Product market competition, disclosure framing, and casting in earnings conference calls

Allee, Kristian D.; Do, Chuong; Sterin, Mikhail

doi:10.1016/j.jacceco.2021.101405

Cited by 36 publications

(9 citation statements)

References 63 publications

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“…The competitive business environment builds pressure on relevant business managers to achieve their targets with dedication and full of motivation to maximize the firm’s profitability ( Raith, 2003 ; Li and Li, 2018 ; Javeed et al, 2020 ; Yung and Nguyen, 2020 ; Carter et al, 2021 ). The competitive business environment encourages managers to perform well, and fiercely competitive markets do not allow managers to utilize the firm’s resources for personal usage ( Januszewski et al, 2002 ; Allee et al, 2021 ; Won Henny Jung and Subramanian, 2021 ). Table 3 shows ROE here.…”

Section: Results and Findingsmentioning

confidence: 99%

Product Market Competition and Firm Performance: Business Survival Through Innovation and Entrepreneurial Orientation Amid COVID-19 Financial Crisis

et al. 2022

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The product market competition has become a global challenge for business organizations in the challenging and competitive market environment in the influx of the COVID-19 outbreak. The influence of products competition on organizational performance in developed economies has gained scholars’ attention, and numerous studies explored its impacts on business profitability. The existing studies designate mixed findings between the linkage of CSR practices and Chinese business firms’ healthier performance in emerging economies; however, the current global crisis due to the coronavirus has made product market completion fierce, which ultimately affects business firms’ performance. This study focuses on this logical global challenge, investigates the rationale, and examines product-market completion impact on firms’ performance operating in the Chinese markets. The study collected data from the annual reports of Chinese business organizations with A-share listing and registered with the database of China Stock Markets and Accounting Research (CSMAR). The study employed a Generalized Method of Moment technique and investigated the connection between product market competition and Chinese firm performance. The empirical analysis of this study highlights the conclusion that market competition positively and significantly affected business firms’ performance. This study specified that product market competition play a dynamic and indispensable role in achieving healthier firm performance in the Chinese markets. This study provides valuable insights on practical implications and future research directions for the scholars to draw interesting results with new study models.

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Section: Results and Findingsmentioning

confidence: 99%

Product Market Competition and Firm Performance: Business Survival Through Innovation and Entrepreneurial Orientation Amid COVID-19 Financial Crisis

et al. 2022

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“…Besides establishing the COVID-19 disclosure contains value-relevant information that can reduce investor uncertainty, we expand our inquiry to determine how the characteristics of the COVID-19 narrative modify the relationship between COVID-19 disclosure and investor uncertainty. Prior studies suggest that disclosure framing, such as the tone and the readability of the disclosure texts, may affect how the audience processes the information (Loughran and McDonald 2016;Allee et al 2021). We believe that the readability and tone of the COVID-19 disclosures could be the conditions on which COVID-19 disclosure mitigates investor uncertainty.…”

Section: The Readability (And Sentiment) Of Covid Disclosure and Inve...mentioning

confidence: 87%

“…Prior studies suggest that disclosure framing, such as the tone and the readability of the disclosure texts, may affect how the audience processes the information (Loughran and McDonald 2016 ; Allee et al. 2021 ). We believe that the readability and tone of the COVID‐19 disclosures could be the conditions on which COVID‐19 disclosure mitigates investor uncertainty.…”

Section: Methodsmentioning

confidence: 99%

“…Finally, we study how characteristics of COVID-19 disclosure moderate the relationship between COVID disclosure and investor uncertainty. Prior studies suggest that the readability and the sentiment of the disclosure narratives affect how the audience processes information (Loughran and McDonald 2016;Allee et al 2021). Due to limited cognitive ability, investors would be subject to higher information processing costs when presented with difficult to read financial texts, and thus, prevented from incorporating the information fully (Bloomfield 2002;Lee 2012).…”

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confidence: 99%

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COVID‐19 Disclosures and Market Uncertainty: Evidence from 10‐Q Filings

Hao

Pham

2022

Australian Accounting Review

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We examine whether the quarterly filing COVID‐19 disclosures reduce uncertainty for investors and analysts. We find a negative relationship between COVID‐19 disclosure and return volatility, suggesting COVID‐19 disclosure reduces investor uncertainty. This reduction effect concentrates mainly during the short window following 10‐Q releases and phases out over time. We then detect that industry‐wide COVID‐19 disclosure dispersion is positively associated with return volatility, suggesting high variation of industry‐wide COVID‐19 disclosures reduces information comparability across firms, resulting in increased investor uncertainty. Moreover, we find that COVID‐19 disclosures are positively associated with analysts’ downward earnings forecast revisions and negatively associated with analyst forecast dispersion after 10‐Q releases, suggesting the disclosures reduce information risk even for sophisticated market participants. Further analyses show that COVID‐19 disclosures are negatively associated with future financial and operational performances (i.e., sales, operating cash flow, operating income and ROA). Lastly, we find that the low readability of COVID‐19 disclosure attenuates the negative relation between COVID‐19 disclosure and market volatility. Collectively, our findings suggest that 10‐Q COVID‐19 disclosures contain value‐relevant information that temporarily assists market participants in evaluating the changes in firms’ values in the time of a crisis.

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“…Additionally, [35] discovered that managers prefer to manipulate real earnings over accrual earnings because real earnings manipulation has a low detection risk [36]. This result is reinforced by data from a survey conducted by the [3] which shows that the fraud rate in Indonesia is still high, at IDR 873.430 million in 2019.…”

Section: Hypothesis Testing and Discussionmentioning

confidence: 99%

The Effect of Obedience Pressure and Religiosity On Fraudulent Financial Reporting

Nafiati¹,

Ainy²

2022

Proceedings of the 3rd International Conference of Business, Accounting, and Economics, ICBAE 2022, 10-11 August 2022, Purwoker

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Financial reporting fraud is the least common type of fraud, but causes the most significant median loss of USD 1 billion. Given the magnitude of the impact of fraudulent financial reporting, academics need to understand the actions that can be used to reduce fraudulent financial reporting. This study examines the moderating effect of religiosity on the relationship between obedience pressure and fraudulent financial reporting behaviour among corporate managers. Previous research has shown that God's supervision and punishment and secular authorities can increase prosocial actions. Using an experimental study design, subjects were randomly assigned to two conditions of obedience pressure (none and present) and their level of religiosity was measured (low and high). The results of the study indicate that obedience pressure affects financial reporting fraudulent behaviour. Nevertheless, the effect of obedience pressure on fraudulent financial reporting behaviour can not be reduced under high religiosity. This paper differs from previous studies in that we examined fraudulent at the behavioural stage and no longer at the intention stage.

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Product market competition, disclosure framing, and casting in earnings conference calls

Cited by 36 publications

References 63 publications

Product Market Competition and Firm Performance: Business Survival Through Innovation and Entrepreneurial Orientation Amid COVID-19 Financial Crisis

Product Market Competition and Firm Performance: Business Survival Through Innovation and Entrepreneurial Orientation Amid COVID-19 Financial Crisis

COVID‐19 Disclosures and Market Uncertainty: Evidence from 10‐Q Filings

The Effect of Obedience Pressure and Religiosity On Fraudulent Financial Reporting

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