Corporate social responsibility, institutional investors’ ownership, financial restatements and sell-side analysts’ stock recommendations

In Malaysia, the capital market regulators have recently given prominent attention to issues such as corporate responsibility (CSR), shareholder activism and integrity in financial reporting by issuing the Sustainability Reporting Guide (2015) and Malaysian Code for Institutional Investors (2014). G...

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Main Author:	Qasem, Ameen Ali Mohammed
Format:	Thesis
Language:	eng eng
Published:	2018
Subjects:	HD60 Small Business.
Online Access:	https://etd.uum.edu.my/7727/1/s95290_01.pdf https://etd.uum.edu.my/7727/2/s95290_02.pdf
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id	my-uum-etd.7727
record_format	uketd_dc
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Aripin, Norhani Wan Hussin, Wan Nordin
topic	HD60 Small Business.
spellingShingle	HD60 Small Business. Qasem, Ameen Ali Mohammed Corporate social responsibility, institutional investors’ ownership, financial restatements and sell-side analysts’ stock recommendations
description	In Malaysia, the capital market regulators have recently given prominent attention to issues such as corporate responsibility (CSR), shareholder activism and integrity in financial reporting by issuing the Sustainability Reporting Guide (2015) and Malaysian Code for Institutional Investors (2014). Given the importance of these issues, this study examines whether CSR, institutional investors’ ownership, and financial restatements influence stock recommendations made by analysts. It employs a dataset from a panel of 285 Malaysian public listed companies (PLCs) for the period 2008 to 2013 (737 company-year observations). The results show a positive and significant influence of CSR reporting on the stock recommendations, which means that analysts issue more favourable stock recommendations for companies with higher CSR disclosures. Further, the findings indicate that the presence of both transient and dedicated institutional investors are viewed positively by analysts. In particular, the results indicate that analysts issue more favourable stock recommendations for the companies with higher levels of transient and dedicated institutional investors’ ownership. In addition, the results also show that analysts tend to give favourable stock recommendations for companies that restated their financial statements, contrary to expectation. These findings imply that analysts tend to echo government initiatives by giving favourable stock recommendations to companies with greater engagement in CSR activities and the ability to attract institutional investors. The findings also suggest that analysts view financial restatements as informative rather than opportunistic. Overall, these findings should be useful to PLCs and policymakers. PLCs might use the findings to understand the preferences of sell-side analysts towards CSR engagement. Furthermore, policymakers might use it to recognize the important role played by institutional investors in monitoring investee companies and to understand how analysts perceive and evaluate restated companies.
format	Thesis
qualification_name	Ph.D.
qualification_level	Doctorate
author	Qasem, Ameen Ali Mohammed
author_facet	Qasem, Ameen Ali Mohammed
author_sort	Qasem, Ameen Ali Mohammed
title	Corporate social responsibility, institutional investors’ ownership, financial restatements and sell-side analysts’ stock recommendations
title_short	Corporate social responsibility, institutional investors’ ownership, financial restatements and sell-side analysts’ stock recommendations
title_full	Corporate social responsibility, institutional investors’ ownership, financial restatements and sell-side analysts’ stock recommendations
title_fullStr	Corporate social responsibility, institutional investors’ ownership, financial restatements and sell-side analysts’ stock recommendations
title_full_unstemmed	Corporate social responsibility, institutional investors’ ownership, financial restatements and sell-side analysts’ stock recommendations
title_sort	corporate social responsibility, institutional investors’ ownership, financial restatements and sell-side analysts’ stock recommendations
granting_institution	Universiti Utara Malaysia
granting_department	Tunku Puteri Intan Safinaz School of Accountancy (TISSA)
publishDate	2018
url	https://etd.uum.edu.my/7727/1/s95290_01.pdf https://etd.uum.edu.my/7727/2/s95290_02.pdf
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spelling	my-uum-etd.77272021-08-11T06:33:28Z Corporate social responsibility, institutional investors’ ownership, financial restatements and sell-side analysts’ stock recommendations 2018 Qasem, Ameen Ali Mohammed Aripin, Norhani Wan Hussin, Wan Nordin Tunku Puteri Intan Safinaz School of Accountancy (TISSA) Tunku Intan Safinaz School of Accountancy (TISSA) HD60 Small Business. In Malaysia, the capital market regulators have recently given prominent attention to issues such as corporate responsibility (CSR), shareholder activism and integrity in financial reporting by issuing the Sustainability Reporting Guide (2015) and Malaysian Code for Institutional Investors (2014). Given the importance of these issues, this study examines whether CSR, institutional investors’ ownership, and financial restatements influence stock recommendations made by analysts. It employs a dataset from a panel of 285 Malaysian public listed companies (PLCs) for the period 2008 to 2013 (737 company-year observations). The results show a positive and significant influence of CSR reporting on the stock recommendations, which means that analysts issue more favourable stock recommendations for companies with higher CSR disclosures. Further, the findings indicate that the presence of both transient and dedicated institutional investors are viewed positively by analysts. In particular, the results indicate that analysts issue more favourable stock recommendations for the companies with higher levels of transient and dedicated institutional investors’ ownership. In addition, the results also show that analysts tend to give favourable stock recommendations for companies that restated their financial statements, contrary to expectation. These findings imply that analysts tend to echo government initiatives by giving favourable stock recommendations to companies with greater engagement in CSR activities and the ability to attract institutional investors. The findings also suggest that analysts view financial restatements as informative rather than opportunistic. Overall, these findings should be useful to PLCs and policymakers. PLCs might use the findings to understand the preferences of sell-side analysts towards CSR engagement. Furthermore, policymakers might use it to recognize the important role played by institutional investors in monitoring investee companies and to understand how analysts perceive and evaluate restated companies. 2018 Thesis https://etd.uum.edu.my/7727/ https://etd.uum.edu.my/7727/1/s95290_01.pdf text eng public https://etd.uum.edu.my/7727/2/s95290_02.pdf text eng public https://sierra.uum.edu.my/record=b1698830~S1 Ph.D. doctoral Universiti Utara Malaysia Abarbanell, J., & Lehavy, R. (2003). 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Corporate social responsibility, institutional investors’ ownership, financial restatements and sell-side analysts’ stock recommendations

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