Figure 1 - uploaded by Adriana Florina Popa
Content may be subject to copyright.
Source publication
This paper examines the value relevance of ESG scores (environmental, social and governance) before, during, and after tumultuous economic periods (including the 2008 financial crisis and the COVID−19 pandemic) taking into consideration a company’s financial performance. The analysis, using Ohlson’s price model, is based on a sample of companies li...
Context in source publication
Similar publications
This paper examines the impact of COVID-19 on accrual-based earnings management (AEM) in Kenya and Tanzania, two countries with similar economies but different pandemic responses. Using a panel data regression model on 43 non-financial firms listed on the Nairobi and Dar-es-Salaam Stock Exchanges, covering 344 firm-year observations, the study anal...
Prior research states that during extreme uncertainties stock prices deviate from their fundamentals. This study examines the cross-section of share price returns during the COVID-19 and pre-COVID periods to determine how investors' reaction to prior earnings volatility is affected by the COVID-19-induced ambiguity. The sample consists of 840 firms...
Orientation: Environmental, social and governance (ESG) performance remains crucial information required by stakeholders as they are interested in monitoring whether companies contribute to sustainability or not.Research purpose: The study’s purpose was to determine how the sample companies scored on the three pillars of ESG performance and to dete...
![Distributions of averages MASR¯1\documentclass[12pt]{minimal}...](publication/389044867/figure/fig1/AS:11431281310213018@1739760549778/Distributions-of-averages-MASR1documentclass12ptminimal-usepackageamsmath_Q320.jpg)
![Box-plots of distribution of MASR¯1\documentclass[12pt]{minimal}...](publication/389044867/figure/fig2/AS:11431281310156706@1739760549930/Box-plots-of-distribution-of-MASR1documentclass12ptminimal-usepackageamsmath_Q320.jpg)
![Box-plots of distribution of CMASR¯4\documentclass[12pt]{minimal}...](publication/389044867/figure/fig3/AS:11431281310222872@1739760550088/Box-plots-of-distribution-of-CMASR4documentclass12ptminimal-usepackageamsmath_Q320.jpg)
This paper analyzes the impact of U.S. economic announcements on stock prices of major companies on the Warsaw Stock Exchange. Using event study methodology and intraday data from April 2013 to August 2023, it reveals that unexpected U.S. news—particularly CPI releases—affects the prices of the most liquid stocks within 5 min post-announcement, wit...
The validity of the use of financial statements as a source of information for detecting financial distress is questionable because of the opportunistic behaviour of the company’s management. This study aims to analyse the effect of accrual earnings management, real earnings management, and family control on the Z-score financial distress predictio...
Citations
... Earnings per share (Graham et al., 2000;Bilgic et al., 2018;Al-Refiay, 2023;Sahlian et al., 2023) Net profit EPS Number of shares = * Book value per share (Keener, 2011;da Costa et al., 2012;Almujamed, Alfraih, 2018) Shareholder s equity BVPS Number of shares = ′ ...
... Regarding operating cash flows, they are able to be managed in the short term, for instance, due to changes in payment terms or excessive stock purchases/ sales. Hence, investors might treat cash flows as temporarily disrupted and, therefore, not containing general information regarding the company's performance, which supports the findings of Bepari et al. (2013), Tahat (2017) or Choi et al. (2022), but is in contrary to Sahlian et al. (2023). The results from the research are valuable not only for investors making investment decisions during economic crises but also for the owners and management of companies listed on the stock exchange, as they would like to find out about the drivers of market value in turbulent times. ...
... However,Bepari et al. (2013) andKousenidis et al. (2013) identified an increase in the VR of earnings as a result of the GFC, while Belesis et al.(2019) -found no significant changes in this regard. Such different results might be affected inter alia by the lower extent of earnings management during crises(Kousenidis et al., 2013).According toSahlian et al. (2023), in periods of crises (based on the GFC and COVID-19 pandemic) and recoveries, a significantly greater focus of investors is on accounting measures, i.e. earnings and book values. As a result, ESG disclosures, more subjective measures, were more value-relevant only before the crisis periods. ...
Research background
Within the research area of value relevance (VR), the impact of macroeconomic changes is usually analysed. The influence of economic crises, such as the Asian financial crisis, global financial crisis, and COVID-19, on VR was, however, inconclusive. Moreover, it differs between individual markets.
Purpose
The aim of the paper was to analyse the impact of COVID-19 and the war in Ukraine on the value relevance with the example of Polish listed companies. VR of earnings, book values, and cash flows was taken into account in this regard.
Research methodology
Panel data models (fixed effects) were used. The focus was especially on interactions between earnings per share (EPS), book values per share (BVPS), cash flows per share (CFO), and binary variables referring to periods of COVID-19 and the war in Ukraine.
Results
VR of earnings, book values, and cash flows noted the positive impact of COVID-19. However, the war affected book values and cash flows negatively. The results obtained highlight the specificity of different crises and various markets, with the findings being only partially in line with the results of previous studies.
Novelty
So far, the impact of the war in Ukraine on VR has not been analysed. Moreover, the influence of COVID-19 on VR on the Polish market has also not been studied.
... This finding is consistent with the study conducted by Grosu et al. [44], which found that the financial market behavior in Eastern Europe and Romania during the COVID-19 pandemic differed from normal periods. Sahlian et al. [45] also discovered that since the 2008 financial crisis and the COVID-19 pandemic, European citizens have been more interested in finance than the environment, society, and governance. ...
Climate change is an important issue that countries worldwide are aware of and campaign to reduce. All parties must cooperate, whether the government, the private sector, individuals, etc. Many perception surveys have met the public's understanding and knowledge about climate change. Despite the odds, previous research supported environmental protection and sustainability in surveys, polls, and past research. However, the existing literary gap between intentions and actions and awareness and implementation has recently widened. The objectives of this research include comparing perceptions and climate change mitigation actions between Eastern and Western European countries because both regions are different, as well as searching for and comparing perceptions influencing climate change mitigation actions between them. The research adopts a quantitative methodology, emphasizing exploring secondary data from the European Investment Bank (EIB) climate change survey 2022–2023. It analyzed the data to compare the perceptions and actions of the two regions in mitigating climate change. The statistical tests included a t-test and stepwise multiple regression analysis to predict the influence of perceptions and actions on reducing climate change. The results showed that respondents' perceptions of climate change in Eastern and Western Europe were not significantly different. However, there was a significant difference in the number of reduction actions taken by Western Europeans compared to Eastern Europeans. Perceptions of climate change catastrophes and serious government mitigation actions positively influenced actions in Eastern Europe. This study found that businesses' attention to mitigation and their perception of the catastrophic effects of climate change positively influence mitigation actions in Western Europe. The recommendations guided governments, policymakers, and businesses to take action to reduce climate change, motivating people's adequate perceptions and actions. Stakeholders communicating climate change's impacts on catastrophe should present true information with honesty and transparency. Doi: 10.28991/HEF-2024-05-03-03 Full Text: PDF
... Most valuerelevance studies on this topic focus on ESG performance as opposed to ESG controversies (see, e.g. Al-Hiyari and Kolsi, 2021;Aureli et al., 2020;Mervelskemper and Streit, 2017;Sahlian et al., 2023) and provide mixed and inconsistent results. The reason for inconsistent results may be related to the bias resulting from managerial discretion associated with the disclosure of ESG information. ...
Purpose
Interest in environmental, social and governance (ESG) controversies is acquiring great relevance in the business and academic communities. Nonetheless, previous studies in the area have devoted little attention to how the market views ESG controversies. Against this backdrop, this paper aims to investigate whether ESG controversies are value-relevant to investors, as reflected in equity values. It also investigates whether top management team (TMT) gender diversity is likely to affect the association between ESG controversies and equity market values in the context of high-tech firms.
Design/methodology/approach
This paper uses a sample of high-tech firms listed on the STOXX 600 index during the period 2006–2022. The ESG data for the sample is retrieved from the Refinitiv Eikon database. This paper adopts a fixed-effect panel regression to test the hypotheses.
Findings
Based on the Ohlson’s (1995) valuation framework, the authors find evidence that ESG controversies are associated with a lower market valuation, suggesting that shareholders perceive ESG controversies as conveying negative information about future performance. The authors also find evidence that TMT gender diversity negatively moderates the relationship between ESG controversies and equity values, indicating that TMT gender diversity alleviates the detrimental effect of corporate controversies. These results remain consistent when using the return model of Easton and Harris (1991).
Originality/value
This paper throws more light on the economic consequences of ESG controversies in European high-tech firms. This is particularly important due to the increasing importance of ESG criteria in guiding investment choices. This paper also adds to the current literature by providing new evidence that the value-relevance of ESG controversies is affected by TMT gender diversity.
... A pesquisa de Santos e Tavares (2023), ao comparar o período antes e após o início da pandemia, revelou redução no preço das ações das empresas latino-americanas. Sahlian et al. (2023) encontraram que no período da pandemia, as informações contábeis apresentaram maior r 2 para explicar o preço das ações. Desse modo, considerando as incertezas e desafios econômicos gerados pela pandemia, formula-se a hipótese 2: H2: A pandemia tem uma relação negativa com o preço das ações. ...
Esta pesquisa tem como objetivo analisar a relação entre o valor adicionado total a distribuir e o preço das ações nos períodos antes, durante e pós-pandemia. Os dados foram coletados no site da Comissão de Valores Mobiliários (CVM) e Refinitiv Eikon®, resultando em uma amostra de 1.910 observações de empresas brasileiras, no período de 2010 a 2022 de todos os setores, exceto Atividade Governamental (por falta de dados). Os dados foram tratados por meio de estatística descritiva e do modelo de regressão Generalized Least Squares (GLS). Os resultados revelaram que: i) a divulgação do VATD é relevante para explicar o preço das ações; ii) há uma relação negativa entre o período da pandemia e o preço das ações; e iii) a interação entre o VATD e a pandemia tem relação positiva com o preço das ações. Os resultados contribuem com investidores, sugerindo que as informações disponíveis na Demonstração do Valor Adicionado (DVA) podem aumentar o preço das ações em períodos de maiores incertezas. Com os gestores, evidencia que a geração de mais riqueza pode aumentar o preço das ações, podendo ajudá-los na obtenção de melhores retornos, pois normalmente têm parte da remuneração atrelada ao desempenho das ações. E com os reguladores brasileiros, os resultados podem indicar que a obrigatoriedade da divulgação DVA no período da pandemia é relevante para auxiliar os stakeholders nas tomadas de decisões. A lacuna explorada nesta pesquisa é a falta da análise entre a relação do VATD e a pandemia. A relevância do estudo é por evidenciar aos stakeholders que informações da DVA contribuem para aumento do preço das ações em períodos de maior instabilidade. Portanto, o impacto do estudo é que os usuários podem utilizar-se das informações da DVA para precificação das ações, principalmente em períodos de maior instabilidade econômica.
... The research by Santos and Tavares (2023) compared the periods before and after the beginning of the pandemic and revealed a reduction in the share price of Latin American companies. Sahlian et al. (2023) found that accounting information showed a higher r 2 to explain the share price during the pandemic. Thus, considering the uncertainties and economic challenges generated by the pandemic, hypothesis 2 is formulated: H2: The pandemic has a negative relationship with the share price. ...
This research analyzes the relationship between the total value added to be distributed and the share price in the before, during, and post-pandemic periods. The data were collected on the Securities and Exchange Commission (CVM) website and Refinitiv Eikon®, resulting in 1,910 observations of Brazilian companies from 2010 to 2022 from all sectors, except Government Activity (due to lack of data). The data were treated using descriptive statistics and the Generalized Least Squares (GLS) regression model. The results revealed that i) the disclosure of the TVAD is relevant to explain the share price; ii) there is a negative relationship between the pandemic period and the share price; and iii) the interaction between the TVAD and the pandemic has a positive relationship with the share price. The results contribute to investors, suggesting that the Value Added Statement (VAS) information can increase the share price in periods of more significant uncertainty. With managers, it shows that the generation of more wealth can increase the price of shares, which can help them obtain better returns since part of the remuneration is usually linked to the performance of the shares. With Brazilian regulators, the results may indicate that the mandatory disclosure of VAS during the pandemic is relevant to assisting shareholders in decision-making. The gap explored in this research is the lack of analysis of the relationship between TVAD and the pandemic. The study's relevance is to highlight to the shareholders what information from the VAS contributes to an increase in the share price in periods of greater instability. Therefore, the impact of the study is that users can use the VAS information for share pricing, especially in periods of greater economic instability.
... In response to these demands from stakeholders, most companies are transforming their business to become more sustainable (Hermundsdottir & Aspelund, 2021) and are increasingly making disclosures in sustainability reports (Jasni et al., 2020). As a consequence, investors are increasingly interested in environmental, social and governance information, referred to as ESG (Burckart et al., 2018), because it provides comprehensive sustainability analysis that is useful for evaluating potential risks and opportunities, and facilitates better investment decisions (Sahlian et al., 2023). ...
... Previous studies have found that high ESG disclosure can reduce sustainability information asymmetry between companies and investors that impact the value relevance of ESG (Sahlian, 2023). Furthermore, the study shows that in different economic conditions, there are differences in the value relevance of ESG (Sahlian, 2023). ...
... Previous studies have found that high ESG disclosure can reduce sustainability information asymmetry between companies and investors that impact the value relevance of ESG (Sahlian, 2023). Furthermore, the study shows that in different economic conditions, there are differences in the value relevance of ESG (Sahlian, 2023). Disclosure of sustainability performance through ESG provides more transparent information, thereby increasing investor confidence regarding the company's future risks (Lourenço et al., 2012;Schadewitz & Niskala, 2010), and this has the impact of increasing the efficiency of stock market information and reducing conflict costs among stakeholders thereby increasing value (Ng & Rezaee, 2015;Porter, 2019). ...
This paper aims to investigate the value relevance of ESG (environmental, social and governance) and earnings quality of companies listed on the Indonesia Stock Exchange during the period from 2012 to 2022. Furthermore, this study also investigates the value relevance of earnings and book value in the presence of ESG and earnings quality. The value relevance was operationalized using Ohlson's price model (1995), and data was extracted from the Refinitiv database. Based on 353 firm-years, the panel data analysis indicates that ESG and earnings quality have value relevance; this proves that information about ESG and earnings quality are used by investors and stakeholders as a basis for decision-making. Moreover, the presence of ESG has a negative impact on the value relevance of earnings but has a positive impact on the value relevance of book value. By contrast, with ESG, the presence of earnings quality has a positive impact on the value relevance of earnings but has a negative impact on the value relevance of book value, implying that when the quality of accounting information increases, users rely more on earnings information rather than book value. A robustness test testing was also carried out by conducting sub-sample tests based on the period during which the COVID-19 pandemic occurred during the research. Results show that before the pandemic, users tended to be more interested in ESG information, while during the pandemic, users tended to focus more on earnings quality information as a basis for decision-making.
... Maram, 2021 ;Sahlian et al., 2023 ; del Rio et al. 2023, Wegener et Labelle 2017. ...
Alors qu’ils cherchaient à définir une norme spécifique aux activités extractives, de nombreux normalisateurs comptables ont tenté de répondre à la question suivante : quelle estimation des perspectives de croissance future est utile aux investisseurs en complément des informations issues du bilan et du compte de résultat ? Notre étude emploie le modèle d’Ohlson (1995) sur un échantillon de 52 entreprises cotées pendant une période de 11 ans (1996-2006) et examine la pertinence informationnelle de quatre vecteurs orientés vers le futur : la valeur optionnelle des réserves de pétrole, les flux de trésorerie disponibles, les capex et la volatilité du prix du pétrole brut. Nos résultats suggèrent qu’une valeur heuristique des réserves considérées comme une option réelle sur un volume de pétrole découvert est la plus informative et la moins redondante des valeurs prospectives testées. Ils remettent en cause l’utilité de la communication de résultats futurs sous forme d’estimations ponctuelles.
... Thus, by measuring health, education, and level of economic well-being of the population, the Human Development Index (henceforth HDI) is used to assess the investment in human capital. Unfortunately, the COVID-19 pandemic showed the weaknesses in social, economic, and political systems on the planet (UNDP 2022; Ștefan et al. 2023 Sahlian et al. 2023). ...
The BRICS countries are known to be a key market for foreign direct investment. This paper analyzes the decision of EU acquirers from developed economies to invest in the energy sector in BRICS countries. Using empirical evidence on 4,222 cross-border M&As and fuzzy logic, the research results show that acquirers consider macroeconomic factors as significant. When choosing a company located in the BRICS, its audit status is significant, but financial returns are not. This fact indicates that for sustainable decisions, industry is importantly correlated with financial information quality but not with company performance.
