Effect Of Information Asymmetry Research Articles

Institutional differences, state ownership and financing decisions: Evidence from Chinese cross‐border mergers and acquisitions

AbstractUsing data on Chinese cross‐border mergers and acquisitions (M&As) from 2002 to 2022, this paper considers the effects of institutional differences and state ownership on the financing decisions of Chinese cross‐border M&As. We find that cultural differences and formal institutional differences have significantly positive effects on internal financing and equity financing. These findings indicate that under the influence of institutional differences, internal financing is the type of financing most favoured by Chinese enterprises engaged in cross‐border M&As, followed by equity financing and, finally, debt financing. We document that the financing decision most favoured by Chinese state‐owned enterprises is debt financing, whereas the least favoured decision is equity financing. In addition, we find a prominent mediating effect of information asymmetry, which implies that information asymmetry serves as a potential channel through which institutional differences impact the financing decisions of Chinese cross‐border M&As.

A Literature Review on the Theory of Asymmetric Information

Asymmetric information refers to a situation in which one of the parties involved in a market transaction has more information than the other, which reduces efficiency in resource allocation. The basic reasons are the high cost of information acquisition, blocked information transmission channels, and lack of enough information disclosure. Problems such as adverse selection and moral hazard created by asymmetric information damage the efficiency of the market. Asymmetric information has played a very important role in lending, hotel, and catering. As for the industry of lending, the existence of asymmetric information between borrowers and lenders would make it easy for high-risk borrowers to obtain loans and, further, increase the risk of default. Asymmetric information within the hotel industry makes it hard for consumers to judge the hotels service quality and price rationality. Asymmetric information affects investment decisions and enterprise efficiency in the catering industry, distorting valuation and causing investment loss. Addressing asymmetric information in various industries is crucial for fostering market transparency and efficiency. To achieve this, researchers must employ both signaling and screening models to mitigate the adverse effects of information asymmetry. This paper examines historical literature on asymmetric information across diverse industries and delineates strategies to enhance information transparency and promote more informed decision-making.

TAX PLANNING, INFORMATION ASYMMETRY AND FREE CASH FLOW TO EARNINGS MANAGEMENT WITH GOOD CORPORATE GOVERNANCE AS A MODERATING VARIABLE

This research was conducted with the aim of examining the effect of tax planning, information asymmetry and free cash flow on earnings management, as well as good corporate governance as a moderator of the relationship between tax planning, information asymmetry and free cash flow on earnings management. The data used is in the form of annual reports of companies in the goods & consumer industry sector listed on the Indonesia Stock Exchange (IDX) for the 2018-2021 period. The method used is quantitative with an analytical tool in the form of multiple linear regression. The results show that tax planning and information asymmetry have an effect on earnings management, while free cash flow has no effect on earnings management. Good corporate governance is able to moderate the relationship between tax planning, information asymmetry and free cash flow on earnings management. The implications of this research are expected to make a positive contribution to investors and creditors to be more careful in assessing management performance, company conditions and understanding reported earnings, because these profits are not necessarily true profits. This research is expected to provide input for companies to observe earnings management activities carried out by management for the benefit of management itself.

Technology shock of ChatGPT, social attention and firm value: Evidence from China

The release of ChatGPT has attracted widespread attention and triggered fluctuations in the capital market. This study employs difference-in-differences (DID) and event study (ES) to investigate the effects of ChatGPT's release on the cumulative abnormal return (CAR) of listed companies in China. The results reveal that a series of ChatGPT launch events, including GPT-3.5 and GPT-4, have a significantly positive impact on the firm value of the companies focused on ChatGPT, with dynamic effects. In the initial two months after the release of ChatGPT, the Chinese stock market exhibited an undervaluation of GPT-focused companies, indicating information asymmetry and competitive substitution effect. With the widespread promotion of generative AI, social recognition of ChatGPT's potential value increased. This study verifies the moderation effect of social attention in strengthening ChatGPT's impact, demonstrating that a higher search index for ChatGPT enhances stock returns for GPT-focused companies. Heterogeneity tests reveal that the impact of ChatGPT is significantly positive for large or non-state-owned companies, while small or state-owned companies show no significant effect. From the perspective of labor structure, companies dominated by technical and production personnel experience positive effects, whereas those dominated by sales personnel do not. In the eastern regions with more favorable digital economic innovation environments, companies experience a notably positive impact. This paper provides a theoretical explanation and empirical evidence for the microeconomic impact of generative AI in the Chinese context, offering valuable insights for both government and firms.

Pengaruh Asimetri Informasi, Financial Distress, dan Good Corporate Governance terhadap Manajemen Laba

This study aims to test and prove empirically the effect of information asymmetry, financial distress, managerial ownership, and audit committee on earnings management. The population used is all annual reports of infrastructure companies in the building construction sector listed on the Indonesia Stock Exchange for the period 2018-2022, with a total sample of 12 companies. The test method uses partial least square (PLS) which is processed with SmartPLS for Windows Version 3.0. The results showed that information asymmetry, financial distress, managerial ownership, and audit committee have a positive and significant effect on earnings management.

The Ripple Effects of Financial Fraud: Investor Trust and Risk Appetite Post-Kangmei Pharmaceutical

The financial fraud at Kangmei Pharmaceutical (stock code: 600518) has had profound implications for retail investors. This paper, through data analysis, explores the correlation between information asymmetry and investment outcomes for retail investors. Information asymmetry often leaves retail investors unable to access the true financial state and operational conditions of companies, leading them to make speculative investments. Post-exposure, as information transparency increased, retail investors became aware of the company's financial issues and rushed to sell, causing a stock plunge. This highlights how information asymmetry not only affects investment decisions but also amplifies market volatility. To mitigate risks from information asymmetry, regulators must strengthen oversight and penalties, improve disclosure transparency and authenticity, while investors need to enhance self-protection awareness and information gathering and analysis capabilities. Only then can we minimize the impact of information asymmetry on retail investors and uphold fairness and stability in financial markets. This paper suggests that by implementing a robust regulatory framework and encouraging proactive investor education, we can better safeguard retail investors from the detrimental effects of information asymmetry, thereby fostering a more resilient and equitable financial market ecosystem.

The effect of information asymmetry, budget emphasis, individual capacity and self esteem on budget performance with budgetary slack as a mediation variable and budget participation as a moderating variable in regional apparatus organizations in Berau district

The effect of information asymmetry, budget emphasis, individual capacity and self esteem on budget performance with budgetary slack as a mediation variable and budget participation as a moderating variable in regional apparatus organizations in Berau district

Addressing the Lemons Problem in Environmental Sustainability:Greenwashing and E-Waste Challenges in African Markets

The "lemons problem," as conceptualized by Akerlof in 1970, depicts the adverse effects of information asymmetry in markets wherein sellers are more informed than buyers, consequently causing the leakage of low-quality commodities. This paper explains how this phenomenon plays out in an environmental sense more specifically, through the disguise of greenwashing and e-waste overflowing into African nations. False claims of sustainability by company’s dupe customers and lead to environmental degradation. The agriculture and energysectors are put under the scanner, showing the damage done by monoculture practices and the fraudulent promotion of genetically modified organisms. The importation of electronic waste and used vehicles into Africa serves to underscore the serious health and environmental implications of such exploitation. To answer this, there is the need to first introduce the EPR model where the responsibility of dealing with waste management will be passed to the producers who will be forced to be responsible and sustainable.

PENGARUH KINERJA KEUANGAN DAN KEPEMILIKAN MANAJERIALTERHADAP MANAJEMEN LABA DIINTERVENING ASIMETRI INFORMASI

Earnings management is an activity carried out by management by interfering in the preparation of a company's financial statements for the benefit of the company or individuals. The practice of earnings management can be detected using the financial performance approach, managerial ownership, and information asymmetry. This study aims to examine the effect of managerial ownership, information asymmetry, and profitability on earnings management carried out by companies. This study took the research population from financial sector companies listed on the Indonesia Stock Exchange for the 2019-2021 period. The type of data used in this study is secondary data in the form of company financial reports that are used as samples. The research method used in this study is a quantitative research method. The sample was selected using the purposive sampling method. For hypothesis testing, this study uses multiple linear regression analysis. Based on the expected research results in this study are: (1) Financial performance has a significant effect on earnings management; (2) Managerial ownership does not have a significant effect on earnings management; (3) Financial performance has a significant effect on information asymmetry; (4) Managerial ownership does not have a significant effect on information asymmetry; (5) Information asymmetry has an effect on earnings management; (6) Financial performance has an indirect effect on earnings management practices mediated by information asymmetry; (7) Managerial ownership has an indirect effect on earnings management practices mediated by information asymmetry

The Effect of LPD Internal Control, Morality, Compensation Suitability, and Information a symmetricity on Fraud Tendency

Lembaga Perkreditan Desa (LPD) is one of the assets and sources of income of traditional villages so that it requires good management so that there is no fraud by the administrators, employees and supervisory bodies of an LPD. In general, LPD aims to improve the standard of living of villagers and preserve the existence of traditional villages in Bali Province. Fraud Institutions in the scope of accounting are deviations from accounting procedures that should not be applied in an entity. This study aims to determine the effect of LPD internal control, morality, compensation suitability and information asymmetry on accounting fraud. The population in this study were administrators and employees of 38 LPDs in Mengwi District. The sample in this study was determined by the Purposive Sampling method, namely the chairman and treasurer of the LPD, so that the number of respondents in this study was 76 people. The data in this study were obtained using a questionnaire. The data analysis technique used in this study was Multiple Linear Regression Analysis, . From the analysis carried out, the results of the study were obtained, namely the Internal Control variable had a negative and significant effect on the Accounting Fraud variable. The Morality variable does not affect the Accounting Fraud variable and the Compensation Suitability variable does not affect the Accounting Fraud variable.

The Effect of CSR, Information Asymmetry and ROA on Real Earnings Management with Size as a Moderating Factor

This study examines the effect of CSR, information asymmetry. and ROA on real earnings management with company size as a moderating variable. The sample was selected using purposive random sampling method on manufacturing companies listed on the IDX for the period of 2015-2018. The results show that all variables (CSR, information asymmetry, and ROA) have a signific ant effect on abnormal operating cash flows. However, abnormal operating costs are significantly influenced only by CSR and information asymmetry. Meanwhile, abnormal production costs are significantly influenced by CSR and ROA. The final results show that total real earnings management is influenced by two important factors: Information Asymmetry and ROA. Additionally, the results indicate that company size can moderate the influence of CSR asymmetry and ROA on real earnings management practices. This study contributes to filling the research gap regarding independent factors affecting real earnings management

Moderates of job relevant information: Budget participation, information asymmetry, autonomous budget motivation and budgetary slack

The purpose of this research is to determine the effect of budget participation, information asymmetry, and autonomous budget motivation on budgetary slack directly or moderated by job relevant information. The population in this research is all village officials in Gianyar Regency who are involved in preparing the village budget in Gianyar Regency. Sampling in this research was carried out by purposive sampling with a sample size of 192 people. Research data was collected through the results of distributing questionnaires and analyzed using the Partial Least Square/PLS analysis technique. The research results state that budget participation has a positive effect on budgetary slack. Information asymmetry has no effect on budgetary slack. Autonomous budget motivation has a negative effect on budgetary slack. Job relevant information is unable to moderate the influence of budget participation on budgetary slack. Job relevant information is unable to moderate the influence of information asymmetry on budgetary slack. autonomous budget motivation against budgetary slack.

Effects of information asymmetry on green advertising for remanufacturing within a closed-loop supply chain

Manufacturers invest in Green Advertising for Remanufacturing (GAR) to attract consumers by promoting the eco-friendly benefits of their remanufacturing. Despite this, the production of remanufactured products is often influenced by Third-Party Collectors (3PCs) which handle the collection of used products. Unfortunately, market responsiveness to GAR levels is undisclosed due to proprietary information, which leaves 3PCs to unreasonably set pricing and collection quantities, potentially leading to profit loss. To explore how a two-part tariff (TPT) contract menu facilitates 3PCs in acquiring information regarding the manufacturer’s GAR effectiveness, a closed-loop supply chain comprising one manufacturer and one 3PC is taken into consideration. The optimal decisions are analyzed in three distinct decision-making scenarios: the centralized scenario, the complete information scenario, and the asymmetric information scenario. The research findings suggest that in the presence of information asymmetry, manufacturers with high GAR effectiveness (H-type manufacturers) are inclined to masquerade as manufacturers with low GAR effectiveness (L-type manufacturers). Consequently, H-type manufacturers gain additional profits due to information asymmetry. However, for the 3PC, information asymmetry leads to reduced expected profit when the manufacturer has high GAR effectiveness and increased expected profit when the manufacturer has low GAR effectiveness. Finally, our analysis demonstrates that information asymmetry does not consistently hurt consumer surplus.

The effect of strategy, information asymmetry, and incentive scheme on budgetary slack in family business company

Research aims: This research focuses on testing the influence of implementing strategies by the company, the influence of information asymmetry that occurs between parties in the organization, and the incentive system applied in the organization to its employees.Design/Methodology/Approach: Computerized experimental research was conducted using a 2x2x2 mixed-subject research design, where there were two between-subject variables and one within-subject variable. Participants in this research were employees of family business companies involved in preparing the company budget. This test used the ANOVA analysis tool with Repeated Measurement.Research findings: This research provides results that the information asymmetry variable had a positive effect on the emergence of budgetary slack, while the variables of strategy, incentive scheme, and the interaction of each variable have not proven to influence the emergence of budgetary slack.Theoretical contribution/Originality: The experimental findings support the agency problem that arises from information asymmetry.Practitioner/Policy implication: By using practitioners conditioned in specific budgeting situations in experimental budget studies, this research provides practical implications for budgeting problems in business practice. In particular, it provides an overview of the factors that can influence budget gaps, and in this case, a business can condition its efforts in taking advantage of conditions to create the right budget. Apart from that, this research will be able to provide an overview of what treatments can encourage motivation and increase opportunities for the tendency to create budget slack.Research limitation/Implication: This study was limited to certain company sectors, and there is the possibility of a gap in understanding and interpreting the experimental scenario.

The cost bearing mechanism for advertising in a capital-constrained supply chain

With rising market competition, increasing numbers of firms are launching adverting to attract customers and promote product sales. The increase in operating costs caused by advertising places greater pressure on small retail businesses that are prone to capital shortages, leading them to seek financing from upstream firms. However, in the financing process, upstream and downstream firms may not be able to acquire all of one another's real information, which inevitably has a significant impact on their operating strategies. In this paper, by constructing a Stackelberg game, we study the effects of information asymmetry on the retailer's initial capital and the manufacturer's financing rate on their advertising strategies. We find that in a capital-constrained supply chain with symmetric information, when the advertising cost coefficient is low, manufacturer advertising is the superior strategy and increases the profits of the retailer and the manufacturer, consumer surplus and social welfare; when it is moderate, retailer advertising is the superior policy; but when it is high, retailer advertising is more beneficial for the manufacturer's profit, consumer surplus and social welfare but is more unfavorable for the retailer's profit. In addition, information asymmetry on the manufacturer's financing rate affects the advertising strategies of the manufacturer and the retailer, but information asymmetry on the retailer's initial capital fails. Additionally, we further extend the model to the Nash game scenario and cooperative advertising scenario and draw some different conclusions. The findings provide new theoretical implications for the formulation of firm advertising strategies.

The Impact of Accounting Information Quality on Corporate Investor Relations Research

This paper aims to explore the impact of accounting information quality on corporate investor relations and proposes corresponding enhancement strategies. The paper begins with an overview of accounting information quality and analyzes its importance to investors. It then delves into the impact of accounting information quality on investors, such as the effects of information asymmetry and information transparency on investor decision-making and trust. Furthermore, strategies for improving accounting information quality are proposed, providing reference for enterprises to optimize their accounting information quality.

The Effect of Internal Control System, Information Asymmetry, and Suitability of Compensation on the Tendency of Accounting Fraud (Fraud) in Denpasar City (Opd)

This research aims to determine the influence of internal control systems, information asymmetry, and suitability of compensation on the tendency of accounting fraud in regional organizations in Denpasar City. The population used in this research was 21 Regional Apparatus Organizations in Denpasar City using a saturated sampling technique. The respondents used in this research were 42 respondents. This research uses several data analysis techniques. The data analysis techniques used in this research are the Instrument Test, Classical Assumption Test, Multiple Linear Regression Analysis, Coefficient of Determination Analysis (Adjusted R Square), F Test, and t-test. Based on the results of the analysis that has been carried out, it can be seen that the results of this research are that the Internal Control System has a significant negative effect, Information Asymmetry has a significant positive effect, and Compensation Suitability has a significant negative effect. Its Influence on Accounting Fraud Tendencies in Denpasar City Regional Organizations.

Financial technology and firm productivity: Evidence from Chinese listed enterprises

Recent data show that the number of fintech investment deals is increasing, implying that fintech is gradually penetrating various industries and may have far-reaching impacts on industrial production and operations. This paper studies the impact of fintech on firm productivity and the mediating effects of financing constraints, information asymmetry and technological innovation. This paper collects data from 1662 samples of Chinese listed firms from 2011 to 2022 and screens the number of firms that meet the fintech criteria to construct the regional fintech development level. Our analysis shows that fintech has a positive effect on enhancing firm productivity. Path analysis reveals that digital transformation indirectly enhances firm productivity by reducing information asymmetry, easing financing constraints, and improving technological innovation. Our research introduces innovative approaches for developing indicators in financial technology. The insights generated from this study hold potential value for both entrepreneurs and governmental bodies.

FAKTOR- FAKTOR YANG MEMPENGARUHI BIAYA MODAL EKUITAS PADA PERUSAHAAN MAKANAN DAN MINUMAN YANG TERDAFTAR DI BURSA EFEK INDONESIA TAHUN 2018-2021

This study aims to examine the effect of information asymmetry, earnings quality, firm size, and voluntary disclosure with the Cost of Equity Capital in Food and Beverage Companies listed on the Indonesia Stock Exchange in 2018-2021. This study used a sample of 22 companies during the 2018-2021 period using purposive sampling. This study uses secondary data with descriptive statistical data analysis methods, classical assumption test, and hypothesis testing. The results of this study indicate that the extent of voluntary disclosure has a positive effect on the cost of equity capital with a significant value of 0.006. Meanwhile, information asymmetry, earnings quality, and firm size have no significant effect on the cost of equity capital.

Emission abatement in low-carbon supply chains with government subsidy and information asymmetry

Governmental subsidy policy and channel information structure have substantial effects on supply chain emission reduction, operations and marketing decisions. In this paper, we use game theory to study the interplay of government subsidizing arrangement and information asymmetry on manufacturers' emission reduction and retailers' low-carbon promotion. Suppose realistically that the investment coefficients for manufacturers' emission reduction levels and retailer' low-carbon promotion levels are their respective private information. Among diverse governmental subsidy schemes, we find dual subsidizing are the best choice for the defined level of total subsidy under information asymmetry, while it is not always the best choice if the total subsidy level is uncertain. Under information asymmetry, the results show that manufacturer have no incentive to lie under any subsidy policy. However, the retailer has incentive to misrepresent individual information and its misreporting behaviour is related to the coefficient and allocation ratio of governmental subsidies. On this basis, we illustrate that a screening model can be deployed to reduce the negative effects of information asymmetry on supply chain operations. We therefore propose the method of improving the performance of low-carbon supply chains under various situations of information asymmetry and governmental subsidizing schemes to achieve system-wide Pareto improvement.