Financial Reporting Quality and Capital Markets Efficiency

A special issue of Journal of Risk and Financial Management (ISSN 1911-8074). This special issue belongs to the section "Applied Economics and Finance".

Deadline for manuscript submissions: 30 September 2025 | Viewed by 1194

Special Issue Editors


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Guest Editor
Department of Accounting, Florida State University, Tallahassee, FL 32303, USA
Interests: capital markets; market efficiency; analyst forecasts; earnings management; institutional and insider trading

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Guest Editor
Department of Accounting, University of Richmond, Richmond, VA 23173, USA
Interests: institutional investors’ trading; corporate disclosures; auditing; insider trading; trading volume; behavioral finance; international taxation; investment

Special Issue Information

Dear Colleagues,

In the evolving landscape of capital markets, understanding the dynamics that shape financial reporting quality and market efficiency is essential. This Special Issue invites research exploring the pivotal roles of factors such as corporate governance, managerial incentives, external monitoring, and investor sophistication in influencing both financial reporting quality and market efficiency. We aim to gather studies that examine how these elements impact investor decision making, institutional trading, and broader market dynamics.

We encourage submissions that delve into how managerial incentives and corporate governance elements—such as board characteristics and CEO attributes—affect financial reporting quality and market efficiency. Papers investigating the factors associated with the accuracy and efficiency of analyst forecasts and the use of financial information by institutional and individual investors are also highly relevant. Additionally, we welcome research on the integration of environmental, social, and governance (ESG) factors into financial reporting and how these dimensions influence capital markets and long-term sustainability.

Moreover, we are interested in studies that consider the effects of recent developments in data analysis and technology on financial reporting reliability and market behavior. As advancements in data processing, predictive tools, and technology become more accessible, understanding their role in shaping reporting standards and market responses remains crucial.

This Special Issue aims to provide fresh insights and practical guidance for academics, practitioners, and policymakers navigating today’s complex capital markets. We encourage submissions that offer forward-looking perspectives, rigorous methodologies, and actionable findings that deepen our understanding of the evolving relationships among capital markets, financial reporting quality, and market efficiency.

Dr. Sami Keskek
Dr. Abdullah Kumas
Guest Editors

Manuscript Submission Information

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Keywords

  • capital markets
  • market efficiency
  • financial reporting quality
  • earnings management
  • investor behavior
  • institutional trading
  • analyst forecasts
  • corporate governance
  • managerial incentives
  • environmental, social, and governance (ESG)

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Published Papers (2 papers)

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Research

19 pages, 320 KiB  
Article
Market Competition, Downward-Sticky Pay, and Stock Returns: Lessons from South Korea
by Jungho Cho, Daecheon Yang, Kyeongmin Baek and Yeju Bu
J. Risk Financial Manag. 2025, 18(5), 280; https://doi.org/10.3390/jrfm18050280 - 19 May 2025
Viewed by 222
Abstract
This study examines whether market competition reduces managerial slack under downward-sticky CEO pay schemes, thus mitigating the potentially negative link between downward-sticky pay and shareholder’s value. Using data on the Korean product market, which has been dominated by business conglomerates known as ‘chaebols’, [...] Read more.
This study examines whether market competition reduces managerial slack under downward-sticky CEO pay schemes, thus mitigating the potentially negative link between downward-sticky pay and shareholder’s value. Using data on the Korean product market, which has been dominated by business conglomerates known as ‘chaebols’, we first find that downward-sticky pay is prevalent in underperforming firms and affects shareholder value negatively. Then, we find that a higher level of market competition alleviates the value-deteriorating effect of downward-sticky pay. Overall, the findings from our study imply that market competition as an external mechanism of corporate governance threatens still highly paid CEOs with worsening performance and motivates them implicitly to work harder. Together with a need for shareholders’ influence on downward-sticky pay, this study sheds light on the importance of market competition regimes in developing countries where legal protection for shareholders and internal governance structures are weak. Full article
(This article belongs to the Special Issue Financial Reporting Quality and Capital Markets Efficiency)
14 pages, 3306 KiB  
Article
Is Bitcoin’s Market Maturing? Cumulative Abnormal Returns and Volatility in the 2024 Halving and Past Cycles
by Vinícius Veloso, Rafael Confetti Gatsios, Vinícius Medeiros Magnani and Fabiano Guasti Lima
J. Risk Financial Manag. 2025, 18(5), 242; https://doi.org/10.3390/jrfm18050242 - 1 May 2025
Viewed by 706
Abstract
This study examines how cumulative abnormal returns (CARs, the sum of abnormal returns over a period) and volatility behave around Bitcoin halving events, focusing on whether these patterns have evolved as the cryptocurrency market matures. Halvings are periodic events defined by Bitcoin’s algorithm, [...] Read more.
This study examines how cumulative abnormal returns (CARs, the sum of abnormal returns over a period) and volatility behave around Bitcoin halving events, focusing on whether these patterns have evolved as the cryptocurrency market matures. Halvings are periodic events defined by Bitcoin’s algorithm, during which the reward—in the form of newly issued bitcoins—paid to miners for validating network transactions is reduced, impacting miners’ profitability and potentially influencing the asset’s price due to a decreased supply. To carry out the analysis, we collected data on returns and risk for the 2012, 2016, 2020, and 2024 halving events and compared abnormal returns before and around the event, focusing on the 2020 and 2024 halvings. The results reveal significant shifts in Bitcoin’s price behavior within the event window, with an increased occurrence of abnormal returns in 2020 and 2024, alongside variations in average return, volatility, and maximum drawdown across all events. These findings suggest that Bitcoin’s returns and volatility during halvings are decreasing as the cryptocurrency market becomes more regulated and attracts greater participation from institutional investors and governments. Full article
(This article belongs to the Special Issue Financial Reporting Quality and Capital Markets Efficiency)
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