Internationalization and the reliance of analyst forecasts in stakeholder-oriented corporate governance: Evidence from Japanese MNEs

Sakawa, Hideaki; Watanabel, Naoki; Gu, Junjian

doi:10.1016/j.pacfin.2022.101755

Cited by 9 publications

(5 citation statements)

References 57 publications

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“…On the other hand, the increase in foreign shareholders mitigates the lower dividend payments [38] and informational efficiency of stock prices [39] in Japanese publicly listed firms. As for the disclosure quality problems, foreign shareholders care about the importance to enhance disclosure quality to mitigate information asymmetry [40] and enhance the role of analysts' monitoring [41]. Thus, we do not simply predict the attitude of foreign shareholders related to disclosure problems such as IR.…”

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confidence: 92%

Does Integrated Reporting Affect Real Activities Manipulation?

Shirabe

Nakano

2022

Sustainability

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Integrated reporting (IR) by firms is intended to improve not only the quality of information available to external parties, but also internal managerial decision making. IR is considered useful to address the short-term orientation of firms caused by pressure from short-term oriented shareholders. This study examines whether the introduction of IR discourages real activities manipulation, a form of myopic behavior. Using a large sample of Japanese listed companies, the study empirically tests the effect of IR on real activities manipulation through panel data regression analysis. We find that the introduction of IR is related to higher level of abnormal cash flows from operations, lower level of abnormal production costs, and lower level of total activities manipulation. These results generally suggest that firms tend not to engage in real activities manipulation after IR is introduced. Our results also show that while there is insignificant difference in the degree of real activities manipulation between IR and non-IR firms immediately after the introduction of IR, the degree of real activities manipulation is generally smaller in IR firms than in non-IR firms after more time has passed since the introduction of IR, consistent with the view of practitioners that IR is a continuous improvement process of internal decision making. Regarding the non-financial aspects, additional analysis shows that introducing IR is positively associated with the performance of environmental, social and governance (ESG). Our findings suggest that IR could discourage companies’ short-term oriented behavior and promote long-term value creation, which is of interest to a wide range of stakeholders. Thus, our findings provide insightful evidence for researchers, practitioners, and policy makers interested in the role of IR in stakeholder-oriented corporate governance mechanisms.

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confidence: 92%

Does Integrated Reporting Affect Real Activities Manipulation?

Shirabe

Nakano

2022

Sustainability

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“…Therefore, it is interesting to investigate the impact of corporate governance on the accuracy of earnings forecasts from analysts. Previous empirical studies have investigated the relationship between corporate governance and the quality of financial analysts' information around the world (Adut et al, 2011, Sakawa et al, 2022, Almeida and Dalmácio, 2015, Chahine et al, 2021. Sakawa et al (2022) find that internalization lowers reliance on analyst forecasts while foreign ownership and bank ownership increases reliance on analyst forecasts of MNEs in Japan.…”

Section: Introductionmentioning

confidence: 99%

“…Previous empirical studies have investigated the relationship between corporate governance and the quality of financial analysts' information around the world (Adut et al, 2011, Sakawa et al, 2022, Almeida and Dalmácio, 2015, Chahine et al, 2021. Sakawa et al (2022) find that internalization lowers reliance on analyst forecasts while foreign ownership and bank ownership increases reliance on analyst forecasts of MNEs in Japan. Almeida and Dalmácio (2015) show that strong corporate governance enhances the financial reporting process and consequently the quality of analysts' forecasts in Brazil.…”

Section: Introductionmentioning

confidence: 99%

Corporate Governance and the Accuracy of Analysts’ Earnings Forecast in Vietnam

Thai,

Ha Thi Thu,

Pham Ngoc

et al. 2023

Advances in Economics, Business and Management Research

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The paper aims to examine the influence of corporate governance on the accuracy of analyst's earnings forecasts in Vietnamese stock markets. Although previous studies have examined the influence of corporate governance on the accuracy of analysts' earnings forecasts, there has been no study in Vietnam where the financial markets are having high growth rate of development. In the paper, we investigate the impact of corporate governance on the analysts' forecast accuracy using panel regression. Our sample comprises 386 firm-years for the period of 2015-2020. Corporate governance is studied through the roles of state, institution, board and management ownership, board size, board independence, board gender diversity, CEO duality and female CEO/chairman. The results show that state ownership has a negative impact and institutional ownership has a positive effect on analysts' earnings forecast accuracy whereas other corporate governance characteristics are insignificant.

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“…Internationalization can help enterprises to break through the institutional constraints of the domestic market , this principle is also valid for the development of the construction sector. The higher internationalization leads to complexity and uncertainties (Sakawa et al, 2022), so the construction sector needs a clear developing pathway towards the international market and quantifies its status based on the indicators. Internationalization is a process that requires more resource input to achieve the expected market position, the scope of internationalization affects the relationship between entrepreneurial orientation and innovation, a weakened influence appears in this relationship only when the scope states in a moderate condition (Wach et al, 2022).…”

Section: Introductionmentioning

confidence: 99%

Internationalization of the Construction Industry in the Global Value Chain

Niu,

Xu,

Liu

et al. 2023

Technological and Economic Development of Economy

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The construction sector plays a significant role in national economic development and accounts for a dominant portion of national economic growth. The international construction industry’s development has been explored from the perspective of the economy. Internationalization improves awareness about participation in international trade activities. This paper aims to quantify the internationalization of the construction industry in the global value chain. The sectoral participation index and interaction index are conducted to evaluate the internationalized degree of the construction industries. In the results, the distribution of the backward participation indices shows nearly all countries’ internationalization processes were still at the stage of benefiting from primary resources. The forward support index is easily influenced by the scale effect. The backward independence index accounts for a small percentage of national imports measured by value added. The main source of value-added supply was the local construction sector. This study proposes a comprehensive indicator to quantify the internationalization of the construction industries in the sight of national and global points. The references have a positive value for policymakers in the management of value-added flows in the international market and adjustment of the foreign trade environment.

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Internationalization and the reliance of analyst forecasts in stakeholder-oriented corporate governance: Evidence from Japanese MNEs

Cited by 9 publications

References 57 publications

Does Integrated Reporting Affect Real Activities Manipulation?

Does Integrated Reporting Affect Real Activities Manipulation?

Corporate Governance and the Accuracy of Analysts’ Earnings Forecast in Vietnam

Internationalization of the Construction Industry in the Global Value Chain

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