Marshall A. Geiger, Rajib Hasan, Abdullah Kumas and Joyce van der Laan Smith
This study explores the association between individual investor information demand and two measures of market uncertainty – aggregate market uncertainty and disaggregate…
Abstract
Purpose
This study explores the association between individual investor information demand and two measures of market uncertainty – aggregate market uncertainty and disaggregate industry-specific market uncertainty. It extends the literature by being the first to empirically examine investor information demand and disaggregate market uncertainty.
Design/methodology/approach
This paper constructs a measure of information search by using the Google Search Volume Index and computes measures of aggregate and disaggregate market uncertainty using institutional investors' trading data from Ancerno Ltd. The relation between market uncertainty, as measured by trading disagreements among institutional investors, and information search is analyzed using an OLS (Ordinary Least Squares) regression model.
Findings
This paper finds that individual investor information demand is significantly and positively correlated with aggregate market uncertainty but not associated with disaggregated industry uncertainty. The findings suggest that individual investors may not fully incorporate all relevant uncertainty information and that ambiguity-related market pricing anomalies may be more associated with disaggregate market uncertainty.
Research limitations/implications
This study presents an examination of aggregate and disaggregate measures of market uncertainty and individual investor demand for information, shedding light on the efficiency of the market in incorporating information. A limitation of our study is that our data for market uncertainty is based on investor trading disagreement from Ancerno, Ltd. which is only available till 2011. However, we believe the implications are generalizable to the current time period.
Practical implications
This study provides the first concurrent empirical assessment of investor information search and aggregate and disaggregate market uncertainty. Prior research has separately examined information demand in these two types of market uncertainty. Thus, this study provides information to investors regarding the importance of assessing disaggregate component measures of the market.
Originality/value
This paper is the first to empirically examine investor information search and disaggregate market uncertainty. It also employs a unique data set and method to determine disaggregate, and aggregate, market uncertainty.
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The purpose of this paper is to investigate the effects of Facebook users' responses to corporate Facebook posts on investor diversity and trading consensus.
Abstract
Purpose
The purpose of this paper is to investigate the effects of Facebook users' responses to corporate Facebook posts on investor diversity and trading consensus.
Design/methodology/approach
The authors collect publicly available data on corporate Facebook posts and user responses to such posts. They use the OLS regression framework to analyze the effects of such Facebook activities on institutional ownership percentage and trading consensus among investors.
Findings
The authors find that Facebook users' responses to corporate Facebook posts reduce large institutional investors' ownership. Their interpretation for this finding is that such Facebook activities increase the visibility of the companies across a more diverse group of investors. This increased visibility especially makes information more accessible to smaller investors so that they are attracted to invest more in these companies. They also find that Facebook activities increase the buy-sell consensus among investors, indicating that the information disseminated through social media reduces the disagreements among investors.
Research limitations/implications
This paper examines the effects of user reactions to all kinds of corporate Facebook posts without separately identifying the types of posts such as advertising, financial information and corporate news. Future research may try to identify the differential effects of specific types of posts and reactions on investor diversity.
Practical implications
The results suggest that social media has become a new and effective supplement to traditional disclosure channels in making information available to all investors in the capital market.
Originality/value
This paper is among the first to document the effects of corporate disclosures on social media in changing investor composition and reducing the information gap among investors.
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Abu Amin, Rajib Hasan and Mahfuja Malik
The purpose of this paper is to examine whether corporate social media information helps improve analysts’ forecast accuracy.
Abstract
Purpose
The purpose of this paper is to examine whether corporate social media information helps improve analysts’ forecast accuracy.
Design/methodology/approach
This study uses hand-collected information on S&P 500 firms’ official Facebook pages and uses posts and reactions to such posts to measure corporate Facebook information. Multivariate regression models are estimated to test the relationship between analysts’ forecast accuracy and corporate Facebook information.
Findings
The results indicate that analysts forecast accuracy is unresponsive to posts. However, analyst forecast errors are decreasing in reactions to posts. These findings are robust to the inclusion of control variables, firm and time fixed effects, and alternative specifications of forecast errors and different pre-forecast time windows.
Research limitations/implications
This study has some limitations. It focuses only on the S&P 500 firms, which are large and generally provide better information to the market. The sample period coincides with the early period of the corporate Facebook culture. However, more recent data sets are likely to provide stronger results.
Practical implications
The findings of this study provide support for “information generation” role of social media and show that reactions to corporate Facebook posts are the new and unique information generated from corporate social media activities, which help information intermediaries in improving their forecasting accuracy.
Originality/value
This study makes an important contribution to the literature by separating the information dissemination role of social media from information generation role and establishes the first evidence on how corporate social media information affects forecast accuracy of financial analysts.
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Md Rajibul Hasan, Ben Lowe and Mizan Rahman
This paper aims to explore how visual comprehensibility of a product can affect innovation adoption among the bottom of the pyramid (BOP) consumers in Bangladesh.
Abstract
Purpose
This paper aims to explore how visual comprehensibility of a product can affect innovation adoption among the bottom of the pyramid (BOP) consumers in Bangladesh.
Design/methodology/approach
This is an exploratory qualitative study based on interviews with eight managerial respondents involved in the design and marketing of innovative products targeted at BOP consumers in Bangladesh and three respondents who are consumers of these products.
Findings
One key finding from this research, in comparison to innovation adoption research in developed contexts, is the distinct importance that BOP consumers attach to visual cues in learning about and understanding a new product.
Practical implications
This research provides guidance for private and public sector organisations selling products and services to BOP consumers explaining the role of visual cues in generating better product comprehension. It also identifies the role of social relations in facilitating the adoption of new products within this segment.
Social implications
By enhancing the adoption of so-called pro-poor innovations, this research can assist in bringing about positive social change and developmental benefits in this burgeoning segment of the market.
Originality/value
This is one of the first studies to consider innovation adoption of pro-poor innovations in BOP markets and one of the first studies to collect data on the role of visual comprehensibility for consumers in BOP markets.
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Rajib Hasan and Abdullah Shahid
We highlight two mechanisms of limited attention for expert information intermediaries, i.e., analysts, and the effects of such limited attention on the market price discovery…
Abstract
We highlight two mechanisms of limited attention for expert information intermediaries, i.e., analysts, and the effects of such limited attention on the market price discovery process. We approach analysts' limited attention from the perspective of day-to-day arrival of information and processing of tasks. We examine the attention-limiting role of competing tasks (number of earnings announcements and forecasts for portfolio firms) and distracting events (number of earnings announcements for non-portfolio firms) in analysts' forecast accuracy and the effects of such, on the subsequent price discovery process. Our results show that competing tasks worsen analysts' forecast accuracy, and competing task induced limited attention delays the market price adjustment process. On the other hand, distracting events can improve analysts' forecast accuracy and accelerate market price adjustments when such events relate to analysts' portfolio firms through industry memberships.
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Fakhrul Hasan, Sujana Shafique, Bijoy Chandra Das and Rajib Shome
Given the importance of both research and development (R&D) investments and dividend policy in the growth of firms, this paper examines the moderating effects of investor…
Abstract
Purpose
Given the importance of both research and development (R&D) investments and dividend policy in the growth of firms, this paper examines the moderating effects of investor protection and other country-level governance mechanisms on the relationship between R&D investments and dividend payments in the firms from Brazil, Russia, India, China and South Africa (BRICS countries).
Design/methodology/approach
This empirical study uses a sample of 22,073 firm year observations from the BRICS countries over a period of 2008–2020 and employs both ordinary least squared (OLS) and system generalized method of moments (GMM) estimation methods. The GMM estimation controls for unobservable heterogeneity and endogeneity and reduces estimation bias.
Findings
The findings indicate that although R&D intensity is negatively related with the cash dividend payments, with the interaction of investor protection and other country-level mechanisms the relationship between R&D intensity and dividend payments becomes positive. The results further show that investor protection has stronger impact on the relationship between R&D intensity and firm cash dividend payments than other selected country-level governance factors.
Practical implications
The research findings should encourage the policy makers in BRICS countries to strengthen investor protection and enhance quality of their institutions to make a right balance between retaining their growth potential and maintaining the value of the firms.
Originality/value
This is the first study to provide evidence of the moderating effects of investor protection and other country-level governance mechanisms on the relationship between R&D investments and dividend payments using the data from BRICS countries.
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Anulekha Banerjee and Rajib Dasgupta
The consumer-based study was conducted among the population of Kolkata metropolis to assess the impact of corporate social responsibility (CSR) practices on the purchase intention…
Abstract
Purpose
The consumer-based study was conducted among the population of Kolkata metropolis to assess the impact of corporate social responsibility (CSR) practices on the purchase intention of selected cooking oil brands.
Design/methodology/approach
Data were collected from a questionnaire based survey on 322 respondents residing in Kolkata metropolis. Reliability of the scales was ascertained by Cronbach’s alpha values. Kendall's W test was used for rank analysis. Pearson’s correlation was examined to correlate the cognitive criteria. Factor analysis was used to sort out influential cognitive criteria which were compared between genders by the Kruskal–Wallis H test. The involvement of CSR components in enhancing the brand equity was analysed by multiple linear regression.
Findings
The brands vouching for the cause of health and nutritional value of the society attained significant loyalty and generate considerable brand association. The regression model predicts a socially accepted cooking oil brand to be one which addresses health, transparency and ethics in unison.
Research limitations/implications
The study was restricted within the resident population of Kolkata metropolis which ratifies the CSR perception of a confined mass.
Practical implications
The study delineates the plausible avenue of CSR investments to touch the cognitive centre of the consumers’ mind.
Social implications
The consumers expect to embrace a healthy yet reasonably priced cooking oil brand which imparts a notion to address multiple social causes.
Originality/value
The study identifies the strategic CSR attributes which might influence the mind of the consumers while they select cooking oil brands for household use.
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Rajib Chakraborty and Rebecca Abraham
The purpose of this paper is to measure the impact of financial inclusion on economic development.
Abstract
Purpose
The purpose of this paper is to measure the impact of financial inclusion on economic development.
Design/methodology/approach
Study 1 used World Bank Data to develop financial inclusion percentages of ownership of checking accounts, savings accounts, debit cards and loans for 179 countries among the poorest 40% of the population, from 2011–2017. Regressions established the financial inclusion, gross savings and GDP per capita growth linkage. Study 2 created and validated scales to measure social empowerment, economic empowerment and economic development, among inhabitants of Bangladesh villages. Structural equation modeling measured the mediation by social empowerment and economic empowerment of the financial inclusion and economic development linkage.
Findings
Total financial inclusion was significantly explained by gross savings, which was significantly explained by GDP per capita growth. Ownership of a checking account significantly increased gross savings, while ownership of a savings account significantly increased GDP per capita growth. Ownership of a checking account differentiated countries with the highest 5% of gross savings, while ownership of a debit card significantly differentiated countries with the GDP per capita growth. Social empowerment and economic empowerment significantly mediated the financial inclusion and economic development relationship.
Originality/value
The study is unique in examining financial inclusion from a multi country, macroeconomic perspective combined with measurement of its theoretical underpinnings through a primary data-based sample extracted from respondents in Bangladesh, a lower middle-income country in Southeast Asia.