Pub Date : 2024-11-01DOI: 10.1016/j.bar.2023.101238
Joye Khoo , Adrian (Wai Kong) Cheung
Organisation capital is an important firm-specific resource that is linked to value created by key talents, and the risk arising from the unexpected departure of key talents is detrimental to the firm. We find that trade credit decreases with organisation capital, particularly when labour mobility is greater or employees have more outside opportunities. This supports the agency view of organisation capital. However, when the threat of losing key talents is low, such as during the global financial crisis, the efficiency view of organisation capital prevails, making firms with high organisation capital more attractive customers for suppliers. The evidence is robust to endogeneity tests.
{"title":"The hidden cost of organisation capital: Evidence from trade credit","authors":"Joye Khoo , Adrian (Wai Kong) Cheung","doi":"10.1016/j.bar.2023.101238","DOIUrl":"10.1016/j.bar.2023.101238","url":null,"abstract":"<div><div><span>Organisation capital is an important firm-specific resource that is linked to value created by key talents, and the risk arising from the unexpected departure of key talents is detrimental to the firm. We find that trade credit decreases with organisation capital, particularly when labour mobility is greater or employees have more outside opportunities. This supports the </span><em>agency view</em> of organisation capital. However, when the threat of losing key talents is low, such as during the global financial crisis, the <em>efficiency view</em> of organisation capital prevails, making firms with high organisation capital more attractive customers for suppliers. The evidence is robust to endogeneity tests.</div></div>","PeriodicalId":47996,"journal":{"name":"British Accounting Review","volume":"56 6","pages":"Article 101238"},"PeriodicalIF":5.5,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42449216","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.bar.2023.101276
Shujie Liu , Mohammed Aminu Sualihu , Mingwei Sun , Alfred Yawson
We document that penny stock firms' acquisition likelihood increases with firm size, sales growth, free cash flow, stock price volatility, and run-up, but decreases with leverage, the number of years since IPO, and Tobin's Q. These findings are validated in a stepwise regression framework and are robust to alternative model specifications. Penny stock acquirers prefer public targets and are more (less) likely to use stocks (cash) as the payment method. We also find that acquisitions announcement returns are higher for penny stock firms than for non-penny stock firms, even after accounting for firm- and deal-characteristics. Further analyses indicate that the increase in announcement returns is driven by the firm's improved information environment. Overall, we document that penny stock firms are significant players in the market for corporate control.
{"title":"Exploring the acquisition behavior of penny stock firms","authors":"Shujie Liu , Mohammed Aminu Sualihu , Mingwei Sun , Alfred Yawson","doi":"10.1016/j.bar.2023.101276","DOIUrl":"10.1016/j.bar.2023.101276","url":null,"abstract":"<div><div><span>We document that penny stock firms' acquisition likelihood increases with firm size, sales growth, free cash flow, stock price volatility, and run-up, but decreases with leverage, the number of years since IPO, and Tobin's Q. These findings are validated in a stepwise regression framework and are robust to alternative model specifications. Penny stock acquirers prefer public targets and are more (less) likely to use stocks (cash) as the payment method. We also find that acquisitions announcement returns are higher for penny stock firms than for non-penny stock firms, even after accounting for firm- and deal-characteristics. Further analyses indicate that the increase in announcement returns is driven by the firm's improved information environment. Overall, we document that penny stock firms are significant players in the market for </span>corporate control.</div></div>","PeriodicalId":47996,"journal":{"name":"British Accounting Review","volume":"56 6","pages":"Article 101276"},"PeriodicalIF":5.5,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135714539","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.bar.2024.101486
Lemonia M. Rempoutsika , Dimitris K. Chronopoulos , Linh Nguyen , John O.S. Wilson
This study examines the impact of deposit insurance coverage on credit union earnings opacity. For identification, we employ the provisions outlined in Section 136 of the Emergency Economic Stabilization Act, which raised the upper limit of deposit insurance coverage from $100,000 to $250,000. Using variation in insured deposits brought about by the differential impact of the change to deposit insurance arrangements and a difference-in-differences approach, we find that credit unions experiencing a substantial rise in insured deposits tend to exercise more discretion over loan loss provisions, leading to an increase in earnings opacity. This is most evident for small and medium sized credit unions.
{"title":"Deposit insurance and credit union earnings opacity","authors":"Lemonia M. Rempoutsika , Dimitris K. Chronopoulos , Linh Nguyen , John O.S. Wilson","doi":"10.1016/j.bar.2024.101486","DOIUrl":"10.1016/j.bar.2024.101486","url":null,"abstract":"<div><div>This study examines the impact of deposit insurance coverage on credit union earnings opacity. For identification, we employ the provisions outlined in Section 136 of the Emergency Economic Stabilization Act, which raised the upper limit of deposit insurance coverage from $100,000 to $250,000. Using variation in insured deposits brought about by the differential impact of the change to deposit insurance arrangements and a difference-in-differences approach, we find that credit unions experiencing a substantial rise in insured deposits tend to exercise more discretion over loan loss provisions, leading to an increase in earnings opacity. This is most evident for small and medium sized credit unions.</div></div>","PeriodicalId":47996,"journal":{"name":"British Accounting Review","volume":"56 6","pages":"Article 101486"},"PeriodicalIF":5.5,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0890838924002634/pdfft?md5=828d8282b4b75f17e9df45b590523904&pid=1-s2.0-S0890838924002634-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142231924","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.bar.2024.101487
Yongwei Ye , Dongmin Kong , Renzhi Li , Xiaofan Li , Yunqing Tao
Online judicial auctions can significantly impact corporate investment by enhancing creditor protection and facilitating loan availability. Using a dynamic difference-in-differences strategy, we find that the reform significantly boosts corporate investment. Mechanism tests reveal that the reform boosts corporate investment by improving corporate loan availability and creditors' willingness to lend. The effect is more pronounced in regions with high judicial auction turnover, high public participation, poorer legal environments, and lower banking competition, suggesting that these reforms enhance legal system efficiency and market competition. Additionally, we find that judicial auction reform reduces firms’ precautionary savings and fosters regional economic development. Overall, our study contributes to understanding the important role of creditor protection in corporate investment and provides insights for implementing digital judicial reforms.
{"title":"Online judicial auction, loan availability, and corporate investment in China","authors":"Yongwei Ye , Dongmin Kong , Renzhi Li , Xiaofan Li , Yunqing Tao","doi":"10.1016/j.bar.2024.101487","DOIUrl":"10.1016/j.bar.2024.101487","url":null,"abstract":"<div><div>Online judicial auctions can significantly impact corporate investment by enhancing creditor protection and facilitating loan availability. Using a dynamic difference-in-differences strategy, we find that the reform significantly boosts corporate investment. Mechanism tests reveal that the reform boosts corporate investment by improving corporate loan availability and creditors' willingness to lend. The effect is more pronounced in regions with high judicial auction turnover, high public participation, poorer legal environments, and lower banking competition, suggesting that these reforms enhance legal system efficiency and market competition. Additionally, we find that judicial auction reform reduces firms’ precautionary savings and fosters regional economic development. Overall, our study contributes to understanding the important role of creditor protection in corporate investment and provides insights for implementing digital judicial reforms.</div></div>","PeriodicalId":47996,"journal":{"name":"British Accounting Review","volume":"56 6","pages":"Article 101487"},"PeriodicalIF":5.5,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142312625","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.bar.2024.101387
Sang Mook Lee , Jong Chool Park , Hakjoon Song
Prior studies provide mixed interpretations for the effect of abnormal audit fees on audit quality. One interpretation is that abnormal audit fees reflect economic bonding which decreases audit quality, while the other interpretation is that they are associated with unobserved audit efforts and audit risk. We argue that long-term abnormal audit fees clarify mixed evidence, as they reflect the gradual formation and development of both economic bonding and sustained auditor efforts over time. We examine the effect of long-term abnormal audit fees on audit quality by focusing on client's future stock price crash risk. Using 42,604 firm-year observations of U.S. firms, we find that sustained positive abnormal audit fees (consistently positive long-term abnormal audit fees) are negatively associated with future stock price crash risk, supporting the auditor effort argument and negating the economic bonding argument. We also find weak evidence that current-period abnormal audit fees are positively associated with future stock price crash risk, supporting the audit risk argument. Overall, our evidence shows that the magnitude and the pattern of long-term abnormal audit fees jointly affect audit quality in mitigating a client's bad news hoarding behavior.
{"title":"The capital market consequence of sustained abnormal Audit fees: Evidence from stock price crash risk","authors":"Sang Mook Lee , Jong Chool Park , Hakjoon Song","doi":"10.1016/j.bar.2024.101387","DOIUrl":"10.1016/j.bar.2024.101387","url":null,"abstract":"<div><div>Prior studies provide mixed interpretations for the effect of abnormal audit fees on audit quality. One interpretation is that abnormal audit fees reflect economic bonding which decreases audit quality, while the other interpretation is that they are associated with unobserved audit efforts and audit risk. We argue that long-term abnormal audit fees clarify mixed evidence, as they reflect the gradual formation and development of both economic bonding and sustained auditor efforts over time. We examine the effect of long-term abnormal audit fees on audit quality by focusing on client's future stock price crash risk. Using 42,604 firm-year observations of U.S. firms, we find that sustained positive abnormal audit fees (consistently positive long-term abnormal audit fees) are negatively associated with future stock price crash risk, supporting the auditor effort argument and negating the economic bonding argument. We also find weak evidence that current-period abnormal audit fees are positively associated with future stock price crash risk, supporting the audit risk argument. Overall, our evidence shows that the magnitude and the pattern of long-term abnormal audit fees jointly affect audit quality in mitigating a client's bad news hoarding behavior.</div></div>","PeriodicalId":47996,"journal":{"name":"British Accounting Review","volume":"56 6","pages":"Article 101387"},"PeriodicalIF":5.5,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140643249","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.bar.2024.101386
Zabihollah Rezaee , Saeid Homayoun
We examine whether the audit regulation of disclosing key audit matters (KAM) provides value-relevant information to short sellers as informed investors. The theoretical underpinning for examining short sellers' ability and incentives to use KAM disclosures in their stock valuation implications is based on a prediction theory and a skilled information processing theory of short sellers. Using a sample of expanded auditor's reports from UK-listed firms during the 2010–2017 period and hand-collecting a dataset of KAM disclosures, we find no evidence that the short interest is different for the period before than after the U.K.'s expanded auditor's report regulation. However, in our cross-sectional tests, we find that KAM disclosures have a marginal effect on short interest and a positive association between short interest and unexpected and severe KAM disclosures. We conclude that, except for severe KAM that is value-relevant to sophisticated investors, the disclosures in the expanded auditor's report have no valuation implications for short sellers. Our results are robust in examining the reactions of the financial market and analysts to KAM disclosures and addressing potential endogeneity concerns.
我们研究了披露关键审计事项（KAM）的审计规定是否为作为知情投资者的卖空者提供了价值相关信息。研究做空者在股票估值影响中使用关键审计事项披露的能力和动机的理论基础是做空者的预测理论和熟练信息处理理论。利用 2010-2017 年期间英国上市公司的扩大审计师报告样本和手工收集的 KAM 披露数据集，我们没有发现证据表明英国扩大审计师报告监管之前和之后的做空兴趣有所不同。然而，在我们的横截面测试中，我们发现 KAM 披露对做空兴趣有边际效应，做空兴趣与意外和严重的 KAM 披露之间存在正相关。我们的结论是，除了与成熟投资者的价值相关的严重 KAM 外，扩大后的审计师报告中披露的信息对卖空者的估值没有影响。在研究金融市场和分析师对 KAM 披露的反应以及解决潜在的内生性问题方面，我们的结果是稳健的。
{"title":"Key audit matters disclosures and informed traders","authors":"Zabihollah Rezaee , Saeid Homayoun","doi":"10.1016/j.bar.2024.101386","DOIUrl":"10.1016/j.bar.2024.101386","url":null,"abstract":"<div><div>We examine whether the audit regulation<span><span> of disclosing key audit matters (KAM) provides value-relevant information to short sellers as informed investors. The theoretical underpinning for examining short sellers' ability and incentives to use KAM disclosures in their stock valuation implications is based on a prediction theory and a skilled information processing theory of short sellers. Using a sample of expanded </span>auditor's reports from UK-listed firms during the 2010–2017 period and hand-collecting a dataset of KAM disclosures, we find no evidence that the short interest is different for the period before than after the U.K.'s expanded auditor's report regulation. However, in our cross-sectional tests, we find that KAM disclosures have a marginal effect on short interest and a positive association between short interest and unexpected and severe KAM disclosures. We conclude that, except for severe KAM that is value-relevant to sophisticated investors, the disclosures in the expanded auditor's report have no valuation implications for short sellers. Our results are robust in examining the reactions of the financial market and analysts to KAM disclosures and addressing potential endogeneity concerns.</span></div></div>","PeriodicalId":47996,"journal":{"name":"British Accounting Review","volume":"56 6","pages":"Article 101386"},"PeriodicalIF":5.5,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140779030","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.bar.2024.101407
Ruizhe Wang , Wai Fong Chua , Roger Simnett , Shan Zhou
The establishment of the International Sustainability Standards Board (ISSB), and the endorsement by the International Financial Reporting Standards (IFRS) foundation of the principles underlying the Integrated Reporting (IR) Framework, attest to a regulatory intent to develop a disclosure framework better connecting sustainability-related financial disclosures with financial disclosures. Strategic Reporting (SR), effective in the United Kingdom (U.K.) since 2013, is a prime example of such a framework. Utilizing proprietary data from PwC U.K., we find higher SR disclosure quality is associated with higher liquidity, lower cost of capital, and more accurate, less dispersed analysts’ forecasts. We then hypothesize and compare these impacts with the capital market effects of disclosure quality under the reporting framework preceding SR. We find that the effects of higher liquidity and lower cost of capital are more pronounced under SR, suggesting that SR, as a mandated, more connected reporting framework, enables more effective capital market communication. We also find that the incremental capital market benefits are more significant for entities with higher exposure to the change, better sustainability performance and higher organizational complexity. For regulators and standard setters, these findings indicate that their emphasis on greater connectivity of financial and non-financial information is valued by market participants.
国际可持续发展标准委员会（ISSB）的成立，以及《国际财务报告准则》（IFRS）基金会对综合报告（IR）框架基本原则的认可，证明了监管机构有意制定一个披露框架，更好地将与可持续发展相关的财务披露与财务披露联系起来。自 2013 年起在英国（U.K.）生效的战略报告（Strategic Reporting，SR）就是这样一个框架的典型例子。利用普华永道英国公司的专有数据，我们发现较高的战略报告披露质量与较高的流动性、较低的资本成本以及更准确、更分散的分析师预测相关联。然后，我们将这些影响与 SR 之前的报告框架下信息披露质量对资本市场的影响进行了假设和比较。我们发现，提高流动性和降低资本成本的效果在证券交易准则下更为明显，这表明证券交易准则作为一个强制性的、关联性更强的报告框架，能够实现更有效的资本市场沟通。我们还发现，资本市场的增量效益对那些受变革影响较大、可持续发展表现较好和组织复杂性较高的实体更为显著。对于监管者和标准制定者来说，这些研究结果表明，市场参与者重视加强财务和非财务信息的联系。
{"title":"Is greater connectivity of financial and non-financial information in annual reports valued by market participants?","authors":"Ruizhe Wang , Wai Fong Chua , Roger Simnett , Shan Zhou","doi":"10.1016/j.bar.2024.101407","DOIUrl":"10.1016/j.bar.2024.101407","url":null,"abstract":"<div><div>The establishment of the International Sustainability Standards Board (ISSB), and the endorsement by the International Financial Reporting Standards (IFRS) foundation of the principles underlying the Integrated Reporting (IR) Framework, attest to a regulatory intent to develop a disclosure framework better connecting sustainability-related financial disclosures with financial disclosures. Strategic Reporting (SR), effective in the United Kingdom (U.K.) since 2013, is a prime example of such a framework. Utilizing proprietary data from PwC U.K., we find higher SR disclosure quality is associated with higher liquidity, lower cost of capital, and more accurate, less dispersed analysts’ forecasts. We then hypothesize and compare these impacts with the capital market effects of disclosure quality under the reporting framework preceding SR. We find that the effects of higher liquidity and lower cost of capital are more pronounced under SR, suggesting that SR, as a mandated, more connected reporting framework, enables more effective capital market communication. We also find that the incremental capital market benefits are more significant for entities with higher exposure to the change, better sustainability performance and higher organizational complexity. For regulators and standard setters, these findings indicate that their emphasis on greater connectivity of financial and non-financial information is valued by market participants.</div></div>","PeriodicalId":47996,"journal":{"name":"British Accounting Review","volume":"56 6","pages":"Article 101407"},"PeriodicalIF":5.5,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0890838924001641/pdfft?md5=cba492ad19900a8084f8b8fb25cb6ee9&pid=1-s2.0-S0890838924001641-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141329542","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.bar.2024.101463
Mengxia Yu , Ke Xu , Xinwei Zheng
In this paper, considering the difference in the energy demand level, we utilize the daily pricing data from 10/01/2019 to 06/30/2023 to construct mimicking crypto portfolios with 12 clean cryptocurrencies to replace the dirty cryptocurrency, Bitcoin (BTC). With a monthly rebalancing strategy, the mimicking portfolio closely matches the exposures to the risk factors of the BTC but with fewer specific risks. Furthermore, relying on the bivariate dynamic conditional correlation (DCC-) GARCH model, we compare the hedging capability of BTC and the corresponding mimicking crypto portfolio against movements of returns of sustainable assets. The empirical results show that the mimicking crypto portfolio provides ESG investors with a cheaper hedge tool of higher hedge effectiveness compared to the BTC. Moreover, we find that the mimicking crypto portfolio can act as a strong safe haven for the S&P Global Clean Energy Index and S&P Latin America Emerging LargeMidCap ESG Index during periods of market stress. Therefore, the mimicking crypto portfolio is a more attractive option for ESG investors due to its superior hedging efficiency and the added environmental advantages.
{"title":"Mimicking crypto portfolios in sustainable investment","authors":"Mengxia Yu , Ke Xu , Xinwei Zheng","doi":"10.1016/j.bar.2024.101463","DOIUrl":"10.1016/j.bar.2024.101463","url":null,"abstract":"<div><div>In this paper, considering the difference in the energy demand level, we utilize the daily pricing data from 10/01/2019 to 06/30/2023 to construct mimicking crypto portfolios with 12 clean cryptocurrencies to replace the dirty cryptocurrency, Bitcoin (BTC). With a monthly rebalancing strategy, the mimicking portfolio closely matches the exposures to the risk factors of the BTC but with fewer specific risks. Furthermore, relying on the bivariate dynamic conditional correlation (DCC-) GARCH model, we compare the hedging capability of BTC and the corresponding mimicking crypto portfolio against movements of returns of sustainable assets. The empirical results show that the mimicking crypto portfolio provides ESG investors with a cheaper hedge tool of higher hedge effectiveness compared to the BTC. Moreover, we find that the mimicking crypto portfolio can act as a strong safe haven for the S&P Global Clean Energy Index and S&P Latin America Emerging LargeMidCap ESG Index during periods of market stress. Therefore, the mimicking crypto portfolio is a more attractive option for ESG investors due to its superior hedging efficiency and the added environmental advantages.</div></div>","PeriodicalId":47996,"journal":{"name":"British Accounting Review","volume":"56 6","pages":"Article 101463"},"PeriodicalIF":5.5,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0890838924002270/pdfft?md5=c977104002f95322f9c0f54de4b08f26&pid=1-s2.0-S0890838924002270-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142100791","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.bar.2024.101462
Mostafa Monzur Hasan , Md Borhan Uddin Bhuiyan , Grantley Taylor
Using a large sample of U.S. firms from 2002 to 2020, we investigate the relationship between corporate culture and the extent of carbon emissions. We provide evidence that the quantum of carbon emissions is negatively associated with corporate cultural attributes manifested by integrity, teamwork, innovation, and respect. These results hold after controlling for potential endogeneity issues using several identification techniques. We also document that the negative culture–emissions relationship is magnified in firms with weak corporate governance and in those operating in environmentally sensitive industries. Additionally, this relationship is less salient in the presence of social capital. Finally, we demonstrate that in firms with a stronger culture, elevated carbon emissions result in a lower firm value. Our findings may be of interest to environmental regulators and management in their pursuit of firm-level carbon emission targets.
{"title":"Corporate culture and carbon emission performance","authors":"Mostafa Monzur Hasan , Md Borhan Uddin Bhuiyan , Grantley Taylor","doi":"10.1016/j.bar.2024.101462","DOIUrl":"10.1016/j.bar.2024.101462","url":null,"abstract":"<div><div>Using a large sample of U.S. firms from 2002 to 2020, we investigate the relationship between corporate culture and the extent of carbon emissions. We provide evidence that the quantum of carbon emissions is negatively associated with corporate cultural attributes manifested by integrity, teamwork, innovation, and respect. These results hold after controlling for potential endogeneity issues using several identification techniques. We also document that the negative culture–emissions relationship is magnified in firms with weak corporate governance and in those operating in environmentally sensitive industries. Additionally, this relationship is less salient in the presence of social capital. Finally, we demonstrate that in firms with a stronger culture, elevated carbon emissions result in a lower firm value. Our findings may be of interest to environmental regulators and management in their pursuit of firm-level carbon emission targets.</div></div>","PeriodicalId":47996,"journal":{"name":"British Accounting Review","volume":"56 6","pages":"Article 101462"},"PeriodicalIF":5.5,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0890838924002269/pdfft?md5=e92888a5dafa7700ee6273fe8bf8a7ba&pid=1-s2.0-S0890838924002269-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142100793","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.bar.2024.101452
Lihua Liu , Dongmin Kong
This study examines whether exposure to dangerous infectious diseases affects how analysts assess risks. We use the outbreaks of the severe acute respiratory syndrome (SARS) at analysts' previous office locations across China as a plausibly exogenous shock in the analysts' life experience. We show that compared to their less-affected counterparts, analysts in provinces with more SARS cases issue more optimistic forecasts for firms. This effect is stronger for affected analysts in provinces perceived as more salient during the SARS epidemic period. Mechanism tests show a high level of unexpected economic growth and positive media reports can motivate optimistic forecast bias induced by SARS exposure. Further heterogeneity tests indicate that our findings are particularly pronounced among busier analysts, those with less industry specialization, and female analysts. Overall, these findings suggest that exposure to the SARS epidemic influences the information intermediaries’ judgment.
{"title":"Epidemic experience, analyst sentiment, and earnings forecasts: Evidence from SARS exposure","authors":"Lihua Liu , Dongmin Kong","doi":"10.1016/j.bar.2024.101452","DOIUrl":"10.1016/j.bar.2024.101452","url":null,"abstract":"<div><div>This study examines whether exposure to dangerous infectious diseases affects how analysts assess risks. We use the outbreaks of the severe acute respiratory syndrome (SARS) at analysts' previous office locations across China as a plausibly exogenous shock in the analysts' life experience. We show that compared to their less-affected counterparts, analysts in provinces with more SARS cases issue more optimistic forecasts for firms. This effect is stronger for affected analysts in provinces perceived as more salient during the SARS epidemic period. Mechanism tests show a high level of unexpected economic growth and positive media reports can motivate optimistic forecast bias induced by SARS exposure. Further heterogeneity tests indicate that our findings are particularly pronounced among busier analysts, those with less industry specialization, and female analysts. Overall, these findings suggest that exposure to the SARS epidemic influences the information intermediaries’ judgment.</div></div>","PeriodicalId":47996,"journal":{"name":"British Accounting Review","volume":"56 6","pages":"Article 101452"},"PeriodicalIF":5.5,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142312557","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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