Dedhy Sulistiawan
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Do stock investors need to discuss to reduce decision bias?
Investment Management and Financial Innovations Volume 16, 2019 Issue #3 pp. 1-9
Views: 860 Downloads: 144 TO CITE АНОТАЦІЯThe research examines the role of discussion in investors’ decision in a step-by-step information setting. Several studies present that disclosure strategy stimulates order-effect bias, but simultaneous information decreases the impact of that bias. This bias makes people weigh more heavily to recent observations than they do to older ones. Using step-by-step information, a recency effect is expected to be found. This study uses an experimental method. The participants are the representation of non-professional investors in the stock market because of a lack of knowledge and experience. Participants are also a reflection of the customer easiness in registering to be stock traders. The role of discussion between participants is a new feature of this experiment. After evaluating participants’ decision in a discussion, the experiment shows that an individual’s choice after discussion produces more bias, although they already learn the information before the discussion. The research finds that (1) using the within-subject sample, group discussion produces overvaluation (undervaluation) in positive (negative) sequential information, (2) there is bigger price revision when negative sequential information is presented. This study suggests disclosure strategies for companies. Considering a recency bias, companies must present step-by-step information when they disclose good news, but they must avoid step-by-step disclosures when giving bad news. The second practical implication is for investors; they need to think about the benefits of joining an investor club, since the discussion exacerbates recency bias. These results are expected to contribute to finance literature.
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Impact of intellectual capital on earnings management and financial performance
Gizela Eleonora Hermando , Felizia Arni Rudiawarni , Dedhy Sulistiawan , Elżbieta Bukalska doi: http://dx.doi.org/10.21511/imfi.20(3).2023.06Investment Management and Financial Innovations Volume 20, 2023 Issue #3 pp. 68-78
Views: 503 Downloads: 206 TO CITE АНОТАЦІЯIntellectual capital is widely recognized as one of the most important assets in modern businesses, but it is only reported in the financial statement in certain conditions. This study aims to evaluate the role of value-added intellectual capital (VAIC) in moderating the relationship between earnings management and financial performance. This research uses data from non-financial companies listed on the Singapore Exchange and Indonesia Stock Exchange covering the period of 2016–2021, with a total of 3,303 firm-year observations. VAIC is measured using Pulic’s intellectual capital model and earnings management using the Kasznik Model (1999). This study uses multiple linear regressions to examine the relationship between variables. The findings indicate that earnings management has no significant effect on the financial performance of Singapore, but it has a significant positive effect on the financial performance of Indonesia. Furthermore, this study discovers that intellectual capital moderates the relationship between earnings management and financial performance in both countries differently, that intellectual capital moderation is positive (negative) for the Singapore (Indonesia) sample. These findings suggest that the role of intellectual capital varies depending on stock exchanges; Singapore is considered a developed country in Southeast Asia, whilst Indonesia is considered a developing one. This study concludes that the role of intellectual capital in the relationship between earnings management and financial performance varies between market characteristics and across industries.
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