Michael Grassmann, Stephan Fuhrmann and Thomas W. Guenther
Credibility concerns regarding integrated reports can harm the intended decrease of information asymmetry between a firm and its investors. Therefore, it is crucial to examine…
Abstract
Purpose
Credibility concerns regarding integrated reports can harm the intended decrease of information asymmetry between a firm and its investors. Therefore, it is crucial to examine whether voluntary third-party assurance enhances the credibility of integrated reports and, thus, decreases information asymmetry. Furthermore, this study aims to investigate the interaction effect between assurance quality and the disclosed connectivity of the capitals, a distinguishing feature of integrated reports.
Design/methodology/approach
Content analysis is performed of the 176 assurance statements included in the 269 integrated reports of Forbes Global 2000 firms disclosed from 2013 to 2015 and the 269 integrated reports themselves. Regression analyzes are applied to examine the associations between assurance, the disclosed connectivity of the capitals and information asymmetry.
Findings
The presence of an assurance statement in an integrated report significantly decreases information asymmetry. Surprisingly, assurance quality is not significantly associated with information asymmetry. However, an interaction analysis reveals that combining high assurance quality with high disclosed connectivity of the capitals allows a significant decrease in information asymmetry.
Research limitations/implications
The paper demonstrates that the connectivity of the capitals of integrated reports and assurance quality are connected and together are associated with information asymmetry.
Practical implications
The results imply, both for report preparers and standard setters, that assurance quality is advantageous only when combined with disclosed connectivity of the capitals.
Social implications
More information on non-financial information measured by the connectivity of the capitals of integrated reporting has an interaction effect together with assurance quality on information asymmetry.
Originality/value
This paper builds on a unique data set derived from the contents of integrated reports and accompanying assurance statements. Furthermore, it extends the integrated reporting literature by investigating the interaction between assurance quality and the disclosed connectivity of the capitals, which had not previously been examined in combination.
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Deborah Yvonne Nagel, Stephan Fuhrmann and Thomas W. Guenther
The usefulness of risk disclosures (RDs) to support equity investors’ investment decisions is highly discussed. As prior research criticizes the extensive aggregation of risk…
Abstract
Purpose
The usefulness of risk disclosures (RDs) to support equity investors’ investment decisions is highly discussed. As prior research criticizes the extensive aggregation of risk information in existing empirical research, this paper aims to provide an attempt to identify disaggregated risk information associated with cumulative abnormal stock returns (CARs).
Design/methodology/approach
The sample consists of 2,558 RDs of companies listed in the S&P 500 index. The RDs were filed within 10 K filings between 2011 and 2017. First, this study automatically extracted 35,685 key phrases that occurred in a maximum of 1.5% of the RDs. Second, this study performed stepwise regressions of these key phrases and identified 67 (78) key phrases that show positive (negative) associations with CARs.
Findings
The paper finds that investors seem to value most the more common key phrases just below the 1.5% rarest key phrase threshold and business-related key phrases from RDs. Furthermore, investors seem to perceive key phrases that contain words indicating uncertainty (impacts) as a negative (positive) rather than a positive (negative) signal.
Research limitations/implications
The research approach faces limitations mainly due to the selection of the included key phrases, the focus on CARs and the methodological choice of the stepwise regression analysis.
Originality/value
The study reveals the potential for companies to increase the information value of their RDs for equity investors by providing tailored information within RDs instead of universal phrases. In addition, the research indicates that the tailored RDs encouraged by the SEC contain relevant information for investors. Furthermore, the results may guide the attention of equity investors to relevant text passages whose deeper analysis might be useful with regard to investors’ capital market decisions.
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Michael Grassmann, Stephan Fuhrmann and Thomas W. Guenther
Integrated reporting (IR) aims to provide disclosures of the connectivity of non-financial and financial value creation aspects. These disclosures are defined as the disclosed…
Abstract
Purpose
Integrated reporting (IR) aims to provide disclosures of the connectivity of non-financial and financial value creation aspects. These disclosures are defined as the disclosed connectivity of the capitals resulting from integrated thinking. This paper aims to investigate the extent of disclosed connectivity of the capitals in integrated reports and its underlying managerial discretion by drawing on economic-based theories.
Design/methodology/approach
Regression analyses are applied to examine the associations between economic firm-level characteristics and the extent of disclosed connectivity of the capitals. The analyses are based on a content analysis of 169 integrated reports disclosed in 2013 and 2014 by Forbes Global 2000 companies.
Findings
This paper finds high heterogeneity in the extent of disclosed connectivity of the capitals in current IR practice. This heterogeneity is related to drivers arising from economic-based theories. Firms’ non-financial and financial performance and the importance of strategic shareholders and debt providers are positively associated with the extent of disclosed connectivity of the capitals. The complexity of the business model and a highly competitive environment are negatively associated with the extent of disclosed connectivity of the capitals.
Research limitations/implications
This paper extends qualitative IR studies on the disclosed connectivity of the capitals by quantitative results from a content analysis for a cross-sectional and global sample. Additionally, this study adds to prior IR literature on the drivers of the binary decision to disclose an integrated report by focusing on the extent of disclosed connectivity of the capitals.
Practical implications
For report preparers, users and standard setters, the results reveal that perceived cost-benefit considerations (signaling vs. direct and proprietary costs) may explain managerial discretion regarding the connectivity of the capitals within integrated reports.
Social implications
This paper examines integrated reports, which are intended to inform providers of financial capital and other stakeholders about the connectivity of the six capitals of the IR framework.
Originality/value
This paper develops a metric disclosure measure of the extent of disclosed connectivity of the capitals. It provides initial evidence of how the IR framework’s focus on this key characteristic is realized in disclosure practice. Concerns about competitive disadvantages and preparation costs limit this key characteristic of integrated reports.
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This paper aims to unite firm- and country-level drivers of the disclosure of integrated reports. It creates a synopsis of voluntary disclosure, signaling, proprietary cost…
Abstract
Purpose
This paper aims to unite firm- and country-level drivers of the disclosure of integrated reports. It creates a synopsis of voluntary disclosure, signaling, proprietary cost, legitimacy, stakeholder and institutional theory.
Design/methodology/approach
The empirical analyses build on a logistic regression model examining the disclosure decisions for integrated reports published between 2012 and 2016 by the 2,000 largest listed companies worldwide.
Findings
The results indicate that the disclosure of integrated reports by large listed companies is explained in parallel by multiple theories, operationalized by the firm-level characteristics of lower profitability, a higher market-to-book value, lower leverage, lower level of industry concentration and higher social performance. Additionally, the country-level characteristics of civil law setting and lower investor protection, lower power distance and lower masculinity coincide with the disclosure of integrated reports.
Originality/value
The inferences emphasize that a single theoretical framework cannot explain the decision to disclose an integrated report. Rather, a set of economic firm characteristics may lead to different disclosure decisions in different socio-economic and institutional environments.
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Stephan Leixnering, Renate E. Meyer and Peter Doralt
Institutions are collective responses to collective concerns, with the underlying link between concern and response being the purpose of the institution. With this conceptual…
Abstract
Institutions are collective responses to collective concerns, with the underlying link between concern and response being the purpose of the institution. With this conceptual lens, we analyze the history of the Aktiengesellschaft (AG), which emerged in Austria and Germany around 1800. While any analysis of the organizational features of the form would have diagnosed marked stability over the past two centuries, our historical study reveals significant shifts of the AG’s purpose and meaning: from a vehicle in the service of the public interest, shareholders, and employees to a persona with legitimate self-interests and the will to survive. We suggest to regard such purpose drifts as distinct variant of institutional change. In addition, we conclude that the AG’s essentially political actorhood institutionalizes the ever fragile and delicate quest for a balance between the different legitimate interests on whose behalf a corporation acts (including those of the self). Such a view, we argue, can offer a future for the corporation as organizational form.
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Heather A. Haveman and Nataliya Nedzhvetskaya
This paper traces how in Britain and Germany, for-profit and non-profit businesses coevolved with political-economic institutions. Starting in the late eighteenth century, Britain…
Abstract
This paper traces how in Britain and Germany, for-profit and non-profit businesses coevolved with political-economic institutions. Starting in the late eighteenth century, Britain embraced the logic of liberal capitalism, although the path was not smooth. Over the same period, German states balanced both liberal and social-welfare ideals. Social-welfare ideals did not gain support in Britain until the start the twentieth century. The market logic embodied by for-profit businesses was more congruent with liberal capitalism than with social-welfare capitalism, so business corporations thrived more in Britain than in Germany. Yet in both countries, the growing number and power of for-profit businesses created problems for farmers, workers, and small producers. They sought to solve their problems by launching non-profit businesses – co-operatives, mutual-aid societies, and credit co-operatives – combining the ideals of community, enterprise, and self-help. British non-profits gained support from authorities by emphasizing their self-help and enterprise ideals, which were congruent with liberal capitalism, over the community idea, which was not. In contrast, German non-profits gained support by emphasizing all three ideals, as two were congruent with liberal capitalism and all three with social-welfare capitalism. Our analysis reveals how the success of different forms of business, embodying different institutional logics, depends on prevailing political-economic logics. It also shows how the existence and technical success of various organizational forms shapes elites’ perceptions and through them, societal-level logics of capitalism.
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Frank Holzäpfel, Anton Stephan, Tobias Heel and Stephan Körner
From pilot reports, field measurements and numerical simulations, it is known that wake vortices may persist within the glide path in ground proximity, leading to an increased…
Abstract
Purpose
From pilot reports, field measurements and numerical simulations, it is known that wake vortices may persist within the glide path in ground proximity, leading to an increased encounter risk. This paper aims to investigate wake vortex behaviour during final approach and landing to understand why landings can be safe nevertheless. Further, it is investigated whether and to which extent the installation of plate lines beyond the runway tails may further accelerate wake vortex decay and thus improve safety by reducing the number of wake vortex encounters.
Design/methodology/approach
A hybrid numerical simulation approach is used to investigate vortex evolution from roll-up until final decay during the landing manoeuvre. The simulations are complemented by field measurement data accomplished at Munich Airport and at Special Airport Oberpfaffenhofen.
Findings
During touchdown, the so-called end effects trigger pressure disturbances and helical vortex structures that appear to ensure vortex decay rates in ground proximity needed to guarantee the required safety targets of aviation. Light detection and ranging (LIDAR) measurements indicate that vortex decay indeed can be accelerated by a plate line installed on the ground surface. The lifetime of the most safety relevant, long-lived and strongest vortices can be reduced by one-third.
Practical implications
The installation of plate lines beyond the runway tails may improve safety by reducing the number of wake vortex encounters and increase the efficiency of wake vortex advisory systems.
Originality/value
The novel numerical simulation technique and the acquired insights into the wake vortex phenomena occurring during landing as well as the demonstration of the functionality of the patented plate line provide high originality and value for both science and operational application.
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Franz Rumstadt, Dominik K. Kanbach, Josef Arweck, Thomas K. Maran and Stephan Stubner
When CEOs are publicly weighing in on sociopolitical debates, this is known as CEO activism. The steadily growing number of such statements made in recent years has been subject…
Abstract
Purpose
When CEOs are publicly weighing in on sociopolitical debates, this is known as CEO activism. The steadily growing number of such statements made in recent years has been subject to a flourishing academic debate. This field offers first profound findings from observational studies. However, the discussion of CEO activism lacks a thorough theoretical grounding, such as a shared concept accounting for the heterogeneity of sociopolitical incidents. Thus, the aim of this paper is to provide an archetypal framework for CEO activism.
Design/methodology/approach
The authors used a multiple case study approach on 145 activism cases stated by CEOs and found seven distinct statement archetypes.
Findings
The study identifies four main structural design elements accounting for the heterogeneity of activism, i.e. the addressed meta-category of the statement, the targeted outcome, the used tonality and the orientation of the CEOs’ positions. Further, the authors found seven distinguishable archetypes of CEO activism statements: “Climate Alerts”, “Economy Visions”, “Political Comments”, “Self-reflections and Social Concerns”, “Tech Designs”, “Unclouded Evaluations” and “Descriptive Explanations”.
Research limitations/implications
This typology classifies the heterogeneity of CEO activism. It will enable the analysis of interrelationships, mechanisms and motivations on a differentiated level and raise the comprehensibility of research-results.
Practical implications
The framework supports executives in understanding the heterogeneity of CEO activism and to analyse personality-fits.
Originality/value
To the authors’ knowledge, this marks the first conceptualisation of activism developed cross-thematically. The work supports further theory-building on CEO activism.
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Kareem Abdul Waheed, Mohammed Laeequddin and Vinita Sahay
This study investigates the role of mindfulness in the relationship between entrepreneurial intention and behavior.
Abstract
Purpose
This study investigates the role of mindfulness in the relationship between entrepreneurial intention and behavior.
Design/methodology/approach
To investigate the effect of mindfulness on entrepreneurial intention and behavior, we adopt a conceptual framework based on the theory of planned behavior and develop our hypothesis, anticipating that mindfulness has a moderating effect on the entrepreneurial intention–behavior relationship. We conduct an empirical study by administering a survey questionnaire with 329 respondents who attended a training program organized by one of the leading management institutes in India.
Findings
We find a positive effect of entrepreneurial intention and mindfulness on entrepreneurial behavior. Further, mindfulness has a moderating effect on the entrepreneurial intention–behavior relationship.
Research limitations/implications
The study has a few limitations. It was conducted among unemployed youth who participated in a government-sponsored training program for the promotion of entrepreneurship. Although not all the participants in the program were automatically eligible for government funding for starting a business, their entrepreneurial intention–behavior relationship may vary based on their conditions after the training concluded. This study emphasizes only the relationship between mindfulness and entrepreneurial intention behavior, considering EI and well-being implicit in mindfulness. Other contingent factors might also influence the entrepreneurship intention–behavior relationship, but our argument is that, ultimately, all emotional and rational factors can be subordinated to mindfulness. Hence, future research could be carried out to study the effect of mindfulness practice, entrepreneurial intention and the effectiveness of implementation behavior. Further longitudinal studies could be designed to understand how mindfulness training bridges the gap in the entrepreneurial intention–behavior relationship.
Practical implications
Through this study, we offer empirical evidence on the role of mindfulness in moderating the intention–behavior relationship in entrepreneurship. Mindfulness makes people more aware of their internal and external environment when they pay attention with a purpose that helps them to regulate their emotions, cognition, novelty seeking and social contexts to sustain the ups and downs in starting a business.
Originality/value
The findings of the study offer new insights into the nuanced association between entrepreneurial intention and behavior through the lens of mindfulness.
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Radomir Ray Mitic and Hironao Okahana
The purpose of this study is to identify what skills gained during PhD study are linked with preparation and differences between industry and academic positions.
Abstract
Purpose
The purpose of this study is to identify what skills gained during PhD study are linked with preparation and differences between industry and academic positions.
Design/methodology/approach
Using student-level data from nearly 2,400 early career PhD alumni from 50 US PhD granting institutions, this study uses a generalized ordered logit model with partial proportional odds to test the main and conditional effects of 14 areas of skill development on perceptions of career preparation.
Findings
This study contributes empirical evidence to show that research skills and communicating with non-technical audiences are positively linked with job preparation.
Practical implications
The combination of sophisticated research and noncognitive skills promotes the idea of a well-rounded PhD – a highly skilled and versatile researcher that can interact in both academic and industry settings – as a goal of doctoral education. The knowledge gained from this study will assist scholars and graduate educators, including faculty advisors, program directors, graduate deans, graduate education professionals and career development professionals to reconceptualize professional preparation for work in industry.
Social implications
For-profit businesses, particularly start-up companies, are vital for economic development and many require PhD-level employees across research and management roles. Developing PhDs with the appropriate skills for industry will better align higher education and economic interests.
Originality/value
The wide scope of doctoral institutions allows for a quantitative approach not appropriate for single-institution case studies of doctoral career pathways research.