Journal articles on the topic 'Non-listed markets'
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1
Senteney, Michael H., David L. Senteney, and Mohammad S. Bazaz. "Equity Market Response to Form 20-F Disclosures for ADR Firms." International Journal of Economics and Finance 9, no. 3 (February 22, 2017): 233. http://dx.doi.org/10.5539/ijef.v9n3p233.
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Non-U.S. companies may list securities in U.S. stock exchanges, provided that they file a set of audited financial statements as well as comply with extensive SEC disclosure requirements. We speculate that non-U.S. firms who choose to be listed in the major U.S. exchanges will comply with the supplemental disclosure requirements in order to have the supplemental disclosures impounded in the home country equity share price via the ADR share price in the manner described by Fishman and Hagerty (1989). We investigate the information content of non-U.S. firm’s earnings released vis-à-vis the SEC Form 20-F filings in both ADR and home country equity share markets. We employed models of the ADR and equity security share earnings release date abnormal returns controlling for the incremental firm-specific SEC Form 20-F disclosures required of exchange listed ADRs. Our results suggest that both ADR and home country equity share markets exhibit abnormal returns associated with the earnings release date. Particularly noteworthy, however, is the association between magnitudes of U.S. GAAP earnings and magnitudes of SEC Form 20-F filing date. Abnormal returns are significantly larger than the association between magnitudes of reported earnings and earnings report date abnormal returns in both the ADR and home country equity share markets. Our results seemingly suggest that the U.S. ADR share market’s response dominates the cross-market information flow, driving the home country equity share market response in a manner consistent with the notion that U.S. GAAP conveys price relevant information beyond reported earnings for non-U.S. firms.
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Mwambuli, Erick Lusekelo. "Does Corporate Capital Structure influence Corporate Financial Performance in Developing Economies? Evidence from East African Stock Markets." International Finance and Banking 3, no. 1 (May 10, 2016): 97. http://dx.doi.org/10.5296/ifb.v3i1.9357.
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This paper examines the statistically significant influence which capital structure has had on corporate financial performance of listed non-financial companies in East African stock markets. It used panel data of 272 observations including 34 East African non-financial listed firms listed in East African stock markets such as Dar Es Salaam Stock Market (DSE), Nairobi Securities Exchange (NSE) and Uganda Securities Exchange (USE) for a period of 8 years {i.e. 2006-2013}.Using the Panel Corrected Standard Errors (PCSEs) and Fixed Effect (FE),the study formulated two (2) econometric models with return on assets (ROA) and return on equity (ROE) as dependent variables and measures of corporate financial performance respectively, three (3) independent variables such as short term debt ratio (STDR),long term debt ratio (LTDR) and total debt ratio (TDR) as a measure of capital structure, furthermore the study used size of the firm (SIZ) as a control variable in order to control the differences in firm’s operating environment. The result indicate that capital structure has a negative and statistically significant influence on East African listed firm’s financial performance at 5% significance level. These results show that in average profitable listed firms in East African prefers to use internal source of financing in their capital structure as compared to external source of financing {like Debts-STDR,LTDR and TDR} and this results are supporting pecking order theory. Lastly the study recommends to corporate financial managers of East African non-financial listed firms should reduce financing their operations and growth by debt (STDR,LTDR and TDR) on their capital structure in order to enhance their corporate financial performance, regulatory authorities in East African region such as East African member states securities regulatory authority (EASRA) to formulate policies that will improving of financial markets in the region in order to reduce the cost of debt, further research could examine the influence {if any} of capital structure on sector wise (as per industry-like Manufacturing firms) for East African non-financial listed firms, take into account more control variables which are likely to influence financial performance such as macroeconomic variables (like gross domestic product - GDP) and consider other capital structure theories like ,market timing theory, agency theory which were not considered in our study.
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Tajudeen, Aluko Bioye, and Olaleye Abel. "UNITIZATION AND SECURITIZATION OF PROPERTY INVESTMENT: IMPLICATIONS FOR FUTURE VALUATION." Journal of Business Economics and Management 6, no. 3 (September 30, 2005): 125–34. http://dx.doi.org/10.3846/16111699.2005.9636101.
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Property investments are now mobile, being tradable securities or listed units (vehicles) comparable to stocks/ shares in the financial market. Hence, the need for valuation to be a counterpart to investment and security analysis. But, current valuation practice in the country has not placed property in a wider economy and the analytical techniques of other markets. The paper therefore demonstrates how current valuation techniques in the property market can meet the needs of investors for listed or tradeable property assets in the country. It also examines the implications on the valuation profession as well as the attendant consequences that are likely to be associated with the quest for change. The study utilizes data from both the Nigerian property and capital markets using simple descriptive, non‐statistical, techniques.
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Ashbaugh, Hollis, and Per Olsson. "An Exploratory Study of the Valuation Properties of Cross-Listed Firms' IAS and U.S. GAAP Earnings and Book Values." Accounting Review 77, no. 1 (January 1, 2002): 107–26. http://dx.doi.org/10.2308/accr.2002.77.1.107.
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Despite the increasing integration of global capital markets, there is little evidence on the valuation properties of cross-listed, non-U.S. firms' accounting variables. We use the relative performance of the earnings capitalization, the book value, and the residual income valuation models to explore the valuation properties of International Accounting Standards and U.S. Generally Accepted Accounting Principles earnings and book values reported by non-U.S., cross-listed firms trading in a common equity market. Using non-U.S./non-U.K. firms whose shares trade on the International Stock Exchange Automated Quotation system in London, we find that the earnings capitalization model is the dominant accounting-based valuation model when crosslisted firms report under International Accounting Standards. In contrast, we find that when cross-listed firms report under U.S. Generally Accepted Accounting Principles, the residual income model is the dominant accountingbased valuation model. Our exploratory study provides insights into the valuation implications of allowing a dual reporting system for foreign registrants trading in a common equity market.
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Tegtmeier, Lars. "Testing the Efficiency of Globally Listed Private Equity Markets." Journal of Risk and Financial Management 14, no. 7 (July 8, 2021): 313. http://dx.doi.org/10.3390/jrfm14070313.
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This study is the first to investigate the efficient market hypothesis in its weak form and the random walk behaviour of globally listed private equity (LPE) markets represented by nine global, regional, and style indices based on weekly data covering the period from January 2004 to December 2020. Autocorrelation tests, variance ratio tests, and a non-parametric runs test are employed. The results of the autocorrelation tests and the variance ratio tests tend to correspond for all indices, and they reject the random walk hypothesis for the returns of all LPE indices under investigation. In contrast, the runs test for direct weak-form market efficiency cannot reject the null hypothesis of a random walk process for almost all LPE indices under investigation. Furthermore, there is no evidence that the market efficiency of globally listed private equity markets has improved after the global financial crisis. Due to the fact that the rapidly growing asset class of LPE as a form of private equity is still relatively unknown, the implications of the results of our paper are relevant for investors, policy makers, and academics alike. In addition, the results provide valuable insights to better understand the emerging asset class of LPE.
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Magner, Nicolás S., and Cinthia K. Roa. "Terrorism and Latin-American Stocks Markets." Revista Mexicana de Economía y Finanzas 14, PNEA (August 1, 2019): 583–99. http://dx.doi.org/10.21919/remef.v14i0.424.
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This paper investigates the effects of major terrorist attacks of the last 20 years on a set of stocks listed at Latin-American stock markets. Utilizing the capital market model, we calculate abnormal returns during the day of the terror attacks for 115 stocks listed in 6 Latin-American countries. In this sense, we appreciate different reaction between countries, where Brazil, Peru, and Chile have a significant market reaction of terrorism. These results promote international diversification and the use of this loss to avoid significant capital losses. However, the results are limited by the validity of the capital market model. This paper has important implications for international investors and their investment risk management strategies. Despite the frequency of terrorist events, this is the first work that addresses a wide range of these in Latin American countries. The main conclusion is that there is a negative effect of terrorist events on Latin American markets, but this effect is mixed; there is a negative and significant impact of the US terrorist attacks and a weak and non-significant effect when the attacks occur outside the US.
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Nnadi, Matthias, Nyema Wogboroma, and Bariyima Kabel. "Determinants of dividend policy: Evidence from listed firms in the African stock exchanges." Panoeconomicus 60, no. 6 (2013): 725–41. http://dx.doi.org/10.2298/pan1306725n.
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The study demonstrates that much of the existing theoretical literature on dividend policy can be applied to the emerging capital markets of Africa. Using available financial data of listed firms in the 29 stock exchanges in Africa, the study finds similarities in the determinants of dividend policy in African firms with those in most developed economies. In particular, agency costs are found to be the most dominant determinant of dividend policy among African firms. The finding is non-synonymous with emerging capital markets which have a high concentration of private ownership and trading volumes. Agency cost theory may be important in both emerging and developed capital markets but the nature of the agency problem may be different in each case. Other factors such as level of market capitalization, age and growth of firms, as well as profitability also play key roles in the dividend policy of listed African firms.
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Wulandari, Vera Pipin, and Kusdhianto Setiawan. "ANALYSIS OF MARKET TIMING TOWARD LEVERAGE OF NON-FINANCIAL COMPANIES IN INDONESIA." Journal of Indonesian Economy and Business 30, no. 1 (September 16, 2015): 42. http://dx.doi.org/10.22146/jieb.7333.
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ABSTRACTThis study aimed to examine the effect of market timing on leverage on non-financial compa-nies in Indonesia. Market timing was tested on the hot and cold market conditions. Hot and cold markets are determined by the monthly market to book ratio. A hot (cold) market occurs when the average market to book ratio of a particular month is above (below) the value of the moving average of the monthly market to book ratio. This study also aimed to test whether non-financial companies in Indonesia persistently applied leverage policies. This study used two research models. The first model was a panel data with a sample size of 77 non-financial companies listed on the Indonesian Stock Exchange from 2002-2013.The second model was a cross section data with a sample size of 157 non-financial companies that conducted their IPO in Indonesia from 2003-2013. The dependent variable in both the research models was leveraget (levt). The independent variables were markett and leveraget-1 (levt–1). The control variables were profitabi-lityt-1 (proft-1); and sizet-1. The results of this study indicated that market timing affected the lev-erage of non-financial companies listed on the Indonesian Stock Exchange. However, market timing did not affect the leverage of non-financial companies that had their IPO in Indonesia. The non-financial companies in Indonesia were not persistently applying a leverage policy. The capital structure of non-financial companies in Indonesia changed because of the influence of variable profitability and size (which supports the pecking order and trade off theory).Keywords: market timing theory, leverage, hot and cold market, market to book ratio
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Wu, Yaoan, Dayu Wang, Jiatong Bao, and Jinglong Qu. "The Role of Regional Formal Institution and Foreign Direct Investment in the Performance of Tourism Firms." International Journal of Business Management and Finance Research 5, no. 2 (July 15, 2022): 46–66. http://dx.doi.org/10.53935/26415313.v5i2.224.
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Tourism, as one of the important pillar industries of China's economic development, has also made rapid development. At the same time, the number and the scale of tourism enterprises are also growing. This study collects the marketization index of each province in China, the actual level of foreign capital utilization in each province, and the return on total assets and return on equity of listed tourism companies. In addition, the evaluation of corporate social performance is collected by questionnaire with 500 responses. The results of the model show that the regional formal institution has a significant impact on the financial performance of tourism companies. The total index of marketization, the development of factor markets, the development of market-intermediate institutions and legal framework have significant positive effects on the ROA of tourism listed companies. Foreign direct investment has no significant impact on the performance of tourism listed companies; however, it has impact on their performance under the mediation of regional formal institutions. The total market index, the relationship between government and markets, the development of non-state enterprise sector, the development of factor markets the development of market-intermediate institutions and legal framework have moderating effects on the impact of FDI on ROA. Regional formal institution has a significant impact on consumer perception of social performance of tourism enterprises.
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Valls Pereira, Pedro L., and André Barbosa Oliveira. "Strategies of portfolio investment with estimates of bull and bear markets." Brazilian Review of Finance 19, no. 4 (December 24, 2021): 160–85. http://dx.doi.org/10.12660/rbfin.v19n4.2021.80765.
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The financial market has non-linear patterns, with different return behavior in bull versus bear markets. This article uses multivariate model estimates to study portfolios in changing conditions, and develops investment strategies for portfolios in light of uncertainty about the bear or bull status of the stock market. Portfolios were optimized for the main stocks listed on the Brazilian market index Ibovespa. The portfolios proposed with estimates of changing market status outperformed others over the analyzed period, with rebalancing adjustments made either weekly or monthly.
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Shen, Jianfu, and Xianting Yin. "Credit expansion, state ownership and capital structure of Chinese real estate companies." Journal of Property Investment & Finance 34, no. 3 (April 4, 2016): 263–75. http://dx.doi.org/10.1108/jpif-09-2015-0067.
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Purpose – The purpose of this paper is to explore the impact of the credit expansion in 2009 and 2010 in China on the capital structure of listed real estate companies. Design/methodology/approach – Chinese listed real estate companies are divided into two groups, state-owned and non-state-owned, because their access to credit markets have different priority to state-owned banks that dominate bank lending. The difference-in-differences approach is employed to test the impact of changes in leverage ratios and loan ratios before and after the credit expansion period in state-owned firms and non-state-owned firms. Findings – Using quarterly panel regressions, the authors find that during the credit expansion period, state-owned companies exhibit a relatively greater increase in leverage ratios than non-state-owned firms. State-owned firms have greater increases in book leverage ratios, market leverage ratios and long-term debt ratios by 5.2, 4.9 and 1.1 per cent, respectively. It is also shown that loan ratios have increased more in state-owned firms than non-state-owned firms during the credit expansion period. Research limitations/implications – The paper explores only the impacts of credit expansion on capital structure of listed real estate firms in China. Further studies can be conducted to investigate the impact of credit supply on corporate investment decisions of real estate firms and on real estate markets. Practical implications – The findings can help explain the surge in land and housing prices after 2008 in China. Deng et al. (2015) find that state-owned real estate firms paid more for land price than non-state-owned firms, which contributed to upward pressure on housing prices. This paper shows that such “over-investment” may be due to the increase of debt financing and availability of bank loans to real estate firms. Thus the credit market can affect real estate markets through debt financing at company level. Originality/value – This paper is the first to investigate the impact of credit supply on capital structure of real estate companies, and presents evidence of the importance of credit supply as a determinant of capital structure.
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Hassan, Mostafa Kamal, and Fathia Elleuch Lahyani. "Media, independent non-executive directors and strategy disclosure by non-financial listed firms in the UAE." Corporate Governance: The International Journal of Business in Society 20, no. 2 (November 21, 2019): 216–39. http://dx.doi.org/10.1108/cg-01-2019-0032.
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Purpose This study aims to investigate the effect of media coverage, negative media tone and the interaction between negative media tone and independent non-executive directors (INEDs) on strategic information disclosure (SD). Design/methodology/approach The authors rely on media agenda-setting theory, agency theory and a panel data set of 52 UAE non-financial listed firms from 2009 to 2016. Multivariate regressions examine the effect of media coverage and negative media tone on SD and examine the moderation of INEDs on the effect of negative media tone on SD while controlling for firm size, board size, board meeting frequency, firm profitability and leverage. Findings The results show that negative media tone has a negative effect on SD, and there is no association between media coverage and SD. The results show that INEDs are negatively associated with SD and have a negative moderating effect on the negative media tone–SD relationship. INEDs follow a conservative approach, encouraging less SD when their firms face negative media tone. Research limitations/implications The authors measured media coverage and negative media tone by the number of news articles. In the robustness test, they use media tone score. They measured SD using an index that captures firm strategy dimensions. Though these measures are inherently subjective, they were used to measure variation in media coverage, media tone and SD across listed UAE non-financial firms. Mitigation of subjectivity was achieved through rigorous cross-checking measurements. Practical implications Findings assist UAE policymakers and the international business community with insights related to articulation of media to SD and INEDs’ role in moderating the effect of media on SD. Originality/value To the authors’ knowledge, this is the first study that combines media agenda-setting theory with agency theory and SD in an emerging market economy (the UAE). The study is also among the few studies that illustrate the possible role of INEDs under different media tones in emerging markets.
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Celli, Massimiliano. "Minority Discount for Reduced Powers in Negotiations of Non-Listed Minority Holdings: Evidence from European Countries." International Journal of Business and Management 12, no. 4 (March 26, 2017): 23. http://dx.doi.org/10.5539/ijbm.v12n4p23.
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This article aims at giving a contribution to the issue of valuating the minority discount for reduced powers in purchase/sale transactions of non-listed minority interests. Firstly, the meaning of minority discount for reduced powers will be investigated as well as its economic determinants, specifically pointing out that the economic rationale behind this type of minority discount lies in the impossibility for the minority purchaser to gain the prerogatives associated to a controlling position. Then the analysis will focus on the considered examination of the evaluation criteria of minority interests in businesses non-listed on official markets developed by main doctrine, at the same time singling out the salient and peculiar features thereof together with some comments and in-depth studies on the subject-matter. In this respect the main features of both direct and indirect valuation criteria will be analysed, specifically focusing on the second ones which measure the economic value of such minority interests by executing a discount percentage to the pro-rata value of the whole company’s economic capital (W). Finally the methods most often utilised by the European well-qualified professional praxis to measure the value of minority interests non-listed on regulated markets will be investigated. To this purpose, a number of official reports concerning purchase/sale transactions of minority interests in European non-listed companies will be examined. Finally, some conclusions on the topic at stake will be drawn.
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Aigbovo, Omoruyi, and Ikavbo Esther Evbayiro-Osagie. "Corporate Governance Mechanisms and Dividend Payouts of Listed Non-Financial Firms: Evidence from Selected Sub-Saharan African Countries." SRIWIJAYA INTERNATIONAL JOURNAL OF DYNAMIC ECONOMICS AND BUSINESS 6, no. 3 (October 24, 2022): 227. http://dx.doi.org/10.29259/sijdeb.v6i3.227-254.
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This study examined the effects of corporate governance elements on the dividend distribution of listed corporations in the three Sub-Saharan African countries of South Africa, Nigeria, and Kenya. The inquiry used inferential statistics in the form of the system generalized method of moments (GMM). The findings show that corporate governance factors have a fundamental influence on dividend distribution in the three Sub-Saharan African countries. More specifically, board independence has a significant negative influence on dividend payout, but board size, board gender diversity, and management ownership all directly and materially affect the dividend payout of listed non-financial firms. The paper suggested that authorities in charge of regulation in the examined Sub-Sahara Africa nation’s securities exchange have to continually ensure that all firms comply stringently with the codes of corporate governance in other to limit market infractions and boost stakeholders’ confidence and thus stimulate more investment in their respective capital markets.
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Yaakub, Nurwahida, Mohamed Sherif, and Roszaini Haniffa. "The Post-issue Market Performance of Initial Public Offerings: Empirical Evidence from the Malaysian Stock Markets." Journal of Emerging Market Finance 17, no. 3_suppl (October 10, 2018): S376—S414. http://dx.doi.org/10.1177/0972652718798188.
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This study examines the long-run performance of the initial public offerings (IPOs) listed in the Malaysian main and alternative ‘Access, Certainty and Efficiency’ (ACE) markets at the economic and sectorial levels. Using event- and calendar-time study methods and monthly data from January 2000 to December 2011, we provide novel evidence on the existence of under performance anomaly in the Malaysian markets and more intensely in the ACE markets. We demonstrate robust evidence on the distinction in sector-specific characteristics from the aggregate market characteristics. While the consumer products and industrial sectors dominate the overall underperformance, the construction, property and technology sectors significantly overperform. The findings are robust to a wide range of other sensitivity checks including parametric and non-parametric tests. JEL Classification: G14, G15, G30, G34, G32, G38
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Gupta, Ashish, Graeme Newell, Deepak Bajaj, and Satya Mandal. "Determinants of foreign and domestic non-listed real estate fund flows in India." Journal of Property Investment & Finance 38, no. 6 (July 17, 2020): 503–24. http://dx.doi.org/10.1108/jpif-08-2019-0107.
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PurposeReal estate forms an important part of any economy and the investment in real estate, in turn, is impacted by the macroeconomic environment of that country. The purpose of the present research is to examine macroeconomic determinants of foreign and domestic non-listed real estate fund (NREF) flows and to examine whether they are similar or different for an emerging economy like India.Design/methodology/approachThe long and short-run cointegration between the time-series variables is estimated using the autoregressive distributed lag (ARDL) bounds test and error correction model (ECM) using quarterly data across the 2005–2017 period. ARDL is a suitable method for short time-series data.FindingsThe empirical results indicate that domestic NREF flows are positively and significantly impacted by real GDP and performance of listed real estate stocks (i.e. BSE realty index). Whereas, foreign NREF flows are positively and significantly impacted by the exchange rate, performance of listed real estate stocks and domestic NREF flows.Practical implicationsThe empirical results have significant implications for academicians, policy makers and real estate market practitioners. In the context of these results, some interesting insights are gained that would help in the implementation of the policies aimed toward increasing the fund flows in the real estate sector, which in turn would have a significant trickle-down effect on the Indian economy.Originality/valueThe existing literature looks at macroeconomic and other drivers of foreign investment in international real estate investments. However, there are very few studies on the determinants of domestic real estate investment flows and on determinants of NREFs' investment flows; particularly in emerging markets. The present study, in contrast, evaluates simultaneously the macroeconomic determinants of the domestic and foreign NREFs' investment flows in India. The ARDL and ECM method used has been applied for the first time to the study of NREFs.
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Hessayri, Manel, and Malek Saihi. "Monitoring earnings management in emerging markets." Journal of Economic and Administrative Sciences 31, no. 2 (November 16, 2015): 86–108. http://dx.doi.org/10.1108/jeas-11-2014-0029.
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Purpose – The purpose of this paper is to examine whether International Financial Reporting Standards (IFRS) adoption complements corporate governance factors (e.g. ownership structure) in monitoring managers’ discretional behavior in an emerging market context. Design/methodology/approach – The paper relies on a sample of listed companies in the United Arab Emirates, Morocco, South Africa and the Philippines during an eight-year period on average (four years of pre-adoption period and four years of post-adoption period). Findings – The authors find no evidence of lower earnings management after the switch to IFRS reporting, suggesting that managerial discretional behavior is insensitive to a firm’s IFRS adoption. However, the authors document effective monitoring role of a firm’s ownership structure on earnings management. More interestingly, institutional investors are effective in constraining earnings management when holding a high level of ownership. Moreover, the effect of blockholders and institutional blockholders varies as their ownership rises following a non-linear pattern. Research limitations/implications – First, the assumption that discretionary accruals are adequate measure of earnings management may be criticized in different ways. Second, the findings, performed on listed companies in the United Arab Emirates, Morocco, South Africa and the Philippines, should be interpreted with caution and cannot be generalized to all emerging market countries. Practical implications – Standards setters and market authorities should be aware of earnings management determinants to set adequate and fitting accounting standards limiting opportunistic behavior of managers and mainly to set up training programs to accounting professionals improving the IFRS implementation. Moreover, considering specific features of firms in emerging market countries related to ownership structure, international investors may rely on such criteria to evaluate firms. Finally, auditors should be aware of different incentives for earnings management in order to be able to detect eventual manipulation of accounting earnings. Originality/value – This paper provides a timely contribution to the continuous debate of the effect of IFRS adoption on earnings management in a poorly exploited setting, emerging market context. When investigating, additionally, the eventual non-linear effect of institutional ownership, block ownership, institutional block ownership and non-institutional block ownership on earnings management, a major contribution is that it brings to light the finding of a differential influence of ownership levels on earnings management.
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Upadhyaya, Tanka Prasad. "A Study on Changing Role of Foreign Institutional Investors (FIIs) in Indian Capital Market." Cognizance Journal of Multidisciplinary Studies 2, no. 7 (July 30, 2022): 66–76. http://dx.doi.org/10.47760/cognizance.2022.v02i07.005.
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The commencement of financial sector reform initiated in early 1990’s changed India’s policy on development strategy absolutely. The preliminary approach of financing current account deficit mainly by way of debt flows and official development assistance has altered to harnessing non-debt creating capital flows. Under this approach since September 14, 1992; Foreign Institutional Investors (FIIs) were allowed to invest in financial instruments in India and consequently Indian financial markets have changed greatly in its volume, size, depth and nature. FIIs are important to emerging economies because they bring funds and capital to businesses in developing countries. Foreign institutional investors play a very important role in any economy, since these are the big companies such as investment banks, mutual funds etc, who invest considerable amount of money in the Indian markets. These investors typically include hedge funds, mutual funds, insurance companies and investment banks among others. FIIs generally hold equity positions in foreign financial markets. Due to this, the companies invested in by FIIs generally have improved capital structures due to healthy inflow of funds. Thus, FIIs facilitate financial innovation and growth in capital markets. The entry of an FII can cause a drastic swing in domestic financial markets. It increases demand for local currency and directs inflation. Therefore, there are restrictions put by the managing authority of a country on how much stake FIIs can hold in the domestic company. This ensures that the FII’s influence on the company is limited, so as to avoid exploitation. However, not every FII will make an FDI in the country it is investing in. FIIs directly impact the stock market of the country, its exchange rate and inflation. FIIs can invest in listed, unlisted, and to-be-listed companies on the stock markets, in both the primary and secondary markets. This paper tries to analyse the changing role of FIIs in Indian capital markets because of their increasing share in the market.
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Upadhyaya, Tanka Prasad. "A Study on Changing Role of Foreign Institutional Investors (FIIs) in Indian Capital Market." Cognizance Journal of Multidisciplinary Studies 2, no. 7 (July 30, 2022): 66–76. http://dx.doi.org/10.47760/cognizance.2022.v02i07.005.
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The commencement of financial sector reform initiated in early 1990’s changed India’s policy on development strategy absolutely. The preliminary approach of financing current account deficit mainly by way of debt flows and official development assistance has altered to harnessing non-debt creating capital flows. Under this approach since September 14, 1992; Foreign Institutional Investors (FIIs) were allowed to invest in financial instruments in India and consequently Indian financial markets have changed greatly in its volume, size, depth and nature. FIIs are important to emerging economies because they bring funds and capital to businesses in developing countries. Foreign institutional investors play a very important role in any economy, since these are the big companies such as investment banks, mutual funds etc, who invest considerable amount of money in the Indian markets. These investors typically include hedge funds, mutual funds, insurance companies and investment banks among others. FIIs generally hold equity positions in foreign financial markets. Due to this, the companies invested in by FIIs generally have improved capital structures due to healthy inflow of funds. Thus, FIIs facilitate financial innovation and growth in capital markets. The entry of an FII can cause a drastic swing in domestic financial markets. It increases demand for local currency and directs inflation. Therefore, there are restrictions put by the managing authority of a country on how much stake FIIs can hold in the domestic company. This ensures that the FII’s influence on the company is limited, so as to avoid exploitation. However, not every FII will make an FDI in the country it is investing in. FIIs directly impact the stock market of the country, its exchange rate and inflation. FIIs can invest in listed, unlisted, and to-be-listed companies on the stock markets, in both the primary and secondary markets. This paper tries to analyse the changing role of FIIs in Indian capital markets because of their increasing share in the market.
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Lefort, Fernando. "Ownership structure and market valuation of family groups in Chile." Corporate Ownership and Control 3, no. 2 (2006): 90–105. http://dx.doi.org/10.22495/cocv3i2p10.
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In this paper I provide a summary description of corporate structure in Chilean firms and explain the evolution of conglomerates and capital markets in the Chilean economy. Specifically, I look at the control mechanisms and the identity of controllers of listed non-financial companies in Chile. Using a database developed by Lefort and Walker (2000, 2003b), I look at the relationship between family ownership and control and market valuation of listed firms in Chile. The evidence provided in this paper indicates that in the case of the highly concentrated Chilean companies, family management of a company is associated to a market discount. This evidence is consistent with the hypothesis of imperfect correlation of talent across generations. However, as I explained earlier in the paper, most Chilean groups have less than 30 years of existence and therefore, the succession problem is not likely to be very important in Chile
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Sheng, Dachen, and Heather Montgomery. "Should Firms in Emerging Markets Invest in R&D? Evidence from China’s Manufacturing Sector." Journal of Risk and Financial Management 15, no. 11 (November 7, 2022): 517. http://dx.doi.org/10.3390/jrfm15110517.
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Analyzing micro-level firm data from the Chinese manufacturing sector, this study provides compelling evidence that firms in emerging markets that invest in research and development (R&D) for product differentiation significantly increase firm performance as measured by market power, profitability, and earning quality. Privately held (non-state-owned), mid-size, Shenzhen exchange-listed firms experience the largest boost to firm performance when they invest in research and development. However, analyzing the contribution of R&D investment to firm market value, we reveal that while R&D investments are valued by institutional investors, the potential for investment in R&D to boost firm performance is not recognized by individual investors, who dominate Chinese financial markets. This finding suggests that managers may under-invest in R&D if equity compensation comprises a large share of the overall compensation package.
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Oba, Beyza, Elvin Tigrel, and Pinar Sener. "Board structure in listed firms: evidence from an emerging economy." Corporate Governance 14, no. 3 (May 27, 2014): 382–94. http://dx.doi.org/10.1108/cg-05-2012-0044.
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Purpose – This paper aims to understand the determinants of board structure of listed firms at institutional, industry and firm levels within an emerging economy. At the institutional level, the paper explores laws, managerial culture and the role of state in instituting and endorsing corporate governance practices. At the firm level, ownership patterns (family and non-family), experience in the capital markets, age and size of the firms are studied to find out the relation between these variables and the board structure. Design/methodology/approach – The research domain of the study is listed firms operating on the Istanbul Stock Exchange. The data for the study are collected at two phases; at the first phase, compliance reports, annual reports, articles of association and annual shareholders’ meeting reports of each firm in the sample are analyzed. At the second stage, secondary data are used for understanding the dynamics of Turkish institutional context. Findings – The results of this study reveal that boards of directors of listed Turkish firms comply with the governance practices instituted by state agencies, except on issues as independent members and committees that will influence the majority owners’ control domain and private benefits. Originality/value – This paper draws attention on institutional context and argues that “good governance” instruments developed for Anglo-Saxon stock market-controlled business systems provide limited explanation for an emerging economy that is characterized by close cooperation between the state, family-owned businesses and financial markets. The study offers insight to policy makers at a national level, interested in developing corporate governance principles regarding boards of directors of listed firms.
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Atici, Gonca, and Guner Gursoy. "Trends of non-financial corporations listed on Borsa Istanbul: Rethinking corporate ownership and governance under COVID-19." Journal of Governance and Regulation 9, no. 3 (2020): 132–43. http://dx.doi.org/10.22495/jgrv9i3art10.
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The purpose of this study is to analyze trends of non-financial corporations listed on Borsa Istanbul (BIST) in terms of ownership structure for the period of 2002-2019. According to our findings, Turkish non-financial corporations reveal a concentrated nature as an example of family capitalism. Findings also reveal that initial public offerings are mainly from family-controlled corporations. This is noteworthy as corporations integrate more to the capital markets of Turkey. Besides, they get more disciplined as they subject to the regulations of the governing bodies and internalise corporate governance criteria. In terms of ownership mix, findings denote that non-financial corporations listed on BIST benefit from the advantages of conglomerates, cross-ownership, and foreign ownership in line with the literature. Contrary to several emerging economies, state-ownership has a minor share which renders strength and quality of governance level. The concentrated nature of corporations is believed to have a positive effect on governance mechanisms for controlling agency problems especially in the environment of uncertainty during COVID-19. Although Turkish capital markets have promising and progressing corporate governance mechanisms, steps to build up advanced digital governance mechanisms for the “digital new normal” should be taken as soon as possible.
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Zhang, Tingting, William Yu Chung Wang, and David J. Pauleen. "Big data investments in knowledge and non-knowledge intensive firms: what the market tells us." Journal of Knowledge Management 21, no. 3 (May 8, 2017): 623–39. http://dx.doi.org/10.1108/jkm-12-2016-0522.
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Purpose This paper aims to investigate the value of big data investments by examining the market reaction to company announcements of big data investments and tests the effect for firms that are either knowledge intensive or not. Design/methodology/approach This study is based on an event study using data from two stock markets in China. Findings The stock market sees an overall index increase in stock prices when announcements of big data investments are revealed by grouping all the listed firms included in the sample. Increased stock prices are also the case for non-knowledge intensive firms. However, the stock market does not seem to react to big data investment announcements by testing the knowledge intensive firms along. Research limitations/implications This study contributes to the literature on assessing the economic value of big data investments from the perspective of big data information value chain by taking an unexpected change in stock price as the measure of the financial performance of the investment and by comparing market reactions between knowledge intensive firms and non-knowledge intensive firms. Findings of this study can be used to refine practitioners’ understanding of the economic value of big data investments to different firms and provide guidance to their future investments in knowledge management to maximize the benefits along the big data information value chain. However, findings of study should be interpreted carefully when applying them to companies that are not publicly traded on the stock market or listed on other financial markets. Originality/value Based on the concept of big data information value chain, this study advances research on the economic value of big data investments. Taking the perspective of stock market investors, this study investigates how the stock market reacts to big data investments by comparing the reactions to knowledge-intensive firms and non-knowledge-intensive firms. The results may be particularly interesting to those publicly traded companies that have not previously invested in knowledge management systems. The findings imply that stock investors tend to believe that big data investment could possibly increase the future returns for non-knowledge-intensive firms.
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Anh, Phan, Nguyen Dinh Trung, and Dinh Tran Ngoc Huy. "What are effects of tax changes on market risk? - a case in listed Viet Nam investment and financial service companies." LAPLAGE EM REVISTA 7, Extra-E (August 6, 2021): 497–504. http://dx.doi.org/10.24115/s2446-622020217extra-e1228p.497-504.
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The financial crisis has been affected many global stock markets, as well as the Viet Nam stock exchange. This study analyzes the impacts of tax policy on market risk for the listed firms in the non-banking financial service and investment industry, so-called financial service industry, as it becomes necessary. First, by using quantitative and analytical methods to estimate asset and equity beta of total 10 listed companies in Viet Nam financial service industry with a proper traditional model, we found out that the beta values, in general, for many companies are acceptable. Second, under 3 different scenarios of changing tax rates (20%, 25% and 28%), we recognized that there is not large disperse in equity beta values, estimated at 1,048, 1,050 and 1,052.These values are just little higher than those of the listed VN construction firms but much higher than those of listed banking firms. Third, by changing tax rates in 3 scenarios (25%, 20% and 28%), we recognized equity /asset beta are most the same (0,23 and 0,16) if tax rate increases from 20% to 25%, then goes up from 25% to 28%.
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Anh, Phan, Nguyen Dinh Trung, and Dinh Tran Ngoc Huy. "What are effects of tax changes on market risk? - a case in listed Viet Nam investment and financial service companies." Laplage em Revista 7, Extra-E (August 6, 2021): 510–17. http://dx.doi.org/10.24115/s2446-622020217extra-e1228p.510-517.
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The financial crisis has been affected many global stock markets, as well as the Viet Nam stock exchange. This study analyzes the impacts of tax policy on market risk for the listed firms in the non-banking financial service and investment industry, so-called financial service industry, as it becomes necessary. First, by using quantitative and analytical methods to estimate asset and equity beta of total 10 listed companies in Viet Nam financial service industry with a proper traditional model, we found out that the beta values, in general, for many companies are acceptable. Second, under 3 different scenarios of changing tax rates (20%, 25% and 28%), we recognized that there is not large disperse in equity beta values, estimated at 1,048, 1,050 and 1,052.These values are just little higher than those of the listed VN construction firms but much higher than those of listed banking firms. Third, by changing tax rates in 3 scenarios (25%, 20% and 28%), we recognized equity /asset beta are most the same (0,23 and 0,16) if tax rate increases from 20% to 25%, then goes up from 25% to 28%.
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Li, Tao, Mi Luo, and David Ng. "Earnings management and listing regulations in China." China Finance Review International 4, no. 2 (May 13, 2014): 124–52. http://dx.doi.org/10.1108/cfri-02-2014-0005.
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Purpose – The purpose of this paper is to document earnings management of Chinese firms. Design/methodology/approach – The paper takes advantage of the introduction of stringent delisting requirements around 2000 that non-cross-listed firms with consecutive earnings losses for more than two years would be delisted from the mainland Chinese exchanges. The paper examines whether listed firms in Chinese market manage earnings to avoid listings. The paper also examines whether mainland Chinese firms cross-listed in Hong Kong exchanges manage earnings the same way. The measure for earnings management is derived from a kernel density estimate for the return on equity distribution, following Bollen and Pool (2009). Findings – The paper finds that the new delisting threats induce rampant earnings management on mainland markets, and cross-listing in Hong Kong has a curbing effect on earnings management. The paper also finds that prices became less value relevant after the implementation of delisting regulations, and investors rationally discounted the reliability of earnings announcements in China. Such market responses were absent for cross-listed firms in Hong Kong. Originality/value – There is little conclusive evidence about whether cross-listing in a non-US market has a curbing effect on earnings management. The paper contributes to this literature by using this unique exogenous policy change in China and following a difference-in-difference approach in identifying the potential curbing effect. The particular measure adapted from Bollen and Pool (2009) utilizes information of the whole distribution of return on equity, thus extends earlier crude comparison of nearest two bars around zero and partially deals with the potential endogeneity problem.
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Omran, Mohamed, and Yasean A. Tahat. "Does institutional ownership affect the value relevance of accounting information?" International Journal of Accounting & Information Management 28, no. 2 (March 9, 2020): 323–42. http://dx.doi.org/10.1108/ijaim-03-2019-0038.
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Purpose Drawing upon agency theory, this study aims to assess the value relevance (VR) of accounting information released by non-financial firms listed on the Kuwait stock exchange for the period of 2015-2018. Also, the influence of institutional ownership level and other explanatory variables, namely, book value per share, earnings per share, growth in assets and changes in financial leverage on share prices is examined. Design/methodology/approach To test the hypotheses, the Ohlson (1995) model is extended. This study uses panel data analysis and applies appropriate statistical techniques to measure empirical relationships. Findings The results show that the VR of accounting information released by the Kuwaiti non-financial listed firms varies over the period of 2015-2018. Book value and earnings have significant and positive effects on share prices. In recent years, the VR of book value information has been growing, while that of earnings information has been declining. Institutional ownership level has a significant and positive influence on the VR of accounting information released by the Kuwaiti non-financial listed firms. The findings confirm a positive power, signalling growth in assets regarding the share prices. However, no significant relationship between changes in financial leverage and share prices is found. Practical implications The findings of the study provide evidence of the linkage between VR and institutional ownership level, which promotes the understanding of the influence of institutional investors on a firm’s market value. Empirical evidence from Kuwait will have international implications and can serve as a guide for accounting researchers studying other emerging markets. Capital market regulators can provide guidelines in the form of information characteristics and elements of financial statements that need improvement. Finally, the findings assist non-financial listed firms to enhance the quality of accounting information by identifying the strengths and weaknesses in their financial reports. Originality/value This study extends the previous literature by investigating a relatively new set of data in more depth than that has been examined by prior research, which focusses on the relationship between accounting information and the firm’s market value.
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Cormier, Denis, and Michel L. Magnan. "The Advent of IFRS in Canada: Incidence on Value Relevance." Journal of International Accounting Research 15, no. 3 (February 1, 2016): 113–30. http://dx.doi.org/10.2308/jiar-51404.
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ABSTRACT The paper focuses on Canada's enactment of IFRS for publicly accountable firms. We investigate whether IFRS meet one of their stated goals, which is to improve financial statements' relevance for stock markets. Results show that migrating from Canadian GAAP to IFRS enhances the value relevance of earnings but the effect is concentrated among firms that are cross-listed in the U.S. (and that do not report according to U.S. GAAP). The advent of IFRS enhances the value relevance of information contained in footnotes but attenuates the need for non-GAAP measures' disclosure. Stock market prices also embed more precise anticipations about future IFRS earnings. Additional analyses suggest that less earnings management accompanies IFRS adoption. Our results suggest that, for cross-listed firms, the adoption of IFRS enhanced the comparability of their financial statements and, ultimately, their value relevance.
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del Carmen Briano-Turrent, Guadalupe, and Jannine Poletti-Hughes. "Corporate governance compliance of family and non-family listed firms in emerging markets: Evidence from Latin America." Journal of Family Business Strategy 8, no. 4 (December 2017): 237–47. http://dx.doi.org/10.1016/j.jfbs.2017.10.001.
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LIN, YU-EN, HSIANG-HSUAN CHIH, CHIA-HSIN CHENG, and YAN-QING KU. "MARKET COMPETITION, ARBITRAGE RISK, AND CAPITAL STRUCTURE: EVIDENCE FROM TAIWAN." Annals of Financial Economics 11, no. 01 (March 2016): 1650002. http://dx.doi.org/10.1142/s2010495216500020.
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The purpose of this paper is to understand how the product market competition and the arbitrage risk affects managers’ decisions on capital structure. To find managers’ risk preference, we introduce the interaction between market competition and the arbitrage risk of the firm. Sampling from Taiwanese listed companies from 1986 to 2011, we identify both the market competition and the arbitrage risk affects managers’ debt decisions. In addition, we find that most managers in monopolistic firms increase debt to decrease the agency costs. However, some hold risk-averse motivation to enjoy their “quiet life”. These “quiet life” managers exist in those companies that are in non-competitive markets and that exists large idiosyncratic risk.
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Jain, Pawan, and Mark A. Sunderman. "Stock price movement around the merger announcements: insider trading or market anticipation?" Managerial Finance 40, no. 8 (July 8, 2014): 821–43. http://dx.doi.org/10.1108/mf-09-2013-0256.
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Purpose – The purpose of this paper is to examine the stock price movements for existence of informed trading prior to a merger announcement for the companies listed on the emerging markets of India for the period from 1996 to 2010. Design/methodology/approach – This study applies several event study methodologies and regression analyses to analyze the stock price movement surrounding a merger announcement. The paper divides mergers in two different types: industry merger cases and non-industry merger cases and in two different time periods: recession and boom. Findings – The results show that the information held only by insiders’ works its way into prices. The paper finds strong evidence of insider trading in the case of industry mergers and mergers during recessions. Practical implications – The results from this study have immediate policy implications for India and other developing markets as the paper provides the type of mergers and time periods when merger announcements are more susceptible to insider trading. Originality/value – The paper extends the literature on mergers and insider trading by analyzing firms trading on a developing capital market, which, unlike the developed markets, is characterized by inadequate disclosure and a weaker enforcement of securities regulations. The results support this notion and recommend Indian securities market regulators to tighten the lax regulations. In addition, the author document the divergence in price reaction to the merger announcements for different types of mergers: industry mergers and non-industry mergers, as well as for mergers during different market conditions: recession vs booming capital markets.
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Al-shamahi, Mohammed Gubran, Kamarul Bahrain Abdul Manaf, and Ali Saleh Al-arussi. "The Impact of Effective Corporate Boards and Audit Committees on Attracting Foreign Ownership in Listed Companies in the Gulf Cooperation Council." Asian Journal of Finance & Accounting 9, no. 2 (November 19, 2017): 190. http://dx.doi.org/10.5296/ajfa.v9i2.12152.
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This study empirically examines the impact of effectiveness of both corporate boards and audit committee on foreign ownership in selected non-financial listed companies of the stock markets in Gulf Cooperation Council (GCC) countries. Contrary to previous studies, this study enters the firm size, leverage, exchange rate risks, inflation risks and economic growth as control variables. For the first time, it also includes the political risks’ variable as a control variable that may affect foreign ownership. In term of panel data regression analysis, the study was built on fixed effect model and conducted to the period of 2012-2015 for 143 non-financial listed companies on the GCC stock markets. Our results explain that foreign ownership is positively related to the effectiveness of both the boards of directors and the audit committees. Political risks and firm size are positively significant with foreign ownership, while the leverage is negatively related to foreign ownership. The implication of this study may help beneficiaries in making better policy decisions and provide guidance for corporate managers on the needs of foreign investors.
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Ahmad, Rubi, and Oyebola Fatima Etudaiye-Muhtar. "Dynamic Model of Optimal Capital Structure: Evidence from Nigerian Listed Firms." Global Business Review 18, no. 3 (April 24, 2017): 590–604. http://dx.doi.org/10.1177/0972150917692068.
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Examination of optimal capital structure in financial markets with imperfections suggests that when deviations from optimal capital structure occur, adjustment costs may prevent firms from moving towards target capital structure. However, previous studies on the capital structure of non-financial firms in Nigeria did not consider these imperfections and adjustment costs. It is against this background that this study investigates the dynamic adjustment to target capital structure by non-financial firms listed on the Nigerian Stock Exchange. By utilizing a framework that provides for the determination of adjustment costs, the results reveal the existence of dynamic adjustment to optimal capital structure suggesting attempts made by the sampled firms to maximize shareholders wealth. A comparison of the adjustment costs with those of firms in more developed economies shows that Nigerian firms have higher costs of adjustment indicating that the level of development of the market is important in lowering transaction costs. In addition, tangibility of assets, non-debt tax shield, growth opportunity, firm size, profitability and inflation significantly influence Nigerian firms’ optimal capital structure.
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Su, Linlin. "Coronavirus Impact on the leading stock markets and IPOs Intention." BCP Business & Management 30 (October 24, 2022): 247–55. http://dx.doi.org/10.54691/bcpbm.v30i.2438.
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The goal of this research report is to look into the impact of the coronavirus disease (COVID-19) on the stock markets of China and the United States, focusing on the major stock indices in both countries' stock markets while also looking at the performance of companies in various industries during the epidemic. Also, the impact of the epidemic on the IPOs status of firms in various industries, in order to determine which industries and companies are worth paying attention to during the epidemic. Methodology: Based on the S&P Global 100 closing price, a comparison and event study of index closing prices for the aforementioned countries during the COVID-19 pandemic and pre-pandemic. To that purpose, we utilised cross-sectional Mest and non-parametric Mann-Whitney U-tests to look at changes in major stock indexes during the pandemic, cross-sectional t-tests for sample analysis, and OLS (ordinary least the squares) market model to combine the market and industries to make conclusions. Data visualisation, financial indicator calculations, and a clear display of analysis results are required for the success of IPOs efforts. Findings: The study discovered that different industries reacted to the stock market in different ways. There was a positive link between the number of listed firms and their industry stock performance as the market size of the industry grew. Furthermore, different industries have varied reactions to the stock market, and the IPOs activities of companies in different industries will influence the stock market's future development path.Implication: COVID-19 has supported another set of tech industries, although first affecting a portion of traditional industries.Originality: During COVID-19, no research has been done to determine the impact of the stock market on IPOs activities in various industries.
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Miglietta, Nicola, Enrico Battisti, Elias Carayannis, and Antonio Salvi. "Capital structure and business process management: evidence from ambidextrous organizations." Business Process Management Journal 24, no. 5 (September 3, 2018): 1255–70. http://dx.doi.org/10.1108/bpmj-07-2017-0214.
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Purpose The purpose of this paper is to investigate the relationship between capital structure and business process management (BPM) within ambidextrous firms. In particular, referring to the listed companies in the Mercato Telematico Azionario (MTA) and Mercato degli Investment Vehicles (MIV) markets with large- and mid-sized capitalization, divided into ambidextrous and non-ambidextrous companies, the authors examined the capital structure to fill a gap in the current literature. Design/methodology/approach This study uses a mixed-method sequential exploratory design. In particular, a qualitative study was conducted to identify some Italian-listed companies, called ambidextrous firms, which have implemented incremental (exploitative) and radical (explorative) innovations in an ambidexterity perspective of process management. A quantitative study was designed to provide insights into the different degrees of leverage of the listed companies selected by the qualitative analysis. Findings The research is based on an empirical analysis undertaken with 69 companies listed on Italian markets (starting from the MTA and MIV Italy 100 – large- and mid-sized capitalization). In particular, the authors highlight 11 companies that, based on the literature, can be defined as ambidextrous organizations. These firms, in each year analyzed (2014, 2015, and 2016), have more leverage than non-ambidextrous ones. Considering that firms today need to constantly revisit their portfolio of debt and equity, ambidextrous organizations could evaluate the largest debt available in order to implement new BPM tools. Originality/value To the authors’ knowledge, this is the first exploratory study based on capital structure and the simultaneous exploration and exploitation of knowledge (ambidexterity) that also is informed by a BPM perspective. The paper presents evidence from Italian-listed companies that are referred to as ambidextrous and have different degrees of leverage.
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Yuliana, Rita, and M. Nizarul Alim. "The Islamic Capital Market Response to the Real Earnings Management." Journal of Economics, Business & Accountancy Ventura 20, no. 1 (July 27, 2017): 61. http://dx.doi.org/10.14414/jebav.v20i1.772.
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This study aims to prove the effect of the company's status, i.e membership on the Islamic capital market and the status as suspect firm, as a determinant of real earnings management (REM). REM is conducted by abnormally increasing sales, increasing production and reducing discretionary costs in order to achieve a certain earnings target. This study uses Earnings Distribution Analysis (EDA) technique, which refers to the Prospect Theory (Kahneman & Tversky, 1979) to identify the suspect firms. Suspect firms are companies that have small positive earnings. The samples of this research are companies listed on the Indonesia Stock Exchange in 2011 and 2012. Based on the result of regression analysis, hypothesis testing results show that the suspect firms conduct real earnings management in all three types of activities more aggressively than the non-suspect firms. Furthermore, this study also showed empirical evidence that there are differences in real earnings management actions between companies listed in the Islamic capital market compared to conventional capital markets. Then, this study also showed that the Islamic capital market is more appropriate in response to the REM than the conventional capital market.
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Suzuki, Yoshihisa, and Anh Tho To. "The change in board independence in the presence of firm risk and regulation." Contaduría y Administración 64, no. 4 (May 24, 2019): 139. http://dx.doi.org/10.22201/fca.24488410e.2020.2233.
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The purpose of the paper is to explore the impact of firm risk on board independence, typically the proportion of non-executive directors. Our sample is based on a panel data of publicly listed firms on Vietnamese stock markets over a ten-year period (2007-2016). By applying dynamic generalized method of moments estimators, the results are robust to endogeneity issues and highlight the U-shaped nonlinear impact of firm risk on non-executive director ratio. In addition, because the lack of information transparency in Vietnamese enterprises caused many risks for investors, the government issued the Circular 121/2012/TT-BTC dated July 26, 2012 on corporate governance applicable to public companies, which enhanced changes in the board structure of listed companies. Under the pressure of this regulation, high-risk companies increased the proportion of non-executive directors.
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Vržina, Stefan, Vladimir Obradović, and Jasmina Bogićević. "Financial reporting on income tax in Serbia and Croatia: An empirical analysis." Ekonomika preduzeca 68, no. 5-6 (2020): 330–40. http://dx.doi.org/10.5937/ekopre2006330v.
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The paper examines the quality of financial reporting on income tax in Serbia and Croatia in order to determine the extent to which disclosed information on income tax in these countries is useful for economic decision making. The research based on financial statements of listed and non-listed companies for 2016 reveals that disclosed information on the income tax is not entirely in accordance with the relevant regulation. Therefore, there is a significant room for improvement of income tax financial reporting practices in both countries. The quality of disclosed income tax information is not related to the presence of companies in the stock market, as capital markets in Serbia and Croatia do not provide strong incentives for disclosing adequate information on income tax. The research also reveals significant differences in the prevailing sources of deferred tax assets and deferred tax liabilities between Serbia and Croatia, which indicates that the income tax financial reporting is conditioned by the specifics of the national environment.
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Lee, Jeong Hwan, and Bohyun Yoon. "Stock Market Liquidity And Dividend Policy In Korean Corporations." Journal of Applied Business Research (JABR) 33, no. 4 (June 30, 2017): 729. http://dx.doi.org/10.19030/jabr.v33i4.9995.
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The liquidity hypothesis predicts a negative relationship between stock liquidity and dividend payout propensity, i.e., a firm will decide to pay dividends to compensate for the liquidity demand of investors. This study comprehensively examines whether the liquidity hypothesis applies to the sample of Korean firms listed in the KOSPI and KOSDAQ markets. The main results of this paper are as follows. First, the dividend policy in Korean firms does not support the liquidity hypothesis, contradictory to the existing empirical studies. Next, the explanatory power of the liquidity hypothesis is even weaker for the KOSDAQ market, inconsistent with international evidence. Finally, even when we focus on the firm-year observations with non-negligible dividend payments, the liquidity hypothesis does not explain the dividend policy of Korean firms either. Our findings significantly contribute to the literature by robustly confirming the very limited role of the liquidity hypothesis for Korean financial markets.
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Khan, Safi Ullah, and Syed Tahir Hijzi. "Single Stock Futures Trading and Stock Price Volatility: Empirical Analysis." Pakistan Development Review 48, no. 4II (December 1, 2009): 553–63. http://dx.doi.org/10.30541/v48i4iipp.553-563.
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This study examines impact of the introduction of single stock futures contracts on the return volatility of the SSFs-listed underlying stocks. The study documents a significant decrease in return volatility for the SSFs-underlying stocks following the introduction of single stock futures contracts on the Karachi Stock Exchange. The multivariate analysis in which the spot trading volume, the futures trading volume and open interest were partitioned into news and informationless components, the estimated coefficient of expected futures volume component is statistically significant and negatively related to volatility, suggesting that equity volatility is mitigated when the expected level of futures activity is high. The findings of the decreased spot price volatility of the SSFs-underlying stocks associated with large expected futures activity is important to the debate of regarding the role of equity derivatives trading in stock market volatility. These empirical results for the Pakistan’s equity market support theories implying that equity derivates trading improves liquidity provision and depth in the equity markets, and appear to be in contrast to the theories implying that equity derivates markets provide a medium for destabilising speculation. Finally, the SSFs-listed stocks were grouped with a sample of non-SSFs stocks to examine cross-sectional data for comparing changes in return volatility. After controlling for the effects of a number of determinants of volatility, sufficient evidence is found to support that, this multivariate test, like the previous analysis, provides no evidence that the volatility of the SSFsunderlying stocks is positively related to the introduction of the single stock futures trading in the Pakistan’s stock market.
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Lakkanawanit, Pankaewta, Wilawan Dungtripop, Muttanachai Suttipun, and Hisham Madi. "Energy Conservation and Firm Performance in Thailand: Comparison between Energy-Intensive and Non-Energy-Intensive Industries." Energies 15, no. 20 (October 12, 2022): 7532. http://dx.doi.org/10.3390/en15207532.
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This study investigated and compared energy conservation levels between listed companies in energy-intensive industries and non-energy-intensive industries in Thai capital markets. It also tested the impact of energy conservation on firm performance using companies in the two industries. The sample for the study was sourced from 552 companies in the Stock Exchange of Thailand (SET) and 169 companies in the Market for Alternative Investment (MAI). The data was collected from the companies' annual reports spanning the period from 2016 to 2020. Descriptive analysis, independent sample t-test, and unbalanced panel data analysis were used to analyze data. The findings revealed that energy conservation scores for Thai-listed companies were generally stable, averaging between 0.45 and 0.46. It was also revealed that the energy conservation of companies in energy-intensive industries was significantly greater than that of companies in non-energy-intensive industries, with average scores of 0.55 and 0.43, respectively. Additionally, the study found that energy conservation has a positive impact on the firm performance of energy-intensive industries, while no significant impact in energy-intensive industries was recorded. The findings demonstrate that stakeholder and legitimacy theories can help explain how energy conservation benefits companies in terms of increased firm performance.
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Parikh, Ravi Bharat, Justin E. Bekelman, Qian Huang, Joseph Martinez, Ezekiel J. Emanuel, and Amol S. Navathe. "Characteristics of medical oncologists participating in the Oncology Care Model." Journal of Clinical Oncology 37, no. 15_suppl (May 20, 2019): e18017-e18017. http://dx.doi.org/10.1200/jco.2019.37.15_suppl.e18017.
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e18017 Background: The Oncology Care Model (OCM) is Medicare’s first bundled payment program for patients with cancer. Because practices voluntarily enrolled in the OCM in 2016, there may be differences between OCM-participating and non-participating oncologists that impact the OCM’s generalizability. We examine baseline characteristics of OCM participants and markets with high OCM physician participation. Methods: In this cross-sectional study, we identified characteristics of US medical oncologists practicing in 2016 using a national telephone-verified physician database. We linked this data with Dartmouth Atlas and Medicare claims data to identify market characteristics of areas with high OCM participation. We used logistic regression to examine relationships between market characteristics and OCM participation. Results: Of 10428 US medical oncologists, 2605 (24.9%) were listed on an OCM-participating practice’s website. There were no differences in sex or medical training between OCM participants and non-participants, although OCM participants were younger. OCM participants were more likely to be affiliated with large, group, and urban practices that were not part of a health system (Table). Southwest, Southeast, and mid-Atlantic markets had higher OCM participation. Markets with high OCM physician participation had higher specialist density, Hospital Care Intensity Index, and acute care utilization at the end of life (all p < 0.001). Market penetration of Accountable Care Organizations (adjusted odds ratio [aOR] 4.65, 95% CI 3.31-6.56, p < 0.001) and Medicare Advantage (aOR 2.82, 95% CI 1.97-4.06, p < 0.001) were associated with higher OCM participation. Conclusions: We found differences in provider and practice demographics, care intensity, and prior exposure to alternative payment models between OCM-participants and non-participants. Differences in practice and market characteristics influence oncologists’ participation in alternative payment models and should be accounted for in Medicare’s OCM evaluation. [Table: see text]
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Mwambuli, Erick Lusekelo. "Analysis of the Role of Corporate Governance on Listed Firm’s Capital Structure: The East African Stock Markets Perspective." International Journal of Accounting and Financial Reporting 9, no. 3 (June 25, 2019): 143. http://dx.doi.org/10.5296/ijafr.v9i3.15411.
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This paper examine the role of corporate governance on listed firm’s capital structure decisions in developing economies, East African stock markets. To achieve the objective of this paper, we used a strongly balanced panel dataset of 320 observations (i.e. a sample of 32 non-financial listed firms in East African region from 2006-2015. Measures for capital structure decisions were short term debt ratio (STDR),long term debt ratio (LTDR) and total debt ratio (TDR) as dependent variables and explanatory (independent) variable was corporate governance practices measured by researcher-constructed index consisting of 28 corporate governance provisions ;thus the corporate governance practices index (CGPI). Furthermore, the effects of control variable such as firm size (SIZ), the level of economic development (GDP) and industry dummies were also examined. The panel corrected standard errors (PCSEs) regression model was employed for corporate governance practices and capital structure decisions to analyze the data. Our results indicate a statistically significant negative effect of corporate governance practices on capital structure decisions at 5% significance level. Our paper contributes to both literature and the practical implications, because our paper provides a first insight of the corporate governance practices and its effects on capital structure decisions for the East African regional stock markets. The paper recommends to securities markets regulatory authorities in East African region such as East African member states securities regulatory authority (EASRA) and their respective countries securities markets regulatory authorities to stimulates new efforts towards better corporate governance practices to listed firms in the regional bloc due to its statistically significant effects on capital structure decisions and future study can be extended after considering external corporate governance mechanisms.
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Lucchese, Manuela. "Country-specific institutional effects on non-financial disclosure level: Evidence from European listed banks." Corporate Ownership and Control 17, no. 4 (2020): 166–82. http://dx.doi.org/10.22495/cocv17i4art14.
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This study investigates the relationship between disclosure level of GRI-compliant non-financial statements, provided to conform with the Directive 2014/95/EU, and cross-country societal variables (Hofstede’s cultural dimensions, political and civil systems, legal system and level of economic development) of the European listed banks, using the political economic theory. It analyzes the banks listed in the stock markets of 18 European countries for 2016-2018. The data was collected from the BvD BankFocus database, selecting 134 bank-year observations. A disclosure index based on the GRI framework compliant to the Directive was determined to measure the non-financial reporting disclosure. The findings, partially consistent with the previous literature, show for the banks a significant negative influence of power distance, masculinity, indulgence, the legal system, and level of economic development on the non-financial disclosure. Moreover, the results evidence a significant positive association between individualism, long-term orientation, indulgence, and political and civil system on the non-financial disclosure level. This study contributes to the international debate on how the socio-cultural-economic institutional factors affect non-financial disclosure expectations in the banking sector. Furthermore, understanding the effect of cross-country societal factors on NFR disclosure under EUD might benefit managers when implementing social and environmental strategies in all socio-cultural institutional settings. It might help regulators and policy-makers when adopting new legislation and making reforms dealing with social and environmental laws.
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Xu, Shoufu, Xuehui He, and Longbing Xu. "Market or government: who plays a decisive role in R&D resource allocation?" China Finance Review International 9, no. 1 (February 18, 2019): 110–36. http://dx.doi.org/10.1108/cfri-08-2017-0190.
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Purpose The purpose of this paper is to empirically investigate the impact of equity market valuation and government intervention on the research and development (R&D) investments of listed companies in China and their relationship. Design/methodology/approach Using a manually collected R&D database in the period 2007–2015, this paper constructs a sample of 6,595 firm–year observations and applies the methods of pooled OLS regressions to examine the effects of market valuation and government intervention on corporate R&D expenditures. Findings This paper finds that market valuation enhances corporate R&D investments, but there is no evidence that government intervention may significantly affect the R&D investments. Government intervention also decreases the sensitivity of corporate R&D investment to stock price, which implies that government intervention weakens the promotion of market mechanism to corporate R&D investment. Furthermore, these effects are stronger in the non-state-owned firms and the non-regulated industries. Practical implications This study suggests that the functional borders of markets and government should be reasonably defined and markets play a decisive role in resource allocation to improve corporate innovation and national innovation. Originality/value This paper provides a micro view of the relationship between market and government at the stage of transitional economy in China as well as directions for further research on the relationship between stock prices and corporate investments.
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Mwambuli, Erick Lusekelo. "How Does Board Structure Characteristics Affect Capital Structure Decisions? Evidence from East African Stock Markets." Journal of Corporate Governance Research 2, no. 1 (February 4, 2018): 1. http://dx.doi.org/10.5296/jcgr.v2i1.12599.
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This research examines the board structure characteristics and its effects on capital structure decisions in developing economies, East African stock markets. To achieve the objective of this research, we used a strongly balanced panel dataset of 320 observations (i.e. a sample of 32 non-financial listed firms in East African region from 2006-2015. Measures for capital structure decisions were short term debt ratio (STDR),long term debt ratio (LTDR) and total debt ratio (TDR) as dependent variables and explanatory (independent) variable was board structure characteristics measured by researcher-constructed index consisting of 10 board structure characteristics provisions; thus the board structure characteristics index (BSCI), furthermore, the effects of control variable such as firm size (SIZ),the level of economic development (GDP) and industry dummies were also examined. The panel corrected standard errors (PCSEs) regression model was employed for board structure characteristics and capital structure decisions to analyze the data. Our results indicate a statistically significant negative effect of board structure characteristics on capital structure decisions (except on short term debt where it’s insignificant) all models at 5% significance level. Our study is very innovative in both corporate finance and accounting literature and the practical implications because our study provides a first insight of the board structure characteristics and its effects on capital structure decisions for East African stock markets context. The study recommends to securities markets regulatory authorities in East African region such as East African member states securities regulatory authority (EASRA) and their respective countries securities markets regulatory authorities to stimulates new efforts towards better board structure provisions to listed firms in the regional bloc due to its statistically significant effects on financing behavior and future research can be extended after inclusion of both listed and unlisted firms.
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Hanni, Noona. "Exclusive Distribution and Non-Compete Clause in Trade: Transnational Agreements in European Union and United States." Udayana Journal of Law and Culture 3, no. 2 (July 31, 2019): 141. http://dx.doi.org/10.24843/ujlc.2019.v03.i02.p02.
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Exclusive distribution agreements are commonly used in both European Union (EU) and United States (US) markets to ensure the efficient distribution of products and services. This article compares the competition legislation in the EU and US and focuses on the differences in the treatment of vertical agreements. This topic is addressed also from an economic perspective and focuses on the possible abuse of dominant market position by international multisectoral companies. This article focuses on the following legal and economic questions: how do competition legislations regulating vertical agreements differ in EU and US and, what kind of possible effects do transnational exclusive distribution agreements have on international trade and competition. In EU law exclusive distribution agreements, even those which include a non-compete obligation limited to five years, are considered as lawful restrictions on competition as long as they fulfil certain criteria listed in the Block Exemption Regulation. EU competition law recognizes the terms of block exemption and ‘safe haven’, whereas the US antitrust law does not regulate any exemptions to vertical restraints. Vertical restraints are interpreted in the US common law of antitrust in the light of the principle of Rule of Reason. An important difference in these jurisdictions is the definition of relevant markets, which is taken into consideration when evaluating the legality of a vertical agreement under competition law. Both jurisdictions emphasize the market power of the producer, but the allowed percentage of market share varies between EU and US and only EU legislation gives emphasis to the market power of the distributor. These differences in competition legislations regulating vertical agreements can lead to conflicts when interpreting the legality of a distribution agreement. The definition of relevant product markets might lead to big international multisectoral companies abusing their dominant position by entering into exclusive arrangements.
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Chen, Lucy Huajing, and Inder K. Khurana. "The Impact of Eliminating the Form 20-F Reconciliation on Shareholder Wealth: Evidence from U.S. Cross-Listed Firms." Accounting Review 90, no. 1 (August 1, 2014): 199–228. http://dx.doi.org/10.2308/accr-50893.
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ABSTRACT This paper examines shareholder wealth effects in U.S. and home-country markets relating to the Securities and Exchange Commission's (SEC) decision to eliminate the Form 20-F reconciliation. During the period of examined events, we find positive cumulative abnormal returns for the treatment sample of U.S. cross-listed firms that prepare financial statements under International Financial Reporting Standards (IFRS), but no such effects for our control sample comprising cross-listed non-IFRS, U.S. domestic, or home-country firms. We find the stock market impact for our treatment sample to be positively related to our proxy for cost savings and negatively related to the pre-adoption reconciliation magnitude from IFRS to U.S. GAAP. This suggests shareholders place some value on reconciliation information, but the costs of preparing and auditing reconciliations generally outweigh concern about information loss. Moreover, we find that information loss is less pronounced for firms having used IFRS for a longer period, suggesting the learning effect mitigates information loss. Data Availability: Data are publicly available from sources identified in the article.
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Rana Shahid Imdad Akash, Muhammad Mudasar Ghafoor, and Nida Siddique. "Impact of Macroeconomic Conditions, Industry Attributes and Firms Related Variables on Capital Structure: A Cross Industry Analysis." Journal of Business and Social Review in Emerging Economies 6, no. 1 (March 31, 2020): 287–300. http://dx.doi.org/10.26710/jbsee.v6i1.1058.
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Purpose: This study is conducted to examine the main strength of firms’ specific variables, industry effects and macroeconomic conditions in predicting the capital structure choices of non financial listed companies of Pakistan Stock Exchange (PSX-100). Design/Methodology/Approach: To perform the study, a sample of twelve sectors covering a period from 2012 to 2017 is taken from PSX-100. Seemingly Unrelated Regression (SUR) model is applied to explore the capital structure choices. Results of study indicate that the short term debt plays a major part in designing the capital structure of listed companies of PSX-100.
Findings: Macroeconomic conditions have been identified to cause an increase in financial distress and costs of debt unanimously. The financial distress and costs are significant in financial market developments for a time horizons.
Implications/Originality/Value: The development in financial markets can have an opportunity to increase the choice of capital structure of firms optimistically. It is explored that source of capital choice seems to decrease in agency behavior and risk due to refinancing. The less agency problem and less risk provide better choice of debt and future growth to the financial market. The growth environment is life blood of financial market and economy.