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The purpose of this study is to examine the association between carbon emissions and earnings management (EM). This study also considers the effect of female CEOs on the association between carbon emissions and EM.

This study uses the carbon disclosure project (CDP) for carbon emissions data, the Compustat database for financial information and the ExecuComp database for female CEOs. The empirical sample of this study consists of 1,692 firm-year observations in the USA that voluntarily participated in the CDP survey from 2007 to 2015. Regression analysis and robustness tests are conducted for this study and both accrual and real EM are considered.

This study provides evidence that firms with female CEOs who voluntarily disclose their carbon emissions information engage in less real EM. Thus, the presence of female CEOs moderates the association between carbon emissions and EM. This study/paper also finds a positive association between carbon emissions and real EM, although there is an insignificant association between carbon emissions and accruals EM.

The association between carbon emissions and EM has important implications for investors, regulators and policymakers. This study suggests that policymakers should improve the conditions that promote inclusion of females in the top management positions to constrain EM.

This study focuses on the USA, which is one of the major contributors to carbon emissions in the world. The presence of female CEOs moderates the association between carbon emissions and EM and firms with female CEOs show a greater impact on EM.

The purpose of this paper is to examine the association between company reputation and dividend policy.

In this study, sample of 98,809 firm-year observations from 22 countries covering 2005–2016 were used.

Firm reputation concerns are associated with higher propensities to pay dividends and payout ratios. Further, this positive effect is more pronounced for firms with high free cash flows, high information asymmetry and low institutional monitoring. The results are robust to an instrumental variable approach, propensity score matching and the Heckman two-stage correction approach while addressing endogeneity concerns.

These findings have significant implications for various stakeholders, such as existing and potential investors, managers, policymakers and regulators, by providing insights into the relationship between corporate reputation and firm dividend payout decisions. Corporate reputation is highlighted as crucial for accessing finance, emphasizing the role of national regulators and policymakers in facilitating firms' efforts to improve their reputation. The study highlights the dynamics of corporate reputation and dividend payout, calling for proactive engagement from regulators and policymakers. Crafting policies conducive to reputation-building can enhance firms' financial prospects, indicating the need for strategic interventions at managerial, regulatory and policy levels. Understanding the influence of economic context is crucial for firms to tailor reputation management strategies and optimize funding opportunities in different economic environments.

Overall, results suggest that reputation serves as a disciplining mechanism, where firms will pay dividends to maintain their reputations.

This research examines the influence of financial secrecy culture on audit fees. Additionally, we investigate the potential moderating effect of adopting International Financial Reporting Standards (IFRS) on the relationship between financial secrecy culture and audit fees.

We use an international dataset comprising 249,217 firm-year observations from 30 countries/regions listed between 1996 and 2022. Our analysis includes regression analysis, the Heckman self-selection bias test, change analysis and various robustness tests.

Our results reveal a significant positive association between audit fees and firms listed in secretive jurisdictions, suggesting that auditors charge higher fees to accommodate additional audit effort or risk premiums. Furthermore, our empirical findings indicate that implementing IFRS in countries/regions with higher levels of secrecy introduces complexities or ambiguities in audit procedures, leading to increased audit fees. These results hold up under rigorous endogeneity tests and remain consistent across alternative measures and tests.

Our findings establish a direct link between financial secrecy and audit fees, demonstrating higher costs for firms with greater secrecy. Additionally, they show that implementing IFRS in secretive jurisdictions intensifies audit complexities, resulting in higher fees. These findings emphasize the critical importance of transparency, regulatory compliance and risk management in financial reporting, with implications for investor confidence and regulatory strategies.

This study contributes to the literature by exploring the previously unexamined relationship between financial secrecy culture and audit fees while also assessing the moderating effect of IFRS adoption. By utilizing a comprehensive international dataset spanning multiple jurisdictions and years, our research provides valuable insights into cross-border variations in audit practices and their broader implications.

The purpose of this paper is to determine the properties of analysts’ cash flows from operations (CFO) forecast generated for Australian listed firms as a productive activity, within the wider processes of financial disclosure in Australia.

Two categories of criteria are adopted: first, basic predictive statistical performance relative to a benchmark model and earnings forecasts; and second, relevance for equity pricing, as indicated by the market reaction to cash flow or forecast error reactions. The final sample comprised 2,138 observations between 2001 and 2016 and several regression models are estimated to determine the relative performance and market reaction.

Analysts’ consensus cash flow forecasts demonstrate poor predictive performance relative to earnings forecasts. Cash flow forecasts are typically naïve extensions of earnings forecasts. Furthermore, cash flow forecasts appear to be of minimal use for equity market participants in complementing earnings forecasts’ role in informing firms’ equity pricing.

While analysts’ earnings forecasts are useful for making predictions, the role of analysts’ cash flow forecasts in capital market functional efficiency appears quite limited.

This study is one of few that examines comparative usefulness of analysts’ earnings and cash flow forecasts and their predictive power using the Australian setting. Additionally, it enriches the sparse international literature on such forecasts.

This study investigates the association between debt overhang and carbon emissions (both direct and indirect emissions) using a sample of US publicly listed firms.

The study applies generalized least squares (GLS) regression analyses to a sample of 2,043 US firm-year observations over a period of 14 years from 2007 to 2020. The methods include contemporaneous effect, lagged effect, alternative measures of carbon emissions and debt overhang, intensive versus non-intensive analysis, channel analysis, firm fixed effects, change analysis, controlling for credit rating analysis, propensity score matching approach, instrumental variable analysis with industry and year fixed effect.

This study's findings reveal that the debt overhang problem increases carbon emissions. This finding holds when the authors use alternative measures of carbon emissions and debt overhang. The authors find that carbon abatement investment is a channel that is negatively impacted by debt overhang, which in turn increases carbon emissions. This study's results are robust for several endogeneity tests, including firm fixed effects, change analysis, propensity score matching approach and two-stage least squares (2SLS) instrumental variable analysis.

The outcome of this research has policy implications for several stakeholders, including investors, firms, market participants and regulators. This study's findings offer insights for investors and firms, helping them allocate resources effectively and make financing decisions aimed at reducing carbon emissions. Regulators and policymakers can also use the findings to formulate policies that promote alternative sustainable finance practices.

The outcome of this research is likely to help firms develop their understanding of the debt overhang problem and undertake strategies that yield a significant amount of funding to invest in reducing carbon emissions.

This paper aims to examine the impact of dual-class share structures, where share structure is measured by the existence of a dual-class structure and also by excess voting rights and the proximity of the superior class shareholders in such structures, on financial constraints.

The study applies regression analyses to a sample of 2,466 observations on non-financial US firms over the period 2002–2018. The methods include regression with industry and year fixed effects, “propensity score matching” approach to match the dual-class firms with non-dual class firms and alternative measures of financial constraints.

The result shows that irrespective of how dual-class share structure is measured, it increases the level of financial constraints, except where dual-class share structure is measured by the proximity of superior class shareholders. Among the additional tests, the HM index has been used as a measure of financial constraints, and the findings show that the impact of dual-class structures on financial constraints appears to be driven by their effect on debt constraints. Finally, the findings are robust when the authors address endogeneity issues and remain consistent when the authors use alternative measures and tests.

The study has important implications for investors, regulators and policymakers, as it could help an understanding of the effect of the potential for conflict between superior class shareholders and other shareholders.

The results from the study support earlier literature on the impact of dual-class share structure on financial constraints. However, the study also provides new evidence on the different dimensions of dual-class share structure and financial constraints. Furthermore, the hand-collected data set on dual-class firms and the values of their voting wedge and the proximity of superior class shareholders may be useful to other researchers.

The purpose of the study is to examine the impact of corporate reputation (hereafter CR) and the degree of economic development on firms’ cost of capital remains unresolved. This study addresses these issues.

Using a global sample across 20 countries, the study investigates the discrete and joint effects of CR and jurisdictional economic development on the cost of equity (COE) and cost of debt (COD) capital. The analysis encompasses a dual data set, comprising 1,308 observations for COE and 1,223 observations for COD, allowing for a comprehensive exploration of these dynamics.

The findings indicate that CR leads to a reduction in the cost of capital for reputable firms. Nevertheless, the extent of this decrease varies per type of capital and firm’s reputation level and is contingent upon the economic development level within the firm’s jurisdiction. Particularly noteworthy is the moderating effect of economic development on CR, which shows that COE capital tends to be lower for reputable firms operating in economically developed jurisdictions. Albeit, this is not the case for COD capital for reputable firms in similarly developed jurisdictions.

This study illustrates that effective CR management, aimed at reducing the cost of capital, necessitates a combination of the firm’s unique competitive advantage and the economic development context of its jurisdiction to truly achieve its intended goal.

To the best of the authors’ knowledge, this is the first global study to explore the impact of CR on both COE and COD capital. Furthermore, this study is primarily towards understanding the moderating role of economic development in the relationship between CR and cost of capital.

The purpose of this study is to develop a new measure for discriminatory related party transactions (DRPTs). There are currently measures for such discriminatory transactions but the new measure has a strong theoretical basis and is less susceptible to measurement error.

This paper develops and tests a new measure for these discriminatory transactions. Type I and Type II error rates and the power of the new measure are compared with an existing measure using computer-simulated and real data.

The capital market sensitivity of the new measure is also tested and compared with the existing measure. The new measure is found to be superior.

The new measure of DRPTs has the potential to contribute to both further research on the impact of related party transactions and policy-making in relation to DRPTs.

This paper has developed and tested a new measure for DRPTs.

Extant literature investigating the tax payment behaviour of politically connected firms largely supports the notion that politically connected firms have tax sheltering incentives, i.e. politically connected firms pay significantly less tax. Our paper adds to this stream of literature by considering the tax payment behaviour of two different groups of politically connected firms in Pakistan, viz. civil connected firms and military connected firms.

The paper sheds light on the tax payment behaviour of politically connected firms and provides evidence that the tax incentives of politically connected firms are shaped by the institutional structure and contextual factors.

The results indicate that civil (military) connected firms pay significantly lower (higher) tax than non-connected firms. The findings hold in the face of a number of robustness tests, including the use of alternative proxies for the tax variable and endogeneity concerns.

These results make a significant contribution to the existing literature examining the tax payment behaviour of politically connected firms by providing evidence suggesting that tax sheltering is not the only viable option for politically connected firms; rather, some groups of connected firms have tax under-sheltering incentives. Our findings add to the political cost hypothesis and the signalling hypothesis in relation to tax payment incentives of politically connected firms.

This paper investigates the impact of International Financial Reporting Standards (IFRS) adoption and domestic investor protection on the relationship between United States (US) cross-listing and earnings management.

The paper applies ordinary least squares (OLS) regression analyses to a matched sample of cross-listed and non-cross-listed firms from 2000 to 2018, covering 38 countries.

We find that US cross-listed firms have lower real earnings management. The results also show that real earnings management is lower for US cross-listed firms that adopt IFRS and from high domestic investor protection countries. Our results further show that real earnings management is higher when cross-listed firms use Level 1 American Depository Receipts (ADRs) to cross-list but adopting IFRS and high domestic investor protection help reduce real earnings management. Using the SEC’s Rule 12h-6 as a quasi-natural experiment, we document that post-12h-6 Rule, firms in high domestic investor protection countries experience a reduction in both accruals and real earnings management. However, the result is the opposite in countries with low investor protection.

Our findings have implications for regulators and policymakers on the impact of ADR levels and Rule 12h-6 on earnings management.