1 / 26

Does Innovation Matter to Conference Calls

.Anecdotal evidence. ????(2002/07/24)??????????????????????????,??????????????,??????????,?????????????,??????????,??????????????,???????????????????????,????????,???????,???????????????????????,,?????????,???????????????????,????????,?????????????,?????????????????????????????????,?????????

junius
Download Presentation

Does Innovation Matter to Conference Calls

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

    1. Does Innovation Matter to Conference Calls? .

    2. .Anecdotal evidence ????(2002/07/24)??? ???????????…????????????,????????????…??,??????????,?????????????,??????????…,??????????????,?????????…??????????????,????????,???????,???????????????????????,…,?????????,???????…????????????,????????,?????????????,???????????????????…??????????????,???????????????

    3. Inspiration Does Innovation Matter to Conference Calls? ??????????????????? H1:??????????????????????,???????????????? H2:??????????????????????(???)???,????????????????

    4. Motivation Innovation activities is increasing in Taiwan 9th in the World (China Times, 08/24/2002) Innovation: General information asymmetry Accounting-related information asymmetry GAAP: RD is fully expensed as incurred Economic asset are unrecognized as accounting assets in F/S. Information opacity: East Asian (Fan and Wong, 2001; Claessens and Fan 2003 )

    5. Motivation Disclosure is used to reduce Information asymmetry (Healy and Palepu, 2001) Forms of voluntary disclosure Disclosure in financial reports Management earnings forecast Conference calls …

    6. Motivation Conference calls Increasing popular! US: 82% (National Investor Relations Institute, 1998 ) ROC:53.8%(Corporate Asia Network, TechInsight Inc) An effective communication channel Financial information Non-financial information=> unrecognized assets

    7. Literature Frankel, Johnson, and Skinner (1999) Determinant of CC. Tasker (1998, 1999) Low quality of accounting information M/B, Sale growth rates Sunder (2002) Regulation Fair Disclosure Matsumoto (2002) Analyst accuracy Bushee et al. (2003) Open and closed CC

    8. Hypotheses: incentive H1A: more innovative firms are more likely to hold a CC than less innovative firms. H1B: more innovative firms are more likely to hold frequent CC than less innovative firms. H1C: more innovative firms are more likely to relay innovation and R&D-related information during CC.

    9. Hypotheses: information content H2A:the more innovative firms have more positive information content surrounding CC event dates. H2B: the more innovation-related information that firms provide during CC calls results in more positive information content.

    10. Research Design H1A and 1B =>(Probit &Order probit) Pr(CC_DUMMY) = a1+b1[INNOVATION]+?b2[MGTOWN]+ b3 [LDE] + b4 [LOGASSET] + b5 [DEPLAN] + b6 [MB] + b7 [PE] + ?b8 [SG] + ? (1) Pr(CC_FREQ) = a1+b1[INNOVATION]+?b2[MGTOWN]+ b3 [LDE] + b4 [LOGASSET] + b5 [DEPLAN] + b6 [MB] + b7 [PE] + ?b8 [SG] + ? (2)

    11. INNOVATION R&D patent counts (PATENT#) estimated patent value (PATENTV) a composite variable of R&D expenditures and patent counts CD_DUMMY: Dummy variable=1 if holding CC. CD_FREQ; Number of CC

    12. Research Design H1C: MRD_CALL = a1+b1[INNOVATION]+?b2[MGTOWN]+?b3[LDE]+ b4[LOGASSET]+?b5[DEPLAN]+ b6[MB]+b7[PE]+?b8[SG]+ ?b9[ELE]+? (3) MDISC = a1+b1[INNOVATION]+?b2[MGTOWN]+?b3[LDE]+ b4[LOGASSET]+?b5[DEPLAN]+ b6[MB]+b7[PE]+?b8[SG]+ ?b9[ELE]+? (4)

    13. Variables RD_CALL=> M RD_CALL Dummy variable=1 if discussing RD during CC. DISC=>MDISC Content analyst: 1~12 (Gu and Li, 2003)

    14. Research Design H2 MCAR= a1+ b1[INNOVATION]+? b2 [MRD_CALL]+ b3 [LOGASSET]+? b4[MB]+b5[SG]+ b6[ELE] +b7[INVMILL]+? (5) MCAR= a1+b1[INNOVATION]+? b2 [MDISC]+ b3 [LOGASSET]+? b4[MB]+b5[SG]+ b6[ELE] +b7[INVMILL]+? (6)

    15. Variables MCAR: mean cumulative abnormal returns INVMILL: inverse Mill's ratio (Heckman: selection bias)

    16. Sample Data Conference calls China Times’ Information Winner Series database Financial and Price data Taiwan Economic Journal Patent Asia Pacific Intellectual Property Association (APIPA) Sample period: 1997~2001 Conference calls Table 1: frequency distribution

    18. Results Descriptive Statistics Table 2 As predicted! H1A and IB Table 3 As predicted! H1 Table 4 As predicted!

    23. H2 Table 5 As predicted!

    26. Further analyses Conference Call Timing Pr(CC_DUMMY) = a1+b1[?INNOVATION] MCAR= a1+ b1[?INNOVATION] Table 6 &7=> as predicted Market expectation adjustments MCAR= a1+ b1[(1-p)INNOVATION] P is estimated from the equ. (1) Pr(CC) = a1+b1[INNOVATION]+ control variables? (1) Untabulated results: robust~~~

More Related