings: The findings underline that cyber risk rationale plays a crucial role in the CRM process. The interplay between institutional complexity and the need to manage cyber risk is critical for a bank to have a stable and flexible infrastructure. The knowledge boundaries related to the cyber risk culture require further cyber risk talk. Originality/value: This research furthers the understanding of cyber risk and CRM as an integral part of the ERM and internal control systems in the financial sector, in which there is a shortage of case studies. The financial sector is highly regulated, and managing cyber risk has become crucial as banks usually deal with enormous amounts of personal and sensitive data stored on networks and in the cloud. Practical implications: This case study emphasizes the crucial role of CRM in the identification and reporting of cyber risk information in annual reports.
{"title":"Managing cyber risk in the financial sector: Insights from a case study","authors":"Chiara Crovini, Pier Luigi Marchini","doi":"10.3280/fr2023-001004","DOIUrl":"https://doi.org/10.3280/fr2023-001004","url":null,"abstract":"Purpose: This article focuses on cyber risk as an emerging issue within the risk management process and the internal control system in the financial sector. It in-vestigates whether cyber risk management (CRM) is (dis)integrated into traditional enterprise risk management (ERM) and analyzes the external dynamics affecting the CRM design. Design/methodology/approach: This article draws upon institutional theory and the concept of boundary objects. The research examines a listed Italian bank and gathers the data from semi-structured interviews, direct observations, meet-ings, and archival sources. Findings: The findings underline that cyber risk rationale plays a crucial role in the CRM process. The interplay between institutional complexity and the need to manage cyber risk is critical for a bank to have a stable and flexible infrastructure. The knowledge boundaries related to the cyber risk culture require further cyber risk talk. Originality/value: This research furthers the understanding of cyber risk and CRM as an integral part of the ERM and internal control systems in the financial sector, in which there is a shortage of case studies. The financial sector is highly regulated, and managing cyber risk has become crucial as banks usually deal with enormous amounts of personal and sensitive data stored on networks and in the cloud. Practical implications: This case study emphasizes the crucial role of CRM in the identification and reporting of cyber risk information in annual reports.","PeriodicalId":42044,"journal":{"name":"Journal of Financial Reporting","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2023-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86457967","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
P. de Andres, Salvatore Polizzi, Enzo Scannella, Nuria Suárez
Purpose: This paper reviews the literature on corporate social responsibility (CSR) disclosure in banking to identify the most relevant aspects analyzed to date and avenues for future research. The CSR concept is key in the banking industry and banks are pushed to improve their social and environmental performance, and to disclose information about CSR in their financial and non-financial reports. Design/methodology/approach: This paper adopts a mixed literature review approach, based on a qualitative analysis of the literature and complemented by some structured systematic analyses. The theoretical frameworks employed in the literature, the time and geographical distribution of the samples analyzed, and the main findings of the studies indexed in Scopus, Web of Science, Google Scholar, and EBSCOhost are also examined. Findings: The findings show that (i) there is a significant gap between the liter-ature focusing on the financial dimension of bank disclosure and that exploring the CSR dimension; (ii) the time horizons analyzed in the empirical literature are concentrated around the 2008-2009 global financial crisis; (iii) the empirical litera-ture mainly focuses on the most developed European, North American and Asian countries. Originality/value: This study contributes to extant literature by describing the state of the art on CSR disclosure in banking and paving the way for future re-search on this topic. A call for research is raised on corruption-related disclosure and the relationship between national economic development and bank transpar-ency, with specific reference to CSR disclosure.
目的:本文回顾了有关银行企业社会责任(CSR)披露的文献，以确定迄今为止分析的最相关的方面和未来研究的途径。企业社会责任概念在银行业是关键，银行被要求提高其社会和环境绩效，并在其财务和非财务报告中披露有关企业社会责任的信息。设计/方法论/方法:本文采用混合文献综述法，以文献定性分析为基础，辅以一些结构化的系统分析。本文还分析了文献中采用的理论框架、样本的时间和地理分布，以及在Scopus、Web of Science、Google Scholar和EBSCOhost中检索的主要研究结果。研究结果表明:(1)关注银行信息披露财务维度的文献与探索企业社会责任维度的文献存在显著差距;(2)实证文献分析的时间范围主要集中在2008-2009年全球金融危机前后;(3)实证文献主要集中在最发达的欧洲、北美和亚洲国家。原创性/价值:本研究通过描述银行业社会责任披露的最新状况，为现有文献做出贡献，并为该主题的未来研究铺平道路。呼吁对腐败相关信息披露以及国家经济发展与银行透明度的关系进行研究，并特别提到企业社会责任信息披露。
{"title":"CSR disclosure in banking: A qualitative literature review","authors":"P. de Andres, Salvatore Polizzi, Enzo Scannella, Nuria Suárez","doi":"10.3280/fr2023-001001","DOIUrl":"https://doi.org/10.3280/fr2023-001001","url":null,"abstract":"Purpose: This paper reviews the literature on corporate social responsibility (CSR) disclosure in banking to identify the most relevant aspects analyzed to date and avenues for future research. The CSR concept is key in the banking industry and banks are pushed to improve their social and environmental performance, and to disclose information about CSR in their financial and non-financial reports. Design/methodology/approach: This paper adopts a mixed literature review approach, based on a qualitative analysis of the literature and complemented by some structured systematic analyses. The theoretical frameworks employed in the literature, the time and geographical distribution of the samples analyzed, and the main findings of the studies indexed in Scopus, Web of Science, Google Scholar, and EBSCOhost are also examined. Findings: The findings show that (i) there is a significant gap between the liter-ature focusing on the financial dimension of bank disclosure and that exploring the CSR dimension; (ii) the time horizons analyzed in the empirical literature are concentrated around the 2008-2009 global financial crisis; (iii) the empirical litera-ture mainly focuses on the most developed European, North American and Asian countries. Originality/value: This study contributes to extant literature by describing the state of the art on CSR disclosure in banking and paving the way for future re-search on this topic. A call for research is raised on corruption-related disclosure and the relationship between national economic development and bank transpar-ency, with specific reference to CSR disclosure.","PeriodicalId":42044,"journal":{"name":"Journal of Financial Reporting","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2023-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76890245","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Cristian Carini, Laura Rocca, Monica Veneziani, Claudio Teodori
The International Accounting Standards Board (IASB) in January 2020 is-sued "Classification of Liabilities as Current or Non-current", which amended IAS 1 Presentation of Financial Statements. The main purpose of the amend-ments regards the classification of financial liabilities and how to classify them under particular circumstances. The amendments are proposed to be effective for annual reporting periods beginning on or after 1 January 2023, with earlier application permitted. Due to feedback received and enquiries about the classification of financial liabilities with financial covenants, in December 2020 the IFRS Interpretations Committee (IFRIC) published a tentative agenda decision in response to such feedback. Subsequently, in October 2022 the International Accounting Stand-ards Board (IASB) published a document titled "Non-current Liabilities with Covenants (Amendments to IAS 1)". The purpose of this document is to clarify the conditions with which an entity must comply within twelve months after the reporting period affect the classification of a liability. The amendments are ef-fective for reporting periods beginning on or after 1 January 2024. The classification of financial liabilities as current or non-current is an im-portant consideration for financial reporting purposes, as it can have a significant impact on a company's financial statements and financial ratios. Current liabili-ties are those that are expected to be settled within one year, while non-current liabilities are those that are expected to be settled beyond that time frame. The purpose of the following review is to analyse the main impacts of the amendments on the classification of the financial liabilities with covenants and the project's history and timeline.
{"title":"Exploring the accounting community perspective on the \"Consultation Paper on Sustainability Reporting\"","authors":"Cristian Carini, Laura Rocca, Monica Veneziani, Claudio Teodori","doi":"10.3280/fr2023-001003","DOIUrl":"https://doi.org/10.3280/fr2023-001003","url":null,"abstract":"The International Accounting Standards Board (IASB) in January 2020 is-sued \"Classification of Liabilities as Current or Non-current\", which amended IAS 1 Presentation of Financial Statements. The main purpose of the amend-ments regards the classification of financial liabilities and how to classify them under particular circumstances. The amendments are proposed to be effective for annual reporting periods beginning on or after 1 January 2023, with earlier application permitted. Due to feedback received and enquiries about the classification of financial liabilities with financial covenants, in December 2020 the IFRS Interpretations Committee (IFRIC) published a tentative agenda decision in response to such feedback. Subsequently, in October 2022 the International Accounting Stand-ards Board (IASB) published a document titled \"Non-current Liabilities with Covenants (Amendments to IAS 1)\". The purpose of this document is to clarify the conditions with which an entity must comply within twelve months after the reporting period affect the classification of a liability. The amendments are ef-fective for reporting periods beginning on or after 1 January 2024. The classification of financial liabilities as current or non-current is an im-portant consideration for financial reporting purposes, as it can have a significant impact on a company's financial statements and financial ratios. Current liabili-ties are those that are expected to be settled within one year, while non-current liabilities are those that are expected to be settled beyond that time frame. The purpose of the following review is to analyse the main impacts of the amendments on the classification of the financial liabilities with covenants and the project's history and timeline.","PeriodicalId":42044,"journal":{"name":"Journal of Financial Reporting","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2023-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82292406","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Book Review. Luca Menicacci, Book-Tax Conformity in the IFRS era. Evidence from Italian Listed Companies","authors":"G. Greco","doi":"10.3280/fr2023-001006","DOIUrl":"https://doi.org/10.3280/fr2023-001006","url":null,"abstract":"","PeriodicalId":42044,"journal":{"name":"Journal of Financial Reporting","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2023-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74805208","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The International Accounting Standards Board (IASB) in January 2020 is-sued "Classification of Liabilities as Current or Non-current", which amended IAS 1 Presentation of Financial Statements. The main purpose of the amend-ments regards the classification of financial liabilities and how to classify them under particular circumstances. The amendments are proposed to be effective for annual reporting periods beginning on or after 1 January 2023, with earlier application permitted. Due to feedback received and enquiries about the classification of financial liabilities with financial covenants, in December 2020 the IFRS Interpretations Committee (IFRIC) published a tentative agenda decision in response to such feedback. Subsequently, in October 2022 the International Accounting Stand-ards Board (IASB) published a document titled "Non-current Liabilities with Covenants (Amendments to IAS 1)". The purpose of this document is to clarify the conditions with which an entity must comply within twelve months after the reporting period affect the classification of a liability. The amendments are ef-fective for reporting periods beginning on or after 1 January 2024. The classification of financial liabilities as current or non-current is an im-portant consideration for financial reporting purposes, as it can have a significant impact on a company's financial statements and financial ratios. Current liabili-ties are those that are expected to be settled within one year, while non-current liabilities are those that are expected to be settled beyond that time frame. The purpose of the following review is to analyse the main impacts of the amendments on the classification of the financial liabilities with covenants and the project's history and timeline.
{"title":"Dialogue with standard setters. Amendments to IAS 1 regarding non-current liabilities with covenants","authors":"Stefano Bianchi","doi":"10.3280/fr2023-001005","DOIUrl":"https://doi.org/10.3280/fr2023-001005","url":null,"abstract":"The International Accounting Standards Board (IASB) in January 2020 is-sued \"Classification of Liabilities as Current or Non-current\", which amended IAS 1 Presentation of Financial Statements. The main purpose of the amend-ments regards the classification of financial liabilities and how to classify them under particular circumstances. The amendments are proposed to be effective for annual reporting periods beginning on or after 1 January 2023, with earlier application permitted. Due to feedback received and enquiries about the classification of financial liabilities with financial covenants, in December 2020 the IFRS Interpretations Committee (IFRIC) published a tentative agenda decision in response to such feedback. Subsequently, in October 2022 the International Accounting Stand-ards Board (IASB) published a document titled \"Non-current Liabilities with Covenants (Amendments to IAS 1)\". The purpose of this document is to clarify the conditions with which an entity must comply within twelve months after the reporting period affect the classification of a liability. The amendments are ef-fective for reporting periods beginning on or after 1 January 2024. The classification of financial liabilities as current or non-current is an im-portant consideration for financial reporting purposes, as it can have a significant impact on a company's financial statements and financial ratios. Current liabili-ties are those that are expected to be settled within one year, while non-current liabilities are those that are expected to be settled beyond that time frame. The purpose of the following review is to analyse the main impacts of the amendments on the classification of the financial liabilities with covenants and the project's history and timeline.","PeriodicalId":42044,"journal":{"name":"Journal of Financial Reporting","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2023-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77601262","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Purpose: The phenomenon of Interlocking Directorship within the same busi-ness group (the Intra-group Interlocks, IgI) has received little attention by scholars, especially when the interlocked affiliated-group companies are listed. Focusing on listed business groups, characterized by the presence of at least two affiliated-listed companies, and following the contingency perspective, this study aims to explore the determinants of IgI. Design/methodology/approach: The study analyses the controlling sharehold-er type (family, State, coalitions), the business ties, and the separation between ownership and control, focusing on 315 business groups listed in different Europe-an countries, i.e., Belgium, France, Greece, Italy, Spain, and Portugal. The social network analysis is applied to these groups, to compare the networks that originate from the corporate board of directors. Findings: In groups controlled by the State the density of social links is lower than in those controlled by families and coalitions. The strength of IgI is also relat-ed to the degree of correlation of firms' industries, even if this correlation is influ-enced by the separation between ownership and control and by the country regula-tion that protects minority shareholders. Overall, the results show that for listed groups the agency theory better explains the determinants of the IgI phenomenon. Originality/value: This study contributes to the understanding of why board members of listed parent companies sit (or do not sit) in the listed subsidiary boards. Relying on agency theory and resource dependence theory, it also propos-es a theoretical framework.
{"title":"Determinants of Intra-group Interlocking in European listed business groups","authors":"E. Di Carlo, L. Fattobene, Marco Caiffa","doi":"10.3280/fr2023-001002","DOIUrl":"https://doi.org/10.3280/fr2023-001002","url":null,"abstract":"Purpose: The phenomenon of Interlocking Directorship within the same busi-ness group (the Intra-group Interlocks, IgI) has received little attention by scholars, especially when the interlocked affiliated-group companies are listed. Focusing on listed business groups, characterized by the presence of at least two affiliated-listed companies, and following the contingency perspective, this study aims to explore the determinants of IgI. Design/methodology/approach: The study analyses the controlling sharehold-er type (family, State, coalitions), the business ties, and the separation between ownership and control, focusing on 315 business groups listed in different Europe-an countries, i.e., Belgium, France, Greece, Italy, Spain, and Portugal. The social network analysis is applied to these groups, to compare the networks that originate from the corporate board of directors. Findings: In groups controlled by the State the density of social links is lower than in those controlled by families and coalitions. The strength of IgI is also relat-ed to the degree of correlation of firms' industries, even if this correlation is influ-enced by the separation between ownership and control and by the country regula-tion that protects minority shareholders. Overall, the results show that for listed groups the agency theory better explains the determinants of the IgI phenomenon. Originality/value: This study contributes to the understanding of why board members of listed parent companies sit (or do not sit) in the listed subsidiary boards. Relying on agency theory and resource dependence theory, it also propos-es a theoretical framework.","PeriodicalId":42044,"journal":{"name":"Journal of Financial Reporting","volume":null,"pages":null},"PeriodicalIF":1.5,"publicationDate":"2023-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86661324","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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