Louis Mangeney

IFRS Information Overload?

The paper contributes to the recent debate on the net benefits of the growing complexity and detailed disclosure requirements of International Financial Reporting Standards (IFRS). It investigates the impact of a voluntary turn away from IFRS on analysts in a country specific setting, Switzerland, where departure from IFRS is made possible for listed firms. Using difference-in-difference analysis, the article studies analysts’ following and accuracy around the switch from IFRS to the Swiss domestic accounting standard. Firms leaving the international standard experience lower analyst following and accuracy. However, further analysis provides evidence that such effects are principally driven by foreign analysts, and analysts without prior experience on the Swiss regulation. Overall the results provide evidence that IFRS still delivers attractive and beneficial information to foreign analysts, even though its demanding requirements and implementation costs.

The impact of the institutional environment on analysts’ herding behavior:

We examine the influence of institutional factors on herding behavior by exploring changes in security analysts’ institutional environments. Specifically, we identify analysts employed at privately held brokers subsequently acquired by a publicly listed institution (hereafter, “treated analysts”). We posit that, after the treatment, analysts are less independent (e.g., due to increased peer pressure or more regulated environments), and thus they issue more herding forecasts. Using a staggered difference-in-differences design, we find that treated analysts issue significantly more herding forecasts in the post-treatment period. In contrast, we do not find a change in herding behavior for analysts subject to acquisitions by non-public brokers, indicating that the institutional change from private to public, not the acquisition per se, drives our inferences. Consistent with the decreasing independency explanation, we find stronger treatment effects for less experienced analysts, more substantial organizational changes, institutional changes associated with higher job uncertainty, and in periods of stricter regulation of public institutions. Taken together, our findings suggest a causal link between the institutional environment and herding behavior.

Available on SSRN.

Is Social media activity incrementally useful for disclosure processing?

In this paper, I investigate social media as information intermediaries to mitigate disclosure processing costs. Specifically, I explore the role of Twitter user activity around earning announcements to reduce processing costs while controlling for firm-initiated tweets. The increasing corporate use of social media and regulators’ growing scrutiny over firms’ behaviors on such platforms justifies the need to assess the usefulness of such medium as information intermediaries. The focus on Twitter, as the most widely used social media platform for investor relations, gives me the opportunity to exploit specific features, providing variation in processing costs: the introduction of the clickable cashtag in 2012 and variation across firms’ and users Twitter accounts (e.g., verified accounts, sophistication). I expect user activity to reduce information asymmetry around earnings announcements with results robust to firms-initiated disclosures, market reaction to the announcements and other factors affecting firms’ information environments.

Working paper

University of Neuchatel, Switzerland

Research Assistant

Computing