Types of politically connected firms and analysts' earnings forecast

Kamarudin, Khairul Anuar; Ismail, Wan Adibah Wan; Harymawan, Iman; Shafie, Rohami

doi:10.1108/jaar-05-2020-0084

Cited by 10 publications

(17 citation statements)

References 100 publications

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“…Sample companies' average (median) BSIZE is almost eight directors, also comparable with prior Malaysian studies (Ghaleb et al. , 2022; Kamarudin et al. , 2021), while the mean (median) value of BIND is 45% (43%), similar to prior studies in Malaysia that report an average of 45–50% (Ghaleb et al.…”

Section: Resultssupporting

confidence: 83%

“…This finding provides new insight into the belief that POC are being run more professionally in recent years than in the earlier periods. Using data from 2007–2016, Kamarudin et al. (2021) show that POC are linked with lower analyst forecast accuracy and higher analyst forecast dispersion compared to non-POC, suggesting higher information asymmetry in POC.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 91%

“…POC are identified using this procedure in several Malaysian studies (Fung et al. , 2015; Kamarudin et al. , 2021; Tee et al.…”

Section: Research Methodology and Datamentioning

confidence: 99%

“…(2021), and the theoretical ambiguity (grabbing versus helping hands hypotheses), in this study we investigate whether the governance role of institutional investors is stronger or weaker in POC than in non-POC, based on ASR. We also examine the different types of POC, as previous studies suggest that they matter (Kamarudin et al. , 2021; Kusnadi, 2019; Wong and Hooy, 2018, 2021).…”

Section: Introductionmentioning

confidence: 99%

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Institutional investors, political connections and stock recommendations from sell-side analysts: the case of Malaysia

Qasem

Wan‐Hussin

Ghaleb

et al. 2022

JAEE

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PurposeThe purpose of this study is to investigate the interplay between institutional investors' ownership (IIO), politically connected firms (POC) and sell-side analysts' stock recommendations (ASR).Design/methodology/approachThis study employs ordinary least square (OLS) regression to test the hypotheses. The sample comprises 280 Malaysian public listed companies (PLC) and encompasses the 2008–2013 time frame (a total of 735 observations).FindingsThe results show a significant and positive link between IIO and ASR. In addition, a negative association is found between POC and ASR. Moreover, the POC weakens the positive relationship between the IIO and ASR.Research limitations/implicationsOne important implication of this study is that political involvement in corporate decisions is a prominent characteristic of the Malaysian market, which can significantly affect the information environment and analysts' reactions.Practical implicationsThe findings of this study provide useful empirical guidance to the regulators in evaluating the efficacy of recent regulatory initiatives. Investors may also gain useful insights from this study, specifically in recognising the crucial monitoring role played by institutional investors and how politically patronised firms are viewed unfavourably by equity analysts.Originality/valueThis study is one of the first to examine the joint influence of IIO and POC, on ASR.

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Section: Resultssupporting

confidence: 83%

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 91%

“…POC are identified using this procedure in several Malaysian studies (Fung et al. , 2015; Kamarudin et al. , 2021; Tee et al.…”

Section: Research Methodology and Datamentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Institutional investors, political connections and stock recommendations from sell-side analysts: the case of Malaysia

Qasem

Wan‐Hussin

Ghaleb

et al. 2022

JAEE

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“…2. We followed prior studies that measure SIZE using the natural logarithm of total assets at the beginning of the year (for, e.g. Dhaliwal et al ., 2012; Duru and Reeb, 2002; Kamarudin et al ., 2021). …”

Section: Notesmentioning

confidence: 99%

Women on board, strength of auditing and reporting standards and analysts' forecasts accuracy: international evidence

Ismail

Kamarudin

Ariff

et al. 2022

JAAR

Self Cite

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PurposeThis paper investigates whether board gender diversity and the strength of auditing and reporting standards are associated with analysts' forecast accuracy and whether the strength of auditing and reporting standards moderates the association between board gender diversity and analysts' forecast accuracy.Design/methodology/approachThe sample covers 24,086 firm-year observations from 37 countries from 2009 to 2018. The data were obtained from various sources: earnings forecast data from the Institutional Brokers' Estimate System (IBES) database; board gender diversity and financial data from Thomson Reuters Fundamentals; and country-level data from World Economic Forum database. The authors measure board gender diversity using four proxies namely, the proportion of women directors on the board, a dummy variable for board with at least one women director, BLAU measurement corresponds to the proportion of group females and males using the formula adopted from the Hirschman-Herfindahl index (Hirschman, 1964) and the proportion of the number of women executives over the total number of directors. The study also uses a series of specification tests using alternative measures for each variable and controlling the global financial crisis and endogeneity issue.FindingsFirms with higher board gender diversity have higher analysts' forecast accuracy. Compared to countries with weak auditing and reporting standards, the authors find firms in countries with strong auditing and reporting standards have more accurate forecasts. Further, the positive relationship between the board gender diversity and analysts' forecast accuracy is weaker for firms in countries with strong auditing and reporting standards, as compared to firms in countries with weak auditing and reporting standards.Research limitations/implicationsThis study found new evidence on the effect of women directorships on analyst forecasts and this relationship varies between levels of the strength of auditing and reporting standards, which was not addressed in prior studies.Practical implicationsThis study highlights the importance of strengthening the policy on getting more women on board and the continuous efforts to enhance the strength of auditing and reporting standards of a country as valuable strategies to enhance the quality of analyst forecasts.Originality/valueThis is the first study that employs the international dataset to examine the moderating effect of the strength of auditing and reporting standards on the relationship between board gender diversity and analysts' forecast accuracy.

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Efficient Time Series of Smoothing and Auto-regressive Forecasting Models for Predicting Police Officer Fatalities in the USA

Nagappan,

Jayabalan,

Alanezi

et al. 2024

Lecture Notes on Data Engineering and Communications Technologies

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Types of politically connected firms and analysts' earnings forecast

Cited by 10 publications

References 100 publications

Institutional investors, political connections and stock recommendations from sell-side analysts: the case of Malaysia

Institutional investors, political connections and stock recommendations from sell-side analysts: the case of Malaysia

Women on board, strength of auditing and reporting standards and analysts' forecasts accuracy: international evidence

Efficient Time Series of Smoothing and Auto-regressive Forecasting Models for Predicting Police Officer Fatalities in the USA

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