The Effects of Voluntary Disclosure and Dividend Propensity on Prices Leading Earnings

We investigate the joint effects of dividend propensity (i.e. whether a firm pays cash dividends) and voluntary disclosure on the relationship between current stock returns and future earnings. We examine whether dividend propensity and voluntary disclosure act as substitutes or complements in the financial communication process. We also examine whether the effects of dividend propensity and voluntary disclosure vary between high- and lowgrowth firms. Consistent with prior studies, we find that share price anticipation of earnings improves with increasing levels of annual report narrative disclosure, and that firms that pay dividends exhibit higher levels of share price anticipation of earnings than non-dividend-paying firms. The paper adds to the literature on share price anticipation of earnings in two crucial respects. First we show that the associations of voluntary disclosure and dividend propensity with share price anticipation of earnings are statistically significant for high-growth firms and insignificant for low-growth firms. Second we show that the significant effects we find for dividend propensity and voluntary disclosure in high-growth firms are not perfectly additive

Coping with potential bi-parental inbreeding: limited pollen and seed dispersal and large genets in the dioecious marine angiosperm Thalassia testudinum

The high prevalence of dioecy in marine angiosperms or seagrasses (>50% of all species) is thought to enforce cross-fertilization. However, seagrasses are clonal plants, and they may still be subject to sibling-mating or bi-parental inbreeding if the genetic neighborhood is smaller than the size of the genets. We tested this by determining the genetic neighborhoods of the dioecious seagrass Thalassia testudinum at two sites (Back-Reef and Mid-Lagoon) in Puerto Morelos Reef Lagoon, Mexico, by measuring dispersal of pollen and seeds in situ, and by finescale spatial autocorrelation analysis with eight polymorphic microsatellite DNA markers. Prevalence of inbreeding was verified by estimating pairwise kinship coefficients; and by analysing the genotypes of seedlings grown from seeds in mesocosms. Average dispersal of pollen was 0.3–1.6 m (max. 4.8 m) and of seeds was 0.3–0.4 m (max. 1.8 m), resulting in a neighborhood area of 7.4 m² (range 3.4–11.4 m²) at Back-Reef and 1.9 (range 1.87–1.92 m²) at Mid-Lagoon. Neighborhood area (Na) derived from spatial autocorrelation was 0.1–20.5 m² at Back-Reef and 0.1–16.9 m² at Mid-Lagoon. Maximal extensions of the genets, in 19 9 30 m plots, were 19.2 m (median 7.5 m) and 10.8 m (median 4.8 m) at Back-Reef and Mid-Lagoon. There was no indication of deficit or excess of heterozygotes nor were coefficients of inbreeding (Fis) significant. The seedlings did not show statistically significant deficit of heterozygotes (except for 1 locus at Back-Reef). Contrary to our expectations, we did not find evidence of bi-parental inbreeding in this dioecious seagrass with large genets but small genetic neighborhoods. Proposed mechanisms to avoid bi-parental inbreeding are possible selection against homozygotes during fecundation or ovule development. Additionally, the genets grew highly dispersed (aggregation index Ac was 0.09 and 0.10 for Back-Reef and Mid-Lagoon, respectively); such highly dispersed guerrilla-like clonal growth form likely increases the probability of crossing between different potentially unrelated genets.Brigitta Ine Van Tussenbroek, Tania Valdivia-Carrillo, Irene Teresa Rodríguez-Virgen, Sylvia Nashieli Marisela Sanabria-Alcaraz, Karina Jiménez-Duran, Kor Jent Van Dijk, Guadalupe Judith Marquez-Guzmá

Transparency, disclosure and the pricing of future earnings in the European market

Paper presented at "Accounting at a Tipping Point", the American Accounting Association (AAA) Annual Meeting held in New York City on August 1-5, 2009. Final version published in Journal of Business Finance and Accounting until title Accruals, Disclosure and the Pricing of Future Earnings in the European Market. Available online at http://onlinelibrary.wiley.com/The present study examines the role of disclosure in assisting market participants to form expectations of future earnings by observing the accrual content of reported earnings. Accounting research has been focusing on investigating the ability of accounting numbers and practices to provide relevant information to market participants. In the context of the association between market returns and accounting numbers or practices, conclusions can be only drawn on the effect of these numbers and practices at an average level of disclosure. Here it is shown that these conclusions can be significantly altered at varying levels of disclosure. Employing a sample of European firms and their Transparency and Disclosure ratings conducted by Standard and Poor’s, we show how disclosure and accruals jointly affect earnings expectations that are included in current stock returns. It is shown that both the joint effect of disclosure and accruals depends on the magnitude, sign and the nature of accruals (i.e. current and non-current accruals), and that increased disclosure appears to correct overstated expectations arising mostly from the extensive use of current accruals and negative non-current accruals