35 results on '"Seraina C. Anagnostopoulou"'
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2. Accrual-based and real earnings management before and after IFRS adoption : The case of Greece
- Author
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Aikaterini C. Ferentinou and Seraina C. Anagnostopoulou
- Published
- 2016
- Full Text
- View/download PDF
3. The impact of human resource practices on corporate investment efficiency
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Seraina C. Anagnostopoulou and Argyro Avgoustaki
- Subjects
Economics and Econometrics ,Finance - Published
- 2023
4. Enhancement in a firm's information environment via options trading and the efficiency of corporate investment
- Author
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Seraina C. Anagnostopoulou, Lenos Trigeorgis, and Andrianos E. Tsekrekos
- Subjects
Economics and Econometrics ,Finance - Published
- 2023
5. Financial Reporting Quality, Investment Efficiency, and the Country-Level Strength of Institutional Enforcement
- Author
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Seraina C. Anagnostopoulou
- Published
- 2022
6. Accounting Comparability between M&A Bidders and Targets and Deal Outcome University of Oxford
- Author
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Seraina C. Anagnostopoulou and Andrianos E. Tsekrekos
- Published
- 2022
7. Online Appendix for: The Real Consequences of Classification Shifting: Evidence from the Efficiency of Corporate Investment
- Author
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Seraina C. Anagnostopoulou and Kamran Malikov
- Subjects
History ,Polymers and Plastics ,Business and International Management ,Industrial and Manufacturing Engineering - Published
- 2022
8. Discussion of 'Related-Party Transactions and Stock Price Crash Risk: Evidence from China' by Ahsan Habib, Haiyan Jiang, and Donghua Zhou
- Author
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Seraina C. Anagnostopoulou
- Subjects
Financial economics ,Economics ,Crash risk ,China ,Stock price - Published
- 2021
9. Earnings Management by Classification Shifting and IPO Survival
- Author
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Dimitrios Gounopoulos, Kamran Malikov, Hang Pham, and Seraina C. Anagnostopoulou
- Subjects
040101 forestry ,Economics and Econometrics ,050208 finance ,Strategy and Management ,Corporate governance ,media_common.quotation_subject ,05 social sciences ,Survivability ,04 agricultural and veterinary sciences ,Core (game theory) ,Earnings management ,0502 economics and business ,Agency (sociology) ,0401 agriculture, forestry, and fisheries ,Profitability index ,Quality (business) ,Business ,Business and International Management ,Classification shifting ,Initial public offering ,Finance ,Industrial organization ,media_common - Abstract
The study examines the effect of earnings management by classification shifting on firm success, focusing on the survival of newly listed firms. We argue that shifting income-decreasing expenses from core to special items should negatively associate with future operating performance because of improper signaling of actual repeatable core profitability. We find that classification shifting strongly and negatively affects future Initial Public Offering (IPO) success and survival. We further identify the economic mechanisms that drive this finding and observe that our results are mitigated when the quality of external corporate governance alleviating agency concerns is stronger, also for IPO firms operating within stronger business contexts. Therefore, in an environment that facilitates firm survivability, the existence of weaker than reported sustainable performance may not end up materializing in the form of lower firm survivability as these factors aid firms' continuing operations from a business perspective. Our findings provide evidence of the longer-term implications of a method of earnings management that has long been considered “soft” and without any longer-term reversing consequences.
- Published
- 2021
10. Earnings management in public healthcare organizations: the case of the English NHS hospitals
- Author
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Seraina C. Anagnostopoulou and Charitini Stavropoulou
- Subjects
Government ,Financial performance ,Public Administration ,Sociology and Political Science ,Earnings ,business.industry ,05 social sciences ,Foundation (evidence) ,Accounting ,050201 accounting ,General Business, Management and Accounting ,Public healthcare ,0506 political science ,Earnings management ,RA0421 ,0502 economics and business ,Health care ,050602 political science & public administration ,HD28 ,Business ,Finance ,health care economics and organizations - Abstract
\ud This paper explores whether NHS hospitals in England managed their earnings upward before applying to the government for foundation trust (FT) status—a scheme that allowed them greater financial freedom and management autonomy—in order to present an overly positive picture and increase their chances for a successful application. The paper shows that NHS FTs adjusted discretionary accruals upward for up to two years before applying for FT status. This practice was negatively associated with their future financial performance. Our study contributes to the growing literature on earnings management in the healthcare sector, by taking an event-study approach applied to this sector when significant institutional changes take place.\ud \ud IMPACT\ud This analysis shows that prospective English NHS foundation trusts (FTs), in anticipation of institutional reforms granting them significant freedoms, engaged in income-increasing earnings management more intensely than did NHS trusts that never attained this status. The authors also provide evidence that earnings management is associated, at least partly, with the future underperformance of NHS FTs, confirming an untested hypothesis in the literature. Hence, incentives that the state provides to public organizations can have a significant effect on their behavior—much like in the private sector. The authors call for improved incentive designs by standard-setting (for example CIPFA) and regulatory bodies to prevent unintended consequences in the process of designing optimal healthcare policies.
- Published
- 2021
11. Classification shifting and efficiency of corporate investment
- Author
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Seraina C. Anagnostopoulou and Kamran Malikov
- Subjects
History ,Profit (accounting) ,Polymers and Plastics ,media_common.quotation_subject ,Audit ,Investment (macroeconomics) ,Industrial and Manufacturing Engineering ,Microeconomics ,Information asymmetry ,Earnings management ,Capital (economics) ,Income statement ,Quality (business) ,Business ,Business and International Management ,health care economics and organizations ,media_common - Abstract
This study investigates into the real consequences of earnings management by classification shifting via examining its effect on corporate investment efficiency. The underlying expectation is that the way of reporting different items of profit within the income statement should induce information asymmetry between managers and the capital providers about the level of core, and so more likely repeatable, firm performance, and therefore deteriorate the informational environment of firms and associate with efficiency in firm-level investment. We find that classification shifting strongly and positively associates with both over- and under-investment. Investigating into the economic mechanisms through which classification shifting affects efficiency in investment, our results are more pronounced when other information and agency problem-related factors that should protect from inefficient investing are weaker, namely for firms facing greater financial constraints, firms with greater pre-existing information asymmetry and lower auditor quality, and also when opportunistic special items, levels of unexpected investment, and investment opacity are higher. Our study provides evidence on the adverse real consequences of classification shifting, representing a form of earnings management typically considered as relatively innocuous and without any bottom-line performance reversing effects, with reference to a very important firm-level outcome, as is efficiency in investment.
- Published
- 2021
12. Options Trading Activity and the Efficiency of Corporate Investment
- Author
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Seraina C. Anagnostopoulou, Andrianos E. Tsekrekos, and Lenos Trigeorgis
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History ,ComputingMilieux_THECOMPUTINGPROFESSION ,Polymers and Plastics ,Moral hazard ,Agency cost ,Investment (macroeconomics) ,Industrial and Manufacturing Engineering ,Skills management ,Investment decisions ,Information asymmetry ,Capital (economics) ,Derivatives market ,Business ,Business and International Management ,Industrial organization - Abstract
We examine the relation of active options market trading and the (in)efficiency of corporate investment in terms of deviation from optimal investment levels. Past research considers the volume of options trading as contributing to firms’ informational efficiency. Investment efficiency is partly driven by information asymmetries between firm managers and capital providers, aggravating moral hazard concerns. We test whether the enhancement in firms’ information environment associated with higher volume of options trading activity is positively related to optimizing investment at the firm level. Our results indicate that the volume of options trading by firms is positively and significantly associated with firm-level investment efficiency. This relation is associated with the enhancement in the firms’ information environment stemming from active options trading. Overall, our findings suggest that the managerial skills associated with active trading in derivatives markets also benefit firms’ investment decisions through enhancing the optimal allocation of firm resources and investment efficiency.
- Published
- 2021
13. Online Appendix for: 'Options Trading Activity and the Efficiency of Corporate Investment'
- Author
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Seraina C. Anagnostopoulou, Lenos Trigeorgis, and Andrianos E. Tsekrekos
- Published
- 2021
14. Accounting Quality, Investment Efficiency, and the Country-Level Strength of Institutional Enforcement
- Author
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Seraina C. Anagnostopoulou
- Subjects
History ,Polymers and Plastics ,Moral hazard ,business.industry ,media_common.quotation_subject ,Adverse selection ,Accounting ,Sample (statistics) ,Investment (macroeconomics) ,Industrial and Manufacturing Engineering ,Information asymmetry ,Capital (economics) ,Quality (business) ,Business ,Business and International Management ,Enforcement ,media_common - Abstract
This study examines the extent to which the effect of firm-level accounting quality on corporate investment efficiency differs across jurisdictions with differential strength of institutional and regulatory enforcement. Institutional enforcement is expected to mitigate adverse selection and moral hazard concerns which drive inefficient investment, in the same way as firm-specific financial reporting quality has been shown to do by previous research within the single-country setting. Using a sample of mandatory IFRS adopters from 25 countries, findings first indicate a significantly negative association between accounting quality and both over- and under-investment, which strongly holds regardless of the institutional characteristics of a country. However, this negative association becomes more pronounced when the level of institutional enforcement is weaker and less effective in a country, consistent with firm-specific reporting quality increasing importance as country-level regulatory enforcement worsens. This evidence indicates that when the effectiveness of institutional enforcement in a country does not successfully alleviate information asymmetries, and does not facilitate the efficient monitoring of corporate insiders by capital providers, there is greater need for firm-specific accounting quality to perform this function and promote efficient investing.
- Published
- 2021
15. The impact of online reputation on hotel profitability
- Author
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Eleftherios G. Manousakis, Andrianos E. Tsekrekos, Seraina C. Anagnostopoulou, Dimitrios Buhalis, and Ioanna Kountouri
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business.industry ,Level of service ,media_common.quotation_subject ,Hospitality industry ,Tourism, Leisure and Hospitality Management ,Financial analysis ,Revenue ,Customer satisfaction ,Strategic management ,Profitability index ,Marketing ,business ,Reputation ,media_common - Abstract
Purpose The purpose of this study is to quantify the impact of online customer reputation on financial profitability. Design/methodology/approach Online reputation is captured by extracting the most recurring textual themes associated with customer satisfaction and dissatisfaction, expressed within positive vs negative online guest reviews on Booking.com. Latent semantic analysis is used for textual analysis. Proxies of overall financial performance are manually constructed for the sample hotels, using financial data from the Financial Analysis Made Easy (FAME) database. Ordinary least squares is used to gauge the effect of online customer reputation on financial profitability. Findings Empirical findings indicate that recurring textual themes from positive online reviews (in contrast to negative reviews) exhibit a higher degree of homogeneity and consensus. The themes repeated in positive, but not in negative reviews, are found to significantly associate with hotel financial performance. Results contribute to the discussion about the measurable effect of online reputation on financial performance. Originality/value Contemporary quantitative methods are used to extract online reputation for a sample of UK hotels and associate this reputation with bottom-line financial profitability. The relationship between online reputation, as manifested within hotel guest reviews, and the financial performance of hotels is examined. Financial profitability is the result of revenues, reduced by the costs incurred in order to be able to offer a given level of service. Previous studies have mainly focused on basic measures of performance, i.e. revenue generation, rather than bottom-line profitability. By combining online guest reviews from travel websites (Booking.com) with financial measures of enterprise performance (FAME), this study makes a meaningful contribution to the strategic management of hotel businesses.
- Published
- 2020
16. Accounting Conservatism and Corporate Social Responsibility
- Author
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Seraina C. Anagnostopoulou, Georgios Voulgaris, and Andrianos E. Tsekrekos
- Subjects
Reverse causality ,business.industry ,Instrumental variable ,Equity (finance) ,Accounting ,Sample (statistics) ,Conservatism ,Accounting conservatism ,Negatively associated ,Capital (economics) ,Corporate social responsibility ,Business ,Endogeneity - Abstract
We examine the association between accounting conservatism, expressed in the form of asymmetric timeliness of recognition of economic gains and losses, and corporate social responsibility (CSR). We provide evidence that, under unfavorable macroeconomic conditions and financial constraints, as well as increased levels of outside pressure from debtholders and equity holders, catering for capital providers through conservative reporting becomes a managerial priority over engagement in CSR. Our results overall indicate that, for our whole sample period (starting in the early 2000s), higher levels of conservatism are negatively associated with a CSR orientation shown by firms; however, our analysis also indicates a significant reversing trend regarding the effect of conservatism on CSR, coinciding with the post-financial-crisis period. The findings are robust to a number of specifications and tests, including the use of an instrumental variable approach explicitly addressing endogeneity biases related to reverse causality concerns. Our study suggests that, under monitoring pressure from financial stakeholders, firms prioritize commitment to accounting conservatism over the needs of non-financial stakeholders and other interest groups.
- Published
- 2020
17. Firm Efforts to Improve Employee Quality and Corporate Investment Efficiency
- Author
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Beatriz García Osma, Argyro Avgoustaki, and Seraina C. Anagnostopoulou
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Human resource management system ,History ,Polymers and Plastics ,business.industry ,media_common.quotation_subject ,Principal–agent problem ,Investment (macroeconomics) ,Outcome (game theory) ,Industrial and Manufacturing Engineering ,Shareholder ,Cash ,Quality (business) ,Business ,Business and International Management ,Human resources ,Industrial organization ,media_common - Abstract
Using agency theory, in this study we examine the effect of systems of human resource practices on investment efficiency, where investment takes the form of purchase of buildings or plants, investments in R&D and acquisitions. We argue that employees at all levels of an organization play a significant role in efficient corporate investment. Thus, human resource systems aimed at improving employee quality should be associated with efficient corporate investment. However, the outcome of such systems can be controversial, as they are often ineffective, costly, have dis-synergies and deprive other types of investments of funding, which could lead to deviations from optimal investment. Using U.S. firms for the period 2002-2016, our findings reveal that systems of human resource practices are negatively associated with investment efficiency, inducing both over- and under-investment. Results are driven mainly by an HR system with a more direct cash cost, and are more pronounced with respect to investments in R&D and acquisitions. Overall, our findings are consistent with human resource systems not aligning employees’ and shareholders’ interests, with consequences for investment efficiency.
- Published
- 2020
18. Accounting quality, information risk and the term structure of implied volatility around earnings announcements
- Author
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Seraina C. Anagnostopoulou and Andrianos E. Tsekrekos
- Subjects
Earnings response coefficient ,050208 finance ,Earnings ,business.industry ,05 social sciences ,Accounting ,050201 accounting ,Factor analysis of information risk ,Implied volatility ,0502 economics and business ,Accounting information system ,Volatility smile ,Economics ,Business, Management and Accounting (miscellaneous) ,Trading strategy ,Volatility (finance) ,business ,Finance - Abstract
We examine the association between accounting quality, which is used as a proxy for firm information risk, and the behavior of the term structure of implied option volatility around earnings announcements. By employing a large sample of US firms having options traded on their equity during 1996–2010, we find that lower (higher) accounting quality is significantly associated with stronger (weaker) changes in the steepness of the term structure of implied volatility curve around quarterly earnings announcements. This finding (which is robust to controls for business-stemming uncertainty regarding future firm performance) is consistent with a stronger differential of short vs. long-term uncertainty for higher information risk firms, indicating greater uncertainty on the future economic performance of poorer vs. stronger accounting quality firms. We also establish the trading implications of these findings by demonstrating a (profitable in-sample) self-financed option trading strategy that is based on the quality of the accounting information released on earnings announcement days.
- Published
- 2017
19. Accounting Quality and Loan Pricing: The Effect of Cross-country Differences in Legal Enforcement
- Author
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Seraina C. Anagnostopoulou
- Subjects
050208 finance ,business.industry ,media_common.quotation_subject ,05 social sciences ,Accounting ,050201 accounting ,Participation loan ,Loan ,Bridge loan ,0502 economics and business ,Credibility ,Quality (business) ,business ,Non-performing loan ,Enforcement ,Financial statement ,media_common - Abstract
This study examines whether the strength of legal enforcement at the country level plays a role in the value-relevance of accounting quality for loan pricing determination, using an international sample of firms reporting under IFRS. The underlying hypothesis is that stronger vs. weaker enforcement should affect the informativeness of financial statements, due to their increased credibility, and thus results in a stronger influence of accounting quality on loan pricing, in case this information is considered more reliable by potential lenders. Evidence indicates that accounting quality is consequential for the determination of loan spread only in combination with the level of legal enforcement, and this only holds for the countries with stronger legal enforcement. This evidence indicates that financial statement quality information is value-relevant and has a significant impact on the determination of loan pricing only if this information is considered to be credible enough by loan providers in a country, and this is the case when legal enforcement is stronger.
- Published
- 2017
20. Response to Discussion of 'Accounting Quality and Loan Pricing: The Effect of Cross-country Differences in Legal Enforcement'
- Author
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Seraina C. Anagnostopoulou
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Finance ,050208 finance ,Cross country ,business.industry ,media_common.quotation_subject ,05 social sciences ,Accounting ,050201 accounting ,Loan ,0502 economics and business ,Quality (business) ,Enforcement ,business ,media_common - Published
- 2017
21. The Effect of Classification Shifting on Firm Success
- Author
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Kamran Malikov, Hang Pham, Dimitrios Gounopoulos, and Seraina C. Anagnostopoulou
- Subjects
Core (game theory) ,Earnings management ,media_common.quotation_subject ,Corporate governance ,Agency (sociology) ,Survivability ,Profitability index ,Quality (business) ,Business ,Initial public offering ,Industrial organization ,media_common - Abstract
The study examines the effect of earnings management by classification shifting on firm success, focusing on the survival of newly listed firms. We argue that shifting income-decreasing expenses from core to special items should negatively associate with future operating performance because of improper signaling of actual repeatable core profitability. We find that classification shifting strongly and negatively affects future Initial Public Offering (IPO) success and survival. We further identify the economic mechanisms that drive this finding and observe that our results are mitigated when the quality of external corporate governance alleviating agency concerns is stronger, also for IPO firms operating within stronger business contexts. Therefore, in an environment that facilitates firm survivability, the existence of weaker than reported sustainable performance may not end up materializing in the form of lower firm survivability as these factors aid firms’ continuing operations from a business perspective. Our findings provide evidence of the longer-term implications of a method of earnings management that has long been considered “soft” and without any longer-term reversing consequences.
- Published
- 2019
22. The effect of financial leverage on real and accrual-based earnings management
- Author
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Seraina C. Anagnostopoulou and Andrianos E. Tsekrekos
- Subjects
Labour economics ,050208 finance ,Scrutiny ,Leverage (finance) ,Earnings ,Accrual ,media_common.quotation_subject ,05 social sciences ,050201 accounting ,Monetary economics ,Earnings management ,Accounting ,Debt ,0502 economics and business ,Substitution effect ,Business ,Finance ,media_common - Abstract
Past research has documented a substitution effect between real earnings management (RM) and accrual-based earnings management (AM), depending on relative costs. This study contributes to this research by examining whether levels of (and changes in) financial leverage have an impact on this empirically documented trade-off. We hypothesise that in the presence of high leverage, firms that engage in earnings manipulation tactics will exhibit a preference for RM due to a lower possibility – and subsequent costs – of getting caught. We show that leverage levels and increases positively and significantly affect upward RM, with no significant effect on income-increasing AM, while our findings point towards a complementarity effect between unexpected levels of RM and AM for firms with very high leverage levels and changes. This is interpreted as an indication that high leverage could attract heavy outsider scrutiny, making it necessary for firms to use both forms of earnings management in order to achieve earnin...
- Published
- 2016
23. Bank loan terms and conditions: Is there a macro effect?
- Author
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Konstantinos Drakos and Seraina C. Anagnostopoulou
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040101 forestry ,050208 finance ,Actuarial science ,business.industry ,education ,05 social sciences ,04 agricultural and veterinary sciences ,Monetary economics ,Participation loan ,Loan ,Bridge loan ,0502 economics and business ,Economics ,0401 agriculture, forestry, and fisheries ,Business, Management and Accounting (miscellaneous) ,Macro ,Non-conforming loan ,Non-performing loan ,business ,health care economics and organizations ,Finance - Abstract
We examine whether macroeconomic factors contain significant information for bank loan contracting terms and conditions (T&Cs), over and above that of standard firm-specific or country-level institutional factors. Our estimation is based on a seemingly unrelated mixed-processes methodology that accommodates two salient data properties: (i) the fact that loan contract terms are determined jointly as a single lending contract, and (ii) the fact that the elements of loan T&Cs are generated by different distributional formats. Our findings indicate that cross-country variation accounts for a significant portion of observed variation in loan T&Cs. In addition, macroeconomic fundamentals significantly explain the “package” of loan T&Cs offered to corporate borrowers, with this effect being distinct from any influence that T&Cs receive from firm-specific factors, and also from country-specific institutional factors.
- Published
- 2016
24. The Options Market Reaction to Bank Loan Announcements
- Author
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Seraina C. Anagnostopoulou, Andrianos E. Tsekrekos, Panagiotis A. Tsaousis, and Aikaterini C. Ferentinou
- Subjects
040101 forestry ,Economics and Econometrics ,050208 finance ,Cross-collateralization ,education ,05 social sciences ,Financial system ,04 agricultural and veterinary sciences ,Implied volatility ,Shareholder loan ,Term loan ,Loan ,Accounting ,0502 economics and business ,Volatility smile ,0401 agriculture, forestry, and fisheries ,Business ,Fixed interest rate loan ,Non-performing loan ,health care economics and organizations ,Finance - Abstract
In this study, we examine the options market reaction to bank loan announcements for the population of US firms with traded options and loan announcements during 1996–2010. We get evidence on a significant options market reaction to bank loan announcements in terms of levels and changes in short-term implied volatility and its term structure, and observe significant decreases in short-term implied volatility, and significant increases in the slope of its term structure as a result of loan announcements. Our findings appear to be more pronounced for firms with more information asymmetry, lower credit ratings and loans with longer maturities and higher spreads. Evidence is consistent with loan announcements providing reassurance for investors in the short-term, however, over longer time horizons, the increase in the TSIV slope indicates that investors become increasingly unsure over the potential risks of loan repayment or uses of the proceeds.
- Published
- 2016
25. Accrual-based and real earnings management before and after IFRS adoption
- Author
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Aikaterini C. Ferentinou and Seraina C. Anagnostopoulou
- Subjects
050208 finance ,Actuarial science ,business.industry ,International accounting ,Accrual ,05 social sciences ,Accounting ,050201 accounting ,International Financial Reporting Standards ,Earnings management ,0502 economics and business ,Production (economics) ,Cash flow ,Financial accounting ,business - Abstract
Purpose – The purpose of this study is to examine the use of accrual-based vs real earnings management (EM) by Greek firms, before and after the mandatory adoption of International Financial Reporting Standards (IFRS). The research is motivated by the fact that past studies have indicated the existence of significant levels of EM for Greece in particular before IFRS. Design/methodology/approach – Accrual-based earnings management (AEM) is examined by assessing performance-adjusted discretionary accruals, while real earnings management (REM) is defined in terms of abnormal levels of production costs, discretionary expenses, and cash flows from operations, for a three-year period before and after the adoption of IFRS in 2005. Findings – The authors find evidence on a statistically significant shift from AEM to REM after the adoption of IFRS, indicating the replacement of one form of EM with the other. Research limitations/implications – The validity of the results depends on the ability of the empirical models used to efficiently capture the existence of AEM and REM. Practical implications – IFRS adoption aims to improve accounting quality, especially in countries with high need for such an improvement; however, the tendency to substitute one form of EM with another highlights unintended consequences of IFRS adoption, which do not improve the informational content of financial statements if EM continues under different forms. Originality/value – Under the expectation that IFRS adoption should lead to improvements in accounting quality, this study examines whether IFRS actually led to a reduction of EM practices for a country with exceptionally high levels of EM before IFRS, by accounting for all possible forms of EM.
- Published
- 2016
26. Earnings management in firms seeking to be acquired
- Author
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Seraina C. Anagnostopoulou and Andrianos E. Tsekrekos
- Subjects
Labour economics ,ComputingMilieux_THECOMPUTINGPROFESSION ,Earnings management ,Earnings ,Order (business) ,Accrual ,Accounting ,Mergers and acquisitions ,Sample (statistics) ,Business ,Empirical evidence ,Preference - Abstract
Empirical evidence regarding accrual-based earnings management around mergers and acquisitions has been setting-specific as far as target firms are concerned. This might be due to the fact that target firms cannot always anticipate an acquisition proposal, and thus lack the motive and the time necessary to manage their earnings in order to facilitate or impede the deal. In this paper, we provide clear evidence of downward earnings management by a sample of target firms that have both time and motive to engage in such actions. These are firms that publicly announce their intention to be acquired. Publicly ‘seeking a buyer’ represents a rather unusual corporate event, and we find that these firms engage in downward earnings management in the years surrounding the ‘announcement year’. To some extent, this result is explained by overrepresentation of low performance and growth among these firms, and it can be interpreted under alternative explanations. Furthermore, we show that such downward earnings management negatively affects the probability for a ‘seeking buyer’ firm to secure an acquisition within a reasonable amount of time, a possible indication of efficient diligence by prospective buyers having a preference for firms ‘seeking buyer’ with no informationally obscure earnings.
- Published
- 2015
27. Accounting quality, information risk and implied volatility around earnings announcements
- Author
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Seraina C. Anagnostopoulou and Andrianos E. Tsekrekos
- Subjects
Earnings response coefficient ,Economics and Econometrics ,Earnings ,business.industry ,media_common.quotation_subject ,Equity (finance) ,Accounting ,Factor analysis of information risk ,Implied volatility ,Economics ,Quality (business) ,business ,Proxy (statistics) ,Quality information ,Finance ,media_common - Abstract
We examine the impact of accounting quality, used as a proxy for information risk, on the behavior of equity implied volatility around quarterly earnings announcements. Using US data during 1996-2010, we observe that lower (higher) accounting quality significantly relates to higher (lower) levels of implied volatility (IV) around announcements. Worse accounting quality is further associated with a significant increase in IV before announcements, and is found to relate to a larger resolution in IV after the announcement has taken place. We interpret our findings as indicative of information risk having a significant impact on implied volatility behavior around earnings announcements.
- Published
- 2015
28. Do firms that wish to be acquired manage their earnings? Evidence from major European countries
- Author
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Andrianos E. Tsekrekos and Seraina C. Anagnostopoulou
- Subjects
Competition (economics) ,Economics and Econometrics ,Earnings management ,Earnings ,Accrual ,Stock exchange ,Control (management) ,Perfect competition ,Context (language use) ,Monetary economics ,Business ,Finance - Abstract
In this paper, we examine whether findings on downward accrual-based earnings management for firms publicly ‘seeking a buyer’ from the US can be extrapolated outside of the US context, given that past research has indicated that the function of the Merger and Acquisition (M&A) markets is highly dependent on the degree of competition in a country. We test for the existence of earnings management (EM) around such events for firms listed in the largest European stock exchanges between 2000 and 2009, and get evidence that downward earnings management around ‘seeking buyer’ announcements more strongly holds for the country with the most competitive market for corporate control in our sample, that is the UK. We consider this finding indicative of the fact that a competitive M&A environment may induce earnings management-prone behavior. We further testify significantly positive abnormal returns around ‘seeking buyer’ announcements for firms from the UK, but limited such evidence for the other countries, a finding we also attribute to differences in competition and uneven split of benefits among bidders and targets in M&A markets. Finally, we find that EM positively affects abnormal returns around ‘seeking buyer’ announcements, indicating that market participants tend to compensate for upward EM, regardless of the degree of competition of the M&A market of a country.
- Published
- 2013
29. Does the Capitalization of Development Costs Improve Analyst Forecast Accuracy? Evidence from the UK
- Author
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Seraina C. Anagnostopoulou
- Subjects
Actuarial science ,Earnings ,business.industry ,Accounting ,Market efficiency ,Business, Management and Accounting (miscellaneous) ,Business ,Finance ,Capitalization - Abstract
It has been documented that investments in Research and Development (RD hence, is informative for users of financial statements. Increased informativeness is expected to have repercussions for the effectiveness with which analysts produce earnings forecasts, and, as a result, market efficiency.
- Published
- 2010
30. R&D and performance persistence: Evidence from the United Kingdom
- Author
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Seraina C. Anagnostopoulou and Mario Levis
- Subjects
Actuarial science ,Economics ,Gross income ,Sample Median ,Demographic economics ,Excess return ,Stock (geology) ,Valuation (finance) - Abstract
There is compelling evidence from both the United States and United Kingdom suggesting that R&D investment is positively related to operating and/or market performance. This study extends prior research on R&D and valuation by further examining the sustainability or persistence of operating growth and market performance as a result of R&D investments. We use a large dataset of U.K. companies during the period 1990–2003 and our findings confirm the relation between R&D intensity and consistent growth in Sales and Gross Income, but only in the cases when a firm needs to engage in R&D activity because of the industry in which it operates. Moreover, our evidence indicates not only a positive relation between R&D intensity and subsequent risk-adjusted excess returns among firms that engage in R&D as testified by prior literature, but we also show that R&D intensity improves persistence in excess stock returns: the highest R&D-intensity firms are found to earn higher risk-adjusted excess returns more consistently than the sample median return, compared to lower R&D-intensity firms, as well as firms with no R&D. We interpret this finding as consistent with at least some form of market mispricing.
- Published
- 2008
31. R&D expenses and firm valuation: a literature review
- Author
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Seraina C. Anagnostopoulou
- Subjects
Actuarial science ,Capital structure ,business.industry ,Accounting ,Pre-money valuation ,Economics ,business ,General Economics, Econometrics and Finance ,Management Information Systems ,Valuation (finance) - Abstract
PurposeThe purpose of this paper is to provide a comprehensive review of the literature on R&D expenses and subsequent firm valuation and to briefly highlight some gaps and implications for future research.Design/methodology/approachThe approach is a review of studies on R&D and valuation between 1978 and 2007. The valuation issues have been grouped into general topics identified among the overall volume of research: economic characteristics, actual and forecast firm performance, capital structure, risk, and other topics which do not fit into the previous categories.FindingsThe paper provides a comprehensive assessment of the literature findings on a variation of valuation topics useful for internal and external users of financial statements of firms intensive in R&D investments. It sheds light on certain literature limitations and thus guides the users of financial statements regarding to which issues they should pay attention when analysing the financial statements of firms intensive in R&D.Research limitations/implicationsExisting research on R&D and valuation focuses mainly on the USA and UK and therefore raises issues of generalisation of the results.Practical implicationsThe paper provides a useful guide for the users of financial statements of R&D intensive firms, since it provides information on possible consequences of these expenses regarding a variety of valuation issues.Originality/valueThe paper fills an information gap by addressing a range of valuation issues on R&D and offers relevant information guidance to the users of financial statements.
- Published
- 2008
32. Tax Incentives as Determinants of Accounting for and Spending on R&D: An International Analysis
- Author
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Seraina C. Anagnostopoulou and Apostolos Ballas
- Subjects
Country level ,Incentive ,Public economics ,business.industry ,Accounting ,Business - Abstract
This article is an investigation of the conundrum of firms whose tax-minimising incentives should result in lower reported income by expensing R&D, while their financial reporting ones should result in higher reported income by capitalising R&D. Tax incentives for R&D help align those goals when accounting regulation permits the capitalisation of R&D. We use firms listed in the UK, France, Germany, Italy, Spain, and the Netherlands reporting under IFRS, and find that R&D-related tax benefits at the country level induce firms to at least partly capitalize, rather than expense R&D. Our results also indicate that country-specific R&D tax benefits provide significant incentives for increasing R&D expenditures, especially among high R&D spenders. Our findings are indicative of the influence of R&D tax incentives on accounting policies, well and above the amount of investments they are meant to induce.
- Published
- 2014
33. Cash Holdings: Determinants and Impact on Future Operating Performance for Listed vs. Unlisted Firms
- Author
-
Seraina C. Anagnostopoulou
- Subjects
Finance ,Leverage (finance) ,business.industry ,media_common.quotation_subject ,Monetary economics ,Cash flow forecasting ,Market liquidity ,Operating cash flow ,Cash ,Cash flow statement ,Cash flow ,business ,Cash management ,media_common - Abstract
Research suggests that the cash ratios of private firms are lower than the ones of public firms, which is not consistent with an expectation for increased importance of the precautionary motive for firms with fewer funding options. The study provides a significant explanation on these lower ratios, attributed to differences in leverage, capital expenditures, internally generated cash flows, and corporate governance. The study finally testifies that excess cash holdings are positively associated with future operating performance for private, but not public firms, a finding which is interpreted as a manifestation of capital raising constraints for unlisted vs. listed firms.
- Published
- 2012
34. Financial Distress: Public vs. Private Firms
- Author
-
Seraina C. Anagnostopoulou and Mario Levis
- Subjects
Finance ,Sales growth ,Distress ,Leverage (finance) ,Capital structure ,business.industry ,Profitability index ,Financial distress ,Demographic economics ,Business ,Debt financing - Abstract
Recent evidence suggests that private firms in the United Kingdom rely heavily on debt financing, have leverage ratios significantly higher than their public counterparts, and their access to external sources of capital remains limited. We extend these findings by examining the implications of such differences in capital structure on financial distress and its repercussions on future operating performance. In spite the higher levels of leverage among private firms, we find a higher incidence of financial distress among public firms; while financial distress, however, among such firms is predominantly due to their sluggish operating performance, the main cause of distress among for private firms is their high level of leverage. We also find that while both public and private firms maintain very similar levels of sales growth in industry adjusted terms, the profitability of the former group is markedly lower in comparison to private firms, during the time period immediately following the appearance of financial distress.
- Published
- 2011
35. Cash Holdings: Determining Factors and Impact on Future Operating Performance for Listed versus Unlisted Firms
- Author
-
Seraina C. Anagnostopoulou
- Subjects
Finance ,Economics and Econometrics ,Leverage (finance) ,business.industry ,media_common.quotation_subject ,Monetary economics ,Cash flow forecasting ,Market liquidity ,Operating cash flow ,jel:G1 ,Cash policy, private firms, liquidity, performance ,jel:G2 ,Cash ,jel:G3 ,Economics ,Cash flow statement ,Cash flow ,Cash management ,business ,media_common - Abstract
Research suggests that the cash ratios of private firms are lower than the ones of public firms, which is not consistent with an expectation for increased importance of the precautionary motive for firms with fewer funding options. The study provides a significant explanation on these lower ratios, attributed to differences in leverage, capital expenditures, internally generated cash flows, and corporate governance. The study finally testifies that excess cash holdings are positively associated with future operating performance for private, but not public firms, a finding which is interpreted as a manifestation of capital raising constraints for unlisted versus listed firms.
- Published
- 2013
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