Diffusion of integrated reporting,insights and potential avenues for future research

This study reviews the diffusion of integrated reporting (IR) research. The systematic literature review method is used to review the effects of IR at the organisational level, determinants of IR adoption and integrated report quality (IRQ), assurance on IR, economic consequences of IR/IRQ, and research design issues to set agendas for future research. The review covers 119 peer-reviewed IR articles published in 36 journals between 2012 and 2021. It finds that the IR literature is dominated by organisational-level studies, but there is limited research on the economic consequences of IR/IRQ, and the findings are inconclusive to date. Further, the factors that determine IR adoption/IRQ are not conclusive, and there is scarce research on IR assurance. This review contributes to the emerging IR literature and provides valuable insights to the International Integrated Reporting Council (IIRC) in establishing the IR framework as a global reporting norm in practice.     

The value relevance of major media advertising expenditures: Some U.K. evidence

This study examines whether ACNielsen MEAL major media advertising expenditure measures, that are publicly available at a cost, have value relevance. Our results suggest that these advertising-expenditure measures are positively associated with market value. We also find little difference in the value relevance of these expenditures among different sizes of firms. Value relevance is found to be present only for nonmanufacturing firms. This suggests that the costly information provided by ACNielsen MEAL surveys may be potentially useful to market participants in valuing firms, at least for nonmanufacturing firms.     

Motivating high‐impact innovation: Evidence from managerial compensation contracts

We investigate the relationship between Chief Executive Officer (CEO) compensation and firm innovation and find that long‐term incentives in the form of options, especially unvested options, and protection from managerial termination in the form of golden parachutes are positively related to corporate innovation, and particularly to high‐impact, exploratory (new knowledge creation) invention. Conversely, non‐equity pay has a detrimental effect on the input, output and impact of innovation. Tests using the passage of an option expensing regulation (FAS 123R) as an exogenous shock to option compensation suggest a causal interpretation for the link between long‐term pay incentives, patents and citations. Furthermore, we find that the decline in option pay following the implementation of FAS 123R has led to a significant reduction in exploratory innovation and therefore had a detrimental effect on innovation output. Overall, our findings support the idea that compensation contracts that protect from early project failure and incentivize long‐term commitment are more suitable for inducing high‐impact corporate innovation.     

Government intervention and institutional trading strategy: Evidence from a transition country

This study investigates the effectiveness of government intervention in rescuing bearish markets in a transition economy. Focusing on a pre- and a post-intervention period, the findings reveal that government intervention successfully rescued bearish markets in China and led to a fundamental change in institutional trading strategy after the intervention. We observe that following an intervention, institutions are more sensitive to long-term stock market regulations, whereas individual investors are more concerned about the rules related to their short-term interests. Evidence suggests that a credible signal from the government can be helpful in creating a positive outcome in the market (Bhanot & Kadapakkam, 2006). The findings are important to the current debate regarding the role of government intervention in markets in other transitional economies, as well as in developed countries.     

Institutional development,financial deepening and economic growth: Evidence from China

There have been profound changes in both political and economic institutions in China over the last 20 years. Moreover, the pace of transition has led to variation across the country in the level of development. In this paper, we use panel data for the Chinese provinces to study the role of legal institutions, financial deepening and political pluralism on growth rates. The most important institutional developments for a transition economy are the emergence and legalization of the market economy, the establishment of secure property rights, the growth of a private sector, the development of financial sector institutions and markets, and the liberalization of political institutions. We develop measures of these phenomena, which are used as explanatory variables in regression models to explain provincial GDP growth rates. Our evidence suggests that the development of financial markets, legal environment, awareness of property rights and political pluralism are associated with stronger growth.     

Bank Relationships and Firms' Financial Performance: The Italian Experience

We examine the connection between the number of bank relationships and firms' performance using a unique data set on Italian small firms for which banks are a major source of financing. Our evidence indicates that return on equity and return on assets decrease as the number of bank relationships increases with a stronger effect on small firms than large firms. We also find that interest expense over assets increases as the number of relationships increases. Particularly for small firms, these results are consistent with analyses suggesting that fewer bank relationships reduce information asymmetries and agency problems and outweigh hold‐up problems.     

THE TECHNICAL INEFFICIENCY EFFECTS OF TURKISH BANKS AFTER FINANCIAL LIBERALIZATION

The banking sector in Turkey has grown significantly over the last two decades of financial liberalization. One of the aims of the financial liberalization was to improve efficiency through restructuring programs including the privatization of state banks and the encouragement of mergers. In this paper we identify key factors determining the technical efficiency differentials among Turkish commercial banks in the pre‐ and post‐liberalization periods, using the technical inefficiency effects model. We found that loan quality, size, ownership of the banks, and profitability have a positive and significant impact on the technical efficiencies of banks. The results warrant implementation of effective regulatory measures to improve the quality of the earning assets of commercial banks. Furthermore, steps by the government to encourage acquisitions or mergers for private banks and the privatization of state‐owned banks seem to be consistent in improving the overall efficiency of commercial banking in Turkey.     

Dark personality in dark times: How Dark Triad personality interacts with injustice and politics to influence detachment and discretionary behaviours

Using two-wave time-lagged multi-source data in two studies, we examine how Dark Triad personality (DTP) interacts with contextual variables to influence psychological detachment and discretionary behaviours. In Study 1 (N = 288), we examine the combined effects of DTP and perceived injustice on psychological detachment and organizational citizenship behaviours (OCBs). In Study 2 (N = 461), we examine the combined effects of DTP and perceived organizational politics (POP) on counterproductive work behaviours (CWB) and psychological detachment. We found that Dark Triad personality was positively related to psychological detachment and CWBs and negatively related to OCBs. The effects of the DTP on psychological detachment, OCBs, and CWBs were stronger when perceived injustice and POP was high.     

Are Asian stock markets efficient? Evidence from new multiple variance ratio tests

This paper tests for the martingale hypothesis in the stock prices of a group of Asian markets. We use new multiple variance ratio tests based on the wild bootstrap and signs. These are non-parametric finite sample tests, which do not rely on large sample theories for statistical inference. This paper also presents Monte Carlo results that these non-parametric tests show superior small sample properties to those of the conventional Chow–Denning test. Both weekly and daily data from 1990 are considered, while moving sub-sample windows are used for the latter to control the sensitivity of the results to a particular sample period. It is found that the Hong Kong, Japanese, Korean and Taiwanese markets have been efficient in the weak-form. The markets of Indonesia, Malaysia and Philippines have shown no sign of market efficiency, despite financial liberalization measures implemented since the eighties. We have also found evidence that the Singaporean and Thai markets have become efficient after the Asian crisis. In general, the results point toward the notion that the pricing efficiency of a market depends on the level of equity market development as well as the regulatory framework conducive of transparent corporate governance.