Stock Price Synchronicity and Informativeness of Reported Earnings: Evidence from the MENA Region

2013 ◽  
Author(s):  
Omar Farooq
Keyword(s):  
Stock Price ◽  
Mena Region ◽  
Stock Price Synchronicity ◽  
Reported Earnings

scholarly journals Does stock price synchronicity effect information content of reported earnings? Evidence from the MENA region

2016 ◽  
Vol 6 (3) ◽  
pp. 43-49 ◽  
Author(s):  
Omar Farooq ◽  
Khondker Aktaruzzaman
Keyword(s):  
Information Content ◽  
Stock Price ◽  
Value Relevance ◽  
Information Environment ◽  
Governance Mechanisms ◽  
Mena Region ◽  
High Quality ◽  
Stock Price Synchronicity ◽  
Reported Earnings ◽  
Traditional Governance

This paper documents the effect of stock price synchronicity on the value relevance of reported earnings in the MENA region during the period between 2009 and 2013. Our results show that the information content of reported earnings increases with increase in stock price synchronicity. We document higher impact of earnings on returns for firms with higher stock price synchronicity. We argue that firms with high synchronicity have better information environment. As a result, these firms disclose information that is of high quality. We also show that information conveyed through stock price synchronicity is more important than information conveyed through traditional governance mechanisms.

scholarly journals Simultaneous Determination Of Stock Price Synchronicity And Dividend Payout Ratios: Evidence From The MENA Region

2016 ◽  
Vol 32 (4) ◽  
pp. 1025-1032 ◽  
Author(s):  
Omar M. Farooq ◽  
Mona A. ElBannan
Keyword(s):  
Simultaneous Determination ◽  
Stock Price ◽  
Information Environment ◽  
System Of Equations ◽  
Information Asymmetries ◽  
Mena Region ◽  
Cross Sectional ◽  
Stock Price Synchronicity ◽  
Dividend Payout

This paper examines the determinants of cross-sectional differences in stock price synchronicity and dividend payout ratio in the MENA region during the period between 2003 and 2013. These variables are related not only directly, but also indirectly, through their relationship with information environment of firms. To distinguish these effects, we examine the determinants of both variables within a system of equations. Our results indicate that both of these variables affect each other negatively. We argue that higher information asymmetries associated with firms exhibiting high synchronicity leads to lower payout ratios, while lower information asymmetries that accompany firms paying high dividends lead to lower synchronicity.

Stock Price Synchronicity and Skewness

2013 ◽  
Author(s):  
Omar Farooq ◽  
Mohammed Bouaddi ◽  
Mohamed Douch
Keyword(s):  
Stock Price ◽  
Stock Price Synchronicity

Analysts' Information Acquisition and Stock Price Synchronicity: A Regulatory Perspective from China

2018 ◽  
Vol 33 (1) ◽  
pp. 153-179 ◽  
Author(s):  
Haiyan Jiang ◽  
Donghua Zhou ◽  
Joseph H. Zhang
Keyword(s):  
Insider Trading ◽  
Private Information ◽  
Stock Prices ◽  
Information Acquisition ◽  
Stock Price ◽  
Specific Information ◽  
Stock Price Synchronicity ◽  
Playing Field ◽  
Information Advantage ◽  
Private Information Acquisition

SYNOPSIS Against the backdrop of the Chinese Directive 40 (China's Reg FD) issued in 2007 as an attempt to curb insider trading and to level the information playing field, this study investigates whether analysts' private information acquisition influences the extent to which firm-specific information is impounded into stock prices, i.e., stock price synchronicity, and how the restrictions on selective disclosures imposed by Directive 40 have shaped the relationship between analyst information acquisition and synchronicity. Using a pre-Directive 40 sample, we show that synchronicity is negatively related to analysts' private information acquisition, which provides support for the “information advantage” argument of analysts' information production. However, the ability of analysts' private information acquisition in improving firm-specific information incorporated into stock price is mitigated post-Directive 40 due to a restriction on selective disclosures and/or private communication. Moreover, we find that this regulatory impact varies for firms being followed by affiliated analysts versus non-affiliated analysts. JEL Classifications: G14; G15; G17; G18.

The Influence of Country-Level Religiosity on Accounting Conservatism

2018 ◽  
Vol 18 (1) ◽  
pp. 1-26 ◽  
Author(s):  
Matt Bjornsen ◽  
Chuong Do ◽  
Thomas C. Omer
Keyword(s):  
Financial Reporting ◽  
Stock Price ◽  
Positive Association ◽  
Accounting Conservatism ◽  
Data Availability ◽  
Country Level ◽  
Legal Enforcement ◽  
Prior Literature ◽  
Reported Earnings ◽  
High Degree

ABSTRACT This study investigates how religiosity (i.e., the strength of religion) differences across countries influence an important characteristic of financial reporting, accounting conservatism. Prior literature suggests that religious individuals are more risk averse and have higher ethical standards, while accounting conservatism has been shown to reduce various risks to the firm (e.g., bankruptcy and stock price crashes) at the expense of higher reported earnings. We find that managers in more religious societies report more conservatively. Specifically, our cross-country analysis reveals that firms headquartered in countries with higher levels of religiosity exhibit, on average, higher accounting conservatism in financial reporting. This positive association is stronger in countries following IFRS or U.S. GAAP, and weaker in countries with a high degree of uncertainty avoidance, strong legal enforcement, and countries with greater numbers of religions. JEL Classifications: G34; M41; Z12. Data Availability: Data are available from the public sources cited in the text.

Sign in / Sign up

Export Citation Format

Share Document