The effect of twitter dissemination on cost of equity: A big data approach

Reducing information asymmetry between investors and a firm can have an impact on the cost of equity, especially in an environment or times of uncertainty. New technologies can potentially help disseminate corporate financial information, reducing such asymmetries. In this paper we analyse firms’ dissemination decisions using Twitter, developing a comprehensive measure of the amount of financial information that a company makes available to investors (iDisc) from a big data of firms’ tweets (1,197,208 tweets). Using a sample of 4131 firm-year observations for 791 non-financial firms listed on the US NASDAQ stock exchange over the period 2009–2015, we find evidence that iDisc significantly reduces the cost of equity. These results are pronounced for less visible firms which are relatively small in size, have a low analyst following and a small number of investors. Highly visible firms are less likely to benefit from iDisc in influencing their cost of equity as other communication channels may have widely disseminated their financial information. Our investigations encourage managers to consider the benefits of directly spreading a firm’s financial information to stakeholders and potential investors using social media in order to reduce firm equity premium (COE)

New Insights into Bank Asset Securitization: The Impact of Religiosity

We examine the influence of both organizational and geographical religiosity, as important ethical parameters moderating a bank’s decision to securitize their assets. The study employs a unique database of banks located within countries marked by high (low) religious adherence. Our results provide evidence that different measures of religiosity affect a bank’s decision to securitize their assets: Banks located in countries with high religious adherence are less likely to engage with securitization compared to banks in countries with lower religiosity, while Islamic banks have a higher likelihood of embarking on a highly monitored model of asset securitization in contrast to conventional banks. When examining the motives underlying a bank’s decision to securitize assets, there is strong evidence that Islamic banks securitize their assets to improve their portfolio diversification, financial performance, and regulatory compliance. This study highlights the importance of considering informal ethical mechanisms, such as religiosity, at both the country and firm levels, when studying bank risk-taking and trading decisions, especially in countries with dual banking systems

Market responses to firms’ voluntary carbon disclosure: Empirical evidence from the United Kingdom

In corporate boardrooms around the world, climate change has quickly risen to become a major issue, matching public concern. Recently, corporate management has encountered stakeholder pressure to disclose more information about their carbon profile and their plans to improve it. They have also been challenged to find the appropriate strategy for carbon disclosures, requiring an understanding of the costs and benefits of both carbon improvement initiatives and the reporting of them. Using a unique data set that contains firms listed on the FTSE 350 index on the London Stock Exchange market from 2009 to 2015, we apply the event study method to examine market reaction to carbon disclosures. The results show that investors respond significantly negatively to carbon disclosure announcements via Carbon Disclosure Project (CDP) of FTSE 350 firms. Moreover, for firms working in carbon-intensive industries, investors react to carbon disclosure announcements in a more significantly negative way compared with the main sample. We also find that the study’s main findings are driven by the smaller FTSE 350 firms. Furthermore, a subsample of observations for the financial crisis period of 2007–2008 was analyzed to explore the examined relationship during the crisis. In contrast, a significant positive market reaction to carbon disclosure was found for the 2007–2008 crisis period. Our study’s findings offer fresh insight and updated policy implications for investors, management and sustainability institutions. We recommend management accompanies their carbon disclosures with more explicit statements of reasons for carbon initiatives and the benefits arising from them

Firm valuations and board compensation: Evidence from alternative banking models

The Enron debacle and the Global Crossing bankruptcy have raised particular concerns of investors about the effectiveness of directors' scrutiny and their compensations. This study, therefore, examines whether the board of directors' compensation schemes affect stock market valuations for banks within an international context. We employ a sample of 386 bank-year observations from 2010 to 2015. Our results show that for the whole sample, director compensation has a significant positive impact on stock market valuations. By conditioning our analyses on the bank type, we find that the positive effect of the board of directors' compensation on market valuations holds only for conventional banks, with no evidence for their Islamic counterparts. We, additionally, examine the stock market valuations of Shari'ah supervisory board's compensation on Islamic banks value. Results show investors positively price information related to such board compensation

Global banking stability in the shadow of Covid-19 outbreak

The ongoing Covid-19 pandemic has been exerting negative effects on several economies in 2020. Therefore, it is of paramount importance to examine the impact of this pandemic on the global banking stability and to assess any potential recovery signals. This study is timely, in that we consider 1090 banks from 116 countries for quarterly periods across 2019–20. The results provide strong empirical evidence that, in the global banking sector, the Covid-19 outbreak has had detrimental impacts on financial performance across various indicators of financial performance (i.e., accounting-based and market-based performance measures) and financial stability (i.e., high-risk indicators including default risk, liquidity risk and asset risk). These results are consistently observed for various regions, countries (US, China and others), and different bank-level characterises, and across income-generation levels among countries. We also find differential effects of the pandemic on alternative banking systems (i.e., conventional and Islamic). Moreover, our trend analysis, based on bank average performance and financial stability over quarterly periods, identifies a signal of recovery for bank stability during the second quarter of 2020. The findings presented in this study offer important financial observations and policy implications to many stakeholders engaging with global banking

Drivers of Global Banking Stability in Times of Crisis: The Role of Corporate Social Responsibility

This study examines the effect of environmental and social (ES) activities on global banking stability in the shadow of the COVID‐19 pandemic. Using a sample of 244 commercial banks across 52 countries from 2002 to 2020, we provide evidence that during the global health crisis, banks with higher levels of ES activities are more financially stable (i.e. lower credit and liquidity risk exposures). Drawing on social capital and stakeholder theories, we find that ES activities increase firm‐level social capital and establish a stakeholder‐centred culture within a bank, strengthening social trust and public confidence in the bank's risk oversight. Accordingly, ES activities constrain excessive and aggressive bank risk‐taking during turbulent times when short‐termism prevails. Our additional analysis reveals that investors value such beneficial effects of ES activities. The findings offer new insights into the increasingly significant roles of social capital creation and stakeholder‐centred culture in maintaining banks’ financial stability

Board busyness and new insights into alternative bank dividends models

This study examines the possible opposing effects of the board function of busyness (i.e. the presence of busy independent non-executive directors serving on multiple boards) on bank dividend payout patterns between two alternative payouts models (i.e. conventional and Islamic). Using an international sample for listed banks during the periods of 2006–2018, we show that the busyness of boards of directors can explain differential dividend payouts behaviour between two banking systems. For conventional banking dividend model, a busy board has a significantly positive impact on the bank’s dividend payout level. However, during the financial crisis of 2007/2009, the positive impact of board busyness on dividends payouts is tempered for these banks. In contrast, Islamic banks operating under a more constrained dividend model, report significantly lower levels of payouts and lower likelihood when they have busy directors on board. We find insignificant evidence for the effect of the financial crisis in Islamic banks. These results highlight a potential challenge for the unique agency conflicts arising from the complex payout model of Islamic banks (in terms of profit distribution principles, motives, mechanics and techniques, and flexibility of payouts), which is subject to the demand for greater monitoring and additional rulings when compared to the conventional

Prognostic impact of Additional Chromosomal Abnormalities in Egyptian Chronic Myeloid Leukemia Patients

BACKGROUND: Emergence of additional chromosomal abnormalities (ACAs) in chronic myeloid leukemia (CML) is associated with disease progression to advanced phases and reflects the genetic instability of CML. AIM: Is to evaluate the frequency of ACAs in chronic phase (CP) and advanced disease (AP) CML patients and study their impact on patient’s outcome, overall survival (OS) and event-free survival (EFS). RESULTS: The studied group (n = 73) included 31 males (43%) and 42 females (57%). Median age of patients at diagnosis was 37 years (17–76). Median TLC was 208×109/L (2.1–784.2), median Hb was 9.4 g/dL (5.7–13), and median platelets count was 290.5×109/L (13–1271). We identified 32 patients (44%) with ACAs. ACAs emergence was significantly associated with advanced phases of CML (13/21, 62%) compared to CP (19/52, 36%) (p = 0.048). ACAs were associated with lower median OS and EFS in CP compared to AP (38 vs. 120 ms) and (58.3 vs. 77 ms) (p = 0.026 and p = 0.065, respectively). Early molecular responders (6/17, 35%) at 3 months, and 6 months (10/26, 38%) developed ACAs less than nonoptimal responders. Disease phase, hepatomegaly and bone marrow eosinophilia were significant predictors of OS (p < 0.001, p = 0.02, p = 0.04, respectively). CONCLUSION: Early identification of ACAs in Ph+ metaphases at diagnosis and during therapy predicts CML outcome. ACAs emergence occurred at a higher frequency and at a younger age in our CML patients and are related to inferior EFS and OS