7 research outputs found
The Complementarity between segment disclosure and earnings quality, and its effect on cost of capital
We investigate the role of earnings quality in determining the levels of segment disclosure, and whether and how better quality earnings and segment disclosure influences cost of capital. Using a large US sample for the period 2001-2006, we find a positive relation between earnings quality and levels of segment disclosures. We also find that firms providing better quality segment information, contingent upon good earnings quality, enjoy lower cost of capital. We base our empirical tests on a self created index of segment disclosure. Our results contribute to a better understanding of (1) the incentives for providing segment disclosures, and (2) how accounting quality (quality of segment information and earnings quality) is related to the cost of capital
The role of representatives of dominant shareholders with the sustainable development through corporate social responsibility matters
In this paper, we analyse the effect that directors representing controlling shareholders have
on corporate social responsibility (CSR) matters since these investors are the core
shareholders in civil law countries, given their high presence on boards. Thus, we analyse the
effect of institutional directors on CSR disclosure, but also the impact of the classification of
these directors between pressure-sensitive and pressure-resistant institutional directors,
depending on if they maintain only an investment relationship with the firm or both an
investment and commercial link, respectively. We hypothesise a quadratic relationship
between institutional directors and CSR disclosure. We show a curvilinear relationship
between institutional directors/pressure-resistant directors and CSR reporting, suggesting that
these directors may play two opposite roles (monitoring or entrenchment with managers).
However, pressure-sensitive directors do not affect CSR disclosure. These findings indicate
that there is an association between board members and strategic decisions. Moreover, our
evidence shows that institutional directors do not act in an identical way. Finally, the
enhancement of corporate governance depends on the proportion of institutional and pressureresistant
directors on boards
The Complementarity between segment disclosure and earnings quality, and its effect on cost of capital
We investigate the role of earnings quality in determining the levels of segment disclosure, and whether and how better quality earnings and segment disclosure influences cost of capital. Using a large US sample for the period 2001-2006, we find a positive relation between earnings quality and levels of segment disclosures. We also find that firms providing better quality segment information, contingent upon good earnings quality, enjoy lower cost of capital. We base our empirical tests on a self created index of segment disclosure. Our results contribute to a better understanding of (1) the incentives for providing segment disclosures, and (2) how accounting quality (quality of segment information and earnings quality) is related to the cost of capital
The role of directors representing institutional ownership in sustainable development through corporate social responsibility reporting
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Creditor intervention, investment, and growth opportunities
We show that creditors do not just ensure that inefficient investment is not undertaken, but also do not preclude efficient investment. Examining what happens following a debt covenant violation, a situation through which creditors acquire some control rights over the firm, we find that investment declines when the firm has few growth opportunities but it may increase otherwise. The results are robust to the use of different proxies for growth opportunities. The firm's performance improves but it suffers dividend cuts and increased CEO turnover. The results suggest that creditors consider the benefits of growth opportunities as a source of future cash flows to meet outstanding debt obligations