Promoting Information in the Marketplace for Financial Services

Latimer, Paul; Maume, Philipp

doi:10.1007/978-3-319-09459-5

Cited by 6 publications

(3 citation statements)

References 24 publications

(72 reference statements)

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“…Regulation of securities markets serves two goals. The first is to protect investors by decreasing the information asymmetry between investors, issuers and underwriters (Cattaneo et al 2015), allowing investors to make confident and informed investment decisions for which correct and material information is fundamental (Latimer and Maume 2014). The second goal is to eliminate an unfortunate allocation due to a market failure (Peltzman 1976).…”

Section: Institutional Changementioning

confidence: 99%

Going public: evidence from stock and bond IPOs in Belgium, 1839–1935

2022

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We investigate firms' initial stock and bond issues in public capital markets and explain fluctuations in these IPOs over time. We study Belgium from 1839 to 1935, which provides a setting with poor investor protection, no tax distortions, and changing regulations. We find that economic growth induces stock and bond IPOs and that the issuers time offerings such that they coincide with favorable market conditions. Even though in 1873, regulation was abruptly relaxed, we find no evidence of increases in the number of IPOs. Finally, we show that stock and bond IPOs do not interact when controlling for the determinants of these IPOs.

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Section: Institutional Changementioning

confidence: 99%

Going public: evidence from stock and bond IPOs in Belgium, 1839–1935

2022

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“…Existing studies maintain that voluntary disclosure of non-financial information serves the purpose of reducing stakeholders' uncertainty regarding a firm's future cash flows and thus reduces the cost of capital (Botosan, 2006;Leuz and Wysocki, 2008), even in terms of potential of mis-pricing at the time of the IPO (Lev, 2001;Williams, 2001;Jog and McConomy, 2003;Guo et al, 2005;Leone et al, 2007;Hanley and Hoberg, 2012;Dambra et al, 2015;Boone et al, 2016). Nevertheless, although managers might have strong incentives to disclose non-financial information, they are under equal pressure to prevent or avoid such disclosure to protect a firm's competitive advantage (Verrecchia, 1983;Latimere and Maumere, 2015;Ding, 2016). In addition, the disclosure of information pertaining to intangibles is often believed to give rise to unnecessary costs (Mangena et al, 2010).…”

Section: Introductionmentioning

confidence: 99%

“…Our findings have both theoretical and practical implications: we add to the literature devoted to understanding primary and secondary market investors' behavior in that we demonstrate how they differ in their reaction to intangibles information disclosure, thus taking a step forward in disproving the widespread opinion that such disclosure reduces investors' uncertainty regarding the future of the listing firm (Botosan, 2006;Leuz and Wysocki, 2008). In addition to this, being aware of what intangibles information disclosure is more effective for different categories of investors should help firms to tailor it to the needs of analysts and institutional investors in private channel communications and to make a differentiated selection of information for public channel communications through which firms address multiple audiences at the same time (Latimere and Maumere, 2015). This selective disclosure of information should help firms focus their efforts, thus reducing unnecessary costs.…”

Section: Introductionmentioning

confidence: 99%

The role of intangibles disclosure in Italian IPOs

Cardi

Mazzoli

2019

EBR

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Purpose This paper aims to study how primary and secondary market investors react to intangibles information disclosed in Italian IPOs. Previous literature on intangibles information disclosure as a determinant of IPO underpricing has reported inconsistent results; moreover, an area that has remained unexplored is to what extent different categories of market investors react to such information disclosure. Design/methodology/approach Based on a sample of firms listed on the Italian Stock Exchange, the authors use factor analysis to uncover the most relevant intangible assets disclosed in IPO prospectuses; this information is then included in a series of regressions which read into the reaction of primary and secondary market investors by means of price variations. Findings Primary market investors are found to be more sensitive to information regarding the company’s attitude towards its human capital and to that describing its innovation capacity in terms of IT and R&D investment. Secondary market investors are more sensitive to strategic alliances, research and development and future plans. Research limitations/implications The findings can be generalized, but the empirical evidence would be more relevant if tested in different geographical contexts (i.e. Europe and/or the USA). Practical implications The empirical results could help firms be more selective in their disclosure, thus possibly soothing management’s concerns regarding an overly extensive, and therefore risky, dissemination of non-financial information and avoiding them to incur unnecessary costs. Social implications Being aware of how the stock market reacts to the information disclosed is crucial in determining new regulations and accounting standards. Originality/value The authors introduce an unbiased categorization of intangibles variables that supplants the multiple classifications proposed in the literature, and the authors set apart the reaction of primary and secondary market IPO investors to the intangible information disclosure.

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Insurance Online: Regulation and Consumer Protection in a Cyber World

Abramovsky

Kochenburger

2016

The "Dematerialized" Insurance

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Promoting Information in the Marketplace for Financial Services

Cited by 6 publications

References 24 publications

Going public: evidence from stock and bond IPOs in Belgium, 1839–1935

Going public: evidence from stock and bond IPOs in Belgium, 1839–1935

The role of intangibles disclosure in Italian IPOs

Insurance Online: Regulation and Consumer Protection in a Cyber World

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