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- Do analysts anticipate and react to bankruptcy? EvidencePublication . Coelho, Luís; Peixinho, RúbenFinance literature suggests that financial analysts are sophisticated agents that act as facilitators of market efficiency by releasing relevant information to the market. This paper uses a sample of four major US bankruptcies to explore if analysts are able to disclose information to the market that provides investors with material information for their investment decisions. In particular, we use a qualitative approach to analyse analysts’ reports in order to verify if these agents are able to predict financial and strategic bankruptcies before the event is publicly known. We also investigate how financial analysts react to bankruptcy shortly after it has become effective. Results show that investors cannot rely on analysts’ reports to anticipate corporate failure in both the case of financial and strategic bankruptcies. Our results also suggest that analysts react asymmetrically to strategic and financial bankruptcies shortly after this event is publicly known.
- The financial impact of a withdrawn ISO 9001 certificatePublication . Cândido, Carlos; Coelho, Luís; Peixinho, RúbenThe purpose of this paper is to assess to what extent the loss of the ISO 9001 certification affects the decertified firms’ financial performance. Design/methodology/approach – Using standard event-study methods, this paper matches a sample of 143 Portuguese companies that lost their ISO 9001 certification with similar non-event counterpart firms (according to return-on-assets and size) and compares the performance of these two groups of firms using financial data collected from the AMADEUS database. Findings – Results show no statistical significant differences in the financial performance (as measured by return-on-assets, return-on-sales, and sales growth) between companies that lost their ISO 9001 certification and their matched firms. Although the literature suggests that certification improves firms’ performance and that the benefits of certification may last over long periods of time, this paper’s results suggest that, after decertification, companies do not exhibit over or underperformance in their operations vis-à-vis comparable firms that do not undergo the same event. Originality/value – As far as the authors are aware, this is the first study assessing the impact of ISO 9001 certificate withdrawal on the decertified firms’ financial performance.
- The impact of financial restatements on financial markets: a systematic review of the literaturePublication . FRAGOSO, JOÃO; Peixinho, Rúben; Coelho, Luís; Paiva, Inna C. S.Purpose - The purpose of this paper is to discuss the most relevant issues related to the impact of financial restatements in the dynamics of financial markets and identify several research gaps to be investigated in future research. Design/methodology/approach - The methodology is based on a systematic review of the literature described by Tranfield et al. (2003). The final sample includes 47 academic papers published from 1996 to 2019. Findings - Papers in this domain discuss three main topics: how the market prices the announcement of a financial restatement; how financial restatements affect the announcing firm's cost of capital and how financial restatements affect firms' reputation. There are several issues to explore in future research, including whether financial restatements affect the dynamics of financial markets in Europe, whether the market fully and promptly assimilates the information content of a restatement, the role of financial analysts' information disclosures in this process or how regulators may improve the way they provide investors with timely information about firms' restating problems. Research limitations/implications - There is always some degree of subjectivity in the definition of the keywords, search strings and selection criteria in a systematic review. These are all important aspects, as they delimitate the scope of the study and define the sample of papers to be reviewed. Practical implications - The answers to the research questions identified in this paper may provide regulators with information to improve financial accounting and reporting standards and strengthen investors' confidence in accounting information and the dynamics of financial markets. Originality/value - This paper systematically reviews the relevant literature exploring the connection between financial restatements and the dynamics of financial markets. It contributes to the academic community by identifying several research questions that may impact the theory and practice related to accounting quality and capital markets.
- Are security analysts rational? a literature reviewPublication . Peixinho, Rúben; Coelho, Luís; Taffler, Richard J.Rational choice theory and bounded rationality constitute the basis for the discussion in several areas regarding human rationality. In finance, this discussion has been made between traditional finance and behavioural finance approach, which have different perspectives concerning market agents’ rationality. This paper reviews several studies addressing rationality among security analysts. The analysis shows that analysts’systematic optimism seems to be inconsistent with rationality. The discussion of analysts’ optimism is made using two main theories for their biased behaviour: cognitive and economic-based explanations. We review literature on over-optimism, under and overreaction, economic incentives, herding behaviour and analysts’ preference to withhold unfavourable forecasts. The paper concludes with suggestions for further research.
- Análise da inserção profissional dos diplomados da FEUALG: 1999-2003Publication . Cândido, Carlos; Peixinho, Rúben; Coelho, Luís; Pereira, Renato NunoEstudo sobre a inserção profissional de graduados e diplomados da Faculdade de economia da Universidade do Algarve, entre 1999 e 2003, descritivo e baseado em inquérito realizado por correio ao universo. Concluiu-se terem os graduados e diplomados facilidade na sua inserção profissional.
- Inserção profissional dos licenciados em Economia e Gestão de Empresas pela Faculdade de Economia da Universidade do Algarve no período de 1999 a 2003Publication . Cândido, Carlos; Coelho, Luís; Peixinho, Rúben; Pereira, Renato NunoO primeiro estudo realizado sobre a inserção profissional dos licenciados da Faculdade de Economia da Universidade do Algarve abrangeu os licenciados que concluíram o seu curso até 1998. Passados cinco anos sobre a realização desse estudo, tornava-se necessário realizar um outro, que abrangesse os restantes licenciados. Para colmatar essa necessidade, optou-se por uma metodologia semelhante à utilizada em 1998, essencialmente descritiva e baseada num inquérito pelo correio. Os dados obtidos permitem retirar conclusões relevantes para os actuais e futuros licenciados, bem como para a própria Faculdade de Economia. Em geral, as conclusões são muito positivas e sugerem que, apesar do contexto económico desfavorável dos últimos anos, a inserção profissional parece estar tão ou mais facilitada que no período até 1998.
- Inserção profissional dos licenciados em economia e gestão de empresas pela Faculdade de Economia da Universidade do Algarve no período de 1999 a 2003Publication . Cândido, Carlos; Coelho, Luís; Peixinho, Rúben; Pereira, Renato NunoO primeiro estudo realizado sobre a inserção profissional dos licenciados da Faculdade de Economia da Universidade do Algarve abrangeu os licenciados que concluíramo seu curso até 1998.Passados cinco anossobre a realização desse estudo, tornava-se necessário realizar um outro, que abrangesse os restantes licenciados. Para cohnatar essa necessidade, optou-se por uma metodologia semelhante à utilizada em 1998, essenciahnente descritiva e baseada num inquérito pelo correio. Os dados obtidos permitem retirar conclusões relevantes para os actuais e futuros licenciados, bem como para a própria Faculdade de Economia. Em geral, as conclusões são muito positivas e sugeremque, apesar do contexto económicodesfavorável dos últimos anos, a inserçãoprofissionalparece estartão oumaisfacilitada que no período até 1998
- Philosophy of research in accounting and finance : a critical reflexionPublication . Peixinho, Rúben; Coelho, LuísExistent taxonomies in accounting and finance are based on different ontological and epistemological positions. We state that, despite the inexistence of a right perspective as well as a proper research method within these domains, a reflection about such issues is crucial for the development of high-quality research. Several reasons justify this reflection. On the one hand, it is well-established that the research process is dependent on researcher’s assumption about the nature of reality. On the other hand, the clear definition of researchers’ philosophical perspective facilitates the understanding of their work by the remaining academic community. This paper aims at clarifying some of these issues in the accounting and finance domains. The paper also presents a two-dimension map describing the main characteristics regarding two extreme philosophical perspectivesthat constitute the basis of several taxonomies in accounting and finance research.
- Why firms lose their ISO 9001 certification: evidence from PortugalPublication . Candido, Carlos; Coelho, Luís; Peixinho, RúbenMore than one million certified companies must choose, every three years, whether to renew or to withdraw from ISO 9001 certification. This paper investigates whether ISO 9001 decertification decision is driven by economic motivations. Using standard event-study methods, the paper looks into this question by comparing the abnormal performance of a sample of Portuguese firms that lose their certification with that of similar, non-event, firms. The paper finds no statistically significant differences in the economic performance of these two sets of firms in their post-ISO certification period. Such evidence suggests that economic underperformance is not the reason why companies are ISO decertifying and further suggests that the decision to decertify is economically irrelevant. The study advances possible explanations for this (ir)relevancy and puts forwards implications for theory and for the ISO 9001 governance system. The governance system must change in order to increase the economic benefits that organisations can expect to gain from ISO (re)certification. This is the first study assessing the impact of ISO 9001 certification on firms that subsequently lost the certificate.
- Are markets efficient? The extreme case of corporatebankruptcy: a literature reviewPublication . Coelho, Luís; Peixinho, Rúben; Taffler, Richard J.In 1970, Fama presented the foundations of what was to become the central proposition in finance: the Efficient Market Hypothesis (EMH). Under the EMH’s framework, a market is efficient if prices always reflect all available information. Behavioural finance is an alternative perspective to understand financial markets, which incorporates the implications of psychological decision processes. This new framework is based on a well-developed theoretical body, which provides a better explanation to certain patterns of market behaviour that cannot be understood within the traditional approach. The emergence of behavioural finance created a fundamental dilemma in the finance literature: which of the two competing theories best describes the actual behaviour of financial markets? This paper reviews existing knowledge on how markets behave when companies announce bankruptcy. This acute and economically significant bad news event constitutes an attractive scenario to explore the irrational pricing patterns that are motivated by market participants’ biases and psychological defences in dealing with extreme bad news.