Malcolm Smith, Anita Jamil, Yang Chik Johari and Syahrul Ahmar Ahmad
The obfuscation hypothesis suggests that under‐performing firms will tend to obscure the meaning of their corporate narratives by deliberately adopting a textual complexity, most…
Abstract
Purpose
The obfuscation hypothesis suggests that under‐performing firms will tend to obscure the meaning of their corporate narratives by deliberately adopting a textual complexity, most readily apparent through poor readability and the use of unnecessarily difficult language. This paper seeks to add to the literature in the area by comparing the textual complexity of corporate narratives, notably the chairman's statement, of main board and second board companies on the Bursa Malaysia (formerly known as the Kuala Lumpur Stock Exchange), with their financial performance, and also to examine the impact of company size, board membership and degree of statutory regulation on the readability of corporate narratives.
Design/methodology/approach
Following the existing literature this paper uses readability as a proxy for textual complexity, in addition to more direct measures, and seeks to examine relationships between textual complexity and various measures of financial performance.
Findings
The findings suggest that there are significant relationships between corporate language and financial performance, but that these are not consistent with the obfuscation hypothesis.
Originality/value
The findings are consistent with the suggestion that increased regulation and statutory monitoring of disclosures are associated with improved readability of narrative. They do not provide support for the obfuscation hypothesis.
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Afred Suci, Sri Maryanti, Hardi Hardi and Nining Sudiar
This paper investigates how to design traditional ready-to-eat food packaging by manipulating its shape, font and slogan to promote consumer buying intention and willingness to…
Abstract
Purpose
This paper investigates how to design traditional ready-to-eat food packaging by manipulating its shape, font and slogan to promote consumer buying intention and willingness to pay (WTP).
Design/methodology/approach
Two package designs, interplaying the square shapes (vertical vs horizontal), font formality (formal vs less formal/casual) and slogans (ethno-positioning vs short and catchy), were created and tested in an online experiment with 483 participants.
Findings
The results revealed that the differed package designs elicited relatively equal levels of attractiveness to consumers and their buying intentions. However, the designs significantly differentiated consumers' WTP. The results further show the significant direct and indirect effects on WTP of packaging attractiveness when it is moderated by package designs and mediated by buying intention. However, the varied package designs did not have significant direct or indirect impacts on WTP when mediated by packaging attractiveness and buying intention.
Practical implications
The vertical square-shaped packaging, written in a less formal font and highlighting a short and catchy slogan, is more financially promising for marketers to get a better price for local food products perceived as hedonic and bought impulsively on casual occasions. Furthermore, besides prominent package design elements such as font, color, size, material and picture, packaging designers or marketing practitioners should consider other supporting factors, such as shelf efficiency.
Originality/value
This study complements existing studies of “cue utilization theory” and “packaging design theory” by demonstrating the importance of extrinsic packaging cues, such as shape, font style and slogan, in improving consumers' WTP for traditional food products. The study also fills some gaps in the literature by exploring the direct, mediating and moderating relationships between package design, packaging attractiveness, buying intention and WTP, especially in an emerging market such as Indonesia.
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Tamanna Dalwai, Gopalakrishnan Chinnasamy and Syeeda Shafiya Mohammadi
The readability of annual reports is an important feature that determines the quality of communication between a firm and its stakeholders. Extant literature has demonstrated that…
Abstract
Purpose
The readability of annual reports is an important feature that determines the quality of communication between a firm and its stakeholders. Extant literature has demonstrated that readability characteristics of annual reports are crucial in facilitating the investor's ability to process and analyze information, resulting in higher firm performance and lower agency costs. This study examines the relationship between annual report readability, agency costs and the firm performance of listed financial sector companies in Oman.
Design/methodology/approach
Using a sample of 150 firm-year observations of listed financial sector companies on the Muscat Securities Market (MSM) over the period 2014 to 2018, a panel regression analysis is used, along with the system generalized method of moments (GMM) estimation to address endogeneity concerns. The readability of annual reports is proxied by the length of the annual report, the Flesch reading ease and the Flesch–Kincaid index.
Findings
The ordinary least squares (OLS) results suggest that readability proxied by the length of the annual report has no significant relationship with agency cost, return on assets (ROA) or stock returns. The OLS results are confirmed through the system GMM estimation model for agency costs, Tobin's Q and stock returns. Easier-to-read annual reports measured by the Flesch reading ease demonstrate high asset utilization ratio and Tobin's Q. These results emphasize Flesch reading ease measure in explaining the economic significance of agency cost and Tobin's Q. In contrast, difficult-to-read annual reports are observed for firms with high ROA.
Research limitations/implications
The study is limited to the financial sector. Its generalizability could be extended to a similar sector or countries with features similar to Oman. Future studies on readability could be extended to other sectors of Oman, and financial firms with easier-to-read annual reports show a high Tobin's Q, which reflects the confidence of investors in the stock market. These findings may encourage policymakers to regulate the readability features of annual reports and influence the reporting quality of financials and disclosures also including cross-country comparisons.
Practical implications
Financial firms with easier-to-read annual reports show a high Tobin's Q, which reflects the confidence of investors in the stock market. These findings may encourage policymakers to regulate the readability features of annual reports and influence the reporting quality of financials and disclosures.
Originality/value
While the study extends prior literature on readability, agency costs and firm performance, it is also one of the first to examine the financial sector of an emerging country, namely, Oman. The study supports the obfuscation hypothesis through the association of readability measure with agency cost. Unlike prior research that has focused on common computational linguistic literature, this study uses three proxies for readability to assess information quality.
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Afzaal Ali, Mehkar Sherwani, Adnan Ali, Zeeshan Ali and Mariam Sherwani
This paper aims to apply the concept of traditional branding constructs, i.e. brand image, brand perceived quality, brand satisfaction, brand trust and brand loyalty to a less…
Abstract
Purpose
This paper aims to apply the concept of traditional branding constructs, i.e. brand image, brand perceived quality, brand satisfaction, brand trust and brand loyalty to a less explored field of halal brand products – halal brand image, halal brand perceived quality, halal brand satisfaction, halal brand trust and halal brand loyalty. Second, the present research is an effort to empirically validate the interrelationships among branding constructs such as brand image, brand perceived quality, brand satisfaction, brand trust and brand loyalty in a holistic framework to confirm whether these branding constructs also work for the halal brand in the same way to gauge Chinese Muslims consumers’ purchasing intentions.
Design/methodology/approach
This research used cross-sectional data from 481 Chinese Muslim students at 9 universities located in 3 cities of China through face-to-face and online survey methods. Data were collected from the consumers of halal milk brand. A theoretical model with the hypothesized relationships was tested with the help of the structural equation modelling procedure.
Findings
The results suggest that halal brand image has a significant and positive influence on the halal brand perceived quality, halal brand satisfaction, halal brand trust and halal brand loyalty. Similarly, the halal brand perceived quality, halal brand satisfaction, halal brand trust and halal brand loyalty significantly influence consumer halal brand purchase intention.
Research limitations/implications
This study is conducted in the halal food sector of China and specific religious and migration contexts. Further investigations of the halal food purchasing behaviour of local Muslims, as well as international Muslim students in those Western countries which are famous destinations for international students for education, could yield varying results.
Practical implications
The outcomes achieved are helpful for commerce and government organizations for policy development to better meet the burgeoning demand for halal products by Chinese Muslims. These are also very helpful for producers and exporters who intend to penetrate the halal market in non-Muslim-dominant countries such as China.
Originality/value
Studies on understanding Muslim consumers’ purchasing behaviours in non-Muslim countries are limited. Given the fact, numbers of Muslims seem a smaller amount of China’s total population, but their total numbers are large compared with total numbers in many Muslim countries. Therefore, understanding their purchasing behaviours for halal products and influential determinants concerning such purchasing behaviours adds to the literature and helps the industry to better serve and capitalise on the growing market.