ROMANIAN COMPANIES’ WEB-BASED DISCLOSURE CHOICES AND CAPITAL MARKETS

This article aims to investigate the web-based disclosure choices andpractices among Romanian companies listed on Bucharest Stock Exchange. Web-based disclosure offers advantages that are absent in paper-based voluntarydisclosure: it can be accessed globally at much lower costs and it can be updatedmuch more timely also at much lower costs. Another goal of the paper is to establishthe criteria in order to select properly the sample companies. After presenting theadvantages and eventual risks of Internet Financial Reporting and analyzing previousinvestigative reports and articles, this paper investigates the degree to whichRomanian listed companies to disclose financial and non-financial information areusing the Internet. The web sites of these companies were examined throughout May2007 to May 2008, with a view to determining which companies present voluntaryfinancial or non-financial data in addition to the Annual Report and Accounts.internet financial reporting, mandatory and voluntary disclosure, capital markets,listed companies

VOLUNTARY DISCLOSURE AND PERFORMANCE IN TIME OF ECONOMIC INSTABILITY. THE CASE STUDY OF TURISM FELIX COMPANY

In the last few decades, the problem of voluntary disclosure of financial or non-financial information has been, in the attention of specialists, given the fact that information assimetry, as explained by the agency theory, has become an important factor for the actors of financial markets. High quality financial reports consistent with the IAS/IFRS, issued at regular intervals, have the role of offering data for in-depth financial analisys that can be the basis for decisions regarding stock market investments. The performance of company, estimated by using the EVA, MVA, VA indicators, are directly linked with the average cost of capital, which in turn is sensitive to the evolutions of the stock market, measured both by the level of the asset attached to the entity and of the level of financial market. The impact of voluntary disclosure on company’s performance in our paper has been studied on TUFE company listed on the Bucharest Stock Exchange, confirming a refined degree of predictability.voluntary disclosure, performance, cost of capital, EVA, TURISM FELIX

Voluntary disclosures as a form of impression management to reduce evaluative uncertainty during M&A

This study develops and tests a set of hypotheses on how to manage investors’ evaluative uncertainty during M&A through a specific form of impression management, namely, interim news events. We suggest that voluntary disclosures are key in influencing investors’ reactions during M&A. Empirical support for our theoretical arguments is shown in a sample of 36,376 deals and 163,023 associated interim news events carried out by NYSE and NSDQ listed organizations over 10 years. Our research contributes to literature on voluntary disclosures, impression management, and managing M&A

Discretionary risks disclosure: a management perspective

Discretionary risks disclosure practices by managers provide useful information to investors and other users of accounting information in assessing the risk profile of a company. A managers’ ability to disclose relevant risk information that reflects more accurately the companies’ current and future financial performance will facilitate these users in making effective investment decisions. This paper aims to examine empirically the effect of management perception on the disclosure of risk-related information in companies’ annual reports, thus, exploring the current practices of risk reporting by managers of listed companies in Malaysia. The findings should provide useful information to regulators and other policymakers in identifying the factors that influence managers’ perception of risk-related information and, consequently, affect the extent and nature of risk information disclosed in companies’ annual reports. Overall, the findings reveal that enhanced understanding and perception on the overall risk concepts are important drivers that can facilitate managers in disclosing more comprehensive and relevant risk-related information. This, in turn, improves the trust and confidence of investors and other users of financial statements as their evaluations are influenced by the choices of information being disclosed in annual reports by managers

Topics In Finance Part V - Capital Structure

Continuing this series on the theory of financial management, the current article investigates capital structure, offering insight into the roles of stockholder wealth maximization, the risk-return tradeoff, and agency conflicts.  Much literature addresses this topic, and some of the most recent literature challenges certain theoretical cornerstones touted in the textbooks, as revealed in this work

A conceptual framework for changes in Fund Management and Accountability relative to ESG issues

Major developments in socially responsible investment (SRI) and in environmental, social and governance (ESG) issues for fund managers (FMs) have occurred in the past decade. Much positive change has occurred but problems of disclosure, transparency and accountability remain. This article argues that trustees, FM investors and investee companies all require shared knowledge to overcome, in part, these problems. This involves clear concepts of accountability, and knowledge of fund management and of the associated ‘chain of accountability’ to enhance visibility and transparency. Dealing with the problems also requires development of an analytic framework based on relevant literature and theory. These empirical and analytic constructs combine to form a novel conceptual framework that is used to identify a clear set of areas to change FM investment decision making in a coherent way relative to ESG issues. The constructs and the change strategy are also used together to analyse how one can create favourable conditions for enhanced accountability. Ethical problems and climate change issues will be used as the main examples of ESG issues. The article has policy implications for the UK ‘Stewardship Code’ (2010), the legal responsibilities of key players and for the ‘Carbon Disclosure Project’

Transparency and disclosure between theory and practice. A case study of Romania

As a modern system by which companies are directed and controlled (The Cadbury Report, 1992) – corporate governance have became in the last years a system implemented by more and more companies from developed countries and recently from developing once. Having as starting point one of the principles of corporate governance – transparency – in this paper we focus on aspects that contribute to reach the transparency at corporate level, taking into consideration both regulation and practical issues in Romania, a developing country that have recently adopted the mechanisms of corporate governance. Corporate disclosure is the principal mean by which companies can become transparent, and is critical for the functioning of an efficient capital market (Healy & Palepu, 2001). For this reason we investigate several non-financial items that companies operating on international capital markets are usualy disclosing, looking for the extent to which Bucharest Stock Exchange listed companies are disclosing corporate social responsibility information. The results suggest that is a poor disclosure of social responsability information within the annual reports even the companies are activating in domains with great impact on the environmentcorporate governance, transparency, corporate disclosure, listed companies, corporate responsibility

The impact of events on annual reporting disclosures

Burchell, Club and Hopwood (1985) considered that “little is known of how...wider social forces can impinge upon and change accounting” (p.382). This study identifies six political forces that may have instigated changes in accounting practice and annual reporting of a New Zealand electricity entity. Based on the literature (Hopwood, 1983, 1990; Napier, 1989; Gray and Haslam, 1990; Thomson, 1993) it is expected that significant changes in the environment in which the entity operates will effect changes in reporting. The study compares the annual report disclosures of an Electricity Supply Authority on a yearly basis from 1970 to 2001 - a 18 year period with little significant environmental impact in the electricity industry with a period of intense activity in the following 14 years. The study found considerable evidence that the change from a local body accountable to electors/consumers to a public company accountable to shareholders, led to a greater emphasis on profits and earnings per share as a means of measuring performance. It identifies specific changes in accounting practice that support this view as well as a period of “big bath” accounting, decreasing disclosure of commercially sensitive information, and the increasing use of dramatic presentation in the annual report

Cross-country differences in stock market development : a cultural view

Although during the last decades the importance of stock markets has increased in all OECD countries, the cross-country differences appear to be remarkably stable. In this paper we relate the factors determining cross-country differences in stock market activity to deeply rooted norms and values in the society, which are represented by the position of countries on cultural dimensions. Stock markets are relatively more important in countries where inhabitants accept more uncertainty and regard competition as a good way of interacting. These attitudes are represented by the national scores on the dimensions of Uncertainty Avoidance and Masculinity. Recent research shows that the differences between countries on these cultural dimensions are very enduring, which suggests that, provided no large shocks occur, the differences in importance of the stock market are likely to persist.

Comparative analysis of environmental performance measures and their impact on firms' financing choices

This study investigates the roles of different measures of environmental performance in firms' financing choices. Environmental performance is measured through energy-efficiency investments, energy intensity, and energy consumption disclosures, which correspond to input-based, output-based, and disclosing perspectives, respectively. We further distinguish between debt financing and equity financing since environmental information asymmetry varies across investors, affecting the pecking order of financial sources. We use Eastern European and Central Asian firm-level data from the World Bank Enterprise Surveys conducted in 2019/2020. The study sample consists of above 3000 private firms from 42 countries. The logit model shows that alternative measures of environmental performance have varying impacts on financing. For a particular measure, it affects bank and equity financing in different ways. We also find that there is a direct joint impact of environmental investments and disclosures on equity financing. Overall, our study indicates that investors prefer to invest in eco-friendly firms rather than supporting conventional firms in reducing their environmental impacts. Hence, it is required to promote government support programs and loan guarantee programs to initiate firm-level environmental practices. Further, the complementary relationship indicates that firms may choose different environmental practices to reduce environmental information uncertainty, which improves the credibility of environmental information from the investors' perspective.publishedVersio