Template-Type: ReDIF-Article 1.0 Author-Name: Sang Koo Kang Author-X-Name-First: Sang Koo Author-X-Name-Last: Kang Author-Name: Haksoon Kim Author-X-Name-First: Haksoon Author-X-Name-Last: Kim Author-Name: Hyunil Lim Author-X-Name-First: Hyunil Author-X-Name-Last: Lim Title: Do foreign investors affect stock price crash risk in the Korean stock market? Abstract: We examine the relationship between short-selling activity and stock price crash risk in the Korean stock market. We find a positive relationship between short-selling and stock price crash risk. This result is consistent with prior literature on short-selling activity and stock price crash risk. Furthermore, the positive relationship is more pronounced when a firm is more likely to attract bad news or when more informed traders, specifically foreign investors, are present in the market. The contribution of this paper's results is that the role of foreign investors as informed traders and their effect on stock price crash risk is deemed significant in the Korean stock market. Journal: Int. J. of Banking, Accounting and Finance Pages: 487-515 Issue: 4 Volume: 13 Year: 2023 Keywords: short sales; crash risk; negative skewness; foreign investor; institutional investors. File-URL: http://www.inderscience.com/link.php?id=133916 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:ids:injbaf:v:13:y:2023:i:4:p:487-515 Template-Type: ReDIF-Article 1.0 Author-Name: Roberta Adami Author-X-Name-First: Roberta Author-X-Name-Last: Adami Author-Name: Sudha Mathew Author-X-Name-First: Sudha Author-X-Name-Last: Mathew Author-Name: Prem Puwanenthiren Author-X-Name-First: Prem Author-X-Name-Last: Puwanenthiren Author-Name: Sheeja Sivaprasad Author-X-Name-First: Sheeja Author-X-Name-Last: Sivaprasad Title: Going global: evidence from India Abstract: American depository receipts (ADRs) and global depository receipts (GDRs) remain one of the predominant routes used by firms in emerging economies to list overseas. However, the aftermarket performance of ADR/ GDR issuances is not widely researched amongst emerging economies. Using an Indian sample of ADR and GDR issues, we analyse the short- and long-term performance of these firms. We adopt an event study methodology to assess the short-term performance and Lyon et al.'s (1999) approach to examine the long-term performance. We also examine the changes in firms' operating performance following ADR/GDR issuances. The results show that the short-term buy and hold abnormal returns for ADRs are relatively better than GDRs and in the long run yield positive abnormal returns. These firms also have better operating performance post their overseas issuance in the American stock markets and finally the results also show that ADR issues is a key driver in firm performance. Journal: Int. J. of Banking, Accounting and Finance Pages: 464-486 Issue: 4 Volume: 13 Year: 2023 Keywords: American depositary receipts; global depositary receipts; GDRs; firm performance; operational characteristics; India. File-URL: http://www.inderscience.com/link.php?id=133919 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:ids:injbaf:v:13:y:2023:i:4:p:464-486 Template-Type: ReDIF-Article 1.0 Author-Name: Tolulola Lawal Author-X-Name-First: Tolulola Author-X-Name-Last: Lawal Title: Director reputation and earnings management: evidence from the British Honours System Abstract: This study introduces a novel and methodological enhancement to the literature on the measurement of director reputation and examines the link between director reputation and earnings management. Using hand-collected British Honours System data for 2005-2014, we test two competing hypotheses about the relationship between director reputation and earnings management: the opportunistic hypothesis and the efficient contracting hypothesis. The results support the hypothesis of a positive association between director reputation and abnormal accruals consistent with the opportunistic hypothesis. However, this study also reports evidence suggesting that boards with reputed directors are more likely to report a loss and, thus, less likely to engage in loss avoidance practices, supporting the prediction of the efficient contracting hypothesis. The results are also robust to the inclusion of additional control variables, self-selection bias, and reverse causality that may result from the potential endogeneity of director reputation. The results of this study suggest that director reputation has different implications for different dimensions of earnings management and contributes to the debate on the double-edged implication of director capital alluded to in the literature. Journal: Int. J. of Banking, Accounting and Finance Pages: 516-556 Issue: 4 Volume: 13 Year: 2023 Keywords: earnings management; earnings quality; British Honours System; director reputation; corporate governance; abnormal accruals; loss avoidance; efficient contracting hypothesis; opportunistic hypothesis. File-URL: http://www.inderscience.com/link.php?id=133922 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:ids:injbaf:v:13:y:2023:i:4:p:516-556 Template-Type: ReDIF-Article 1.0 Author-Name: KwangJoo Koo Author-X-Name-First: KwangJoo Author-X-Name-Last: Koo Title: The dark side of inside debt: evidence from innovation Abstract: This study examines whether executive pensions and deferred compensation plans, collectively known as 'inside debt', influence innovation outputs that are considered critical drivers of firm growth. We find evidence that the association between inside debt and future growth outputs is negative by providing a decline in innovation performance. This result means that chief executive officers (CEOs) with larger inside debt would care more about the risk aspects of their firms. Thus, the firm may have to divert resources to pay off its debt obligations to its executives rather than invest in the innovative initiative. In particular, the negative relationship observed between inside debt and innovation is reduced or reversed in firms with CEOs with higher general management skills and longer decision horizons. Our finding is also robust to controlling for endogeneity concerns through a coarsened exact matching approach and a two-stage least squares (2SLS). In sum, the outcomes of this study contribute to the literature on CEO compensation schemes and corporate management and offer a more nuanced understanding of the role played by debt-like compensation in reducing risk-taking behaviours and decreasing future growth for firms, investors and regulators. Journal: Int. J. of Banking, Accounting and Finance Pages: 557-590 Issue: 4 Volume: 13 Year: 2023 Keywords: inside debt; deferred compensation; pension; innovation. File-URL: http://www.inderscience.com/link.php?id=133925 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:ids:injbaf:v:13:y:2023:i:4:p:557-590 Template-Type: ReDIF-Article 1.0 Author-Name: Sarayut Rueangsuwan Author-X-Name-First: Sarayut Author-X-Name-Last: Rueangsuwan Author-Name: Somchai Supattarakul Author-X-Name-First: Somchai Author-X-Name-Last: Supattarakul Title: What do credit rating agencies tell us about earnings momentum? Abstract: This study extends the literature on the effects of earnings momentum on credit ratings in debt markets by investigating the wider dimensions of their economic implications. Consistent with prior research, our research provides empirical evidence of an association between earnings momentum and credit ratings and further explores whether business fundamentals determine earnings momentum. We find that credit rating agencies assign higher (lower) credit ratings for firms with increasing (decreasing) earnings momentum and that the credit rating implications of decreasing earnings momentum are more pronounced. We further find that increasing (decreasing) earnings momentum with high (but not low) accounting quality can predict better (worse) future firm performance. Our findings suggest that traditional measures of low reporting quality indicate information with respect to future prospects. Our empirical evidence seems to support the view that earnings momentum is a manifestation of a firm's true performance as perceived by credit rating agencies. Journal: Int. J. of Banking, Accounting and Finance Pages: 423-463 Issue: 4 Volume: 13 Year: 2023 Keywords: credit rating; earnings momentum; reporting quality; earnings predictability. File-URL: http://www.inderscience.com/link.php?id=133933 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:ids:injbaf:v:13:y:2023:i:4:p:423-463 Template-Type: ReDIF-Article 1.0 Author-Name: Efstathios Karpouzis Author-X-Name-First: Efstathios Author-X-Name-Last: Karpouzis Author-Name: Dimitris Margaritis Author-X-Name-First: Dimitris Author-X-Name-Last: Margaritis Author-Name: Maria Psillaki Author-X-Name-First: Maria Author-X-Name-Last: Psillaki Author-Name: Christos Staikouras Author-X-Name-First: Christos Author-X-Name-Last: Staikouras Title: Hedge fund activism and short-term value creation prior to the initial filing: evidence from US firms Abstract: Hedge funds trade on non-public information which is not clearly disclosed to the market at the time of schedule 13D or 13G filings. Using a hand-collected dataset of US hedge funds interventions we provide new evidence on the value of non-public information at the time the filer surpasses the 5% threshold and the filing obligation is triggered. We find returns are abnormally high prior to the disclosure and more importantly prior to the 5% threshold date but only for schedule 13D events. Both 13D and 13G targeted firms generate abnormal returns in the post filing period which are significantly lower than the 13D returns prior to the filing date. The novelty of our approach is that it distinguishes gains resulting from insider trading around the 5% threshold event from those generated by information asymmetry around the filing event. Journal: Int. J. of Banking, Accounting and Finance Pages: 277-320 Issue: 3 Volume: 13 Year: 2023 Keywords: hedge fund activism; asymmetric information; insider trading; abnormal returns; event studies. File-URL: http://www.inderscience.com/link.php?id=129332 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:ids:injbaf:v:13:y:2023:i:3:p:277-320 Template-Type: ReDIF-Article 1.0 Author-Name: Dimitris Anastasiou Author-X-Name-First: Dimitris Author-X-Name-Last: Anastasiou Author-Name: Panayotis Kapopoulos Author-X-Name-First: Panayotis Author-X-Name-Last: Kapopoulos Title: Dynamic linkages among financial stress, house prices and residential investment in Greece Abstract: We examine the relationship between financial instability and real estate price fluctuation in Greece, whose experience during the last two decades makes it an ideal laboratory. Employing a VAR and a Bayesian VAR model, we demonstrate the ability of this measure to explain the phases of the housing market (in terms of both residential prices and investment). We find that an adverse shock in financial stability has prolonged adverse effects in the real estate market, with our findings offering a rigorous interpretation of how the 'perfect financial storm' hit the Greek market during the previous decade. Our findings also suggest that residential prices are more sensitive to changes in financial stress conditions than residential investment. Journal: Int. J. of Banking, Accounting and Finance Pages: 321-340 Issue: 3 Volume: 13 Year: 2023 Keywords: house prices; residential investment; financial stability; uncertainty; Greek economy; Greece. File-URL: http://www.inderscience.com/link.php?id=129334 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:ids:injbaf:v:13:y:2023:i:3:p:321-340 Template-Type: ReDIF-Article 1.0 Author-Name: Evangelos Vasileiou Author-X-Name-First: Evangelos Author-X-Name-Last: Vasileiou Title: Is the turn of the month an anomaly on which an investment strategy could be based? Evidence from Bitcoin and Ethereum Abstract: We examine the turn of the month effect (TOM) in cryptocurrency markets. In contrast to most calendar effect studies, we do not take for granted that the TOM period is the last trading day of the month up to the first three trading days (-1, 3), as Lakonishok and Smidt (1988) proposed in their seminal paper, but we employ an optimisation algorithm which tests several four-day intramonth periods. Our findings confirm the existence of the TOM effect because the most profitable four-day periods are those between the last days of one month and the first trading days of the next one [the (-1, 3) definition is included in these combinations]. We reach the conclusion that the existence of a TOM effect may not always lead to higher profits in comparison with a buy-and-hold (BnH) strategy, but it presents better returns to risk reward and it could be beneficial for investment strategies. Journal: Int. J. of Banking, Accounting and Finance Pages: 388-402 Issue: 3 Volume: 13 Year: 2023 Keywords: turn of the month effect; TOM; calendar anomalies; Bitcoin; Ethereum; pricing efficiency; efficient market hypothesis; EMH; investment strategies. File-URL: http://www.inderscience.com/link.php?id=129336 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:ids:injbaf:v:13:y:2023:i:3:p:388-402 Template-Type: ReDIF-Article 1.0 Author-Name: Athanasios Pavlopoulos Author-X-Name-First: Athanasios Author-X-Name-Last: Pavlopoulos Author-Name: George Emmanuel Iatridis Author-X-Name-First: George Emmanuel Author-X-Name-Last: Iatridis Title: Goodwill impairment disclosure and integrated reporting: evidence on credit ratings and earnings manipulation Abstract: This study examines the effect of goodwill impairment disclosure quality and integrated reporting (IR) compliance on earnings manipulation and credit ratings. We assess whether IR and goodwill impairment disclosure quality are associated with managerial behaviour. We find that firms with goodwill impairment are likely to use earnings manipulation and display lower IR compliance and goodwill impairment disclosure quality. We examine the impact of managerial discretion over goodwill impairment on the decision to publish voluntary IR information. We find that companies are likely to voluntarily adopt IR when goodwill impairment is low and goodwill impairment disclosure quality is high. When we broaden our investigation to companies that have already adopted IR, we find that IR compliance is likely to decrease earnings manipulation, increase credit ratings and improve the quality of goodwill impairment disclosure even in the presence of goodwill impairment. Our results highlight the informativeness of IR compliance and support the need for firms to disclose goodwill impairment losses in order to reduce information asymmetry and uncertainty. Journal: Int. J. of Banking, Accounting and Finance Pages: 341-387 Issue: 3 Volume: 13 Year: 2023 Keywords: integrated reporting; goodwill impairment; credit ratings; voluntary disclosure; earnings manipulation. File-URL: http://www.inderscience.com/link.php?id=129339 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:ids:injbaf:v:13:y:2023:i:3:p:341-387 Template-Type: ReDIF-Article 1.0 Author-Name: Ghaith El-Nader Author-X-Name-First: Ghaith Author-X-Name-Last: El-Nader Author-Name: Yasmeen Al-Halabi Author-X-Name-First: Yasmeen Author-X-Name-Last: Al-Halabi Title: Do idiosyncratic volatility and liquidity in stock returns still matter in post-global financial crisis? The UK evidence Abstract: This paper investigates the roles of idiosyncratic volatility and liquidity in explaining the variation in the UK stock returns following the aftermath of the global financial crisis. Results provide strong evidence of a positive idiosyncratic volatility premium across different return data intervals, implying that investors require compensation for higher idiosyncratic volatility stocks. Also, liquidity explains the positive idiosyncratic volatility-return relation and must be considered when seeking a move away from highly volatile stocks. Results of the industry analysis indicate that idiosyncratic volatility (liquidity) is relevant in explaining variations in six (seven) of the ten industry-level returns. The findings of this paper are important for active investors to understand how different industry volatilities are related, and therefore to increase their diversification capacity or speculate by timing their investment strategies. Journal: Int. J. of Banking, Accounting and Finance Pages: 403-422 Issue: 3 Volume: 13 Year: 2023 Keywords: idiosyncratic volatility; liquidity; UK stock market. File-URL: http://www.inderscience.com/link.php?id=129341 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:ids:injbaf:v:13:y:2023:i:3:p:403-422