Information Asymmetry Research Articles

The Business Leadership of the State-Owned Enterprises: Impact of the Digital Transformations

The article explores the digital transformation of State-Owned Enterprises (SOEs) through a bibliometric analysis. The study analyses the scientific literature to understand the current trends, challenges, and emerging themes surrounding the digitalization of SOEs across various industries. Digital transformation, which involves integrating technologies like AI, IoT, and big data, is crucial for improving operational efficiency, reducing costs, and ensuring sustainability in such key sectors as energy, transportation, and telecommunications, where SOEs often play a pivotal role. The research uses bibliometric tools, specifically Scopus and the Biblioshiny App, to map out the literature on digital transformation in SOEs, analyze keywords, and identify thematic clusters in the body of research. The study highlights the significant publication growth, particularly from 2018 onwards, and points to digital transformation, corporate governance, and green innovation as dominant research themes. These themes illustrate how SOEs leverage digital technologies to improve service delivery, increase transparency, and meet environmental targets. The study observed a rapid increase in research output related to SOE digital transformation, particularly from 2020 to 2023. The leading contributors were journals such as Finance Research Letters, Sustainability (Switzerland), and Technological Forecasting and Social Change. The central themes of the analyzed publications included digital transformation, corporate governance, green innovation, and environmental performance. These were classified as “motor themes” due to their high centrality and well-developed nature, indicating their pivotal role in SOE research. The analysis revealed strong links between keywords such as digital transformation, information asymmetry, and innovation. These connections highlight the critical role of digital technologies in enhancing transparency, efficiency, and sustainability within SOEs. The study reveals that the digital transformation of SOEs is a critical area of research, with a growing emphasis on sustainability and innovation. The analysis underscores the need for further studies on the financial impacts of digitalization, the role of government policies, and cross-country comparisons to fully understand how different regulatory and economic environments influence the digital transformation processes in SOEs. By leveraging emerging technologies, SOEs can better align with national digital strategies and contribute to broader policy goals such as energy efficiency and inclusive growth.

Debt maturity and the marginal value of cash holdings

This study investigates the impact of debt maturity on the marginal value of cash holdings. It posits that short-term debt acts as a crucial governance mechanism by reducing agency conflicts and aligning managerial actions with shareholder interests. Using a sample of U.S. public firms, the results indicate that firms with higher proportions of short-term debt have a greater marginal value of cash, reflecting more efficient resource allocation and reduced managerial opportunism. The necessity for frequent capital market interactions associated with short-term debt mitigates agency conflicts. Additionally, the study explores three potential mechanisms: financial constraints, managerial moral hazard, and information asymmetry.

Dynamic Market Making with Asymmetric Information and Market Power

Abstract We study the dynamics of trading volume and bid-ask spread using a multiperiod trading model with oligopolistic market makers. Traders smooth out their trading even though they are not strategic, and thus trading persists after the arrival of information or liquidity shocks. Traders act quickly on their private information while postponing hedging trades until later periods. The market power of market makers enables them to widen bid-ask spreads when trading incentives are heightened. Consequently, both trading volume and bid-ask spread may exhibit U-shaped patterns. Our model calibration aligns with the empirical intraday patterns observed in bid-ask spreads and trading volumes. (JEL D53, D61, D82, G12, G14, G18)

Small and medium-sized enterprises and sustainable transition: Role of FinTech in a country's banking ecosystem

During the sustainable transition, small and medium-sized enterprises (SMEs) request funding to support environmental, social, and governance (ESG) investments. In particular, these requests clash with information asymmetries typical of the bank–firm relationship, causing SMEs to experience credit crunch phenomena or increased loan costs. This aforementioned phenomenon prompted this study to examine whether FinTech increases banks’ ability to support the development of SMEs aimed at achieving ESG or, better yet, sustainable transition goals. The results suggest that FinTech in a country’s banking ecosystem improves the ESG performance of Italian and British SMEs by addressing adverse selection and moral hazard issues. This study also shows a more pronounced effect in the UK banking ecosystem, which has a higher level of FinTech development and diffusion.

Blockchain-based food traceability system and pro-environmental consumption: A moderated mediation model of technology anxiety and trust in organic food product

Blockchain technology is increasingly recognized as a transformative tool for enhancing clarity and responsibility in the organic food supply chain, where concerns about product authenticity and safety are paramount. By offering provable and translucent information about the origination, production processes, and administration of organic items, blockchain helps to reduce information asymmetry and builds consumer trust, which is critical for purchase decisions in the organic food market. Drawing on insights from the trust theory and the stimulus-organism-response framework, this study uses a moderated mediation model to explore how technology anxiety negatively moderates the direct and indirect influences of blockchain-based food traceability systems on trust in organic food products and organic food purchase intention. Using a targeted sample of 5326 consumers in Vietnam, the PROCESS macro approach (models 8 and 4) is utilized to examine the formulated hypotheses. The results demonstrate that blockchain-based food traceability systems notably enhance consumer trust in organic food products and their intention to buy these products. Trust in organic food products serves as a mediator in the connection between blockchain-based traceability and purchase intention, while technology anxiety weakens the positive impacts of blockchain technology on trust and purchase intention when anxiety levels are high. This research makes crucial contributions to the literature by offering a mechanism-based explanation of how blockchain technology enhances consumer trust in organic food products and integrates technological anxiety as a moderator, providing a deeper understanding of how technological innovations shape consumer behavior. In light of the findings, several critical recommendations have been proposed for practitioners and policymakers.

Can long-term institutional owners improve market efficiency in parsing complex legal disputes?

Long-horizon institutional investors can help mitigate information asymmetries around securities class action (SCA) lawsuits. We find that the machine readability of SCA complaint filings can predict the outcome and duration of class actions. Long-term institutional investor ownership leads to a more positive post-SCA announcement price reaction and increases the volatility ratio of prices as a measure of price informativeness. Furthermore, there is a significant interaction effect between long-term institutional ownership and SCA complexity on price informativeness consistent with a superior information processing ability about complex corporate events affecting portfolio firms.

The Impact of Government Data Accessibility on Cross-Regional Venture Capital Investments

This study examines the association between government data accessibility and venture capital (VC)'s cross-regional investments. Exploiting the staggered establishment of government data open platforms (GDOPs) across different cities in China as a positive shock to government data accessibility, we find that this policy significantly increases cross-regional VC investments in treatment cities relative to others. Furthermore, the positive impact is achieved through the reduction of information asymmetry, as the establishment of GDOPs attracts VC investments from greater geographical distances. Additionally, we find a more pronounced positive effect of GDOPs on promoting cross-regional VC investments in regions with higher terrain ruggedness and lower fiscal transparency. Overall, this study demonstrates that the government's informatization and transparency initiatives can positively influence financial markets by enhancing the cross-regional flow of financial capital.

Moderating effects of technological innovation and information environment on market response to information disclosure reforms

Constructing an institutional environment centered around information disclosure (ID) is the direction of development for capital market reforms. This paper innovatively explores the stock market response (MR) to companies' enhanced ID due to institutional changes. Using data from Chinese companies listed on the Sci-Tech Innovation Board (STIB) from 2019 to 2023, the study employs Information Asymmetry Theory and Stakeholder Theory to analyze the relationship between ID levels and MR. The empirical analysis reveals a "U-shaped" relationship between ID level and MR. Furthermore, by introducing variables related to the information environment (IE) and technological innovation (TI), the study finds that their signaling effects vary among different audiences. High transparency in the IE and strong TI capabilities significantly mitigate the negative MR effects caused by revealing deficiencies during the enhancement of ID. This paper provides theoretical support and empirical evidence for capital market reform, improved financial regulation, enhanced credit quality of listed companies, and investor protection.

Internal Information Quality and Corporate Social Responsibility Performance: An Analysis of CSR Strengths and CSR Concerns

ABSTRACT Our study investigates whether the quality of information available within firms promotes corporate social responsibility (CSR) performance. Using different measures of internal information quality, we find that internal information quality is positively associated with CSR strengths, which are discretionary in nature, and negatively associated with CSR concerns, which are compliance oriented. We find that the positive association between internal information quality and CSR strengths is stronger in settings with internal information asymmetries due to greater cash flow volatility, a larger number of employees, or a broader geographic footprint. We also find that the negative association between internal information quality and CSR concerns is stronger in compliance settings where there are internal information asymmetries linked to year-over-year increases in concerns. Our results suggest that organizational practices that improve a firm’s internal information environment will likely enhance CSR performance by promoting CSR strengths and diminishing CSR concerns. Data Sources: Data are available from the public sources cited in the text. JEL Classifications: M14; Q56; M41; D8.

Directional Phase and Polarization Manipulation Using Janus Metasurfaces.

Janus metasurfaces, exemplifying two-faced 2D metamaterials, have shown unprecedented capabilities in asymmetrically manipulating the wavefront of electromagnetic waves in both forward and backward propagating directions, enabling novel applications in asymmetric information processing, security, and signal multiplexing. However, current Janus metasurfaces only allow for directional phase manipulation, hindering their broader application potential. Here, the study proposes a versatile Janus metasurface platform that can directionally control the phase and polarization of terahertz waves by integrating functionalities of half-wave plates, quarter-wave plates, and metallic gratings within a cascaded metasurface structure. As a proof-of-principle, the study experimentally demonstrates Janus metasurfaces capable of independent and simultaneous control over phase and polarization, showcasing propagation direction-encoded focusing and polarization conversion. Moreover, the directionally focused points are utilized with distinct polarization states for advanced applications in direction- and polarization-sensitive detection and imaging. This unique strategy for simultaneous phase and polarization control with direction-dependent versatility opens new avenues for designing ultra-compact devices with significant implications in imaging, encryption, and data storage.

Effect of Budget Goal Clarity and Budget Participation on Budgetary Slack: Information Asymmetry as Moderation in SKPD Palangka Raya City

This study examines the influence of budget goal clarity and budgetary participation on budgetary slack, with information asymmetry as a moderating variable. The research was conducted on 60 respondents from 20 Regional Work Units (SKPD) in Palangka Raya City. Using multiple regression and moderated regression analysis, the results show that budget goal clarity negatively affects Budgetary Slack, while budgetary participation positively affects it. Information asymmetry moderates both relationships, strengthening the effect of budget goal clarity and weakening the effect of budgetary participation on Budgetary Slack. These findings imply the importance of clear budget goals, managed participation levels, and minimized information asymmetry in reducing Budgetary Slack. The study contributes to the understanding of budgetary practices in local government units and provides insights for improving budget management in the public sector.

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.

KAZAKHSTAN'S HEALTHCARE SYSTEM IN THE CONTEXT OF THE INTRODUCTION OF COMPULSORY SOCIAL HEALTH INSURANCE

This article is devoted to the analysis of the Kazakhstani healthcare system in the context of the implementation of the compulsory social health insurance system. It will examine issues related to healthcare costs, the degree of satisfaction of the population with health insurance, the quality of medical services, etc. Since its introduction in 2020, the healthcare insurance system in Kazakhstan has encountered significant challenges. These include public dissatisfaction with the quality of medical services, inadequate coverage of the population with health insurance, vulnerabilities in the insurance information system, the existence of medical supplements, underdeveloped infrastructure in rural areas, and information asymmetry in the health insurance sector. President of Kazakhstan, Kassym-Jomart Tokayev, criticized the reform process of the health insurance system and addressed these issues during a meeting with the Government on February 7, 2024. This article delves into the evolution of the Kazakhstan health insurance system by analyzing financial indicators and monitoring data. Through this analysis, problematic areas were identified, and practical recommendations were developed to optimize the compulsory social health insurance system. Various scientific methods were employed in this study, including institutional analysis, synthesis, literature review, comparative and contrastive, and sociological methods. The goal of this study is to provide recommendations for enhancing the healthcare system in Kazakhstan during the implementation of compulsory social health insurance. The empirical foundation of this study consists of legislative documents in the healthcare sector, official publications, and analytical and statistical reports from the Ministry of Health of the Republic of Kazakhstan. The hypothesis of the study is that the introduction of compulsory social health insurance in Kazakhstan is intended to promote positive changes in the healthcare system, but due to existing organizational and financial barriers does not improve the availability and quality of medical services. Keywords: health, health insurance, health care system, public administration, health care costs.

Effect of Institutional Ownership and Audit Committee to Underpricing in Indonesian Stock Exchange

Underpricing is a phenomenon that remains unresolved. Between 2015 and 2022, 83 percent of companies listed on the Indonesia Stock Exchange (IDX) experienced underpricing. Information asymmetry is often cited as the primary reason for underpricing during the Initial Public Offering (IPO) process. The audit committee and institutional ownership are crucial indicators in reducing information asymmetry between issuers, underwriters, and investors. This study aims to examine the consistency of the application of the audit committee and institutional ownership in influencing underpricing, using a sample of 304 companies that experienced underpricing between 2015 and 2022.

THE SOCIAL DIMENSION OF THE ASSET QUALITY REVIEW IN THE EUROPEAN UNION

During the financial crisis that started in 2008, banks in the European Union (EU) needed state aid to stay afloat. After years of bailing out failing banks with public money, which led to high public debt levels across the EU, the European Commission introduced the bail-in approach. This approach required stress tests and asset quality reviews (AQR) to identify capital shortfalls in the various banking systems. The idea was to review the quality of banks’ assets, including the collateral valuations and the adequacy of assets and other collateral provisions. This study focuses on the case of Slovenia, the first EU member state that applied a bail-in approach even before it became a legally binding law at the EU level. The Slovenian bail-in led to the cancellation of all subordinated obligations (shares or bonds) held by thousands of investors, mainly private individuals. The information asymmetry and data confidentiality argument together with the applied assumptions in AQR and stress tests have raised questions about the reliability and credibility of the national and EU authorities in this respect. This paper focuses on the social/human dimension of this case by presenting the current situation through the lens of the temporal dimension of former investors’ plight in their legal attempts to challenge those extraordinary measures. The paper revolves around data confidentiality and other issues that have contributed to the fact that this situation remains unresolved, more than ten years after the nationalisation measures. The finding of this analysis is that former investors have had no legal means to effectively challenge nationalisation measures because the authorities in Slovenia have failed to provide an appropriate tool that would be effective and available in practice.

Housing prices, airport noise and an unforeseeable event of silence

To evaluate the causal impact of noise exposure on housing prices, we exploit a sudden and massive reduction in flight traffic that occurred with the onset of the COVID-19 measures in Germany. Comparing locations differently exposed to pre- pandemic noise with a difference-in-difference approach, we detect a 2.4% increase in prices for apartments that experienced a noise reduction. Disentangling temporal dynamics, we find a peak effect in mid-2021 (up to 6%), with the effect persisting until 2023, albeit at a lower magnitude. In contrast to most evaluations show- ing that the erection of a disamenity affects prices negatively, we show that lifting the burden enables neighborhoods to catch up again immediately. The immediate catch-up contradicts a stickiness of housing prices regarding (temporal) local fac- tors. The temporal pattern shows a clear peak of the effects during the pandemic, which potentially hints at information asymmetries since buyers may not know the non-pandemic noise level during the pandemic.

Are we measuring impact accurately? Identifying potential sources of bias in the evaluation of extension personnel and programs

AbstractAgricultural extension programs must demonstrate their value to compete for limited government funding. As extension professionals measure the value of their programs, the risk exists that the information they report will provide a biased or an inaccurate measure of value. We examine the evaluation process for extension programs and extension personnel to identify potential sources of bias or inaccuracies. We find that bias and inaccuracy in program evaluation often stems from a focus on short‐term outcomes, rather than long‐term impacts, while bias in personnel evaluation can result from information asymmetries that exist between extension personnel and their evaluators.

The impact of common institutional ownership on financialization in non-financial enterprise: Exacerbation or inhibition?

This paper proposes that common institutional ownership positively affects the non-financial firm financialization by using data from Chinese listed firms from 2007 to 2022. The findings reveal that information asymmetry and financial constraints emerge as significant transmission mechanisms between common institutional ownership and firm financialization. Moreover, this positive relationship is more pronounced in state-owned enterprises, firms audited by non-Big 4 auditors, and those facing weaker market competition.

Effect of Ownership Structure on Performance of Quoted Financial Firms in Nigeria

This study investigates the relationship between ownership structure and firm performance of quoted Nigerian financial firms in Nigeria. This study employs an Ex post facto research design, utilizing data extracted from annual reports of the financial firms listed on the Nigerian Exchange Group (NGX) between the years 2014 to 2023. The population of interest consists of 48 listed financial firms. Secondary data from the firms' annual reports were collected and analyzed using fixed effect panel regression analysis as specified by Hausman test. The findings reveal significant positive effects of managerial ownership, institutional ownership, and ownership concentration on firm performance. These results align with established theories such as agency theory and stewardship theory, as well as previous empirical studies in the field of corporate governance and ownership structure. The study concludes that increasing managerial ownership can align the interests of managers with shareholders, leading to improved firm performance. Attracting institutional investors who bring expertise, monitoring capabilities, and long-term investment perspectives can also contribute to enhanced firm performance. Furthermore, careful management of ownership concentration can enhance monitoring and decision-making efficiency, align shareholder interests, and reduce agency costs. However, the study finds no significant impact of foreign ownership on firm performance in the Nigerian context. This suggests the need for further research to better understand the specific dynamics and potential implications of foreign ownership in the Nigerian financial industry, considering factors such as regulatory restrictions, cultural differences, and information asymmetry.

Market Valuation of Risk Reporting: The Role of Business Model Disclosure

Narrative risk reporting is essential to providing investors with information about company risks. Recent regulations require large companies to disclose narrative information about their main risks, opportunities, and business model (BM) value drivers. While only minimum disclosure requirements are defined, principle‐based guidelines have suggested that companies contextualize risk disclosure by linking it to BM information. Hence, this study investigates the level of integration of BM reporting and risk reporting, and the consequences of such an integration on market values. This research analyzes the annual reports of a sample of UK‐listed companies over four years. Risk disclosure indexes are developed to capture the quality and integration of risk information, and value‐relevance analyses are carried out to investigate the impact of risk reporting on market values. The analyses indicate that narrative risk information is value relevant only when integrated with BM reporting. Additional analyses show that risk information is associated with reduced information asymmetry but only when disclosed risk factors are related to BM information. Hence, BM disclosure can serve as a filter to identify and interpret the most relevant company's risks. The results are valuable to various stakeholders, including academics, standard setters, and professional bodies. The study's policy implications suggest the need to develop guidelines clarifying the definitions of BM and risk and ways to integrate the narrative information, in light of recent regulatory developments in the EU.