The effect of past earnings and dividend patterns on the information content of dividends when earnings are reduced

This study pursues two objectives: first, to provide evidence on the information content of dividend policy, conditional on past earnings and dividend patterns prior to an annual earnings decline; second, to examine the effect of the magnitude of low earnings realizations on dividend policy when firms have more-or-less established dividend payouts. The information content of dividend policy for firms that incur earnings reductions following long patterns of positive earnings and dividends has been examined (DeAngelo et al., 1992, 1996; Charitou, 2000). No research has examined the association between the informativeness of dividend policy changes in the event of an earnings drop, relative to varying patterns of past earnings and dividends. Our dataset consists of 4,873 U.S. firm-year observations over the period 1986-2005. Our evidence supports the hypotheses that, among earnings-reducing or loss firms, longer patterns of past earnings and dividends: (a) strengthen the information conveyed by dividends regarding future earnings, and (b) enhance the role of the magnitude of low earnings realizations in explaining dividend policy decisions, in that earnings hold more information content that explains the likelihood of dividend cuts the longer the past earnings and dividend patterns. Both results stem from the stylized facts that managers aim to maintain consistency with respect to historic payout policy, being reluctant to proceed with dividend reductions, and that this reluctance is higher the more established is the historic payout policy. © 2010 The Authors. Journal compilation © 2010 Accounting Foundation, The University of Sydney.

A csomagoláson található információtartalom újragondolása sokdimenziós skálázással az élelmiszeripar példáján (Rethinking of information content on food packaging using multidimensional scaling)

A csomagolás részét képezi a jelölés – vagy más néven címke, label –, aminek elsődleges funkciója a termék tulajdonságairól való tájékoztatás, amellett, hogy a vállalat és a fogyasztó egyik legfontosabb találkozási pontja. Kiemelt szerepe van a marketing és a vállalati menedzsment eszköztárában, hiszen a fogyasztói döntéshozatal meghatározó forrása. A szerző írásában a jelölések definícióját, fajtáit és csoportosítását tárja az olvasó elé, majd ismerteti jelentőségét, fontosságát és szerepét az élelmiszer-ipari termékek segítségével. Ezután egy 630 fős megkérdezés eredményeképp a sokdimenziós skálázás (MDS) módszerével a jelölések új értelmezését mutatja be: a jelöléseket három dimenzió mentén lehet elhelyezni (előzetes tudás, érdek, megbízhatóság), valamint ezenkívül a jelölések öt homogén csoportot alkotnak (klasszikus, diétás, funkcionális, tudatos, előállítási). A téma jelentőségét az egészség és a környezet iránti növekvő érdeklődés, valamint a változó jogszabályi környezet is alátámasztja. / === / Signs, labels, claims are to inform consumers of product attributes, and are part of the packaging. Labeling is one of the most important marketing and management tool, while purchase decision is made at the point of purchase. The aim of this paper is to present the basic definitions and elements of information content on food packaging. The author developed a new approach to examine labeling using multidimensional scaling as a result of a pilot study. Labels are to distinguish through three dimensions: precognition, interest and reliability. Beyond that labels can be sorted to five homogeneous clusters based on classic, dietary, functional, conscious and production attributes. The relevancy of labeling is supported by growing interest of health and environmental issues and changing law environment.

Information Content of Bank Credit Rating Changes: Evidence from Europe

This thesis examines the short-term impact of credit rating announcements on daily stock returns of 41 European banks indexed in STOXX Europe 600 Banks. The time period of this study is 2002–2015 and the ratings represent long-term issuer ratings provided by S&P, Moody’s and Fitch. Bank ratings are significant for a bank’s operation costs so it is interesting to investigate how investors react to changes in creditworthiness. The study objective is achieved by conducting an event study. The event study is extended with a cross-sectional linear regression to investigate other potential determinants surrounding rating changes. The research hypotheses and the motivation for additional tests are derived from prior research. The main hypotheses are formed to explore whether rating changes have an effect on stock returns, when this possible reaction occurs and whether it is asymmetric between upgrades and downgrades. The findings provide evidence that rating announcements have an impact on stock returns in the context of European banks. The results also support the existence of an asymmetry in capital market reaction to rating upgrades and downgrades. The rating downgrades are associated with statistically significant negative abnormal returns on the event day although the reaction is rather modest. No statistically significant reaction is found associated with the rating upgrades on the event day. These results hold true with both rating changes and rating watches. No anticipation is observed in the case of rating changes but there is a statistically significant cumulative negative (positive) price reaction occurring before the event day for negative (positive) watch announcements. The regression provides evidence that the stock price reaction is stronger for rating downgrades occurring within below investment grade class compared with investment grade class. This is intuitive as investors are more concerned about their investments in lower-rated companies. Besides, the price reaction of larger banks is more mitigated compared with smaller banks in the case of rating downgrades. The reason for this may be that larger banks are usually more widely followed by the public. However, the study results may also provide evidence of the existence of the so-called “too big to fail” subsidy that dampens the negative returns of larger banks.

Agency problems and capital expenditure announcements

This article examines the market valuation of announcements of new capital expenditure. Prior research suggests that the firm's growth opportunities and cash flow position condition the market response. This study jointly examines the role of growth and cash flow, and the interaction between them. Using a new data set of Australian firms that avoids problems associated with expectations models, the results are remarkably strong and support a positive association between growth opportunities and the market valuation, in addition to supporting the role of free cash flow. The findings have implications for the relationship between general investment information and stock prices.

Quasi-optimal assimilation of satellite retrievals for incremental 4D-Var

An interface between satellite retrievals and the incremental version of the four-dimensional variational assimilation scheme is developed, making full use of the information content of satellite measurements. In this paper, expressions for the function that calculates simulated observations from model states (called “observation operator”), together with its tangent linear version and adjoint, are derived. Results from our work can be used for implementing a quasi-optimal assimilation of satellite retrievals (e.g., of atmospheric trace gases) in operational meteorological centres.

Analysis and visualization of chromosome information

This paper analyzes the DNA code of several species in the perspective of information content. For that purpose several concepts and mathematical tools are selected towards establishing a quantitative method without a priori distorting the alphabet represented by the sequence of DNA bases. The synergies of associating Gray code, histogram characterization and multidimensional scaling visualization lead to a collection of plots with a categorical representation of species and chromosomes.

Shannon information and power law analysis of the chromosome code

This paper studies the information content of the chromosomes of twenty-three species. Several statistics considering different number of bases for alphabet character encoding are derived. Based on the resulting histograms, word delimiters and character relative frequencies are identified. The knowledge of this data allows moving along each chromosome while evaluating the flow of characters and words. The resulting flux of information is captured by means of Shannon entropy. The results are explored in the perspective of power law relationships allowing a quantitative evaluation of the DNA of the species.

Accessing complexity from genome information

This paper studies the information content of the chromosomes of 24 species. In a first phase, a scheme inspired in dynamical system state space representation is developed. For each chromosome the state space dynamical evolution is shed into a two dimensional chart. The plots are then analyzed and characterized in the perspective of fractal dimension. This information is integrated in two measures of the species’ complexity addressing its average and variability. The results are in close accordance with phylogenetics pointing quantitative aspects of the species’ genomic complexity.

The evolution of information suppression in communicating robots with conflicting interests.

Reliable information is a crucial factor influencing decision-making and, thus, fitness in all animals. A common source of information comes from inadvertent cues produced by the behavior of conspecifics. Here we use a system of experimental evolution with robots foraging in an arena containing a food source to study how communication strategies can evolve to regulate information provided by such cues. The robots could produce information by emitting blue light, which the other robots could perceive with their cameras. Over the first few generations, the robots quickly evolved to successfully locate the food, while emitting light randomly. This behavior resulted in a high intensity of light near food, which provided social information allowing other robots to more rapidly find the food. Because robots were competing for food, they were quickly selected to conceal this information. However, they never completely ceased to produce information. Detailed analyses revealed that this somewhat surprising result was due to the strength of selection on suppressing information declining concomitantly with the reduction in information content. Accordingly, a stable equilibrium with low information and considerable variation in communicative behaviors was attained by mutation selection. Because a similar coevolutionary process should be common in natural systems, this may explain why communicative strategies are so variable in many animal species.

Fair value versus historical cost-based valuation for biological assets: Predictability of financial information

There is an intense debate on the convenience of moving from historical cost (HC) toward the fair value (FV) principle. The debate and academic research is usually concerned with financial instruments, but the IAS 41 requirement of fair valuation for biological assets brings it into the agricultural domain. This paper performs an empirical study with a sample of Spanish farms valuing biological assets at HC and a sample applying FV, finding no significant differences between both valuation methods to assess future cash flows. However, most tests reveal more predictive power of future earnings under fair valuation of biological assets, which is not explained by differences in volatility of earnings and profitability. The study also evidences the existence of flawed HC accounting practices for biological assets in agriculture, which suggests scarce information content of this valuation method in the predominant small business units existing in the agricultural sector in advanced Western countries

Is more information always good? : investigating the impact of website interface features on e-retailer's sales performance

A number of frameworks have been suggested for online retailing, but still there exists little consensus among researchers and practitioners regarding the appropriate amount of information critical and essential to the improvement of customers' satisfaction and their purchase intention. Against this backdrop, this study contributes to the current practical and theoretical discussions and conversations about how information search and perceived risk theories can be applied to the management of online retailer website features. This paper examines the moderating role of website personalization in studying the relationship between information content provided on the top US retailers' websites, and customer satisfaction and purchase intention. The study also explores the role played by customer satisfaction and purchase intention in studying the relationship between information that is personalized to the needs of individual customers and online retailers' sales performance. Results indicate that the extent of information content features presented to online customers alone is not enough for companies looking to satisfy and motivate customers to purchase. However, information that is targeted to an individual customer influences customer satisfaction and purchase intention, and customer satisfaction in tum serves as a driver to the retailer's online sales performance.

Ontological modelling of content management and provision

Information provision to address the changing requirements can be best supported by content management. The Current information technology enables information to be stored and provided from various distributed sources. To identify and retrieve relevant information requires effective mechanisms for information discovery and assembly. This paper presents a method, which enables the design of such mechanisms, with a set of techniques for articulating and profiling users' requirements, formulating information provision specifications, realising management of information content in repositories, and facilitating response to the user's requirements dynamically during the process of knowledge construction. These functions are represented in an ontology which integrates the capability of the mechanisms. The ontological modelling in this paper has adopted semiotics principles with embedded norms to ensure coherent course of actions represented in these mechanisms. (C) 2008 Elsevier B.V. All rights reserved.

An ontological modelling of user requirements for personalised information provision

The knowledge economy offers opportunity to a broad and diverse community of information systems users to efficiently gain information and know-how for improving qualifications and enhancing productivity in the work place. Such demand will continue and users will frequently require optimised and personalised information content. The advancement of information technology and the wide dissemination of information endorse individual users when constructing new knowledge from their experience in the real-world context. However, a design of personalised information provision is challenging because users’ requirements and information provision specifications are complex in their representation. The existing methods are not able to effectively support this analysis process. This paper presents a mechanism which can holistically facilitate customisation of information provision based on individual users’ goals, level of knowledge and cognitive styles preferences. An ontology model with embedded norms represents the domain knowledge of information provision in a specific context where users’ needs can be articulated and represented in a user profile. These formal requirements can then be transformed onto information provision specifications which are used to discover suitable information content from repositories and pedagogically organise the selected content to meet the users’ needs. The method is provided with adaptability which enables an appropriate response to changes in users’ requirements during the process of acquiring knowledge and skills.

Visualizing probabilistic flood forecast information: expert preferences and perceptions of best practice in uncertainty communication

The aim of this article is to improve the communication of the probabilistic flood forecasts generated by hydrological ensemble prediction systems (HEPS) by understanding perceptions of different methods of visualizing probabilistic forecast information. This study focuses on interexpert communication and accounts for differences in visualization requirements based on the information content necessary for individual users. The perceptions of the expert group addressed in this study are important because they are the designers and primary users of existing HEPS. Nevertheless, they have sometimes resisted the release of uncertainty information to the general public because of doubts about whether it can be successfully communicated in ways that would be readily understood to nonexperts. In this article, we explore the strengths and weaknesses of existing HEPS visualization methods and thereby formulate some wider recommendations about the best practice for HEPS visualization and communication. We suggest that specific training on probabilistic forecasting would foster use of probabilistic forecasts with a wider range of applications. The result of a case study exercise showed that there is no overarching agreement between experts on how to display probabilistic forecasts and what they consider the essential information that should accompany plots and diagrams. In this article, we propose a list of minimum properties that, if consistently displayed with probabilistic forecasts, would make the products more easily understandable. Copyright © 2012 John Wiley & Sons, Ltd.