Investor Protection and the Role of Firm-Level Financial Transparency in Attracting Foreign Investment

Hansen, Bowe; Miletkov, Mihail K.; Wintoki, M. Babajide

doi:10.2139/ssrn.2559926

Cited by 2 publications

(2 citation statements)

References 63 publications

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“…As firm size, SIZE , reflects several aspects of firm characteristics according to the literature, such as the information environment, risk, and liquidity, we have no specific prediction for the SIZE variable. Similar to Hansen, Miletkov, and Wintoki (2013), we also include changes in leverage, market-to-book ratio, and return on assets ( ROA ). Finally, a change in earnings volatility is included to control for foreign investors’ preference for a smoother earnings path.…”

Section: Resultsmentioning

confidence: 99%

Does International Accounting Standard No. 27 Improve Investment Efficiency?

Hsu

Jung

Pourjalali

2015

Journal of Accounting, Auditing & Finance

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We examine how the adoption of International Accounting Standard No. 27 (hereafter, IAS 27) consolidation rules affects firm-level investment efficiency. IAS 27, effective in Taiwan for fiscal years beginning after 2005, defines the ''control'' criteria for consolidated entities as majority control rights rather than majority financial ownership. IAS 27 discourages firms' ability to manage earnings through the use of unconsolidated entities and reduces information asymmetry between managers and shareholders. Consistent with the standard's intended objectives, we document that firms experience a significant increase in investment efficiency after adopting IAS 27. Firms subject to overinvestment (underinvestment) are more likely to reduce (increase) investment toward a more optimal level after IAS 27 adoption. We also find that foreign investors increase their shareholdings in Taiwanese firms after the adoption of IAS 27.

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Section: Resultsmentioning

confidence: 99%

Does International Accounting Standard No. 27 Improve Investment Efficiency?

Hsu

Jung

Pourjalali

2015

Journal of Accounting, Auditing & Finance

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“…Romania, as a developing economy and frontier financial market, offers diversification opportunities to foreign investors. In the same time, similar to the other countries from the region, Romania internationally competes and seeks to attract foreign capital that contributes to its economic growth (Hansen et al, 2015).…”

Section: Introductionmentioning

confidence: 99%

Influence of Local Versus Foreign Corporations, as Shareholders, on Financial Performance of Romanian Listed Companies

Țaran

Mironiuc

2018

Review of Economic and Business Studies

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In the actual context of global mobility of investors and capitals, diverse categories of local and foreign shareholders (institutional investors, governmental agencies, corporations or individual investors) influence business activities, management and results of the owned entities. Shareholders' monitoring ability is related to their interests and their involvement in the investee's business. This study contributes to the on-going debate referring to local and foreign shareholders and investigates the influence of both local and foreign corporate shareholders on financial performance of Romanian listed companies during 1997-2016. Results of fixed-effects panel regression analysis reveal that local corporations positively influence the profitability of their affiliates, as measured by ROE. However, foreign corporate shareholders do not significantly influence financial performance of Romanian entities. Thus, the expected benefits associated with foreign ownership do not enhance the performance of local companies. These findings helps future privatisation or investment decisions in Romanian listed companies. Moreover, the results raise further questions regarding the interests of foreign companies investing in Romanian stock market.

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Investor Protection and the Role of Firm-Level Financial Transparency in Attracting Foreign Investment

Cited by 2 publications

References 63 publications

Does International Accounting Standard No. 27 Improve Investment Efficiency?

Does International Accounting Standard No. 27 Improve Investment Efficiency?

Influence of Local Versus Foreign Corporations, as Shareholders, on Financial Performance of Romanian Listed Companies

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