The Information Content of Security Prices on the Irish Stock Exchange

O'Connell, Vincent

doi:10.1006/bare.1995.0017

Cited by 10 publications

(7 citation statements)

References 13 publications

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“…This difference is not statistically significant between the two groups of observations. Finally, multicollinearity (O"Connell, 1995) does not appear to be a problem in this study as the highest pair-wise correlation coefficient is 0.625 (untabulated), and the highest variance inflation factor is less than 2.5 (O"Connell and O"Sullivan, 2011). Table 3 presents After controlling for economic factors, the overall results suggest that managers are exercising discretion in the reporting of goodwill impairment losses following the adoption of IFRS 3, as indicated by the significant coefficients for BATH, SMOOTH and ∆CEO.…”

Section: Resultsmentioning

confidence: 64%

The Effect of Audit Quality and Audit Committees on Goodwill Impairment Losses

Dabbous

Abughazaleh

Al-Hares

2015

ijafr

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Using a sample of 528 firm-year observations, drawn from the top 500 U.K. listed firms, this study examines the effect of audit quality and audit committee (hereafter: AC) characteristics on goodwill impairment losses recorded following the mandatory adoption of IFRS 3 “Business Combinations”. The hypothesis investigated is that managers disciplined by effective ACs and auditors are less likely to act opportunistically but instead use their accounting discretion to convey their private information resulting in the recognition of higher amounts of existing goodwill impairments that better reflect the underlying performance of the firm. Shareholders will not expect ACs and auditors to constrain accounting choices (e.g., goodwill impairments) used credibly by managers. After controlling for economic factors and financial reporting incentives, empirical results reveal that auditor and AC characteristics do not seem to have a significant effect on the recognition of goodwill impairments. Although ACs are expected to act as a monitoring device, the monitoring incentives of AC directors may be hampered by the joint board responsibility for the quality of financial reporting. The results also suggest that the formation of ACs does not always necessarily imply effective monitoring as ACs may fall short of doing what are generally perceived as their duties (Sommer, 1991). These results may be of interest to standard setters, regulators and policy makers.

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Section: Resultsmentioning

confidence: 64%

The Effect of Audit Quality and Audit Committees on Goodwill Impairment Losses

Dabbous

Abughazaleh

Al-Hares

2015

ijafr

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“…Garrone, Grilli, and Rousseau () find that the effect of political interference on large utility SOEs in Italy is uncertain. In addition, large enterprises are usually under the eye of the media (O'Connell, ), and politicians may opt not to reveal themselves and jeopardize their position.…”

Section: Empirical Results and Discussionmentioning

confidence: 99%

“…Consequently, unstable boards of large SOEs might endanger their performance as a result of a considerable number of short‐term decisions beneficial for politicians. However, as media are more likely to investigate large SOEs (O'Connell, ), politicians might opt to interfere with boards of small‐ and medium‐sized SOEs. In order to investigate these implications of the literature, we propose:Hypothesis Politically induced board member changes are negatively associated with the performance of large SOEs.Hypothesis Politically induced board member changes are less negatively associated with the performance of small and medium SOEs than of large SOEs.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Politically induced board turnover, ownership arrangements, and performance of SOEs

Kuzman

Talavera

Bellos³

2018

Corporate Governance

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Manuscript Type Empirical Research Question/Issue This study investigates the impact of elections on board member changes and its relationship with profit‐oriented performance of state‐owned enterprises (SOEs), thus providing new insights on political tie heterogeneity. Research Findings/Insights Using a unique hand‐collected dataset of 200 SOEs in six countries of the former Socialist Federal Republic of Yugoslavia (SFRY) from 2010 till 2014, we find that board member changes within SOEs, unlike for private enterprises, are politically motivated rather than performance induced. We reveal that SOEs with higher levels of board member changes encounter lower productivity and profitability levels. These findings suggest that political interference via board member changes causes organizational inefficiencies and poor SOE performance. Moreover, the results show that board member changes are insignificant for the performance of large SOEs and SOEs governed by independent government body. Theoretical/Academic Implications This study reveals an indirect channel for political interference, thus contributing to a better understanding of political tie heterogeneity. Moreover, our study is the first to link political interference and performance of SOEs through introduction of election cycles into the board member changes–performance relationship. Practitioner/Policy Implications The results of this study provide insights for policymakers who are interested in enhancement of SOEs' performance. They suggest ways in which board appointment procedures should be altered as to be insulated from political interference. In addition, they show boards how they can lower the negative consequences of frequent board member changes.

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“…We use the one-period-ahead measure of R&D investment in Equation (1) as prior work suggests that it takes time for stock market participants to fully take cognizance of the significance of capitalization [2,53]. We expect that debt market participants will also need time to assimilate the capitalization information [4,54].…”

Section: Estimation Modelmentioning

confidence: 99%

The Impact of R&D Innovation Success on the Relationship between R&D Investment and Financial Leverage

O'Connell

Abughazaleh

Tahat

et al. 2022

Journal of Open Innovation: Technology, Market, and Complexity

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This paper explores the interrelationship between R&D investment, financial leverage, and a firm’s R&D innovation success. Using a sample of UK and EU firms, we predict that changes in one-year-ahead R&D investment are negatively associated with changes in financial leverage in the current period. Crucially, we also predict that this negative association is positively moderated by the extent to which firms are successful in generating commercially viable and technically feasible innovations from their R&D work. We use insights from International Accounting Standard (IAS) 38: Intangible Assets to measure R&D innovation success. Our empirical findings offer strong support for each of our theoretical predictions. Consequently, we contribute to the extant literature by demonstrating that R&D innovation success influences how firms finance their subsequent investments in R&D. Our work also shows that accounting disclosures have the potential to play an important role in open innovation networks.

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The Information Content of Security Prices on the Irish Stock Exchange

Cited by 10 publications

References 13 publications

The Effect of Audit Quality and Audit Committees on Goodwill Impairment Losses

The Effect of Audit Quality and Audit Committees on Goodwill Impairment Losses

Politically induced board turnover, ownership arrangements, and performance of SOEs

The Impact of R&D Innovation Success on the Relationship between R&D Investment and Financial Leverage

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