Financial reporting and corporate innovation: a review of the international literature

Huang, Hedy Jiaying; Habib, Ahsan; Sun, Sophia Li; Liu, Ying; Guo, Huiting

doi:10.1111/acfi.12764

Cited by 21 publications

(5 citation statements)

References 192 publications

(235 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The average values of AGE suggest that the over- and under-investment firms were listed on the SET for approximately 26 years. Comparable to the evidence of Huang et al (2021), the average values of LOSS suggest that 22.6% of underinvestment firms and 14.9% of overinvestment firms reported loss performance. The mean values of PRO are 0.082 and 0.067 for overinvestment and underinvestment, respectively, and these profitability ratios are identical to those of Chinese firms reported by He et al (2022).…”

Section: Resultsmentioning

confidence: 62%

“…It is expected that those conflicts will be more pronounced among firms in innovation-targeted industries. In comparison to noninnovative firms, innovative firms have a faster rate of innovation and a shorter life cycle of products or services, which makes market participants require high-quality financial information to predict growth (Huang et al , 2021). Financial reporting quality (FRQ) was found to be associated with the number of patents (Park, 2018) and optimal investment in market-oriented economies (Li and Wang, 2010).…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Investment efficiency of targeted S-curve industries: the roles of CEO duality and financial reporting quality

Nuanpradit

2024

JABS

View full text Add to dashboard Cite

Purpose The purpose of this study is to examine the association between the combined roles of chief executive officer (CEO)-chairman titles (CEO duality) and investment efficiency, defined as a lower deviation from expected investment for targeted S-curve firms used to propel an innovation-driven economy. This study also aims to investigate the moderating effect of financial reporting quality on this association. Design/methodology/approach This paper focuses on the ten targeted S-curve industries – under the definition of the Thailand 4.0 model – listed on the Stock Exchange of Thailand (SET) from 2000 to 2019. Data related to CEO/chairman titles and investment supports were manually collected from the annual reports, the SET market analysis and reporting tool database and the company websites. Financial data used to estimate investment behaviors and discretionary accruals were extracted from 1999. The study analyzes unbalanced panel data using fixed-effects regressions. Additional tests embrace replacing the sample with nontargeted firms, partitioning into granted and nongranted firms, adding CEOs’ demographic moderators, using alternative variable measures and analyzing for lagged independent variables. Findings The main findings show that CEO duality reduces overinvestment but worsens underinvestment in targeted firms. Financial reporting quality (FRQ) appears to strengthen CEO duality in mitigating extreme spending but has no impact on the association between CEO duality and underinvestment. Additional results, for example, conclude that CEO duality has no association with both over- and underinvesting at nontargeted firms, but its effect becomes positively significant on overinvestment when financial reporting quality is high. The negative association between CEO duality and overinvestment is found only in government-granted and targeted firms. FRQ encourages CEO duality in lowering overinvestment among targeted firms without grants. CEOs’ female and serviced early years appear to elevate those main findings. Practical implications These findings assist innovative corporations in choosing a proper leadership structure to cope with investment inefficiency. The research gives the government and regulatory bodies an insight into the qualifications of the leadership structure and financial information that helps them put forward effective policies. Originality/value To the best of the author’s knowledge, this study is among the first to establish the association between CEO duality and investment efficiency for innovation-driven firms in a transforming economy. The study fills the gap in the literature on management, accounting and finance by unveiling the interplay between dual leadership and financial reporting in affecting the efficiency of investments.

show abstract

Section: Resultsmentioning

confidence: 62%

Section: Introductionmentioning

confidence: 99%

Investment efficiency of targeted S-curve industries: the roles of CEO duality and financial reporting quality

Nuanpradit

2024

JABS

View full text Add to dashboard Cite

show abstract

“…Huang et al. [2021a] found that both the quantity and quality of patents are positively correlated with voluntary management forecasts and internal information quality. Our analysis could help clarify these seemingly inconsistent empirical findings.…”

Section: Empirical Implicationsmentioning

confidence: 99%

Innovation and Financial Disclosure

CHEN,

LIANG,

PETROV

2024

J of Accounting Research

View full text Add to dashboard Cite

We examine how financial disclosure policy affects a firm manager's strategy to innovate within a two‐period bandit problem featuring two production methods: an old method with a known probability of success, and a new method with an unknown probability. Exploring the new method in the first period provides the manager with decision‐useful information for the second period, thus creating a real option that is unavailable under exploiting the old known production method. Voluntary disclosure of the firm's financial performance provides the manager with another option to potentially conceal initial failure from the market. The interaction of these two options determines the manager's incentive to explore. In equilibrium, a myopic manager who cares about the interim market price may over‐ or under‐explore compared to the optimal exploration strategy that maximizes firm value. Our analysis shows that firms operating in an environment with voluntary disclosure early in the trial stage and mandated requirement later are most motivated to explore, while firms subject to early mandated disclosure and late voluntary disclosure are least likely to do so. We also provide empirical predictions about the link between the disclosure environment and the intensity and efficiency of corporate innovation.

show abstract

“…Furthermore, [35] examines the impact of corporate governance on company performance during the COVID-19 pandemic, suggesting that companies with good corporate governance practices, such as board independence and CEO-chair separation, were better able to navigate the pandemic and maintain their financial performance. [36] investigates the relationship between corporate governance and company performance in China during the COVID-19 pandemic, finding that good corporate governance practices, such as board independence and audit committee effectiveness, are associated with better company performance. The board of directors plays a crucial role in corporate governance.…”

Section: Literature Review and Theoretical Framework Underpinning The...mentioning

confidence: 99%

The Moderating Effects of Corporate Social Responsibility on Corporate Financial Performance: Evidence from OECD Countries

Hamad

Çek

2023

Sustainability

View full text Add to dashboard Cite

This study aims to investigate the nature and intensity of the changes in corporate financial performance due to the corporate social responsibility (CSR) disclosures as a result of certain relationships between corporate governance and company performance in the non-financial sector. This study selected 625 non-financial companies across six organizations for economic cooperations (OECD) countries’ stock markets for the period of 10 years (2012–2021). For this qualitative study, corporate governance, financial performance, and corporate social responsibility score data were collected from the DataStream, a reliable database for examining the research on OECD countries’ listed companies. For the data analysis we applied various statistical tools such as regression analysis and moderation analysis. The findings of the study show that all attributes of the corporate governance mechanism, except for audit board attendance, have significant positive impacts on financial performance indicators for all the selected OECD economies except the country France. France’s code of corporate governance has a significant negative impact on return on asset (ROA) and return on equity (ROE) due to differences in cultural and operational norms of the country. The audit board attendance has no significant impact on ROA. Moreover, all the attributes except board size (BSIZ) have significant positive impacts on the earnings per share (EPS) in Spain, The United Kingdom (UK) and Belgium. The values obtained from the moderation effect show that Corporate social responsibility is the key factor in motivating corporate governance practices which eventually improves corporate financial performance. However, this study advocated the implications, Investors and stakeholders should consider both corporate governance and CSR disclosures when making investment decisions. Companies that prioritize both governance and CSR tend to have better financial performance and are more likely to mitigate risks. Moreover, the policy makers can improve the code of corporate governance in order to attain sustainable development in the stock market.

show abstract

Financial reporting and corporate innovation: a review of the international literature

Cited by 21 publications

References 192 publications

Investment efficiency of targeted S-curve industries: the roles of CEO duality and financial reporting quality

Investment efficiency of targeted S-curve industries: the roles of CEO duality and financial reporting quality

Innovation and Financial Disclosure

The Moderating Effects of Corporate Social Responsibility on Corporate Financial Performance: Evidence from OECD Countries

Contact Info

Product

Resources

About