Do XBRL filings enhance informational efficiency? Early evidence from post-earnings announcement drift

In 2009, the Securities Exchange Commission (SEC) mandated public firms to file their financial statements using eXtensible Business Reporting Language (XBRL). The SEC's main motive behind this mandate is that XBRL filings would enhance the informational efficiency in the stock markets by making financial data easier to use and analyze for a broad range of investors. Using a sample from the first wave of mandated XBRL filers, we find a decline in post earnings announcement drift for the good news portfolio in the post-XBRL adoption period. Instead of a drift associated with underreaction, we find that markets overreact to negative earnings surprises for the bad news portfolio during our observation period, which coincides with the financial crisis. We detect limited evidence that XBRL adoption mitigates overreaction, which is another form of market inefficiency. We also find limited evidence that XBRL particularly benefits small investors.     

The impact of text valence,star rating and rated usefulness in online reviews

The influence of text valence, star rating and rated usefulness of online reviews on review readers’ impression of the review and their positive word-of-mouth intention is tested in an experimental study (n = 431). In addition, we investigate the moderating role of review readers’ product category involvement and susceptibility to interpersonal influence on the effect of the three review components. The influence of review text valence on evaluative responses is stronger for more highly involved people and for people who are more susceptible to interpersonal influence. The influence of rated review usefulness on review impression is marginally stronger for people who are more susceptible to interpersonal influence. Star ratings do not influence evaluative responses, and their effect is not moderated by either involvement or susceptibility.     

MSI deliberations and context: The influence of Southeast Asian business systems on member justifications and approaches to anti-corruption

Multi-stakeholder initiatives (MSIs) convene stakeholders from different contexts to deliberate on corporate social responsibility (CSR) issues. Extant research focuses on the deliberative potential of internal governance structures yet neglects the influence of broader sociopolitical contexts on the members that participate in them. Anti-corruption is one CSR issue that MSIs increasingly address which is particularly context dependent. Therefore, this study examines how different sociopolitical contexts influence members’ justifications and approaches to anti-corruption during MSI deliberations and ultimately, how this impacts the MSI’s approach to anti-corruption. Through a single case study of an MSI, the ASEAN CSR Network which is situated in Southeast Asia with members representing business and CSR organizations in six different countries, the findings show that the different National Business Systems clearly influence the member justifications and approaches to anti-corruption. Further, the MSI reinforces and promotes the adoption of the different national business system-related justifications and approaches ultimately, leading to an MSI approach to anti-corruption which is a composite of the different national business system-related approaches. This paper makes three contributions to the literature on MSI deliberations. First, it proposes a novel framework that links the influence of national business systems to member justifications and approaches to anti-corruption during MSI deliberations by leveraging the orders of worth framework. Second, it shows that the concept of compromise may be more relevant to understanding and evaluating MSI deliberations than the notion of consensus. Third, it contributes through the empirical study of an MSI developed in Southeast Asia addressing anti-corruption.     

Value creation around merger waves: The role of managerial compensation

This paper examines the relation between executive compensation and value creation in merger waves. The sensitivity of CEO wealth to firm risk increases the likelihood of out-of-wave merger transactions but has no influence on in-wave merger frequency. CEOs with compensation linked to firm risk have better out-of-wave merger performance in comparison to in-wave mergers. We also present evidence that cross-sectional acquirer return dispersion is greater for in-wave acquisitions. Our results suggest that the underperformance of acquiring firms during merger waves can be attributed in part to ineffective compensation incentives, and appropriate managerial incentives can create value, particularly in non-wave periods.     

Conform or challenge? Adjustment strategies of sanction-torn companies

The literature on sanctions often neglects the role of domestic firms in sender states, although sanctions only have a real economic effect when senders’ firms reduce their activities on the target's market. In contrast, sanctions avoidance and increasing investments in the target country (the observed behaviour of many companies facing the EU sanctions against Russia imposed in 2014) mitigate the impact of these restrictive measures. While sanctions increase the political risk for companies, they also offer economic opportunities—and previous studies could not settle the debate on which factor prevails. By evaluating responses from British, French, German, Italian and Polish enterprises to an online survey distributed in 2017, we analyse at the firm level how sanction-torn companies adjust to new political orders and what drives their strategic decisions. We find evidence that resource dependency induces strategies that challenge sanction policies: in particular, non-fungible assets in the target country incentivise companies to further increase their engagement. These defiance strategies diminish the real economic effect of sanctions and generate a new economic equilibrium, which has negative long-term implications on the choice set of policymakers to further pursue the imposition of sanctions and which even outlasts the lifting of these restrictive measures.     

Learning ahead of time: how evaluation of foresight may add to increased trust,organizational learning and future oriented policy and strategy

Evaluation of futures research (foresight) consists of three elements: quality, success, and impact of a study. Futures research ought to be methodologically and professionally sound, should to a certain extent be accurate, and should have a degree of impact on strategic decision making and policy-making. However, in the case of futures studies, the one does not automatically lead to the other. Quality of method does not ensure success, just as quality and success do not guarantee impact. This article explores the new paths for understanding evaluating of futures studies that are provided by the various articles in this special issue and sets out an agenda for next steps with regard to evaluation of futures research. The more structural and systematic evaluation can result in an increased level of trust in futures research, which may in turn lead to more future oriented strategy, policy and decision making. Therefore, evaluation should be seen as more than a burden of accountability – albeit important as accountability is – but as an investment in the credibility and impact of the profession. It may set in motion a cycle of mutual learning that will not only improve the capacity of futures-researchers but will also enhance the capacity and likeliness of decision-makers to apply insight from futures research.     

Corporate Expenditure on Environmental Protection

We examine the determinants of firm’s current environmental expenditure and firm’s capital investment in equipment for pollution control in Irish manufacturing industries using a Heckman selection model. The main determinants for the two types of expenditure are similar: larger, exporting and energy-intensive firms are more likely to spend. Being subject to environmental regulation also has an effect. Once the decision to commit resources has been taken, larger, older, foreign-owned, exporting and energy-intensive firms incur higher environmental expenditure. For the amount of capital investment only firm size and age play a role. This suggests that the economic and regulatory incentives in place are such that it is the largest and most polluting firms that do most to reduce pollution.     

Inequality caused by macro-economic policies during overaccumulation crisis

ABSTRACT

The tendency of capital to ‘overaccumulate’ has on occasion been severe in post-apartheid South Africa, but has taken different forms. The neoliberal era since the early 1990s has witnessed overaccumulation-crisis displacement in a manner that exacerbates inequality. Such displacement includes financialisation (i.e. higher relative debt and share-portfolio ratios, as well as illicit financial flows), worsening uneven spatial development (within cities and between rural and urban livelihoods), and an amplification of environmentally-damaging extraction systems. Public policy accommodated, accentuated and displaced the crisis, rather than ameliorated, reversed or resolved these symptoms of overaccumulation, to the detriment of the poorest South Africans. Although government has made efforts to address social distress through fiscal policy (e.g. social grants and education), most macro-economic policies – especially in the monetary, financial and international spheres – are amplifiers of inequality. But the most important constraint is a deeper problem than public policy typically admits: capital's tendency to overaccumulation.