A Review of the effects of Sarbanes‐Oxley on Stock Price

Boylan, Daniel H.

doi:10.17549/gbfr.2015.20.1.121

Cited by 3 publications

(3 citation statements)

References 15 publications

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“…The results of the variance decomposition test imply that there is small evidence of that crude oil price shocks in the Turkish securities market have been rationally analyzed (Berk and Aydogan, 2012). Several key elements support the claim that the benefits of SOX implementation surpass the compliance expenses (Boylan, 2015). The VECM study demonstrates that inflation and the CNX nifty index have a bidirectional causal relationship Journal of Decision Analytics and Intelligent Computing 3(1) (2023) 197-220 Surana (Joshi and Giri, 2015).…”

Section: Review Of Literaturementioning

confidence: 63%

VAR and VECM models were used to investigate the factors that influence of Indian securities market performance, including the period of Covid 19's financial crises

Surana

2023

J. Decis. Anal. Int. Comp.

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Using a dummy variable, we evaluate commodities in addition to macroeconomic considerations of the Indian securities market from 2010 to 2021, which includes the era of the Covid 19 crises. We used the Bombay Stock Exchange (BSE) (Sensex) for securities market performance and developed a Vector Auto regressive models that combines the short- and long-run model of economics. On stock price indexes, we discovered that the Indian securities market reflects both macroeconomic indicators and prices of commodity. Growth in the economy, inflation, interest, rates, currency rates, crude oil prices, and gold prices are all factors to consider were all used in this study to see how they affected BSE (Sensex) prices during the Covid 19 crises. In their first difference, all series were judged to be stationary. We discovered that shocks to all eight factors had both positive and negative effects on BSE (Sensex) prices in the short and long term, including Covid 19 crises. Each securities market index’s most significant impulse is its own shock, decreasing from short to long-term. We also used the Joint Co-Integration Test to detect and confirm the lack of a long-term equilibrium link (cointegration) between all eight variables, resulting in four cointegration equations with an estimated error correction term at the 0.05 level (speed of adjustment towards equilibrium) of 0.007362. Vector Error Correction Mode (VECM), on the other hand, suggests that the BSE (Sensex) has a significant value with its lagged values of.007362 and 0.517952. We created Vector Auto regressive (VAR) models for the BSE (Sensex) using eight independent variables, including Dummy variables, but their statistics were not significant, despite the fact that the lagged value of crude oil, gold prices, the rupee, and the BSE (Sensex) lagged value were all significant. We proceed to estimate VECM. We proved the short and long-term effects of lagged BSE(Sensex) prices, crude oil prices, gold prices, and the currency on the BSE (SENSEX) using several robustness tests. Dummy factors have also been included to see how the Covid 19 crisis affected the BSE (Sensex) prices. We discovered that crude oil prices followed value, gold prices lagged value, and rupees based on the dollar had a significant impact on BSE(Sensex) pricing over the study period, including the Covid 19 crises from March 2020 to June 2021.

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Section: Review Of Literaturementioning

confidence: 63%

VAR and VECM models were used to investigate the factors that influence of Indian securities market performance, including the period of Covid 19's financial crises

Surana

2023

J. Decis. Anal. Int. Comp.

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“…Real EM Graham, Harvey, and Rajgopal (2005) show that about 80% of the managers reduce R&D expenses or postpone important investment or capital expenditures to meet or beat market benchmarks, such as analyst earnings forecasts, or to avoid losses. In addition, after the SOX implementation, the number of discretionary accruals has decreased (Boylan 2015), but managers use real EM as a supplementary tool to manage earnings, thus accrual EM. Similarly, Zang (2012) shows that managers use real EM when they perceive a high possibility of litigation cost.…”

Section: ⅱ Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Labor Union and Real Earnings Management

Chun¹,

Shin²

2017

Glob Bus Financ Rev

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A B S T R A C TThis study examines the effect of labor union on the extent of real earnings management using 3,375 firm-year observations of listed Korean firms over [2002][2003][2004][2005][2006][2007][2008]. The empirical results suggest that labor unionization rate is positively associated with real earnings management and the absolute value of each real earnings management proxy. Further, these empirical results are more pronounced in non-chaebol firms. The additional robustness tests using union existence as a supplementary proxy of labor union strength and 2SLS regression supports above findings. Thus, we conclude that labor unions push managers to increase real earnings management to create a favorable negotiation environment for wage maximization and hired managers collude with labor union to receive cash-based bonus incentive.

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“…Stock price movements are affected by market sentiments or expectations about future economic growth trajectory, monetary, and fiscal policy announcements (Singh, 2010). Moreover, the regulatory system of a country and its stock market plays an important role in stock appreciation and depreciation, which aggressively and conservatively affects financial reporting (Boylan, 2015). Therefore, there are no one-size fit specific factors for the stock market performance.…”

Section: ⅰ Introductionmentioning

confidence: 99%

Determinants of Stock Market Performance: VAR and VECM Designs in Korea and Japan

Tulcanaza-Prieto¹,

Lee²

2019

Glob Bus Financ Rev

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A B S T R A C TWe examine commodities and macroeconomic factors of the Korean' and Japanese' stock market performance during the period of 1993-2017. Using both Kospi and Nikkei 225 as proxy for stock market performance, we designed a Vector Error Correction Model (VECM) which integrates the econometric model in the short-and long-run. We found that the Korean and Japanese stock market reflects both macroeconomic variables and commodity prices on stock price indices. Our results reveal that each stock market index, GDP growth, inflation rate, interest rate, exchange rate, crude oil WTI price, and gold price perform a cointegration in the long-term, suggesting that Kospi and Nikkei 225 are corrected in -19.6% and -39.6% in each quarter, respectively. In addition, GDP growth, interest rate, exchange rate, oil price, and gold price affect the Kospi short-run performance, while GDP growth, interest rate, and gold price affect Nikkei 225 in the short-term. Using impulse-response function and the variance decomposition, we identified that the most significant impulse on each stock market index is its own shock, and its magnitude declines from the short-to the long-run. Our results are mostly consistent with the experience of other countries, especially Turkey and India, meaning the stock market index has been particularly affected by its own past prices. Our paper complements the literature of corporate finance by comparing the determinants of stock market performance of two Asian countries, including different robustness tests to explain the effect on Kospi and Nikkei 225 of each independent variable. For future research, the authors suggest to include a dummy variable for structural changes to increase the power of the model.

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A Review of the effects of Sarbanes‐Oxley on Stock Price

Cited by 3 publications

References 15 publications

VAR and VECM models were used to investigate the factors that influence of Indian securities market performance, including the period of Covid 19's financial crises

VAR and VECM models were used to investigate the factors that influence of Indian securities market performance, including the period of Covid 19's financial crises

Labor Union and Real Earnings Management

Determinants of Stock Market Performance: VAR and VECM Designs in Korea and Japan

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