Disclosure of Timely and Forward-Looking Statements and Strategic Management of Major Institutional Ownership

Long Range Planning

Volumn 39, Issue 4, 2006, Pages 409-427

  Gietzmann, Miles ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

COSTS; MANAGEMENT; STRATEGIC PLANNING;

CORPORATE DISCLOSURE; INSTITUTIONAL OWNERSHIP; STRATEGIC MANAGEMENT;

SOCIETIES AND INSTITUTIONS;

INSTITUTIONAL FRAMEWORK; ORGANIZATIONAL FRAMEWORK; OWNERSHIP;

EID: 33751577811     PISSN: 00246301     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.lrp.2006.09.005     Document Type: Article

References (26)

1. Gerstein J. Friedman 93, Set to Unleash the Power of Choice. The New York Sun (March 22 (2006))
2. Moreover theoretical by Power (2003), calls into question the assumed efficacy of detailed external audit as required by SOX. One of his arguments for instance argues that auditors principally audit things that are auditable using simple mechanical methodologies rather than making more complex value judgements, which are needed to understand the real world complexity that underpins dynamic business decision making.
3. The Economist Special Report. A Price Worth Paying?. The Economist (May 19 (2005))
4. R. M. Grant and M. Visconti, The strategic background to corporate accounting scandals, Long Range Planning 39(4), doi:10.1016/j.lrp.2006.09.003.
5. Parthiban D., Kochlar R., and Levitas E. The effect of institutional investors on the level and mix of CEO compensation. Academy of Management Journal 41 2 (1998) 200-208
6. Bushee B. The influence of Institutional Investors on Myopic R&D investment behaviour. The Accounting Review 73 (1998) 305-333
7. Note under reg. FD disclosure needs be identical across all investors. What companies were talking about here does not relate to violations of reg. FD, but instead having a clearer understanding of the types of questions about the corporate business model certain institutional investors held, so that when the company produced briefing notes for all investors, the investor relations department felt confident they addressed such questions.
8. P. Mazzola, D. Ravasi and C. Gabbioneta, How to build reputation in financial markets, Long Range Planning 39(4), doi:10.1016/j.lrp.2006.09.001.
9. F. H. M. Gersten, C. B. M. van Riel and G. Berens, Avoiding reputation damage in financial statement restatements, Long Range Planning 39(4), doi:10.1016/j.lrp.2006.009.002.
10. C. Frost, Characteristics and information value of corporate disclosures of timely and forward-looking information in global equity markets, SUNY at Buffalo, working paper (2004).
11. Beretta S., and Bozzolan S. A framework for the analysis of firm risk communication. International Journal of Accounting 39 (2004) 265-288
12. For a critique of their measure see. Botosan C.A. Discussion of a framework for the analysis of firm risk communication. International Journal of Accounting 39 (2004) 289-295
13. K. Hussainey, T. Schleicher and M. Walker, Undertaking large scale disclosure studies when AIMR-FAF ratings are not available: the case of price leading earnings (2003).
14. Bushee B., and Noe C.F. Corporate Disclosure Practices, Institutional Investors and Stock Return Volatility. Journal of Accounting Research 38 Supplement (2000) 171-202
15. Of course one difference could be because I look at UK rather than US data. However I suggest there are some other fundamental differences in research design that also contribute. For a review of UK institutional investor behaviour see. Lasfer M., and Ersoy-Bozuk A. The trading behaviour of UK institutional investors. Journal of Finance and Quantitative Analysis 4 3 (September (2005))
16. Companies are required to make disclosures on the Regulatory News Service (or most recently also via another primary information provider) before disclosing price sensitive information via any other method.
17. Gietzmann M.B., and Ireland J. Cost of Capital, Strategic Disclosures and Accounting Choice. Journal of Business Finance and Accounting 32 3&4 (April/May (2005)) 599-634
18. For a detailed overview on this specific point, see. Golding T. The City: Inside the Great Expectation Machine (2003), FT Prentice Hall
19. Bushee and Noe focus upon returns volatility whereas I report share price volatility.
20. I gratefully acknowledge Bobby Rakhit's excellent advice for working with the database. Besides using some public information, Lionshare also includes proprietary classifications of the investment style of institutional investors which is exploited.
21. Note I still include some firms which are classified as Financials such as insurance companies for which this cross listing problem does not arise.
22. Given the Lionshare coverage the maximum number of quarterly observations for a single firm is 11.
23. Detailed coverage of the constituents of each of these industry groupings is provided at. http://ftse.jse.co.za/series_overview/global_classification/docs/ftse_js e_global_classification_system.pdf
24. Note the search is not for these specific terms occurring anywhere in corporate disclosures. All corporate news disclosures are independently classified by Factiva and it is from this proprietary Factiva classification list that the five headings are chosen.
25. Note a squared measure such as variance was not used to measure variability since I wanted to allow the tests to detect whether there was an asymmetric response by institutional investors when adding to a position or in contrast reducing a position.
26. With the exception of industry sector 0 in Panel C, which is included for completeness as sector 0 is included in Panel B.