Purpose

The purpose of this paper is to review the literature that measures the concept of firms' information environment (IE) with focus on the validity of proxies used to measure IE.

Design/methodology/approach

The paper reviews the IE literature using theoretically based categories and analyzes the contextual meaning and use of IE proxies. The review is based on a selection of 284 research articles from 51 journals between 2000 and 2018. A total of 37 different proxy measures of IE are found and analyzed with respect to causality based on categories and the use of IE variables as dependent, independent and control variables.

Findings

The study indicates that the IE measures are heterogeneous and there is a lack of consensus regarding their use. The different conditions used to study IE explain part, but far from all, of this heterogeneity. Furthermore, we find that the use of IE measures is only briefly discussed or motivated among the studies in the sample. These findings suggest a necessary discussion about causality in the use of IE as dependent, independent or control variables.

Originality/value

This study contains new and significant information on IE and IE proxy measures. It provides an extensive literature review and provides a novel typology to analyze IE.

A firm's governance structure and business model might explain the firm’s failure or success. Franchising is a business model that has not received much attention within the corporate governance (CG) literature even though it obviously brings several unique CG challenges. Therefore, we review articles at the interface of CG and franchising. We identify and thematize the literature in four focus areas, each with a different relationship to CG: 1) traditional CG, 2) governance challenges unique to franchising, 3) governance modes, and 4) contracts. We find that the literature largely ignores the traditional view of CG when examining many aspects of franchising. We also find that the franchising literature covers governance topics when discussing governance modes, which provides a basis for developing CG theories. Altogether, our findings open a promising avenue for future research that incorporates CG into studies of franchising.

In the accounting and finance literature, the concept of the information environment (IE) is widely used, but its meaning varies across different articles. Given the considerable presence of the IE concept, it seems relevant to clarify the concept and allow a clearer path forward for future research. With this ambition, this paper reviews articles that apply the concept of IE. Our sample consists of 248 articles published within the accounting and finance field between 2000 and 2017. We confirm an increasing trend in the use of the concept over time and discuss the lack of distinctness in the concept's general meaning. Several definitions of IE appear parallel to one another in the literature; in many cases, these definitions are also inconsistent. To analyze the concept, we use a two-step approach with the following subordinated aims: 1) to identify and clarify different types of IE, and 2) to identify and clarify the components that constitute the firm's IE. We find that the description preceding the term IE signals a border between different types of information or between different societal levels of IE. Also, the concept appears as a “system concept,” and its inclusion of different actors, the relations among these actors, and the effect of these relations on information asymmetry are core aspects that need to be described in future research.

A ski carrier (10) for carrying a pair of skis (36) is described. The ski carrier (10) comprises a pair of ski poles (12), each having an elongated shaft (16) and a handle (22) that can be attached in a first and a second orientation relative to the shaft. The first orientation is suitable for skiing. Each ski pole further has a wheel (24) with an axis of rotation (26) that is transverse to the shaft in the second orientation. The ski carrier further has a lock (46) for releasably locking the handles together so that they can support the pair of skis and functions as a rolling cart.

Financial analyst forecast properties are often used to measure the information environment (IE) within which firms operate. The three most common analyst proxies for IE are analyst following, analyst forecast accuracy, and analyst forecast dispersion. Research using these forecast properties indicates that country-level corporate governance (CCG) positively affects IE. However, consider that analyst properties are determined by both public and private information and that these proxies do not enable determining these two dimensions; even so, they can be interpreted as a rough proxy for IE, in particular because there are models that measure the proportion and precision of private information, the precision of public information and the precision of total information using analyst data. We claim that it is especially important to understand these dimensions and that the relationship between CCG and IE has not been fully investigated. The aim of this paper is therefore to investigate this relationship more thoroughly using a new model as a proxy for firms’ IE. We use a worldwide sample, and our results show that higher levels of CCG significantly and positively affect IE. Greater CCG improves the precision of both public and total information. Additionally, our results indicate that precision in private information is unaffected by greater CCG and that analysts use relatively less private information in their forecasts with increased CCG. We can therefore conclude a generally positive relationship between CCG and IE with improved public information. 

In the corporate governance landscape there are several different groups of so-called gatekeepers who act as intermediary between the company and investors. Financial analysts represent one of these groups that have been especially tied to the question of how corporate laws affect the overall efficiency of corporate governance. It has, for example, been proposed that their performance, that is, predicting earnings per share (EPS), is influenced by the strength of the legal system in terms of investor protection. In this study we analyze this relationship in four European countries using a newly developed index for investor protection. This allows us to conduct analysis both cross-sectionally and over time, which is an opportunity for a more refined analysis of the impact of strengthened investor protection than prior studies. Our main conclusion is that there is overall support for the proposition that there is a relation between financial analysts’ performance and the strength of legal protection based on both analyses of changes over time and between countries. Their performance is better with a higher degree of investor protection. But we also claim that the analysts’ role and investor protection can be seen as a substitution for each other when working as mechanisms in the corporate governance landscape, as there is a more extensive market for analysts when there is less investor protection. The results provide an in-depth analysis of the effect of strengthened legalization and also how different corporate governance mechanisms can affect each other. This is especially of value for policy makers and academics interested in the impact and consequences of legal reforms.

Present study investigates the relationship between firm level corporate governance and the performance of financial analysts. By using a comprehensive database the analysis integrates several dimensions of firm level corporate governance as well as the dimension legal context. The result show support for a positive relationship between corporate governance and financial analyst performance. However, based on the fact that the sample is divided into companies belonging to civil law and common law countries, this conclusion must be nuanced. We can conclude that there is just support for a positive relation between firm-level corporate governance and forecast accuracy in civil law countries, and only support for a negative relation between firm-level corporate governance and forecast dispersion in common law countries. However, all firms with strong corporate governance in the two different contexts have a greater analyst following. Furthermore, we find that the variables related to the board seem to matter independently of the context concerning the improved performance of the analyst. In addition, in both civil and common law countries, the higher improved function of the board and ownership increases the demand for analysts, while improved audit function as well as improved takeover regulation lessen the demand for analysts. 

This study investigates the consequences of using different methods when making conclusions about the effect of IFRS. The study’s contribution is related to the suggestion that research design must be considered when analysing the results of prior studies on the adoption of IFRS. In summary, our results demonstrate that the impact of IFRS on accounting quality measured as financial analysts’ information environment depends on the model used. Using the same model as in prior research (the BKLS model) our results confirm earlier studies that IFRS adoption improves the information environment for analysts. However, when using a more sophisticated model no such improvement can be found.

This paper investigates the effect of shareholder protection on analysts’ performance. The important corporate governance role analysts can play by monitoring management has largely been ignored in the literature. Using a newly constructed index, we are for the first time able to analyse how changes in shareholder protection over time affect analysts’ performance as a gatekeeper. We find that strengthened shareholder protection improves analysts’ performance as a gatekeeper, i.e. analysts’ ability to reduce information asymmetry improves with strengthened shareholder protection. However, we also find a substitution effect: Strengthened shareholder protection makes analysts’ services less valuable to investors, thereby leading to a reduction in the number of analysts following firms.