Accounting information in innovative small cap firms: evidence from London’s Alternative Investment Market

References

• Acharya, V. V., and Xu, Z, 2017. Financial dependence and innovation: the case of public versus private firms. Journal of Financial Economics, 124 (2), 223–243.
   Web of Science ®Google Scholar
• Achleitner, A.-K., Günther, N., Kaserer, C., and Siciliano, G, 2014. Real earnings management and accrual-based earnings management in family firms. European Accounting Review, 23 (3), 431–461.
   Web of Science ®Google Scholar
• Alford, A., Jones, J., Leftwich, R., and Zmijewski, M, 1993. The relative informativeness of accounting disclosures in different countries. Journal of Accounting Research, 31, 183–223.
   Web of Science ®Google Scholar
• Amir, E., and Lev, B, 1996. Value-relevance of nonfinancial information: the wireless communications industry. Journal of Accounting and Economics, 22 (1), 3–30.
   Web of Science ®Google Scholar
• Angilella, S., and Mazzù, S, 2015. The financing of innovative SMEs: a multicriteria credit rating model. European Journal of Operational Research, 244 (2), 540–554.
   Web of Science ®Google Scholar
• Arthur, C., 2012. Twitter now has 10m users in UK. London: The Guardian, May 15, 2012.
   Google Scholar
• Balachandran, S., and Mohanram, P, 2011. Is the decline in the value relevance of accounting driven by increased conservatism? Review of Accounting Studies, 16 (2), 272–301.
   Web of Science ®Google Scholar
• Baldwin, J. R., and Johnson, J, 1996. Business strategies in more-and less-innovative firms in Canada. Research Policy, 25 (5), 785–804.
   Web of Science ®Google Scholar
• Ball, R., and Shivakumar, L, 2008. Earnings quality at initial public offerings. Journal of Accounting and Economics, 45 (2), 324–349.
   Web of Science ®Google Scholar
• Ballester, M., Livnat, J., and Seethamraju, C, 1998. Individual-firm style loadings, unrecorded economic assets, and systematic risk. Journal of Accounting, Auditing and Finance, 13 (3), 275–296.
   Google Scholar
• Barret, C., 2015. Aim: 20 years of a few winners and many losers. London: Financial Times, June 19, 2015.
   Google Scholar
• Barth, M. E., Beaver, W. H., and Landsman, W. R, 2001. The relevance of the value relevance literature for financial accounting standard setting: another view. Journal of Accounting and Economics, 31 (1), 77–104.
   Web of Science ®Google Scholar
• Barth, M. E., Landsman, W. R., and Lang, M. H, 2008. International accounting standards and accounting quality. Journal of Accounting Research, 46 (3), 467–498.
   Web of Science ®Google Scholar
• Barth, M. E., Li, K., and McClure, C. G, 2018. Evolution in value relevance of accounting information. working paper, Stanford University, Stanford.
   Google Scholar
• Beck, T., Demirgüç-Kunt, A., and Maksimovic, V, 2008. Financing patterns around the world: are small firms different? Journal of Financial Economics, 89 (3), 467–487.
   Web of Science ®Google Scholar
• Bergstresser, D., and Philippon, T, 2006. CEO incentives and earnings management. Journal of Financial Economics, 80 (3), 511–529.
   Web of Science ®Google Scholar
• Blankespoor, E, 2018. Firm communication and investor response: a framework and discussion integrating social media. Accounting, Organizations and Society, 68, 80–87.
   Web of Science ®Google Scholar
• Blankespoor, E., Miller, G. S., and White, H. D, 2013. The role of dissemination in market liquidity: evidence from firms’ use of Twitter™. The Accounting Review, 89 (1), 79–112.
   Web of Science ®Google Scholar
• Bougrain, F., and Haudeville, B, 2002. Innovation, collaboration and SMEs internal research capacities. Research Policy, 31 (5), 735–747.
   Web of Science ®Google Scholar
• Brown, J. R., and Martinsson, G, 2018. Does transparency stifle or facilitate innovation? Management Science, 65 (4), 1600–1623.
   Web of Science ®Google Scholar
• Burgess, K., 2019. Aim not what it seems as more groups delive profit. London: Financial Times, January 21, 2019.
   Google Scholar
• Burgstahler, D., and Dichev, I, 1997. Earnings management to avoid earnings decreases and losses. Journal of Accounting and Economics, 24 (1), 99–126.
   Web of Science ®Google Scholar
• Burgstahler, D. C., Hail, L., and Leuz, C, 2006. The importance of reporting incentives: earnings management in European private and public firms. The Accounting Review, 81 (5), 983–1016.
   Web of Science ®Google Scholar
• Bushman, R. M., Lerman, A., and Zhang, X, 2016. The changing landscape of accrual accounting. Journal of Accounting Research, 54 (1), 41–78.
   Web of Science ®Google Scholar
• Cascino, S., Pugliese, A., Mussolino, D., and Sansone, C, 2010. The influence of family ownership on the quality of accounting information. Family Business Review, 23 (3), 246–265.
   Web of Science ®Google Scholar
• Christie, A. A, 1987. On cross-sectional analysis in accounting research. Journal of Accounting and Economics, 9 (3), 231–258.
   Web of Science ®Google Scholar
• Chakravarty, A., and Grewal, R, 2011. The stock market in the driver’s seat! implications for R&D and marketing. Management Science, 57 (9), 1594–1609.
   Web of Science ®Google Scholar
• Ciftci, M., and Darrough, M, 2015. What explains the valuation difference between intangible-intensive profit and loss firms? Journal of Business Finance and Accounting, 42 (1–2), 138–166.
   Web of Science ®Google Scholar
• Clark, P., and Kavanagh, M., 2013. UK wind industry given confidence boos. London: Financial Times, March 22, 2013.
   Google Scholar
• Cohen, D. A, 2008. Does information risk really matter? An analysis of the determinants and economic consequences of financial reporting quality. Asia-Pacific Journal of Accounting and Economics, 15 (2), 69–90.
   Web of Science ®Google Scholar
• Cohen, D. A., Dey, A., and Lys, T. Z, 2008. Real and accrual-based earnings management in the pre-and post-Sarbanes-Oxley periods. The Accounting Review, 83 (3), 757–787.
   Web of Science ®Google Scholar
• Collins, D. W., Maydew, E. L., and Weiss, I. S, 1997. Changes in the value-relevance of earnings and book values over the past forty years. Journal of Accounting and Economics, 24 (1), 39–67.
   Web of Science ®Google Scholar
• Collins, D. W., Pincus, M., and Xie, H., 1999. Equity valuation and negative earnings: the role of book value of equity. The Accounting Review, 74 (1), 29–61.
   Web of Science ®Google Scholar
• Cookson, R., 2014. Audioboom aims to disrupt radio industry. Financial Times, London.
   Google Scholar
• Dechow, P. M, 1994. Accounting earnings and cash flows as measures of firm performance: the role of accounting accruals. Journal of Accounting and Economics, 18 (1), 3–42.
   Web of Science ®Google Scholar
• Dechow, P. M., Sloan, R. G., and Sweeney, A. P, 1995. Detecting earnings management. The Accounting Review, 70 (2), 193–225.
   Web of Science ®Google Scholar
• DeFond, M., Erkens, D. H., and Zhang, J, 2016. Do client characteristics really drive the Big N audit quality effect? New evidence from propensity score matching. Management Science, 63 (11), 3628–3649.
   Web of Science ®Google Scholar
• Dimson, E., and Marsh, P, 2016. The Numis Smaller Companies Index (“NSCI”) Annual Review. London: Numis Corporation.
   Google Scholar
• DuCharme, L. L., Malatesta, P. H., and Sefcik, S. E, 2001. Earnings management: IPO valuation and subsequent performance. Journal of Accounting, Auditing and Finance, 16 (4), 369–396.
   Google Scholar
• Durand, R., Paugam, L., and Stolowy, H, 2019. Do investors actually value sustainability indices? Replication, development, and new evidence on CSR visibility. Strategic Management Journal, 40 (9), 1471–1490.
   Web of Science ®Google Scholar
• ESMA SMSG, 2012. Report on Helping Small and Medium Sized Companies Access Funding. Paris: ESMA SMSG.
   Google Scholar
• ESMA SMSG, 2015. Detailed Response to the Commission’s Green Paper. Paris: ESMA SMSG.
   Google Scholar
• European Commission, 2014. Annual Report on European SMEs 2013/2014 – A Partial and Fragile Recovery. Brussels: European Commission.
   Google Scholar
• European Commission, 2015. Building a Capital Markets Union. Brussels: European Commission.
   Google Scholar
• Fama, E. F., and French, K. R, 2004. New lists: fundamentals and survival rates. Journal of Financial Economics, 73 (2), 229–269.
   Web of Science ®Google Scholar
• Faulkender, M., and Wang, R, 2006. Corporate financial policy and the value of cash. Journal of Finance, 61 (4), 1957–1199.
   Web of Science ®Google Scholar
• Filip, A., Jeanjean, T., and Paugam, L, 2015. Using real activities to avoid goodwill impairment losses: evidence and effect on future performance. Journal of Business Finance and Accounting, 42 (3–4), 515–554.
   Web of Science ®Google Scholar
• Galbraith, C. S., and Merrill, G. B, 1991. The effect of compensation program and structure on SBU competitive strategy: a study of technology-intensive firms. Strategic Management Journal, 12 (5), 353–370.
   Web of Science ®Google Scholar
• Gerakos, J., Lang, M., and Maffett, M, 2013. Post-listing performance and private sector regulation: the experience of London’s alternative investment market. Journal of Accounting and Economics, 56 (2), 189–215.
   Web of Science ®Google Scholar
• Graham, J. R., Harvey, C. R., and Rajgopal, S, 2005. The economic implications of corporate financial reporting. Journal of Accounting and Economics, 40 (1), 3–73.
   Web of Science ®Google Scholar
• Hall, B. H, 2002. The financing of research and development. Oxford Review of Economic Policy, 18 (1), 35–51.
   Web of Science ®Google Scholar
• Hall, B. H, 2010. The financing of innovative firms. Review of Economics and Institutions, 1 (1), 1–30.
   Google Scholar
• Hall, B.H., Helmers, C., Rogers, M., and Sena, V, 2013. The importance (or not) of patents to UK firms. Oxford Economic Papers, 65, 603–629.
   Web of Science ®Google Scholar
• Hawn, O., Chatterji, A. K., and Mitchell, W, 2018. Do investors actually value sustainability? New evidence from investor reactions to the Dow Jones Sustainability Index (DJSI). Strategic Management Journal, 39 (4), 949–976.
   Web of Science ®Google Scholar
• Hayn, C, 1995. The information content of losses. Journal of Accounting and Economics, 20 (2), 125–153.
   Web of Science ®Google Scholar
• Healy, P. M, 1985. The effect of bonus schemes on accounting decisions. Journal of Accounting and Economics, 7 (1), 85–107.
   Web of Science ®Google Scholar
• Healy, P. M., and Palepu, K. G, 2001. Information asymmetry, corporate disclosure, and the capital markets: a review of the empirical disclosure literature. Journal of Accounting and Economics, 31 (1), 405–440.
   Web of Science ®Google Scholar
• Hellmann, T., and Puri, M, 2000. The interaction between product market and financing strategy: the role of venture capital. Review of Financial Studies, 13 (4), 959–984.
   Web of Science ®Google Scholar
• Hoffman, K., Parejo, M., Bessant, J., and Perren, L, 1998. Small firms, R&D, technology and innovation in the UK: a literature review. Technovation, 18 (1), 39–55.
   Web of Science ®Google Scholar
• Holthausen, R. W., and Watts, R. L, 2001. The relevance of the value-relevance literature for financial accounting standard setting. Journal of Accounting and Economics, 31 (1), 3–75.
   Web of Science ®Google Scholar
• Iacus, S. M., King, G., and Porro, G, 2012. Causal inference without balance checking: coarsened exact matching. Political Analysis, 20 (1), 1–24.
   Web of Science ®Google Scholar
• IFRS Foundation, 2019. IFRS for SMEs Standard. London: IASB.
   Google Scholar
• Jones, J. J, 1991. Earnings management during import relief investigations. Journal of Accounting Research, 29 (2), 193–228.
   Web of Science ®Google Scholar
• Jung, M.J., Naughton, J.P., Tahoun, A., and Wang, C, 2018. Do firms strategically disseminate? Evidence from corporate use of social media. The Accounting Review, 93 (4), 225–252.
   Web of Science ®Google Scholar
• Kallapur, S., and Kwan, S. Y, 2004. The value relevance and reliability of brand assets recognized by UK firms. The Accounting Review, 79 (1), 151–172.
   Web of Science ®Google Scholar
• Khan, A. M., and Manopichetwattana, V, 1989. Innovative and noninnovative small firms: types and characteristics. Management Science, 35 (5), 597–606.
   Web of Science ®Google Scholar
• Kim, J. B., and Zhang, L, 2016. Accounting conservatism and stock price crash risk: firm-level evidence. Contemporary Accounting Research, 33 (1), 412–441.
   Web of Science ®Google Scholar
• Kothari, S. P, 2001. Capital markets research in accounting. Journal of Accounting and Economics, 31 (1–3), 105–231.
   Web of Science ®Google Scholar
• Kothari, S. P., and Zimmerman, J. L, 1995. Price and return models. Journal of Accounting and Economics, 20 (2), 155–192.
   Web of Science ®Google Scholar
• Kothari, S. P., Leone, A. J., and Wasley, C. E, 2005. Performance matched discretionary accrual measures. Journal of Accounting and Economics, 39 (1), 163–197.
   Web of Science ®Google Scholar
• Landsman, W. R, 2007. Is fair value accounting information relevant and reliable? Evidence from capital market research. Accounting and Business Research, 37 (sup1), 19–30.
   Google Scholar
• Lee, L. F, 2011. Incentives to inflate reported cash from operations using classification and timing. The Accounting Review, 87 (1), 1–33.
   Web of Science ®Google Scholar
• Lee, L., Hutton, A., and Shu, S, 2015. The role of social media in the capital market: evidence from consumer product recalls. Journal of Accounting Research, 53 (2), 367–404.
   Web of Science ®Google Scholar
• Leiponen, A., and Byma, J, 2009. If you cannot block, you better run: small firms, cooperative innovation, and appropriation strategies. Research Policy, 38 (9), 1478–1488.
   Web of Science ®Google Scholar
• Lerman, A., 2020. Individual investors’ attention to accounting information: evidence from online financial communities. Contemporary Accounting Research, 1–38.
   Web of Science ®Google Scholar
• Leuz, C., Nanda, D., and Wysocki, P. D, 2003. Earnings management and investor protection: an international comparison. Journal of Financial Economics, 69 (3), 505–527.
   Web of Science ®Google Scholar
• Lev, B, 2018. The deteriorating usefulness of financial report information and how to reverse it. Accounting and Business Research, 48 (5), 465–493.
   Web of Science ®Google Scholar
• Lev, B., and Gu, F, 2016. The End of Accounting and the Path Forward for Investors and Managers. New York: John Wiley and Sons.
   Google Scholar
• Lev, B., and Zarowin, P., 1999. The boundaries of financial reporting and how to extend them. Journal of Accounting Research, 37 (2), 353–385.
   Web of Science ®Google Scholar
• Maddala, G.S, 1990. Introduction to Econometrics. New York: Macmillan.
   Google Scholar
• Magri, S, 2007. The financing of small innovative firms: The Italian case. Economics of Innovation and New Technology, 18 (2), 181–204.
   Google Scholar
• Miller, J. E., and Rodgers, Y, 2008. Economic importance and statistical significance: guidelines for communicating empirical research. Feminist Economics, 14 (2), 117–149.
   Web of Science ®Google Scholar
• Miller, G. S., and Skinner, D. J, 2015. The evolving disclosure landscape: how changes in technology, the media, and capital markets are affecting disclosure. Journal of Accounting Research, 53 (2), 221–239.
   Web of Science ®Google Scholar
• Nanda, R., and Rhodes-Kropf, M, 2016. Financing risk and innovation. Management Science, 63 (4), 901–918.
   Web of Science ®Google Scholar
• Park, K, 2018. Financial reporting quality and corporate innovation. Journal of Business Finance and Accounting, 45 (7–8), 871–894.
   Web of Science ®Google Scholar
• Penman, S. H, 2006. Financial Statement Analysis and Security Valuation. New York: McGraw-Hill.
   Google Scholar
• Ramanna, K., and Roychowdhury, S, 2010. Elections and discretionary accruals: evidence from 2004. Journal of Accounting Research, 48 (2), 445–475.
   Web of Science ®Google Scholar
• Raymond, L., and St-Pierre, J, 2010. R&D as a determinant of innovation in manufacturing SMEs: an attempt at empirical clarification. Technovation, 30 (1), 48–56.
   Web of Science ®Google Scholar
• Smith, J. A., and Cordina, R, 2014. The role of accounting in high-technology investments. The British Accounting Review, 46 (3), 309–322.
   Web of Science ®Google Scholar
• Song, C. J., Thomas, W. B., and Yi, H, 2010. Value relevance of FAS No. 157 fair value hierarchy information and the impact of corporate governance mechanisms. The Accounting Review, 85 (4), 1375–1410.
   Web of Science ®Google Scholar
• Srivastava, A, 2014. Why have measures of earnings quality changed over time? Journal of Accounting and Economics, 57 (2), 196–217.
   Web of Science ®Google Scholar
• Watts, R. L., and Zimmerman, J. L, 1986. Positive Accounting Theory. Upper Saddle River: Prentice-Hall Inc.
   Google Scholar
• Wyatt, A, 2008. What financial and non-financial information on intangibles is value-relevant? A review of the evidence. Accounting and Business Research, 38 (3), 217–256.
   Web of Science ®Google Scholar
• Yang, J. H., and Liu, S, 2017. Accounting narratives and impression management on social media. Accounting and Business Research, 47 (6), 673–694.
   Web of Science ®Google Scholar
• Zhou, M., Lei, L., Wang, J., Fan, W., and Wang, A. G, 2014. Social media adoption and corporate disclosure. Journal of Information Systems, 29 (2), 23–50.
   Web of Science ®Google Scholar