Information Disclosure

I used the Arellano-Bond type dynamic panel model to control for unobserved fixed effects and endogeneity bias. The major findings are summarized as follows: (1) the Putnam-type group has a positive influence on information disclosure; (2) the Olson-type group has a detrimental effect on information disclosure. Compared with the existing literature examining the effects of Putnam- and Olson-type groups on trust and growth (Knack 2003; Pena Lopez & Sanchez Santos 2007), the primary contribution of this paper is twofold. First, the present study provides a definite understanding of the effect of groups on the choice of public policy. Second, it elucidates the opposite effects of Putnam- and Olson-type groups on policy choice. This might in part be because of the difference of degree to which the group is open to the rest of society. Bridging-group members and other citizens are important to increase the net expected benefit for the whole of society, rather than the net expected benefit only for a particular group. This is in line with the argument that generalized trust is more important than particularized trust for economic growth (Uslaner 2002). The critical issue is how to increase the positive externality of bridging social capital and generalized trust and how to decrease the negative externality of bonding social capital and particularized trust.

According to these theoretical papers, the impact of competition on informa- tion disclosure does not follow a clear direction which highlights the necessity of more empirical work in different settings. Jin (2005) examines how competition impacts disclosure incentives among health maintenance organizations. Her findings show that in a highly competitive market, the disclosure rate is low, and voluntary disclosure is a way for firms to differentiate their product. Jin and Leslie (2003) examine the impact of restaurants hygiene grade cards as a measure of revealing information on the quality of restaurants. Their empirical findings show that the grade cards reduce the search cost which causes an increase in competition. Lewis (2011) examines the impact of information disclosure on automobile auction at eBay and finds that disclo- sure occurs selectively. He adds that the cost of the disclosure can impact the amount of disclosure and the price which seller sets.

Firstly, the accounting information disclosure rule of the NEEQ market made by the State Council and China Securities Regulatory Commission is vague [1]. In December 2013, the State Council issued a document. In this document, the State Council requires companies listed on the NEEQ market to have clear business, clear prop- erty rights and a sound corporate governance structure. Furthermore, these companies must perform information disclosure obligation and the disclosed information must be real, accurate and adequate. But the State Council and China Securities Regulatory Commission haven’t made any rules about specific contents which the compa- nies listed on the NEEQ market should disclose. As a result, improving the information disclosure system still has a long way to go.

A first auto-regression technique was used to correct the autocorrelation problem in the initial output. From the final output, disclosure quality had a positive relationship with size, institutional ownership, performance and earnings per share while firm leverage had a negative relationship with disclosure quality. This means that size, institutional ownership, performance and earning per share are important determinants of quality of accounting information disclosure. The R-squared value is now 0.03 which means that only 0.03 percent of the systematic variations in disclosure quality is explained by the independent variables. This indicates that the estimated model do not have a good predictive power since about 99.97 percent of the variable is left unaccounted for. Hence, we can argue that a significant relationship does not exist between disclosure quality and all the independent variables combined. The Durbin-Waston statistics is now 2.18 indicating the absence of auto correlation.

Texas Gulf Sulphur’s bold ultimatum—”disclose or abstain”— enjoys an enduring place of prominence in discussions of insider trading law be- cause of the intuitive simplicity with which it asserts the expectations of investors in securities markets. As the law of information dissemination has developed into a distinct subset of federal securities law over the past fifty years, however, it is equally important to reflect on how the Texas Gulf Sulphur opinion has shaped the views of courts and regulators in crafting rules and guidelines for information disclosure. Indeed, Texas Gulf Sulphur anticipated—and continues to inform—contemporary debates re- lating to the dissemination of real-time material information, including questions such as how and how much material, nonpublic information should be disclosed to the public, who is in a position to make effective “disclosures” that satisfy the “disclose or abstain” rule, and the standard for determining when new information may be acted upon by insiders. Even as its influence over insider trading doctrine has waned, Texas Gulf Sulphur’s aspirational standard of “equal access to material information” continues to fuel the imagination of investors and policy makers in regulat- ing twenty-first century securities markets.

The existing literature in which a seller, through his choice of a selling mechanism, affects bid- ders’ information-acquisition effort (e.g., Bergemann and Välimäki, 2002; Persico, 2003; Compte and Jehiel, 2007; Crémer et al., 2009; and Shi, 2012) focuses primarily on simultaneous auctions, in which the issue of optimal bid disclosure does not arise. Crémer et al. (2009) examine sequen- tial auctions and design a revenue-maximizing one. Because Crémer et al. (2009) assume that the seller can charge bidders for information, optimal information disclosure turns out to be trivial (full disclosure) and is not their focus. Information disclosure is the focus of Eso and Szentes (2007). In their model, the seller directly designs the signals observed by the bidders instead of motivating bidders to choose signals themselves. Just like Crémer et al. (2009), Eso and Szentes (2007) allow the seller to charge bidders for information and find full disclosure to be optimal. Eso and Szentes’s (2007) seller reveals maximal information to maximize the total surplus, which he then taxes away by cleverly charging for the signals he reveals. 6 In our paper, the critical assump-

because these organizations are established in part to act as special interest groups to lobby for preferential policies. The number of political and business organizations per population is denoted as Political group , while the number of cooperative associations per population is represented by Cooperative group . These groups are organized for special interest purposes. Political group and Cooperative group are incorporated to examine the effects of interest groups on government information disclosure. Table 2 shows the correlation coefficient between Political group and Information disclosure as –0.06 despite being statistically insignificant. In contrast, the correlation coefficient between Cooperative group and Information disclosure is –0.21 and statistically significant at the 1% level. These results imply that Political group is not significantly associated with the enactment of IDOs, whereas Political group is significantly associated with the enactment of IDOs. However, the correlation coefficient is calculated when the trend of the enactment of IDOs illustrated in Figure 1 is not controlled. To remove the trend effect, I included Figures 2(1) and (2). A cursory examination of Figures 2(1) and 2(2) reveals that Political group and Cooperative group are negatively associated with Information disclosure even after controlling for year dummies to capture the trends of Information disclosure . What is observed in Figures 2(1) and 2(2) is consistent with Hypothesis 1. For a closer examination of Hypothesis 1, Tobit and IV-Tobit models were used and these results are discussed later.

The 11th Mediterranean Conference on Information Systems (MCIS), Genoa, Italy, 2017 7 back rating or qualitative reviews are deemed to be conventional channels for buyers to collect infor- mation, and recently live interaction auction running time gradually becomes a popular format (Srini- vasan and Liu 2014). It is reasonable to hypothesize that buyers’ interests and choices of questions will be triggered by the already existing information. People may ask more questions regarding as- pects that are not mentioned in the product description and explore further explanations concerning certain information that has already been revealed by the seller. It is argued that the seller feedback postings is closely associated with buyers’ concern about adverse selection as well as moral hazard issues (Dellarocas 2005), therefore, it is understandable to make the most of the intra-transactional interaction to gather as much information as possible so as to mitigate risk and establish trust (Pavlou and Dimoka 2006, Ghose 2009). This work obviously acknowledges the significant impact that online WOM exerts on other kinds of information disclosure, and that pre-sets of the online auction have on the intra-transactional information revealing, more specifically, how buyer-initiated questions during the online auction are affected by previous seller ratings and auction duration. However, due to the fact that the intra-transactional information belongs to textual data, quantification is necessary for fur- ther analyzes. The conversion from qualitative data to quantitative data is undertaken by classifying the buyer-initiated questions according to given rules. Prior studies have obtained great achievements in long document classification, but online auction Q&A is short, cryptic, often ungrammatical and is very different from typical long grammatically correct text, thus traditional classifiers usually fail to achieve a satisfactory correct classification rate. This study is also an attempt to bridge this gap by de- signing and using a new classification method. The method is based on an n-gram scoring algorithm and is shown to outperform more traditional text classification approaches such as the Naïve Bayes classifier and unsupervised K-Medoids Clustering.

As for Shenzhen government, it focused mainly on information system con- struction, contents construction and platform construction, and made progress every year since. The most outstanding performance is the construction of con- tinually improved website platform—“Shenzhen government online”, which ranks top for consecutive years in the national government websites perfor- mance evaluation. The platform gave a full play in the bridge of communication between the officials and the people, also enhanced political interaction atmos- phere. Differently, Zhuhai’s government information disclosure annual reports are characterized by detailed information in key areas. To be specifically, in 2014 39 departments of Zhuhai government opened 10121 administrative and gov- ernment affairs service items to the society through the government website; in 2015 through government online business hall, 825 municipal items, 2059 items of district, 669 items of town were opened. The information disclosure work is in the steady progress.

The economic and social consequences of these trends are significant. By 2009, 2% of total retail sales in the USA, and 10-15% of retail sales that involve the Internet, including Research Online-Purchase Offline – ROPO, were the direct result of consumers engaging in search for product information. The total value of search activity, including consumer surplus, exceeded $80 Billion (McKinsey Global Institute 2011). Although product videos, product simulators, playable demos and other similar technologies make it easier for firms to reveal product quality information to consumers, they can be expensive. For example, video game developers consider playable game demos as non-trivial investments (Crossley 2010) and Electronic Arts has openly discussed the possibility of charging $10-$15 per comprehensive game demo (Martin 2010), in order to justify the extra development costs. In fact, we collected data on 2196 PC games released between 1996 and 2005 and found that only 55% invested in creating a playable demo. Thus, firms have to determine when it is worthwhile to invest heavily in product information disclosure and, in particular, assess how ambient information available through infomediaries affects these decisions. Further, given the growing importance of information investments, these investments should be viewed as an integral part of the product design process. Firms have to determine how much to invest in quality given the subsequent cost of informing customers about these quality attributes. Consider a printer manufacturer who has recently released one high-end and one budget printer model. The firm needs to determine whether to invest in information disclosure for these products and, if so, whether to do so differently for the two models. Further, it needs to understand how to modify its decision in response to third-party expert reviews.

The other variables – board meetings frequency, board independence, CEO duality and institutional shareholding is not significantly related with online strategic information disclosure. The impact of board meetings was not significant possibly because directors are less concerned about the online disclosure of strategic information in which the managerial actions and business operations would be the main focus during the meetings. According to Sanchez et al. (2011), the directors are more concerned on mandatory disclosure rather than voluntary disclosure. Corporate voluntary disclosure particularly the strategic information probably contains several risks and sensitive information that might impair the position of a company if known by business competitors. Certain potential risks associated with the strategic information may include the privacy problems (Marsden et al., 2011). Fear of litigation if fail to discharge the needs of stakeholders as promise also appears (Santema and van de Rijt, 2001; Sanchez et al, 2011). In addition, company may also face competitive disadvantage and incur political cost (Guo, Lev and Zhou, 2004; Lim et al., 2007; Sanchez et al, 2011) and hardly to change the project strategy once it is disclosed (Ferreira and Rezende, 2007). Besides, the company worry if it keep on continuing disclose much information, the trend will increase in future, so any non-disclosure of information may give negative signal to the outsiders (Graham, Harvey and Rajgopal, 2005). This situation will restrain the directors in deciding for more disclosure of strategic information and only certain relevant information will be disclosed so as to sustain in the market.

In the second essay, “The Effect of Information Disclosure on Industry Payments to Physicians”, I seek answer to the following question: does disclosing industry pay- ment information influence subsequent payments to physicians? I quantify the im- pact of information disclosure during 2014-2015 (after ACA Physician Open Payment Act) on direct-to-physician payments, using machine learning technique with quasi- experimental research design. The technique effectively matches the treated and the control units while circumventing the curse of dimensionality in traditional paramet- ric matching methods. This allows me to obtain individual-level estimates with good asymptotic properties that are robust to irrelevant features. Using a 29-month na- tional panel covering $ 100 million in payments between 16 anti-diabetics brands and 50,000 physicians, I find that the monthly payments declined by 2% on average due to disclosure. However, there is considerable heterogeneity in the treatment effects with 14% of the drug-physician pairs showing a significant increase in their monthly payment. Moreover, the decline in payment is smaller among drugs with larger mar- keting expenditure, and among physicians who were paid more heavily pre-disclosure and prescribed more heavily. Thus, while information disclosure did lead to reduction in payments on average (as intended by policy makers), the effect is limited on big drugs and popular physicians. I present a data pattern consistent with the idea that firms respond to information about competitive payments by trying to differentiate themselves.

Many studies had their focus on whether an EMS would result in better environment performance, but very few of the earlier studies have investigated whether a certified EMS (ISO 14001) may facilitate sustainability reporting (Nazari, et al., 2015). However, all of those studies which did empirical analysis on the latter question, no matter what kind of samples and methods they adopted, came to same result – companies with ISO 14001 Certified EMSs are more likely to provide substantial environmental disclosures of their activities. In other words, the existence of an ISO 14001 certified environmental management system is an important driver for the enhancement of environmental information reporting and the increase in transparency of environmental information (Ienciu, 2012; Naudé, et al., 2012; Nazari, et al., 2015). To explain this finding, Naudé, et al. (2012) argued that those companies involved with ISO 14001 could be more environmentally engaged, and their business growth might require them to build and maintain good reputation with regard to environmental management. It is also likely that the ISO 14001 certification facilitates the whole environmental reporting process. For instance, it makes it easier for one company to have access to the relevant records. Taking into account the previous studies, the adopted hypothesis is:

In this paper, I built a dynamic model of bank runs that allowed me to study important phenomena such as the role of information externalities and herd behavior of depositors as a source of bank runs. I showed that, in the presence of noisy private information, information externalities and herd behavior of depositors can trigger runs on healthy banks. The bank can choose a deposit contract that completely eliminates runs but this has some costs. That type of contract sacrifices from the insurance provided against liquidity shocks. Furthermore, in cases where the bank cannot pay everybody the promised amount, it may be socially optimal to have a run, as shown in AG. These are some costs of completely eliminating runs.

The empirical research into the relationship between corporate social responsibility and economic performance is far from conclusive. In a more recent study, Balabanis, Phillips and Lyall (1998) do not find any empirical support for the hypothesis of “ethical investors”, which suggests that the capital market rewards socially responsible firms. Quite the opposite, their findings suggest that the capital market seems to be rather indifferent to firms that undertake some CSR activities. Even more so, their results show that the degree to which a firm discloses CSR information negatively impacts on capital market participants.

The impact of the changeover from GAAP to IFRS in Canada may not be as large as in other jurisdictions. First, Canadian GAAP are considered principles-based as opposed to rules-based (Webster and Thornton [2005]), although they also contain a certain level of detailed rules (Chlala and Fortin [2005]). Second, for the fund industry in particular, the difference could be even smaller. Canadian GAAP have adapted to the Canadian reality that a large proportion of Canadian listed firms are in the mining and natural resources industry (Blanchette and Desfleurs [2011]) as “ 57% of the global mining financings were done on TSX and TSXV in 2016” (TSX publication [2017]), whereas IFRS aimed for global adoption does not have as many special considerations. However, Canadian GAAP has not particularly made adaption for the fund industry so that the transition to IFRS is not associated with changes as great as that in public firms. Nevertheless, IFRS generally require more disclosure than Canadian GAAP (Deloitte [2009]), and in the case of the Canadian fund industry, IAS 1 clearly mandates, without exemption, the disclosure of cash flows which was voluntary under Canadian GAAP. Although Canadian GAAP have its similarities with IFRS at a conceptual level, this increased disclosure accentuates the difference between Canadian GAAP and IFRS which are both principles-based though. Moreover, reporting entities face increased competition for capital in domestic markets (Tan et al. 2011; DeFond et al. [2011]) after the adoption of IFRS because of enhanced cross-country comparison. As a result, managers have higher incentives to increase the level if not the quality of information contained in financial reports (Biddle, Hilary, and Verdi [2009]; Gordon et al. [2012]). These combined effects translate into greater information content among investment funds after the transition to IFRS.

This paper presents a simple monopoly product model to capture the effect of a potentially harmful substance contained in the product. The firm operates in a market with a population mix of aware and unaware consumers. The firm may want to hide the fact that its product contains a harmful substance, as well as the level of it. As a result, a firm discloses all its information if the level of the harmful substance is low, while it does not disclose if the level is high. Consumers always benefit from more information; thus, they will benefit from learning that the substance is indeed harmful and from knowing how much of the substance the product contains. When endogenizing the firm’s entry decision, the issue arises that a firm may not find it profitable to offer the product. This holds if the expected gross profits are below the entry cost. This makes well-meaning mandatory disclosure rules a double-edged sword. Given the firm’s entry, more-stringent disclosure rules are consumer- surplus increasing. However, implementing a strict rule carries the risk that the firm will not enter. Thus, full mandatory disclosure may be harmful, and, under some circumstances, awareness-enhancing disclosure that does not contain information about the level of the potentially harmful substance may be consumer-surplus superior. Absent regulation, the firm will never choose such a disclosure rule, while the rule may well be optimal for the regulator trying to strike a balance between reducing consumer biases and allowing a firm to extract rents.

This analysis suggests that changes to disclosure requirements, while directly beneficial to owners also carry indirect costs. As such, the optimal level of disclo- sure could be less than maximal disclosure even if disclosure were otherwise free (i.e., if one were free to ignore the actual costs arising from stricter accounting rules, more record keeping, etc.). Going beyond that level would then reduce firm value. However, as the analysis also indicates, executive compensation is not solely a function of managers’ distaste for greater scrutiny; in particu- lar, the managers’ bargaining power and the firm’s profitability also matter. Consequently, reforms that affect all three factors, such as those proposed in response to the Financial Crisis of 2008, affect executive compensation through multiple channels. To the extent that such reforms independently reduce firm profits or reduce managerial bargaining power, our predicted result of greater compensation could be mitigated or reversed.

person's involvement in any type of business, securities, commodities, or banking. activities[r]

He has been Executive Chairman of Breedon Aggregates Limited since its formation in 2010 through the reverse acquisition of Breedon Holdings by Marwyn Materials, the AIM-listed company[r]