E-Thesis 332 views
The Determinations and Consequences of Annual Report Readability: Cross-Sectional Evidence from Banks / YIMIN WAN
Swansea University Author: YIMIN WAN
DOI (Published version): 10.23889/SUthesis.64677
Abstract
This quantitative thesis estimates the determinations and consequences of annual report readability using a cross-sectional sample encompassing 3086 bank years from 2000 to 2019, involving 264 listed banks across 67 countries and jurisdictions. Specifically, this thesis mainly focuses on examining i...
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Swansea, Wales, UK
2023
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| Institution: | Swansea University |
| Degree level: | Doctoral |
| Degree name: | Ph.D |
| Supervisor: | Buckle, Mike J. and Elmagrhi, Mohamed H. A. |
| URI: | https://cronfa.swan.ac.uk/Record/cronfa64677 |
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| Abstract: |
This quantitative thesis estimates the determinations and consequences of annual report readability using a cross-sectional sample encompassing 3086 bank years from 2000 to 2019, involving 264 listed banks across 67 countries and jurisdictions. Specifically, this thesis mainly focuses on examining i). whether corporate governance quality has an impact on annual report readability; ii). whether bank performance affects annual report readability; and iii). whether annual report readability influences market crisis. The FOG index, the most commonly used proxy for annual report readability, is employed in this thesis to measure the bank annual report readability. It is extracted from the CFIE (Corporate Financial Information Environment) Final Structure Extractor (FRSE). Corporate governance variables are collected from BoardEx, and bank market performance data are collected from Eikon. The fundamental data of the bank is collected from SNL. Firstly, this thesis finds that board characteristics and CEO characteristics have an impact on annual report readability. More specifically, boards with more external directors, banks with Chief Risk Officers (CROs) and risk committees, and well-educated CEOs could positively influence annual report readability. Conversely, boards with older directors and directors with more qualifications, as well as banks with longer tenure, might negatively affect annual report readability. This thesis also assesses the influence of board size, CEO-chairing boards, internally hired CEOs, and CEO age on annual report readability, but no statistically significant results are found. Secondly, this thesis provides empirical evidence on the relationship between bank performance and annual report readability. By examining bank profitability and cash holdings, this thesis concludes that firms with higher profits and more stable earnings are likely to produce more readable annual reports, while banks holding more cash might have a negative relationship with annual report readability. No significantassociation is found between changes in yearly income and net interest margin with annual report readability Finally, this thesis estimates the negative impact that unreadable annual reports might have on the capital market. Proxied by bid-ask spreads, bank liquidity risk is found to be negatively affected by annual report readability. Similarly, using DCSKEW (negative conditional skewness of firm-specific weekly stock returns), DUVOL (down-to-up volatility of firm-specific weekly returns), and CRASH (a binary variable equal to one if the firm-year includes one or more negative extreme firm-specific weekly returns and zero otherwise), this thesis observes a negative relationship between bank stock price crash risk and annual report readability. |
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| Keywords: |
Annual report readability, Corporate governance, Bank performance, Market Crisis |
| College: |
Faculty of Humanities and Social Sciences |