In the UK, SSAP 13 requires that firms immediately expense most of their R&D expenditures.The reported earnings of high-R&D expenditure firms are therefore likely to convey less valuerelevantinformation to investors than those of less research-intensive firms. Using a sample offirms from the...

Purpose - This study examines the link between firm-level large share price movements, firm specific company announcements and corporate governance. Stock market regulation in the UK requires firms to disclose new Price Sensitive Information (PSI) immediately via official news providers. We...

Theory suggests that, under certain assumptions, corporate distributions should reduce market value on a one-to-one basis. This result is sometimes known as dividend displacement. Nonetheless, dividend displacement tends to be rejected by empirical tests for total dividends and regular...

Although theory suggests that companies would rationally select into audit even if it were not a legal requirement, many countries impose mandatory audits. This is arguably due to an audit having elements of a public good, which may result in not enough audits being purchased without regulatory...

The Chinese stock markets provide a unique experimental setting in which to examine how cash and stock dividends convey value relevant information about future performance and future cash dividends. Utilising market valuation equations based on Ohlson (1995), as well as prediction models, and...

The information environment in China has been found to be so opaque as to prevent investors from being able to formulate valuations of companies based upon firm-specific information, a situation which promotes inefficiency in the allocation of resources in an economy and stunts its growth. The...

We examine the practice of share repurchases in the UK. We find that an important regulatory reform in 2003, which relaxed previously strict rules about repurchases, was followed by a significant increase in repurchase activity by UK listed firms. However, unlike in the US, repurchases remain a...

In this paper, we extend previous work on the relationship between corporate distributions and market value. Adopting an information content perspective, we study the relationship between both market value and future earnings and regular dividends and share buybacks, controlling for other...

Why do firms pay dividends? This is a question which has long interested researchers, particularly since the dividend irrelevance proposition of Miller and Modigliani (1961) because, even though their theory (which relies on several assumptions) suggests investors are indifferent between a...

In 2003, a new UK corporate governance Code recommended that the CEO should not become chairman of the same firm. The UK regulator, adopting an agency theory perspective, argued that this prevents powerful CEOs from clinging to power, to the detriment of firm performance. An alternative...