Simon Riches, George Hoare, Jo Loughran, Helen L. Fisher and Freya Rumball
This study aims to explore the challenges in the Jordanian health-care system and the potential solutions for these challenges.
Abstract
Purpose
This study aims to explore the challenges in the Jordanian health-care system and the potential solutions for these challenges.
Design/methodology/approach
A narrative literature review was conducted.
Findings
The challenges of the health-care system in Jordan related to geriatric care are the new emergence of nursing homes; the limited health-care services and supplies; the growing aging population; the dramatic change in the family structure. There are many credible approaches used to solve those challenges, including social networking, advocacy, education and research, lobbying and financial support.
Originality/value
There is a lack of research studies examining the perceived barriers and facilitators of geriatric care in Jordan from the perspectives of health-care professionals, health-care managers and older adults themselves. Future intervention studies are recommended to target the challenges in the Jordanian health-care system concerning geriatric care.
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Mohammad Alta'any, Salah Kayed, Rasmi Meqbel and Khaldoon Albitar
Drawing on signalling and impression management theories, this study aims to examine a bidirectional association between managerial tone in earnings conference calls and financial…
Abstract
Purpose
Drawing on signalling and impression management theories, this study aims to examine a bidirectional association between managerial tone in earnings conference calls and financial performance.
Design/methodology/approach
The sample includes non-financial firms listed in the FTSE 350 index during the period 2010–2015. Managerial tone was measured using positive and negative keywords based on the Loughran-McDonald Sentiment Word Lists, while return on assets was used as a proxy for firms’ financial performance.
Findings
The findings indicate that current financial performance positively affects the managerial tone in earnings conference calls. Likewise, the results also show that there is a positive relationship between managerial tone in earnings conference calls and firms’ future financial performance.
Practical implications
The results have important implications for top management to use more virtual communication media (i.e. earnings conference calls) to continue managing their relationships with financial stakeholders and helping them better understand financial performance, especially in countries where holding such calls is not yet part of firms’ policy.
Originality/value
To the best of the authors’ knowledge, this is one of the first studies that explore the relationship between managerial tone in earnings conference calls and financial performance. Overall, this study contributes to managerial tone literature and holds significant theoretical and practical implications.
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Salah Aldain Abdullah Alshorman and Martin Shanahan
This study examines the association between firm profitability and the “voice” of the CEO measured through tones they convey in their annual letter to shareholders. The paper…
Abstract
Purpose
This study examines the association between firm profitability and the “voice” of the CEO measured through tones they convey in their annual letter to shareholders. The paper examines whether the tones corresponds to a firm's profitability and the extent to which CEO tone varies with changes in profitability.
Design/methodology/approach
The authors analyze 187 Australian CEOs communications in 748 annual letters to their shareholders between 2010 and 2013. Two-word lists created by previous researchers are used to assess tones for their positive-negative plurality, uncertainty and use of modal words. Firm profitability is identified using return on assets. The authors examine the relationship between profitability and tones using simple ANOVA as well as a linear mixed model and then a change (differences) model. The change model captures any inertia or genre effect in the CEO letter to shareholders.
Findings
Using both the level and change model, the authors find that firm profitability is associated with CEO's tones that are more optimistic and less pessimistic. The authors also find that the use of negative words has more communicative value than positive words or “net” positive words. The authors also observe some genre effect when CEOs use strong modal words.
Research limitations/implications
The sample is restricted to a selection of Australian firms that had the same CEO for the fiscal years 2010–2013; which reported in each financial year and which survived the global financial crisis. Generalizing the findings to other periods, types of firms, or to CEOs with shorter tenure, might be questionable. This study was conducted in Australia, which may limit the applicability of the findings to other jurisdictions.
Practical implications
The significant link between firm profitability and CEOs' use of positive, net positive and negative words implies that investors may place reliance on the use of these tones in the CEO's annual letter to accurately reflect the profitability of the firm.
Originality/value
The study extends the existing literature by examining whether a change in firm profitability is linked to a change in CEO tone. It concludes that even in periods of general financial stress, shareholders should be confident that CEOs' letters to shareholders provide credible information that corresponds to firm performance.
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This paper aims to examine the relationship between the readability of annual reports and corporate performance in Chinese listed firms.
Abstract
Purpose
This paper aims to examine the relationship between the readability of annual reports and corporate performance in Chinese listed firms.
Design/methodology/approach
This research examined the annual report readability factors of Chinese listed companies by using a textual analysis method using Python to extract the text from the annual reports, convert it into numerical form to facilitate statistical analysis and then merge the results with data from the Chinese stock market to explain the impact on corporate performance and predict future earnings in the Chinese financial markets from 2008 to 2021.
Findings
Study findings indicate that firms with better financial reporting readability are more profitable, incur lower agency costs and have low earnings in the Chinese stock markets when readability is low (i.e. more complexity and length of annual reports). It was also found that when a listed company has a good performance, it prefers to use a short space to explain its operating and financial status. More generally, the means of the report length are short, and accounting terms are used less frequently; in the case of a poor company, the annual report is particularly long and accounting terms are more frequently used. In the context of the COVID-19 crisis, this study served as a proxy measure of returns prior to the announcement of the COVID-19 pandemic. In addition, an instrumental variable approach is used, which helps results to remain robust and control for fixed effects and potential endogeneity problems.
Research limitations/implications
Although this study’s results cannot be generalised globally because of their limited scope, they can still be generalised across non-English speaking countries. Thus, future cross-country research is encouraged to examine the textual analysis of financial reports across those countries.
Practical implications
This study conveys two messages to investors and policymakers within the Chinese market. First, investors ought to pay greater attention to the nonfinancial information contained in annual reports to improve the accuracy of their predictions regarding future firm performance. Second, Chinese policymakers are encouraged to instate a policy for the use of plain English in annual reports to make them more readable by international investors.
Originality/value
This study contributes to the paucity of research that examines English-written annual reports in non-English speaking countries by examining the readability of annual reports in the Chinese market.
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This paper aims to examine whether firms meeting or just beating an earnings benchmark engage in tone management in earnings conference calls to complement earnings management in…
Abstract
Purpose
This paper aims to examine whether firms meeting or just beating an earnings benchmark engage in tone management in earnings conference calls to complement earnings management in the UK context. It also investigates whether the audience tone in beating or just meeting earnings fails to predict future performance.
Design/methodology/approach
This study was performed using a sample of non-financial UK firms listed in the FTSE 350 index over the period 2010–2015.
Findings
The findings show that firms that exercise more earnings management to meet or just beat earnings are positively associated with the abnormal tone during earnings conference calls. The outcomes also reveal that the audience’s tone of firms meeting or just beating an earnings benchmark fails to predict future performance. This confirms the effectiveness of the tone management in managing the perception of audience.
Practical implications
This study highlights the need for increased accountability by firms on earnings conference call. It also supports academics and practitioners in understanding the management discretion used in reporting and communication during the earnings conference call. Overall, the results of this study are beneficial for regulators, policymakers and professionals, regarding confirming the need for the earnings conference calls to be regulated.
Originality/value
To the best of the authors’ knowledge, this is the first study that examines the association between earnings management and tone management in the UK earnings conference calls. It adds to the existing literature by examining the self-serving behaviour of managerial tone during earnings conference calls within a sitting in which meeting or just beating a benchmark is used. Unlike several studies that explain the behaviour of tone as a signalling strategy, this study reveals that the tendency of impression management behaviour can explain the tone management.
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Salah Alshorman and Martin Shanahan
Previous research suggests that a CEO’s attitude can impact a firm’s performance. More particularly, there appears to be a link between the CEO’s revealed level of optimism and…
Abstract
Purpose
Previous research suggests that a CEO’s attitude can impact a firm’s performance. More particularly, there appears to be a link between the CEO’s revealed level of optimism and firm’s market value. The purpose of this paper is to measure the level of optimism revealed by Australian CEOs in their shareholder letters and compares this with their firms’ current and future valuations.
Design/methodology/approach
This study assesses the CEO’s level of optimism using text analysis of the annual letters to shareholders in 180 Australian-based firms from 2010 to 2013. The market valuation of their companies over the same period is calculated using Tobin’s Q, and the results compared with the level of CEO optimism.
Findings
Comparing the level of revealed optimism with their firms’ valuations over four years, CEO optimism is positively correlated, both currently and prospectively with firm valuation. Given the period under study immediately followed the global financial crisis (GFC), the results suggest CEO optimism may be an important factor in adding to firm’s market resilience.
Research limitations/implications
The study examines the link between revealed CEO optimism and firm valuation over a turbulent period of the business cycle. While the sample period follows the GFC, and Tobin’s Q has some known deficiencies, the results imply that further research should be undertaken to examine the importance of CEOs tone and communicated attitudes on their firms’ financial outcomes.
Practical implications
The link between CEO optimism and the firm’s valuation suggest that shareholders and boards should pay particular attention to the values, cognitions and psychological and demographic characteristics of top executives when selecting CEOs. In particular, the results suggest that given two otherwise similar CEOs the one whose record of communication is optimistic should be preferred over a similarly qualified but less sanguine individual.
Originality/value
The paper represents the first study demonstrating the link between CEO’s communicated optimism and Australian firms’ valuations. The study uses three different measures of optimism to improve the robustness of its conclusions, and a comprehensive measure of firm value – Tobin’s Q. It is the first to quantify the association between CEO optimism and firm value shortly after a period of financial upheaval (the GFC). The findings indicate that CEO optimism contributes significantly to firm value. The study also tests whether “excessive” optimism negatively impacts firm performance and conclude there is no evidence of this in the sample period. The study suggests that more research should be done to examine the contribution of positive business attitudes to periods of economic stress.
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Shan Lei and Yafei Zhang
This study aims to understand how media content and media sentiment in corporate social responsibility (CSR) news coverage affect investment performance, as reflected in the S&P…
Abstract
Purpose
This study aims to understand how media content and media sentiment in corporate social responsibility (CSR) news coverage affect investment performance, as reflected in the S&P 500 Environmental and Socially Responsible Index from 2010 to 2016.
Design/methodology/approach
Computer-assisted content analysis and sentiment analysis are employed to analyze 818 CSR-related newspaper articles from mainstream newspapers. Autoregressive model is used to comprehend socially responsible investment (SRI) performance.
Findings
This study reveals the impact of media content and media sentiment of CSR-related news articles on SRI. The authors’ findings indicate that such topics as recognition of a company's CSR contributions in CSR-related news articles are positively associated with SRI performance, whereas topics such as tax avoidance and environmental protection show a negative relationship with SRI performance. In addition, this study contributes to the authors’ understanding of framing bias in investment by confirming a significant positive association between an uncertain or constraining media sentiment and SRI performance, as well as a negative relationship between a litigious sentiment and SRI performance.
Originality/value
There has been limited attention to examining the effect of media coverage of CSR on the financial market. Since SRI is one of the most useful financial indices for SRIs, it is meaningful to explore the relationship between media coverage of CSR and SRI. To fill the research gap, this study specifically examines how media coverage of CSR-related issues is associated with SRI performance.
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Tamer Elshandidy, Philip J. Shrives, Matt Bamber and Santhosh Abraham
This paper provides a wide-ranging and up-to-date (1997–2016) review of the archival empirical risk-reporting literature. The reviewed papers are classified into two principal…
Abstract
This paper provides a wide-ranging and up-to-date (1997–2016) review of the archival empirical risk-reporting literature. The reviewed papers are classified into two principal themes: the incentives for and/or informativeness of risk reporting. Our review demonstrates areas of significant divergence in the literature specifically: mandatory versus voluntary risk reporting, manual versus automated content analysis, within-country versus cross-country variations in risk reporting, and risk reporting in financial versus non-financial firms. Our paper identifies a number of issues which require further research. In particular we draw attention to two: first, a lack of clarity and consistency around the conceptualization of risk; and second, the potential costs and benefits of standard-setters’ involvement.