Showing papers on "Signalling theory published in 2019"

Does Board Composition Matter to Institutional Investors

Abstract: This study examines the resource dependency and signalling role of independent directors from the perspective of institutional investor’s and also investigates if the presence of large blockholder ...

Managing noise in signalling effectiveness: an empirical test of listed companies in China

Abstract: Signalling theory suggests how “strong” or “weak” the signal quality detected by a receiver (defined as signalling strength) is distorted by noisy factors (defined as noise). Although corporate cooperation signals are known to lead to receiver reaction, the effects of distortion factors on signal credibility are generally unexplored in signalling process. The paper aims to discuss this issue.,After analysing 264 contract announcements in 2013–2015 that befall publicly listed firms in China, the authors explore the signalling impact of contract value. the authors also incorporate the signalling noises, namely, signalling environment, external referents and other signallers, into the contracting context and investigate their effects on distorting the relationship between signal strength and receiver reaction.,Results indicate that firms’ contract-signing announcement conveys an effective signal to investors: the larger the contract scale is, the more investor reaction the firms experience. The signalling effects of contract scale on investor reaction are moderated by the three distorting factors.,The findings contribute to the signalling theory literature on the effects of signalling noise on receivers’ perception of signal observability.

Determinants and consequences of the quality of forward-looking information disclosure : the case of Indian listed companies

Abstract: This study aims to examine the determinants and consequences of the Quality of Forward-looking Information Disclosure (QFLID) among non-financial Indian listed companies. Following objectives are accomplished in this study: Firstly, to investigate the association between Corporate Governance mechanisms (CG) and QFLID. Secondly, to investigate the impact of QFLID on Firm Value (FV) and lastly, to investigate the impact of QFLID on the Accuracy of Analysts’ Earnings Forecast (ACUAF). The study uses a sample of 2120 observations of non-financial companies listed on the Bombay Stock Exchange (BSE) from 2006 to 2015. To measure QFLID, this study adopted a multidimensional framework designed by Beretta & Bozzolan (2008). Both the quantity and the richness dimensions are considered in this framework. Regarding the first objective, the results indicate that board size, frequency of board meetings, board independence, female presence on the board, frequency of audit committee meetings, independence of the audit committee and female presence on the audit committee have positive associations with the QFLID. These results are in line with the perspectives of the agency, signalling and resource-dependence theories. However, the study found that CEO duality, blockholder ownership, institutional ownership, promoters’ ownership, audit committee size and audit committee financial expertise have no relationship with the QFLID. To achieve the second objective, the empirical results found that QFLID is positively and significantly associated with FV, which is consistent with the agency and signalling theory perspectives. Thus, firms with high QFLID increase FV more than those with a low QFLID. Concerning the third objective, the analyses indicate that QFLID is positively associated with ACUAF, meaning that firms with high QFLID increase ACUAF as compared to those with low QFLID. This result supports the signalling theory, suggesting that managers increase FLID as it reduces information asymmetry and improves ACUAF. The current study also conducted a series of tests to check the robustness of the main results. The findings of these additional and robustness tests provide evidence that the essential findings of this study are robust and unchanged.