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Full-Text Articles in Business
Is Institutional Ownership Related To Corporate Social Responsibility? The Nonlinear Relation And Its Implication For Stock Return Volatility, Maretno Harjoto, Hoje Jo, Yongtae Kim
Is Institutional Ownership Related To Corporate Social Responsibility? The Nonlinear Relation And Its Implication For Stock Return Volatility, Maretno Harjoto, Hoje Jo, Yongtae Kim
Accounting
This study examines the relation between corporate social responsibility (CSR) and institutional investor ownership, and the impact of this relation on stock return volatility. We find that institutional ownership does not strictly increase or decrease in CSR; rather, institutional ownership is a concave function of CSR. This evidence suggests that institutional investors do not see CSR as strictly value-enhancing activities. Institutional investors adjust their percentage of ownership when CSR activities go beyond the perceived optimal level. Employing the path analysis, we also examine the mediating effect of institutional ownership on the relation between CSR and stock return volatility. We find …
Management Earnings Forecasts And Value Of Analyst Forecast Revisions, Yongtae Kim, Minsup Song
Management Earnings Forecasts And Value Of Analyst Forecast Revisions, Yongtae Kim, Minsup Song
Accounting
This study examines the stock-price reactions to analyst forecast revisions around earnings announcements to test whether preannouncement forecasts reflect analysts' private information or piggybacking on confounding events and news. We find that management earnings forecasts influence the timing and precision of analyst forecasts. More importantly, evidence suggests that prior studies' finding of weaker (stronger) stock-price responses to forecast revisions in the period immediately after (before) the prior-quarter earnings announcement disappears once management earnings forecasts are controlled for. To the extent that management earnings forecasts are public disclosures, our results suggest that the importance of analysts' information discovery role documented in …
Common Auditors In M&A Transactions, Ye Cai, Yongtae Kim, Jong Chool Park, Hal D. White
Common Auditors In M&A Transactions, Ye Cai, Yongtae Kim, Jong Chool Park, Hal D. White
Accounting
We examine merger and acquisition (M&A) transactions in which the acquirer and the target share a common auditor. We predict that a common auditor can help merging firms reduce uncertainty throughout the acquisition process, which allows managers to more efficiently allocate their capital, resulting in higher quality M&As. Consistent with our prediction, we find that deals with common auditors have higher acquisition announcement returns than do non-common-auditor deals. Further, we find that the common-auditor effect is more pronounced for deals with greater pre-acquisition uncertainty and deals involving acquirers and targets that are audited by the same local office of the …
Ceo Equity Incentives And Audit Fees, Yongtae Kim, Haidan Li, Siqi Li
Ceo Equity Incentives And Audit Fees, Yongtae Kim, Haidan Li, Siqi Li
Accounting
This study examines whether CEO equity incentives have an impact on audit pricing. Prior studies investigate whether CEO equity incentives motivate executives to manage earnings for personal financial gains. Our focus is on whether auditors perceive CEO equity incentives to be associated with greater earnings manipulation risk and incorporate such risk in their pricing decisions. We find that CEO equity portfolio vega is positively related to audit fees after controlling for other determinants of audit fees, while equity portfolio delta is not significantly related to audit fees. This result holds after we account for potential endogeneity. The evidence suggests that …