Fanglin Shen, Quantong Guo, Hongyan Liang and Zilong Liu
The purpose of this paper is to investigate the relationship between investors' divergence of opinions and the asset prices of foreign stocks and also examine the effect of home…
Abstract
Purpose
The purpose of this paper is to investigate the relationship between investors' divergence of opinions and the asset prices of foreign stocks and also examine the effect of home market country-level factors on the influence of divergency of opinions on stock price.
Design/methodology/approach
The authors employ panel data estimation with fixed effects to examine the host market response in divergent opinions to the earnings announcements. The paper uses the American Depositary Receipts (ADRs) of 42 countries from 1985 to 2011.
Findings
The authors find a negative relationship between differences of opinions and excess quarterly earnings announcement returns, and investors do process information asymmetrically based on good and bad earnings shocks. In addition, the authors find the negative relationship between divergent opinions and excess earnings announcement returns in ADRs is more pronounced in countries with short-sales restrictions, while other home-market country-level factors – the enforcement of insider trading law, legal origin, investor protection and rating on accounting standard – do not influence the relationship between investors' divergency of opinion and stock returns.
Originality/value
This paper is among the first to bring asymmetric effects on convergence in Miller framework and enhance the understanding of price convergence documented in Miller (1977). In addition, this study incorporates home-market country-level factors in explaining the relationship between investors' divergency of opinions and stock returns.
Details
Keywords
Fanglin Li, Ray Sastri, Bless Kofi Edziah and Arbi Setiyawan
Tourism is an essential industry in Indonesia, and understanding its inter-sectoral and inter-regional connections is critical for policy development. This study examines the…
Abstract
Purpose
Tourism is an essential industry in Indonesia, and understanding its inter-sectoral and inter-regional connections is critical for policy development. This study examines the economic impact of regional tourism in Indonesia and the connections between different tourism-related regions and industries.
Design/methodology/approach
This study uses a non-survey method to estimate the inter-regional input-output table (IRIOT) in 2019, backward and forward linkage to identify the role of tourism in the economy, and the structural path analysis (SPA) to identify the inter-sectoral and inter-regional flow of tourism effect. The benchmark IRIOT 2016 published by Badan Pusat Statistik (BPS) serves as the primary data source.
Findings
The findings indicate that tourism has a relatively high impact on the overall national economy and plays an essential role in nine provinces. However, this study uses four provinces to represent Indonesian tourism: Jakarta, Jawa Timur, Bali, and Kepulauan Riau. The SPA result captures that Kepulauan Riau Province has the highest tourism multiplier effect and Jawa Timur has the highest coverage value. Moreover, the manufacturing sector receives the most benefit from the tourism effect, followed by trade, construction, agriculture, transportation, and electricity-gas. From a spatial perspective, tourism connections are not solely based on geographical proximity. Instead, they are established through an intricate supply chain network of manufactured goods. This emphasizes the significance of considering supply chain dynamics when investigating inter-regional relationships in the tourism sector.
Originality/value
This research contributes to the literature by estimating the IRIOT in 2019, disaggregating tourism activities from related economic sectors, constructing tourism-extended IRIOT, and identifying the critical path of tourism effect in numerous provinces with different economic structures. This novel approach offers valuable insights into the full spectrum of tourism’s economic impact, which has not been previously explored in this depth. This study is useful for policymaking, investment insight, and disaster mitigation.