Transparency and accounting standards

This dissertation tests the extent to which International Financial Reporting Standards (IFRS) affect corporate transparency. This association is tested in the context of three factors relevant to transparency; The adverse selection component of the bid-ask spread, the cost of equity capital, and stock return volatility, with each addressed as a separate essay. The first essay tests whether the global move toward IFRS, leads to a reduction in adverse selection for adopting firms, following adoption. A parsimonious model by Bollen et al. (2004), allows for decomposition of the spread into its respective components; order processing costs, inventory holding costs, and adverse selection costs. As the variable of interest, the Inventory Holding Premium (IHP) is examined surrounding IFRS adoption. Results reveal that the bid-ask spread itself actually increased following adoption across the entire sample, however the adverse selection component, modelled as the IHP, decreased. Restricting the sample to early adopters only and controlling for potential self selection bias, early adopters enjoy a lower bid-ask spread over official adopters, but fail to show any change in adverse selection costs. The second essay tests the contention that firms that switch to compliance with the IFRS from local generally accepted accounting principles (GAAP) experience a reduction in their cost of equity following the change. Drawing upon an ex ante cost of equity measure due to Pastor et al. (2008); and using Easton (2004) for robustness, models developed incorporate a post IFRS dummy variable, and control for other factors related to the cost of equity. Additionally, tests isolate early adopters and control for self-selection bias. Results provide only weak evidence that the IFRS succeed in reducing the cost of equity, with some mixed results across the specified models. Overall results suggest that in this context, it is possible that early adoption has merits, particularly for firms exhibiting greater visibility afforded by higher analyst following. Finally essay three tests whether the switch to International Financial Reporting Standards (IFRS), results in a decrease in stock return volatility following adoption. An intuitive cross sectional volatility model is developed which identifies market volatility and {u03B2} as important factors. Further, given prior research, short-term and long-term effects are predicted to differ, hence separate tests identify the extent of the pre-post windows with this in mind. Results reveal that across the entire sample of adopters, the null of no decrease in stock volatility in the 10 months following adoption, is rejected. Short term tests are less convincing, with all but one specification failing to reject the null. This provides some evidence that the behaviour of stock volatility following this information event differs between the short and long term

Do Investment Treaties Prescribe a Deferential Standard of Review

The dramatic rise in foreign investment in recent decades has brought with it a corresponding increase in the number of bilateral investment treaties (BITs) and, in turn, the number of international investment disputes arising under those treaties. Investment treaty arbitration is the predominant method used to settle those disputes and has certain advantages for both foreign investors and host states compared to available alternatives, but it can tread on delicate issues typically within the domaine rieservd of states. The concern about due regard for sovereign interests in this context is far from purely academic. In the past twenty years, the International Centre for Settlement of Investment Disputes (ICSID) settled nearly ten times as many investor-state disputes as it settled in the previous twenty-five years, and the number of disputes currently pending before ICSID is more than half the number it has settled in toto. Backlash against the system appears to be on the rise and pullback by states is evident in their efforts to renegotiate or terminate existing BITs, to include novel provisions intended to safeguard their regulatory space in new BITs, and, most dramatically, to exit the system altogether. On January 24, 2012, Venezuela became the third state in five years to denounce the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (ICSID Convention)

Exit, Voice, and Loyalty in Investment Treaty Arbitration

I. Introduction II. The Investment Treaty Arbitration Organization ... A. What Organization? ... B. A Look Inside the Club III. Exit, Voice, and Loyalty ... A. Exit: A Long, Difficult, and Open Road to the Door … 1. The Three Types of Exit and the Unavailability of Selective Exit ... 2. The Long Road to Formal Exit ... 3. The Operation of Exit ... B. Voice: From Protest to Prescription ... 1. Protest ... 2. Interpretation ... 3. Prescription ... 4. The Operation of Voice ... C. The Interplay of Exit and Voice, and the Question of Loyalty ... 1. The Interplay and Relative Effectiveness of Exit and Voice ... 2. The Question and Role of Member Loyalty IV. Conclusio

Strategic insider trading around earnings announcements in Australia

This paper tests, within the Australian setting, whether directors strategically time trades in their own firms, around earnings announcements, in the context of impediments to trading in the immediately preceding period. I show that both signed and unsigned trade activity are insignificantly different from zero in the preceding period, and significantly negative and positive after the event. Further, directors in Australia significantly sell following positive earnings news, and buy after negative news, providing evidence of ‘indirect’ trading. Directors’ trades in the longer-term pre-announcement period are also negatively related to the news content sentiment, contrary to expectation. Finally, I find evidence of positive autocorrelation between directors’ trades over the longer-term past, and those executed after earnings announcements, which, in the absence of the ‘short-swing’ rule in Australia, casts doubt over short-term strategic insider trading, more generally

Katselas House

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St. Nicholas Serbian Orthodox Church

2110 Haymaker Road, Monroeville, PA 15146-4322interio

Dreams into action : Getting what you want!

Jakartaxiii, 155 p.; 23 cm

International Firm Lobbying and ED 8 Operating Segments

Exposure Draft 8 (ED 8) Operating Segments was introduced to replace the revised IAS 14 Segment Reporting and to align segment reporting requirements with their United States counterparts in SFAS 131. ED 8 proposed material changes in the identification

Insider trading in Australia: Contrarianism and future performance

This paper examines, within the Australian market, the extent to which legal insider trades are information driven, premised on a disconnect between the market's assessment of firm value, and that of more informed insiders. I address the notion that insiders, endowed with superior information about their firm, are contrarian, reflecting disagreement with the market's current perception of firm value, and also use this knowledge by trading in advance of future performance indicators not known to the market. I find that insiders, directors in particular, are contrarian traders; they buy when their firm is in the bottom tercile according to prior returns (losers), and sell if their firm is a prior winner. Further, this behaviour is exacerbated if the firm is a value (glamour) stock. Finally, I show that even after controlling for the aforementioned factors, directors engage in net buying prior to positive accounting performance changes in the subsequent and following 12 month periods