Matching Level And Investors’ Heterogeneous Beliefs

Jung, Hyun-Uk; Moon, S. Katie

doi:10.19030/jabr.v33i3.9936

Cited by 2 publications

(7 citation statements)

References 8 publications

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“…Therefore, Paek [3] explains that a poor matching level leads to low quality of earnings. Based on the logic that a low matching level lowers the quality of earnings, Lee and Jung [8] and Jung and Moon [6] approved that a poor matching level decreases the future earnings response coefficient (FERC) and increases the trading volume.…”

Section: Research Related To Matching and Establishment Of Hypothesesmentioning

confidence: 99%

“…Firms with a high proportion of private debt are most likely to make transactions with specific banks, and since these banks have long-term relationships with these firms, it has been confirmed that access to internal corporate information is easy [1][2][3]. Banks, which are private debt creditors, have easy access to corporate monitoring as well as access to private information [4][5][6]. As a result, Chun, et al [7] found that the higher the private debt ratio, the lower the benefit of accounting information reliability and an increase in the manager's opportunistic earnings management.…”

Section: Introductionmentioning

confidence: 99%

“…Meanwhile, the number of creditors for companies with a high proportion of public debt is composed of an unspecified majority [4][5][6]8]. This means that creditors related to public debt may have a higher level of information asymmetry than private debt creditors.…”

Section: Introductionmentioning

confidence: 99%

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Does Debt Financing Affect the Sustainability of Transparent Accounting Information?

2021

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With the classification of debt financing into private debt (borrowing) and public debt (bond), this study aims to figure out the relationship between corporate debt financing and transparent accounting information sustainability. Debt financing of a firm was measured as a ratio of private debt to sum of private and public debt while sustainability of transparent accounting information was measured as a matching level. The sample is selected from corporations listed on the stock market in the Republic of Korea, except for the financial industry, from 2011 to 2018. As a result, the ratio of private debt of a firm was found to have a negative relationship with the matching level. It indicates that the ratio of high-private debt of a firm reduces the matching level. These results were found to be consistent even using various methodologies (e.g., Prais–Winsten, and Newey–West). This study confirmed the negative sustainability of transparent accounting information when the ratio of borrowings in corporate financing is high. Our implications that different financing methods can have different effects on the sustainability of corporate transparent accounting information.

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Section: Research Related To Matching and Establishment Of Hypothesesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Does Debt Financing Affect the Sustainability of Transparent Accounting Information?

2021

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“…This suggests that high earning's quality can be a factor in reducing investors' heterogeneous beliefs. In this regard, Jung and Moon (2017) explain that high matching increases earning's quality and decreases investors' heterogeneous beliefs. Kim et al (2012) report that CSR activities contribute to enhancing transparency and reliability of net income.…”

Section: Setting Factors Affecting Investors' Heteroge-mentioning

confidence: 99%

“…Prior studies related to investors' heterogeneous beliefs have reported that a high earning's quality and a low level of information asymmetry reduce an investor's heterogeneous beliefs for target companies (Ajinkya et al, 1991;Jung & Moon, 2017;Ziebart, 1990). In addition, prior studies related to investors' heterogeneous beliefs analyzed the relationship between various firm-specific variables and investors' heterogeneous beliefs.…”

Section: Introductionmentioning

confidence: 99%

The Effect of Corporate Social Responsibility Activities on Investors’ Heterogeneous Beliefs: A Study of Korea’s Data Set

Jung¹,

Mun²,

KIM³

2020

JAFEB

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This study analyzes the effect of corporate social responsibility (CSR) activity on investors' heterogeneous beliefs. The hypothesis of this study is based on the conflicting effects of CSR activities on firm value and earning's quality. Investors' heterogeneous beliefs used in the empirical analysis of this study are trading volume, and CSR activity is measured by the KEJI Index (Korea Economic Justice Institute Index). This study performs an empirical analysis using regression analysis including control variables. CSR activities are found to have a positive relationship with trading volume. This is consistent regardless of the low and high accounting information (earning's quality). It can be interpreted that Korea's CSR activity acts as an incentive to increase investors' heterogeneous beliefs about target companies. In other words, it implies that the investor judges CSR activities negatively when evaluating firm value. This study could have a policy implication in that it analyzes how CSR activities affect investors' decision-making. In other words, this study analyzed CSR activities from the perspective of shareholders. Therefore, this study is expected to provide useful information for policymaking by regulatory agencies. In particular, its contribution is to presents data that CSR activities can be a negative factor in evaluating firm values.

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Matching Level And Investors’ Heterogeneous Beliefs

Cited by 2 publications

References 8 publications

Does Debt Financing Affect the Sustainability of Transparent Accounting Information?

Does Debt Financing Affect the Sustainability of Transparent Accounting Information?

The Effect of Corporate Social Responsibility Activities on Investors’ Heterogeneous Beliefs: A Study of Korea’s Data Set

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