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1
Santoso, Eko Budi. "ANALISIS PENGARUH TATA KELOLA PERUSAHAAN YANG BAIK TERHADAP RASIO PEMBAYARAN DIVIDEN." Jurnal Riset Akuntansi dan Keuangan 3, no. 1 (2007): 1. http://dx.doi.org/10.21460/jrak.2007.31.129.
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Investor protection in highty concentrated ownership as in Indonesia is a crucial problem. Expropriation tends to be high in lower investor protection because controlling shareholders can implement policies that benefit themselves at the expense of outside investors. In a high expropriation, outside investors will choose dividends rather than retained earnings.This paper examines good corporate governance as a solution.for a good investor protection in Indonesia. Using a sample of 245 firms for observdion period of 2001-200j, the results slows that stronger investor ptotection related with lower dividend payout ratio.Kqtwords : Good Corporate Governance, Dividend Payout Ratio,Investor Protection, Concentrated Ownership.
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Newman, D. Paul, Evelyn R. Patterson, and J. Reed Smith. "The Role of Auditing in Investor Protection." Accounting Review 80, no. 1 (2005): 289–313. http://dx.doi.org/10.2308/accr.2005.80.1.289.
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Protection of outside investors depends on the detection and punishment of resource diversion by corporate insiders, including managers and controlling shareholders. We focus on the role played in investor protection by self-interested auditors operating in a competitive audit market. In our setting, auditors represent the mechanism whereby detection of diversion occurs. We show that markets with relatively greater auditor penalties for audit failures and greater insider penalties for detected resource diversion have larger total investment levels, a higher proportion of the firm held by outsiders, higher audit resource investment, higher audit fees, and higher expected investment returns.
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Yeh, Yin Hua, Pei Gi Shu, and Ming Sung Kao. "Corporate Governance and Private Equity Placements." Review of Pacific Basin Financial Markets and Policies 18, no. 02 (2015): 1550013. http://dx.doi.org/10.1142/s0219091515500137.
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In a private placement, the identity of the block purchaser has attracted much attention, while the characteristics of the issuing firm are sparsely noted. We hypothesize that the market concerns about the coupling between the issuing firm and the new block investor. Our empirical findings from a sample of 213 private equity placements in Taiwan indicate that the announcement effect of good-governance firms is significantly higher than that of bad-governance firms. Moreover, the induction of outside block investor further punctuates the coupling effect: the coupling between good-governance (poor-governance) firms and outside block investors yields even higher (lower) returns. Finally, the coupling effect remains significant in explaining the long-run performance of private-equity-placement firms.
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YUSUF, JUITA-ELENA (WIE). "THE ENTREPRENEUR-INVESTOR CHARISMATIC RELATIONSHIP: A DRAMATURGICAL APPROACH." Journal of Enterprising Culture 19, no. 04 (2011): 373–96. http://dx.doi.org/10.1142/s0218495811000805.
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This paper presents a dramaturgical approach to understanding the entrepreneur-investor charismatic relationship in the context of the entrepreneur's business plan presentation to outside investors. This approach highlights how entrepreneurs can behave in the presence of investors and how impression management tools can be utilized to develop a successful business plan presentation. Business plan presentations by winners of the 2008 Moot Corp Competition are used to illustrate the charismatic relationship and the impression management techniques that can be used by entrepreneurs in their efforts to project charisma.
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Khalil, Mohamed, Aydin Ozkanc, and Yilmaz Yildiz. "Foreign institutional ownership and demand for accounting conservatism: evidence from an emerging market." Review of Quantitative Finance and Accounting 55, no. 1 (2019): 1–27. http://dx.doi.org/10.1007/s11156-019-00834-3.
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Abstract This study investigates how foreign institutional ownership interacts with accounting conservatism in an emerging market setting. We posit that weak investor protection and a high degree of information asymmetry between insiders and outside investors increase demand for conservative reporting in firms operating in emerging markets. Foreign investors in this setting have informational disadvantages relative to their domestic peers and have difficulties in getting access to data. Using a sample of Turkish firms, we find that foreign institutions (particularly foreign corporate investors) demand more conservative reporting in the investee firms. Moreover, we show that this association is more pronounced among firms with greater asymmetric information problems and growth opportunities. Our additional tests reveal that the direction of causality flows from foreign institutional ownership to conservatism, and not vice versa.
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Jordan, Steven J., and Ji-Hwan Lee. "Outside Directors and Stock Return Volatility: The Foreign Investor Connection." Academy of Management Proceedings 2012, no. 1 (2012): 17833. http://dx.doi.org/10.5465/ambpp.2012.17833abstract.
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CAMPBELL, CYNTHIA J., MARK L. POWER, and ROGER D. STOVER. "Quid-pro-quo exchanges of outside director defined benefit pension plans for equity-based compensation." Journal of Pension Economics and Finance 5, no. 2 (2006): 155–74. http://dx.doi.org/10.1017/s1474747206002472.
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The independence of outside directors is critical to corporate board effectiveness. We examine a unique period in corporate governance when outside directors' defined benefit pensions are replaced with increases in equity. Firms with pension plans significantly underperform their industry in terms of stock returns. Firms terminating the pension plans in exchange for equity have significant increases in stock returns relative to their industry subsequent to the change. All samples outperform the ROA and ROE industry medians both before and after the change in compensation, indicating pressure from organized investors likely comes from stock performance, not accounting performance. Investor rights pressure and outside director compensation and not takeover risk or institutional ownership best explain firms altering outside director compensation, with board of director effectiveness improving.
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Bedard, Jean C., Steve G. Sutton, Vicky Arnold, and Jillian R. Phillips. "Another Piece of the “Expectations Gap”: What Do Investors Know About Auditor Involvement with Information in the Annual Report?" Current Issues in Auditing 6, no. 1 (2012): A17—A30. http://dx.doi.org/10.2308/ciia-50120.
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SUMMARY The “expectations gap” refers to differences in views of auditors and users regarding the extent of assurance obtained from auditing procedures. One aspect of the expectations gap considered by prior research is whether users differentiate the level of assurance provided by different audit procedures. We extend that research by studying whether investors understand that information outside of the financial statements, in the 10-K as well as on corporate websites, is not audited. This research is important, as the Public Companies Accounting Oversight Board currently is considering proposals aimed at clarifying or expanding the auditor's responsibility for that information. We surveyed professional and nonprofessional investors, and find that professionals are more likely than nonprofessionals to correctly identify which 10-K components are audited. However, many investors in both groups believe that information outside of the financial statements is audited when in fact it is not. We also find some evidence that investors use certain information categories more often when they believe that the information is audited. Also, for both investor groups, responses concerning whether currently unaudited information categories should be audited suggest an unmet demand for greater assurance on information outside of the financial statements. Our results support proposals for greater clarity in the audit opinion concerning the nature of procedures performed on information outside of the financial statements. Further, our findings imply that additional assurance on that information might be considered useful.
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Clark, Gordon L., Sarah McGill, Yukie Saito, and Michael Viehs. "Institutional shareholder engagement with Japanese firms." Annals in Social Responsibility 1, no. 1 (2015): 30–56. http://dx.doi.org/10.1108/asr-12-2014-0003.
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Purpose – The purpose of this paper is to explore how shareholder engagement on environmental, social, and governance (ESG) issues is informally exercised by a large global institutional investor with locally embedded, geographically remote firms. This field is still a new area of research due to a scarcity of data, and because ordinarily, private engagement activities are conducted confidentially. Therefore, the paper aims to fill this gap in the literature by studying the private corporate engagement activities of a large UK-based institutional investor on ESG issues with Japanese investee firms in order to achieve a greater understanding of the under-researched area of corporate social responsibility. Design/methodology/approach – The authors employ a multi-method approach to analyse engagement activities by the institutional investor. The authors have obtained a unique data set of the institutional investor’s engagement activities. The institutional investor is UK-based, has a long history of active engagement, and is considered one of the oldest and largest specialists in responsible investment. Further, the authors have conducted several in-depth interviews with a UK-based ESG service provider as well as one of the largest Japanese trust companies. Findings – First, it is found that main target firms of engagement activities are large firms with global operations, and that corporate governance issues are the most important engagement topic in Japan. Second, in trying to effectively exercise voice across societies, engagement activities are conducted with geographically remote target firms on various ESG agendas in a self-enforcing, face-to-face, and sometimes collective manner. Finally, this study argues for the gap between the asset manager’s motivation to engage and local target firms’ readiness to respond due to corporate organisational and language issues. Originality/value – The authors contribute to social responsibility literature by focusing on the role of global investors in Japan to diffuse global standards. This area has been largely neglected in this stream of literature, despite the increasing presence of foreign investors in Japan. This is one of the first attempts to analyse a global investor’s engagement strategies with one specific country outside of the USA and Europe. Further, within the literature on shareholder engagement, this is the first paper that focuses on the means of engagement activities and the responses by target firms.
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White, Roger M. "Insider Trading: What Really Protects U.S. Investors?" Journal of Financial and Quantitative Analysis 55, no. 4 (2019): 1305–32. http://dx.doi.org/10.1017/s0022109019000292.
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I examine the ability of the U.S. investor protection regime to limit insider trading returns, absent Section 16(b) of the Securities Exchange Act of 1934 (the short-swing rule). I find that in this setting, U.S. insiders execute short-swing trades that i) beat the market by approximately 15 basis points per day and ii) systematically divest ahead of disappointing earnings announcements. These results indicate that the bright-line rule restricting short-horizon round-trip insider trading plays a substantial role in protecting outside investors from privately informed insiders in the United States.
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Elton, Edwin J., Martin J. Gruber, and T. Clifton Green. "The Impact of Mutual Fund Family Membership on Investor Risk." Journal of Financial and Quantitative Analysis 42, no. 2 (2007): 257–77. http://dx.doi.org/10.1017/s0022109000003276.
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AbstractMany investors confine their mutual fund holdings to a single fund family either for simplicity or through restrictions placed by their retirement savings plan. We find evidence that mutual fund returns are more closely correlated within than between fund families. As a result, restricting investment to one fund family leads to a greater total portfolio risk than diversifying across fund families. We examine the sources of this increased correlation and find that it is due primarily to common stock holdings, but is also more generally related to families having similar exposures to economic sectors or industries. Fund families also show a propensity to focus on high or low risk strategies, which leads to a greater dispersion of risk across restricted investors. An investor considering adding an additional fund, either in the same family or outside the family, would need to believe the inside fund offered an extra 50 to 70 basis points to have the same Sharpe ratio.
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Rojas, Gonzalo Islas. "Does Regulation Matter? an Analysis of Corporate Charters in a Laissez-Faire Environment." Revista de Historia Económica / Journal of Iberian and Latin American Economic History 31, no. 1 (2013): 11–39. http://dx.doi.org/10.1017/s0212610913000025.
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AbstractAre laws that protect minority investors a necessary condition for the development of stock markets? This paper attempts to answer this question using data on the origins of the corporate sector in Chile to construct an empirical analysis of the contractual provisions included in charters of corporations in the 19th century. Our findings indicate that, even though corporate law at the time was silent with respect to governance rules and investor protection, a significant number of corporations were created and their shares traded. The empirical analysis of the corporate charters reveals that these contracts frequently included provisions favourable to outside investors and the use of these provisions is consistent with the predictions of a simple agency model.
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박혜식 and 이우창. "The Effect of Interaction between foreign Investor and Outside Directors on Firm Value." Korea International Accounting Review ll, no. 51 (2013): 151–72. http://dx.doi.org/10.21073/kiar.2013..51.007.
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Pathak, Jagdish, and Jerry Sun. "Does investor protection regime affect the effectiveness of outside directorship on the board?" Journal of Multinational Financial Management 23, no. 1-2 (2013): 19–33. http://dx.doi.org/10.1016/j.mulfin.2012.10.004.
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Chen, Hung-Kun, Yan-Shing Chen, Chia-Wei Huang, and Yanzhi Wang. "Managerial Responses to Initial Market Reactions on Share Repurchases." Review of Pacific Basin Financial Markets and Policies 12, no. 03 (2009): 455–74. http://dx.doi.org/10.1142/s0219091509001708.
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While most papers in finance literature investigate how the stock market reacts to announcements of corporate events, very few study the opposite, how namely, the manager responds to the information from outside investors. In this paper, we examine this issue, using open market share repurchases. Open market share repurchase offers flexibility for the manager to decide whether or not to buy back shares. Therefore, the manager may refer to the opinions of outside investors and make the decision, based on actual buyback activities. We propose learning, over-confidence and timing hypotheses to interpret the behavior of the managerial response to initial market reaction on the share repurchase announcement. Empirically, if a repurchase announcement abnormal return is low, then the manager tends to achieve the repurchase announced ratio by purchasing more shares. In addition, the investor will positively react to this repurchase in the long run. These empirical findings are consistent with the market timing hypothesis, which implies that managers know the true value of their firms better than the market at the moment of the share repurchase announcement.
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Arbaa, Ofer, and Eva Varon. "Behavior of investor flows in Israeli provident funds." International Journal of Managerial Finance 16, no. 3 (2019): 334–56. http://dx.doi.org/10.1108/ijmf-08-2018-0247.
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Purpose The purpose of this paper is to study the sensitivity of provident fund investors to past performance and how market conditions, changes in risk and liquidity levels influence the net flows into provident funds by using a unique sample from Israel. Design/methodology/approach The study checks the impact of different levels of fund performance on provident fund flows using three alternative proxies for performance: raw return and the risk adjusted returns based on the Sharpe ratio and the Jensen’s α. The analysis relies on the time fixed effect and fund fixed effect regression models. Findings Results reveal that there exists an approximately concave flow–performance relationship and performance persistence among Israeli provident funds. Israeli provident fund investors are risk averse so they overreact to bad performance both in bull and bear markets. Moreover, liquidity is an important factor to influence the flow–performance curve. The investors’ strong negative response to poor performance and relative insensitivity to outperformance show that provident fund managers are not rewarded for their risk-shifting activities as in mutual funds. Originality/value The authors explore the behavior of investor flows in non-institutional retirement savings funds specifically outside of the USA, which is a topic not properly investigated in literature. Moreover, examining inflows and outflows separately gives the authors a richer understanding of investors in pension schemes. This study also enhances the understanding of the impact of fund liquidity on the flow–performance relationship for the retirement funds segment.
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Ankersmit, Dr Laurens. "The Compatibility of Investment Arbitration in eu Trade Agreements with the eu Judicial System." Journal for European Environmental & Planning Law 13, no. 1 (2016): 46–63. http://dx.doi.org/10.1163/18760104-01301004.
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This article explores the legality of investment arbitration in eu trade agreements under eu law. Investor-state dispute settlement (isds), including the Investment Court System, allows foreign investors to challenge eu acts and decisions before investment tribunals and these tribunals may be faced with questions of eu law. Since this system of dispute resolution operates entirely outside the eu judicial framework and rivals with it, the powers of the courts of the Member States and that of the European Court of Justice may be adversely affected. This in turn could affect the uniform interpretation and effectiveness of eu law and the autonomy of the eu legal order.
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Arbaa, Ofer, Eva Varon, and Uri Benzion. "The Effect of Performance on Israeli Equity Fund Flows." Accounting and Finance Research 6, no. 4 (2017): 272. http://dx.doi.org/10.5430/afr.v6n4p272.
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This paper examines the influence of past performance on Israeli equity mutual funds' net flows between January 2004 and July 2014, using the most recommended and reliable two-cluster regression methodology. Apparently, Israeli investors are more sensitive to risk adjusted returns than absolute returns and the most recent performance seems to be more influential on fund flows than on longer-term past performance. Moreover, investors flock to the latest winners and do not leave the funds with the poorest performance. The effect of past performance seems to be more salient on flows of advertised funds than of those with no advertisement. The results in Israel augment the scant work on mutual fund flows outside the US and add support to a growing body of literature documenting irrational investor behavior worldwide.
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Zahller, Kimberly A., Vicky Arnold, and Robin W. Roberts. "Using CSR Disclosure Quality to Develop Social Resilience to Exogenous Shocks: A Test of Investor Perceptions." Behavioral Research in Accounting 27, no. 2 (2015): 155–77. http://dx.doi.org/10.2308/bria-51118.
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ABSTRACT Our overarching purpose is to propose and test a theory of social resilience to exogenous shocks. The theory posits that high-quality corporate social responsibility (CSR) disclosure promotes the perception of organizational legitimacy, creating social resilience to exogenous shocks (external events outside management control). Using a path model and data from 100 experienced, nonprofessional investors, we examine whether the quality of a corporation's voluntary CSR disclosure increases its perceived organizational legitimacy and if increases in perceived legitimacy help insulate that organization from negative investor reactions following an exogenous shock. The results provide strong support for the model and show that when CSR disclosures are higher quality, investors perceive organizational legitimacy to be higher, inferring that organizations should emphasize quantifiable, consistent, and comparable reporting. Further, the results indicate that higher levels of perceived organizational legitimacy are associated with greater levels of organizational resilience to an intra-industry exogenous shock.
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Fairchild, Richard, and Alma Garro Paulin. "Separation of control rights and cash-flow rights in emerging economies: theory and Mexican evidence." Corporate Ownership and Control 5, no. 1 (2007): 38–57. http://dx.doi.org/10.22495/cocv5i1p4.
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Researchers have identified that corporate ownership structures appear to be quite different in developed and developing economies. For instance, Castañeda Ramos (1999) provides evidence of considerable separation of cash-flow rights and control rights accruing to inside and outside equityholders in publicly listed firms in Mexico. Insiders use mechanisms such as dual voting rights, majority rules and pyramids to maximise their control rights while holding minimal cash-flow rights. In contrast, there is a much closer alignment of cash-flow rights and control rights in developed countries such as UK or US. The purpose of this paper is to develop a game-theoretic model that explains these features. We argue that factors in emerging markets, such as large private benefits of control, extreme risk, low investor protection, inefficient capital markets, and governments sympathetic to incumbent management at the expense of outside investors, all contribute to insiders’ incentives to create a separation of cash flow and control rights. We present evidence from Mexico that supports our results
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Hwang, In, Kang Hur, and Sun Kang. "Does the IFRS Effect Continue? An International Comparison." Sustainability 10, no. 12 (2018): 4818. http://dx.doi.org/10.3390/su10124818.
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Previous research showed that in the early years after adoption, the change to International Financial Reporting Standards (IFRS) impacted accounting quality. The purpose of this study is to analyze whether those effects have changed over time in companies within countries that have different legal regimes, enforcement, and degrees of external investor protection. We measure accounting quality using discretionary accruals, real activities manipulation, and the stock price value relevance of earnings per share and book value per share. The findings show that the early effects of IFRS adoption continue with the passage of time in companies listed in countries with common law systems, such as the United Kingdom (UK) and Australia, which provide powerful outside investor protection in capital markets. Yet, the early effects of IFRS adoption do not continue after the passage of time in companies listed in Asian countries with statutory law systems, such as Korea and China, which have low levels of outside investor protection. Moreover, it is difficult to obtain evidence that value relevance has improved after the accounting measurement of corporate value shifted to IFRS. The results show that there are differences in the sustained effects on accounting quality, even after the application of IFRS due to the different social, economic, and cultural characteristics of countries.
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Gutiérrez, Elizabeth, Ben Lourie, Alexander Nekrasov, and Terry Shevlin. "Are Online Job Postings Informative to Investors?" Management Science 66, no. 7 (2020): 3133–41. http://dx.doi.org/10.1287/mnsc.2019.3450.
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Human capital is a key factor in value creation in the modern corporation. Yet the disclosure of investment in human capital is scant. We propose that a company’s online job postings are disclosures made outside of the investor-relations channel that contain forward-looking information that could be informative to investors about future growth. We find that changes in the number of job postings are positively associated with changes in future performance and that this relation is stronger when postings likely represent growth rather than replacement. Consistent with job postings providing new information to the market, investors react positively to changes in the number of job postings. The market reaction to postings is stronger when firms are likely to be hiring for growth rather than replacement and for firms with low labor intensity (and therefore high marginal productivity of labor). This paper was accepted by Brian Bushee, accounting.
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Ali, Muhammad Jahangir, and Kwong San Ng. "Ownership structure, internal governance and earnings management in Hong Kong." Corporate Ownership and Control 6, no. 3 (2009): 437–49. http://dx.doi.org/10.22495/cocv6i3c4p3.
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This study examines whether ownership structure and internal governance mechanisms are associated with earnings management in Hong Kong. We hypothesize that the earnings management of a firm is associated with the ownership structure including ownership concentrations, different ownership concentration levels of family held companies and substantial institutional investors; and internal governance mechanisms including firms that are audited Big 4 auditors and proportion of outside directors. The non-discretionary accruals are measured using modified Jones model with crosssectional basis. We employ multivariate model to investigate the relationship between discretionary accruals and various independent variables. Our results show that discretionary accruals are positively associated with high/low level of family ownership and negatively related to firms that are audited by Big 4 auditor as hypothesized. Our results reveal that the controlling shareholders in family businesses can expropriate minority shareholders by accounting manipulations and that independent nonexecutive directors cannot effectively constrain opportunistic earnings management. This requires regulators and standard setters to improve the extent of investor protection and to increase the independence of outside directors on the board.
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Chen, Jeff Zeyun, Chee Yeow Lim, and Gerald J. Lobo. "Does the Relation between Information Quality and Capital Structure Vary with Cross-Country Institutional Differences?" Journal of International Accounting Research 15, no. 3 (2016): 131–56. http://dx.doi.org/10.2308/jiar-51606.
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ABSTRACT Prior research based on U.S. data finds that firms with better information quality raise more equity whereas firms with poorer information quality prefer to issue debt when they seek external financing. Little is known about whether the same conclusion holds outside the U.S. and how the country-level institutional environment influences the relation between information quality and capital structure choices. We examine the relation between accounting information quality (measured by earnings precision, accruals quality, and analyst consensus) and financial leverage across 24 countries and whether that relation varies systematically with country-level investor protection and financial orientation. We document a lower financial leverage for firms with better information quality. More importantly, we find a stronger relation between information quality and financial leverage in countries with weaker investor protection and more market-oriented economies. These cross-country results suggest that information quality is especially important in shaping a firm's capital structure decision when investor demand for information is greater. JEL Classifications: G32; G38; M41.
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Andiansyah, Farma, and Slamet Haryono. "Pengaruh Kualitas Pengungkapan Keuangan dan Struktur Kepemilikan Terhadap Asimetri Informasi." Moneter - Jurnal Akuntansi dan Keuangan 8, no. 1 (2021): 44–50. http://dx.doi.org/10.31294/moneter.v8i1.9794.
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Abstract -The presence of information asymmetry increases transaction costs and reduces liquidity, and reduces the quality of investment decisions taken by investors. So that in turn it weakens the overall function of the market. Accounting disclosure plays a role in mobilizing information from management and investors so as to reduce information asymmetry. In addition, it is hoped that the presence of a concentration of investor ownership can carry out internal monitoring of the company so as to reduce information asymmetry. On the other hand, institutional investors have many incentives to access company information for their trading purposes due to the conflict of interest between outside investors and the board of directors. This study aims to determine the effect of disclosure quality and ownership structure on information asymmetry in companies listed on the Jakrta Islamic Index (JII) during the 2015-2019 period. Based on the results of panel data analysis of the Fixed Effect Model (FEM), it was found that institutional ownership had a significant positive effect on information asymmetry, while the quality of disclosure and ownership concentration did not have a statistical effect on information asymmetry.
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Abd Alhadi, Saleh, Rosmila Senik, Jalila Johari, Ridzwana Mohd Said, and Hairul Suhaimi Nahar. "Multiple directorships and earnings quality: Does investor protection matter?" Journal of Asia Business Studies 15, no. 4 (2021): 605–24. http://dx.doi.org/10.1108/jabs-08-2019-0254.
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Purpose This study aims to investigate whether higher earnings quality is related to the existence of multiple directorships among corporate boards and whether this relationship varies with the quality of investor protection. Design/methodology/approach This paper used a dynamic panel data modelling on the sample of 2,090 firm-year observations over the period from 2007 to 2016 in Malaysia. The generalized method of moments estimators were used to deal with endogeneity and other econometric problems. Findings This study finds that the accumulation of several outside directorships is negatively associated with the firm's earnings quality, as measured by the magnitude of discretionary accruals. More importantly, the findings provide evidence that multiple directors are more efficient in improving earnings quality in healthy investor protection environment. Practical implications The appointment of directors should be based on market-based and not on a relationship (i.e. financial and industry professionals). Originality/value The results highlight the importance of interaction between internal and external governance mechanisms to improve the firm's financial performance, investment and market efficiency. High-quality investor protection and law enforcement are significant for enhancing the monitoring role of multiple directorships in improving earnings quality.
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Ullah, Saif. "Who Hires Investor Relations Firms? The Role of Managerial Entrenchment." International Journal of Business and Management 11, no. 10 (2016): 1. http://dx.doi.org/10.5539/ijbm.v11n10p1.
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<p>This paper investigates the role of managerial entrenchment in the decision to hire an investor relations specialist. Managers of small and mid-cap firms spend considerable resources on hiring investor relations (IR) firms. This paper proposes a hypothesis to explain this spending. We argue that more entrenched managers are less likely to hire IR firms, because such managers are less likely to have their compensation tied to stock returns and be more wary of outside attention from the market. Using a common definition of managerial entrenchment, we show that entrenched managers are indeed less likely to hire an IR firm. We also examine the relationship between the method of payment of the IR firm (cash or stock) and future performance of the client. If an IR firm is paid in stock, it has an incentive to expend more effort on its client’s behalf, thus leading to increased client performance. Our evidence shows that there is indeed a positive relationship between payment in stock and future client performance.</p>
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Balashova, I. V., and T. A. Tereshchenko. "Junk Securities: Cheese in the Mouse-Trap or Uncut Diamond." Vestnik of the Plekhanov Russian University of Economics, no. 4 (July 21, 2021): 162–68. http://dx.doi.org/10.21686/2413-2829-2021-4-162-168.
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The article shows that junk securities never demonstrate a smooth trend to rate growth and any jump or drop usually happen by sharp change in the trend. The investor making deals on OTC call-boards should realize that 95% of dark market shares cannot pass analysis and the majority of investors who deal with dark market shares would lose money. Sometimes after good results shares on dark market can go ‘darker' and are not reported for a long time. It resembles ‘leaving on a high pitch'. But occasionally figures can become worse, therefore the company would not like to acknowledge the fact. Junk shares always imply high risk, as in the majority of cases there is no reliable information about the organization issuing shares and securities themselves. The authors point out that in case of placement at outside markets external audit is not carried out and real quotation could differ from those presented. At the same time it is rather difficult to analyze junk shares because of low exchange purchase, as few investors buy securities with low rating.
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Horvatinović, Tin, and Silvije Orsag. "Crowdfunding in a Context of Financing Firms Through Their Life Cycle." Zagreb International Review of Economics and Business 21, no. 1 (2018): 105–18. http://dx.doi.org/10.2478/zireb-2018-0006.
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Abstract In this paper we first present some developed theories of financing that firms might accord with in their development stages. The framework, assumptions and predictions of the capital structure of firms in each theory is shown. Afterwards, crowdfunding, as a fairly new source of financing that is increasing significance, is described and is differentiated on the basis of the type of return on investment for the outside investors. In recent literature there have been models that introduce crowdfunding in the framework of financing firms through their life cycle stages. We point the difficulty of encompassing crowdfunding in the mentioned models because of characteristics that are unique to it from the perspective of the investor and the firm. While it is not surprising that crowdfunding is used in development stages, these characteristics make it difficult to construct a model of financing firms that has traditional means of financing and crowdfunding.
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Beams, Joseph D., Hua-Wei Huang, and Yun-Chia Yan. "Top Management Resignation and Firms' Subsequent Bankruptcy." Accounting and the Public Interest 13, no. 1 (2013): 39–54. http://dx.doi.org/10.2308/apin-10345.
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ABSTRACT Agency theory indicates that a moral hazard occurs when an agent (manager) with superior information has an incentive to behave inappropriately from the perspective of the principal (investor) with inferior information. Because of the superior information that top executives have, they will recognize if the company is declining before outside investors. This gives the executives an opportunity to resign prior to the investors' awareness of the decline. An executive can use this private information to benefit at the expense of the investing public. This study investigates a sample of 9,942 firm-years from 2008 and 2009 and our logistic regression results show a significant relationship between CEO and CFO resignations and the firm's subsequent bankruptcy, even after controlling for other predictors of bankruptcy. However, when both variables are included in the model, only CFO resignation is significant. Due to the significance of these resignations, when some investors have greater details of the reasons for the resignations or receive the information before others, the requirements of the full disclosure principle are not being met. Requiring more timely and forthcoming disclosures about executive resignations may prevent the public from being at a disadvantage when a top executive resigns. Data Availability: Available upon request.
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Coderre, Laurence. "The curator, the investor, and the dupe: Consumer desire and Chinese Cultural Revolution memorabilia." Journal of Material Culture 21, no. 4 (2016): 429–47. http://dx.doi.org/10.1177/1359183516662297.
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This article examines the discourse surrounding the collection of Cultural Revolution memorabilia in the contemporary People’s Republic of China. The author focuses on the emergence of three key discursive figures: the collector/curator, the collector/investor, and the collector as dupe. At issue in the construction of each of these figures is the unsettling force of consumer desire, its ethics and negotiation. In the case of the curator and investor, the author considers the mechanisms through which consumer desire is decentered in the name of historical responsibility and exchange value, respectively. These mechanisms of deferral are contrasted to the often nostalgic desire embodied by the dupe, but this figure and his or her consumer desire are in fact crucial to the discourse of collection as a whole. Indeed, despite claims to the contrary, the dupe bespeaks an enduring quest for a mode of interaction between person and thing outside the bounds of commodity exchange.
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Bock, Carolin, and Christian Hackober. "Unicorns—what drives multibillion-dollar valuations?" Business Research 13, no. 3 (2020): 949–84. http://dx.doi.org/10.1007/s40685-020-00120-2.
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AbstractThe number of ventures with a market value of one billion USD or more has considerably increased during the last decade. Driven by new technologies and business models, these ventures became an integral part of our daily life. Particularly, the number of unicorns based in China and other regions outside the US raised during recent years whereas the phenomenon was initially limited to the US region. Existing research has mainly focused on descriptive approaches to examine the rise of these ventures but lacks knowledge on the drivers of this phenomenon. We address these research gaps and investigate the underlying factors that foster the emergence of such high-valued ventures. Our results present several economic environmental as well as investor-related factors that impact the likelihood for a venture to achieve a market valuation of more than one billion USD. Subsequently, we derive theoretical and practical implications that may foster the future emergence of new high-valued ventures, covering regulatory, investor- and venture-specific aspects.
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Geczy, Christopher C., Robert F. Stambaugh, and David Levin. "Investing in Socially Responsible Mutual Funds." Review of Asset Pricing Studies 11, no. 2 (2021): 309–51. http://dx.doi.org/10.1093/rapstu/raab004.
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Abstract We construct optimal portfolios of mutual funds whose objectives include socially responsible investment (SRI). Comparing portfolios of these funds to those constructed from the broader fund universe reveals the cost of imposing the SRI constraint on investors seeking the highest Sharpe ratio. This SRI cost crucially depends on the investor’s views about asset pricing models and stock-picking skill by fund managers. To an investor who strongly believes in the CAPM and rules out managerial skill, that is, a market index investor, the cost of the SRI constraint is typically just a few basis points per month, measured in certainty-equivalent loss. To an investor who still disallows skill but instead believes to some degree in pricing models that associate higher returns with exposures to size, value, and momentum factors, the SRI constraint is much costlier, typically by at least 30 basis points per month. The SRI constraint imposes large costs on investors whose beliefs allow a substantial amount of fund-manager skill, that is, investors who heavily rely on individual funds’ track records to predict future performance. ( JEL G11, G12, C11) In 2005, when we released what ultimately proved to be the final version of this study, socially responsible investment (SRI) had already become a major presence on the investment landscape. In the years since, this approach, now often called “sustainable” investment, has grown even more rapidly and often encompasses a broad set of “ESG” (environmental, social, and governance) criteria. As evidence of the rapid growth, Morningstar (2020) notes, “one need look no further than the nearly fourfold increase in assets that flowed into sustainable funds in the United States in 2019.” Sustainable investing has also received increased attention in the academic literature, in subsequent studies too numerous to list. Some of the studies are especially related to ours in that they also examine mutual funds. In our study, mutual funds constitute an asset universe faced by an investor imposing an SRI/ESG constraint. A number of the subsequent studies use mutual funds to address other dimensions of sustainable investing. For example, Bollen (2007), Benson and Humphrey (2008), Renneboog, Ter Horst, and Zhang (2011), Bialkowski and Starks (2016) and Hartzmark and Sussman (2019) investigate determinants of mutual fund flows into sustainable funds versus other funds. Riedl and Smeets (2017) use survey and experimental data to explore investors’ preferences for sustainable funds. Madhavan et al. (2020) examine sustainable active equity mutual funds, relating factor loadings and residual returns to ESG characteristics. While we focus on mutual funds, our study also intends that the basic aspects of the SRI setting extend to other institutional investors. That intent is supported, for example, by the recent evidence of Bolton and Kacperczyk (forthcoming, 2020) providing broader perspectives on the SRI portfolio tilts of various types of institutional investors.One conclusion of our study is that an SRI/ESG constraint is especially binding for investors wishing to tilt toward value or small-cap funds. It seems reasonable to infer that such is still the case, though we have not updated our formal analysis. For example, Morningstar (2020) identifies, as of 2019, 99 sustainable U.S. equity funds categorized within its 3 × 3 style box that sorts along the dimensions of value/blend/growth and small/mid-cap/large. Of those 99 funds, only 8 are classified as value, versus 24 as growth and 67 as blend. Only 7 of the 99 are small-cap funds, versus 79 large-cap and 13 mid-cap. More generally, our 2005 study is early in noting meaningful differences in factor loadings between sustainable versus other funds, in both three- and four-factor models.An SRI/ESG constraint is also especially binding for investors who see much information in individual funds’ historical alphas. The basic reason we discuss in our study is seemingly still at work. That is, despite the rapid growth noted earlier, the number of sustainable funds is still well less than those in the total fund universe, so many of the highest track records appear among funds outside that subset. Not mentioned in our original study is that the case of an investor who sees much information in historical alpha confronts the argument of Berk and Green (2004): if fund flows rationally respond to historical alpha, an investor will not view historical alpha as being informative about future alpha. That argument relies on investors correctly assessing the degree of fund-level decreasing returns to scale. One might view an investor who sees historical alpha as informative about future alpha as also having beliefs that favor a lower degree of decreasing returns to scale, as compared to other investors. Moreover, the equilibrating effects of fund flows might interact with the nonpecuniary utility that SRI-conscious investors derive from their fund choices, as suggested by the evidence of Bollen (2007) that flows respond to returns differently for SRI funds versus conventional funds. In any event, when prior beliefs admit substantial information from historical alphas, Busse and Irvine (2006) find that Bayesian predictive alphas computed as in Pástor and Stambaugh (2002a, 2002b), as are the alphas in our study, do predict future performance.While not one we address, a question often asked is whether sustainable investments perform better or worse than other investments. A number of studies do pursue this question, obtaining a range of findings that include both higher and lower performance for sustainable investments. Pástor, Stambaugh, and Taylor (forthcoming) discuss the challenge in interpreting such findings’ implications about expected future performance. A wedge between ex ante and ex post performance of sustainable investments arises during any period that witnesses unanticipated shifts in either customers’ demands for sustainable products or investors’ demands for sustainable holdings.1 As those authors note, sorting out such effects is an important challenge for future research. Our study conducts its analysis under a variety of asset pricing models and prior beliefs. In each case, an investor conditions on funds’ past returns and thus takes account of any historical performance differences between the sustainable funds and other funds in our sample. We do not, however, include models in which expected asset returns depend on sustainability. In this respect, our study does not attempt to provide direct evidence about a potential relation between sustainability and expected investment performance.We are grateful to the Review of Asset Pricing Studies for the opportunity to publish our original study, which follows below with only the references updated to reflect subsequent publications. The study’s abstract is also unchanged from its original version.
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Beer, Francisca, Badreddine Hamdi, and Mohamed Zouaoui. "Investors’ sentiment and accruals anomaly: European evidence." Journal of Applied Accounting Research 19, no. 4 (2018): 500–517. http://dx.doi.org/10.1108/jaar-03-2017-0043.
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Purpose The purpose of this paper is to examine whether investors’ sentiment affects accruals anomaly across European countries. Design/methodology/approach The authors estimate the model using Fama–MacBeth regressions. The sample includes 54,572 firm-year observations for 4,787 European firms during the period 1994–2014. Findings The authors find that investors’ sentiment influences accruals mispricing across European countries. The effect is pronounced for stocks whose valuations are highly subjective and difficult to arbitrage. The cross-country analysis provides evidence that sentiment influences accruals anomaly in countries with weaker outside shareholder rights, lower legal enforcement, lower equity market development, higher allowance of accrual accounting and in countries where herd-like behavior and overreaction behavior are strong. Research limitations/implications The findings suggest the generalizability of the sentiment-accruals anomaly relation in European countries characterized by different cultural values, levels of economic development and legal tradition. Practical implications The findings suggest to caution individuals investors. These investors would be wise to take into account the impact of sentiment on the performance of their portfolio. They must keep in mind that periods of high optimism are accompanied by a high level of accruals and followed by low future stock returns. Originality/value The research supplements previous American studies by showing the significance of the level of sentiment in understanding the accruals anomaly in Europe. Hence, it is important for future studies to consider investor sentiment as an important time-series determinant of the accruals anomaly, particularly for stocks that are hard to value and difficult to arbitrage.
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Iqbal, Mohammed, and Shijin Santhakumar. "Information asymmetry and insider trade profitability in India." Journal of Indian Business Research 10, no. 1 (2018): 53–69. http://dx.doi.org/10.1108/jibr-05-2017-0059.
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Purpose This study aims to measure the magnitude of information asymmetry between insiders and outsiders in Indian equity market. The study also investigates the effect of major information sources that affect information asymmetry namely, the informativeness of financial statements, news reports about the company and analyst follow-up. Design/methodology/approach Six-month profitability of insider trade was used as the proxy to measure information asymmetry. Fama-MacBeth two-stage regression was used to analyse the effect of information sources upon information asymmetry. Findings The results of the analysis demonstrate that in comparison with findings of similar studies the level of information asymmetry is comparatively high in India. On an average, profitable insider traders in India earn 19.28 per cent return than outside investors. Purchase transactions are more profitable than sales transactions, while the size of company and information asymmetry is associated inversely. Further, news and analyst follow-up are inversely associated with information asymmetry whereas informativeness of financial statements has little effect on information asymmetry. Practical implications The study have important insights for corporates in insider information management and legal compliance of insiders’ market activities. Results pointing to the requirements of a deeper Regulatory monitoring and stringent legal framework. Social implications The result validates the concerns of investor protection against informed trade. Originality/value The measurement of information asymmetry using profitability of insider trade is novel in Indian context even though the methodology is often used in the literature.
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Ma, Xuechan, and Anran Zhang. "Be the First Investor to Eat Crabs in North Korea: Tips for Bilateral Investment Treaties." Journal of World Investment & Trade 22, no. 2 (2021): 181–222. http://dx.doi.org/10.1163/22119000-12340207.
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Abstract As the last economic frontier in Northeast Asia, North Korea is a promising land but at the same time a risky land for foreign investment. The ‘dual-track’ policy of advancing both the political stability and economic development promoted by the present leader of North Korea, Kim Jong-un, has prompted the outside world to speculate that he is determined to gradually open the doors to the economy of North Korea to attract foreign investment as initial capital to mobilise domestic economic growth. By conducting a systemic and comparative analysis of the existing bilateral investment treaties (BIT s) signed by North Korea in the Kim Jong-il era, this article has put forward eight tips that can better prepare those daredevils who are interested in seizing the future opportunity to invest in North Korea in the present Kim Jong-un era. It is predicted that denuclearisation will bring a new era for North Korean BIT s.
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Lijing, Du, Jian Huang, Daniel Singer, and Gokhan Torna. "The distribution of unlevered housing in American urban areas." International Journal of Social Economics 45, no. 5 (2018): 765–75. http://dx.doi.org/10.1108/ijse-09-2016-0258.
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Purpose The purpose of this paper is to investigate the impact of social and economic factors on home ownership as an investment in American urban areas. Design/methodology/approach The authors run a spatial analysis using home ownership data on 817 American counties from US Census Bureau’s 2013 American Community Survey. Findings While the amenity value of home ownership is found to be important to overall housing tenure decisions, it is found to be less so for the ownership cohort without mortgages. Economic factors are found to impact the spatial pattern of owner-occupied housing without mortgage differently than that of all owner-occupied housing. The implications of these differences for investors are explored. Research limitations/implications The results may lack generalizability outside of the American urban areas. Practical implications As a result of the findings of this study, a shift in investor focus from minimizing initial housing costs to sustainable housing costs is recommended. Originality/value This study provides insights into the social and economic dimensions of owner-occupied housing in order to create a more profitable investing policy for promoting home ownership.
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Lobo, Gerald, Chong Wang, Xiaoou Yu, and Yuping Zhao. "Material Weakness in Internal Controls and Stock Price Crash Risk." Journal of Accounting, Auditing & Finance 35, no. 1 (2017): 106–38. http://dx.doi.org/10.1177/0148558x17696761.
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We investigate the association between material weakness in internal controls (MW) disclosed under Section 302 of the Sarbanes–Oxley Act of 2002 (SOX) and future stock price crash risk. We argue that relative to firms with effective internal controls, firms with MW have lower financial reporting precision. The lower reporting precision (a) increases divergence of investor opinion with regard to firm valuation and (b) facilitates managers’ withholding of negative information, which increases the information asymmetry between managers and outside investors. We hypothesize that both these effects increase the probability of a future stock price crash. We find empirical evidence consistent with our prediction. In additional analyses, we document that the positive association between MW and crash risk is primarily driven by company level rather than by account-specific weaknesses, increases with the number of material weaknesses, and intensifies during the financial crisis. In addition, we find that both the existence and the disclosure of MW incrementally affect crash risk, and that MW facilitates managers’ withholding of bad news. Finally, we fail to find consistent evidence of a significant relation between MW disclosed under Section 404 of SOX and crash risk.
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Wardani, Ni Nyoman Sri, and I. Ketut Budiartha. "Trading Volume Activity Memediasi Hubungan Perubahan Tarif Pajak Penghasilan Badan terhadap Return Saham." E-Jurnal Akuntansi 31, no. 8 (2021): 1896. http://dx.doi.org/10.24843/eja.2021.v31.i08.p02.
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Stock returns can describe the acquisition of returns on the buying and selling activities of shares carried out by investors. The rate of returns are received by investor can be influenced by elements from outside the company. This study aims to determine the reaction of the capital market as a result of changes in corporate income tax rates in 2020 on stock returns with trading volume activity as an intervening variable. The location of this research is in the Indonesia Stock Exchange by using 45 samples of companies obtained through the purposive sampling method. The data is taken by documentation method. The analysis technique used is path analysis with the single test as the final test. Based on the test results, the changes in corporate income tax rates have a positive effect on trading volume activity. Trading volume activity has a positive effect on stock returns. Changes in corporate income tax rates have a positive effect on stock returns. And trading volume activity can be an intervening variable in changes in corporate income tax rates on stock returns.
 Keywords: Stock Returns; Trading Volume Activity; Change in Corporate Income Tax Rate.
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Nipper, Marvin. "Board financial expertise and IPO performance: An analysis of U.S. public offerings and withdrawals." Corporate Ownership and Control 18, no. 3, special issue (2021): 307–24. http://dx.doi.org/10.22495/cocv18i3siart6.
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Potential investors examine governance characteristics prior to an initial public offering (IPO) to assess the quality and prospects of the issuing firm. One important governance characteristic is board financial expertise, as it provides directors with the relevant knowledge for an IPO process and is valuable for the board’s monitoring duties. Therefore, the purpose of this paper is to examine whether and how board financial expertise affects IPO outcomes. To do so, I employ a sample of 414 completed and 85 withdrawn IPOs that were filed from 2014–2017 at NYSE or NASDAQ. I document that the ratio of directors with financial expertise on the board is negatively associated with the level of underpricing and the probability of IPO withdrawal. The results suggest that particularly outside directors with financial expertise have a positive signaling effect and help to reduce information asymmetry around initial public offerings. Above that, using quantile regression, I find that director financial expertise is most valuable for issuances with high levels of investor uncertainty. Therefore, this study makes important contributions to the corporate governance and IPO literature by providing a comprehensive analysis of the effects of board financial expertise on IPO outcomes
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Ferris, Stephen Paul, and Min Yu Liao. "Relative Governance and the Global Cross-Listing Decision: Extending the Bonding Hypothesis." Accounting and Finance Research 7, no. 1 (2017): 82. http://dx.doi.org/10.5430/afr.v7n1p82.
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Using a comprehensive set of cross-listings, we extend the bonding hypothesis by developing what we term as the relative bonding hypothesis. We hypothesize that firms seek the advantages of stronger investor protections by listing in countries whose governance is relatively better than its own. This means that firms can achieve bonding without listing in the U.S and that the governance advantages of bonding are not only for ADRs. We find that firms are more likely to choose a cross-listing destination if the host country has better governance than the home country, except those firms from countries whose managers enjoy greater private benefits of control. We also find that there is valuation premium even when cross-listing occurs outside of the U.S. The premia are even stronger if the host country has better governance than that of the home country. We conclude that although bonding might explain the existence of ADRs, relative bonding helps to explain the extensive cross-listing which occurs outside of the U.S.
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Zormpas, Dimitrios, and Rossella Agliardi. "The Effect of Vertical Relationships on Investment Timing." International Game Theory Review 23, no. 03 (2021): 2150005. http://dx.doi.org/10.1142/s0219198921500055.
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Billette de Villemeur et al. [Billette de Villemeur, E., Ruble, R. and Versaevel, B. [2014] Investment timing and vertical relationships, Int. J. Industrial Organization 33, 110–123] discuss the case of a firm undertaking a project in order to serve an uncertain demand. They show that when the investor requires an outside supplier with market power to provide it with a discrete input the investment occurs too late from an industry stand point. In this paper, we extend their work assuming that the input production cost is also uncertain. We show that upstream market power results in dynamic inefficiency also in our framework. We also demonstrate how this inefficiency is affected by the correlation between the two stochastic terms.
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Mustika, Desty Anggie. "PERAN UNDANG-UNDANG NOMOR 25 TAHUN 2007 TENTANG PENANAMAN MODAL MENGATUR MENGENAI PENANAMAN MODAL DALAM NEGERI DAN PENANAMAN MODAL ASING DALAM KONTEKS PEMBANGUNAN EKONOMI NASIONAL." YUSTISI 8, no. 1 (2021): 33. http://dx.doi.org/10.32832/yustisi.v8i1.4684.
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<p><em>The presence of law number 25 of 2007 concerning investment, in this case is the function of law as regulation, has substantially provided fresh air for investment growth in Indonesia. Various new breakthroughs regulated in this law are an effort to simplify and provide legal certainty for investors to invest in Indonesia. Of course, these conveniences are expected to attract investors to invest in Indonesia. However, all of that should still be carried out in line with the spirit of the constitution. Even though foreign investment is needed for the country's economic development, the end result must still be used for the benefit of the nation. This means that when foreign parties come to Indonesia it is hoped that they will have good intentions in order to cooperate in the economic sector. Not even detrimental to the domestic party or even more beneficial to outsiders. It is hoped that the government will not always rely solely on outside investment. Because there is a concern that this nation will always depend on the help of investors. The presence of investment, especially foreign investment, if it is too comfortable without a vigilant attitude from the government, is feared that it will create dependence on developed countries which will eventually give birth to economic colonization. For this reason, it returns to the governments of the recipient countries in directing and controlling investment, especially foreign investment so that a real contribution can be made.</em></p><p> </p><p class="16aJudulAbstrak"><strong>Abstrak</strong></p><p class="16bIsiAbstrak">Kehadiran undang-undang nomor 25 tahun 2007 tentang penanaman modal dalam hal ini adalah fungsi hukum sebagai regulasi, secara substansi telah memberikan angin segar bagi pertumbuhan investasi di Indonesia. Berbagai terobosan baru yang diatur dalam undang-undang ini merupakan upaya untuk mempermudah dan memberikan kepastian hukum bagi para pemodal untuk menanamkan modalnya di Indonesia. Kemudahan-kemudahan ini tentunya diharapkan dapat menarik investor agar mau berinvestasi di Indonesia. Namun hendaknya semua itu tetap dilaksanakan dengan sejalan semangat konstitusi. Meskipun penanaman modal asing diperlukan guna pembangunan ekonomi negara tetapi hasil akhirnya nanti tetaplah harus dimanfaatkan guna kepentingan bangsa. Artinya ketika pihak asing yang datang ke Indonesia diharapkan mereka benar-benar bertujuan baik dalam rangka melakukan kerja sama di bidang perekonomian. Bukan malah merugikan pihak dalam negeri atau malah lebih menguntungkan pihak luar. Diharapkan pemerintah juga tidak semata-mata selalu mengandalkan dari investasi pihak luar. Sebab akan dikhawatirkan bangsa ini akan selalu ketergantungan dengan bantuan investor. Kehadiran penanaman modal, khususnya penanaman modal asing apabila terlalu nyaman tanpa ada sikap waspada dari pemerintah dikhawatirkan akan menciptakan ketergantungan kepada negara-negara maju yang pada akhirnya melahirkan penjajahan ekonomi. Untuk itu, kembali lagi kepada pemerintah negara penerima modal dalam mengarahkan dan mengendalikan penanaman modal khususnya penanaman modal asing agar kontribusi nyata dapat diberikan.</p>
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Arugaslan, Onur, and Louise Miller. "On the Conditioning of the Financial Market’s Reaction to Seasoned Equity Offerings." LAHORE JOURNAL OF ECONOMICS 11, no. 2 (2006): 141–54. http://dx.doi.org/10.35536/lje.2006.v11.i2.a8.
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Consistent with asymmetric information arguments, prior research has shown that the financial market typically responds negatively to the announcement of a seasoned equity offering (SEO). Korajczyk and Levy (2003), however, suggest that while some firms time the issuance of their common stock to take advantage of outside investor overvaluations, financially constrained firms do not. We examine whether prior information on how financially constrained a firm is along with its growth prospects influences the financial market’s response to the firm’s announcement to sell common stock. We find evidence that the financial market does condition its response upon such information using a sample of SEOs from the U.S. Our results also have implications for the financial market’s reaction to SEOs/rights offerings in emerging markets.
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Restelli, Enrico Rino. "Shaped by the Rules. How Inducement Regulation Will Change the Investment Service Industry." European Company and Financial Law Review 18, no. 4 (2021): 640–68. http://dx.doi.org/10.1515/ecfr-2021-0025.
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Abstract Inducement regulation is intended to target the conflict of interests between financial advisors and their clients. Nonetheless, it may also represent a ‘public policy device’ meant to conform the activity of European distributors with investor protection goals; indeed, by selecting the conditions under which distributors can freely collect inducements, the European regulator simultaneously shapes the market for financial services. Accordingly, ‘spot advice’ (which poorly performed in the past) is indirectly banned by the quality-enhancement provision set forth in art. 24 MiFID II, and the acknowledged importance of on-going monitoring of the portfolio opens up the collection of inducements linked to the provision of ‘periodic advice’. Since this new regime will probably increase the overall costs of investment advice enlarging the ‘advice gap’, the European regulator tries also to foster the development of FinTech permitting the collection of inducements even outside the strict provision of investment advice. Nevertheless, the concerns regarding investor protection raised by FinTech services (which allow only a mere ‘self-assessment’ of the investor’s profile) suggest a broader interpretation of inducement regulation, with the purpose of enabling investment firms to provide low-cost financial advice capable of effectively encompassing every stage of the investment relationship, from the early assessment of clients’ characteristics and objectives to the on-going management of the investments (‘simplified advice’).
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Velkovska, G. "THE TEMPORARY USE OF AGRICULTURAL LAND - SPECIFIC INSTRUMENT IN AGRICULTURAL EVENTS." Trakia Journal of Sciences 17, Suppl.1 (2019): 210–14. http://dx.doi.org/10.15547/tjs.2019.s.01.35.
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Under the terms of Article 56 (1) of the Rules for the Application of the Law on the Conservation of Agricultural Land [www.lex.bg] in the construction of sites - public property of the state or municipalities, it is possible to use land for a certain period outside the site (track) of the site. In such cases, land that is needed temporarily in the construction of underground and aerial linear objects is needed and is necessary for geological and other research. The text of Art. 57, par. 1, 3 and 4 of the aforementioned Rules regulates the relations between the investor of the site and the owner of the land - for the use of the land a contract is signed between the investor of the site and the owner of the land. The contract is concluded in the presence of an established site (track, terrain) for the site with a decision of the commission under Art. 17, para. 1 Agricultural Land Protection Act [www.lex.bg]. The agreement between the parties sets out the terms and conditions for the use of the land, the amount of the rent, the damages and lost profits, the manner of their payment and the corresponding penalties. The contract can not be concluded for more than 10 years. What are the obligations of the investor? The investor of each site, according to the norm of art. 58 of the Regulation for the application of the law on the preservation of agricultural lands, shall be obliged to return the used temporary land after expiration of the term of the contract in the original form or in a form suitable for agricultural use. The land shall be brought into this type by the investor on the site at his expense within the term of the contract. When the use of the land necessitates the construction of buildings and / or facilities of a permanent character, the investor of the site is obliged, within the term of the contract, to propose a change of the purpose of the necessary land after acquisition of ownership or right to build . In connection with the above, the subject of the article is precisely the basic legal details of the agricultural legislation of the Republic of Bulgaria dealing with the conditions and the process of granting and temporary use of agricultural land in conducting spatial events on it. The subject of an analysis based on the current legal issue is some of its imperfections, affecting to some extent the negative impact on the effective use of this instrument and worsening the expected results. The methodology of the SWOT analysis will be used for the analysis needs. The purpose of the study is to examine and analyze the legal matter of the field of agricultural land use, to summarize and formulate some directions of improvement of the legal framework that it needs in order to fully fulfill its role as a specific and necessary instrument in agro-development activities.
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Wehland, Hanno. "The Enforcement of Intra-EU BIT Awards: Micula v Romania and Beyond." Journal of World Investment & Trade 17, no. 6 (2016): 942–63. http://dx.doi.org/10.1163/22119000-12340023.
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The European Commission and a number of EU Member States have long disputed the compatibility of intra-EU BITs with EU law. As illustrated by the Micula v Romania proceedings, where an investor seeks to enforce an intra-EU BIT award, which is seen as being in conflict with EU law, this can raise questions as to the extent to which an enforcing court should take this kind of conflict into account. The present contribution systematically analyses this issue with regard to both ICSID and non-ICSID awards, differentiating between enforcement proceedings within and outside of the EU. It concludes that within the EU even the enforcement of ICSID awards cannot be entirely taken for granted where such enforcement would lead to the violation of a fundamental provision of EU law.
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Tienhaara, Kyla. "Regulatory Chill in a Warming World: The Threat to Climate Policy Posed by Investor-State Dispute Settlement." Transnational Environmental Law 7, no. 2 (2017): 229–50. http://dx.doi.org/10.1017/s2047102517000309.
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AbstractThe system of investor-state dispute settlement (ISDS) found in over 3,000 bilateral investment treaties and numerous regional trade agreements has been criticized for interfering with the rights of sovereign states to regulate investment in the public interest, for example, to protect the environment and public health. This article argues that while much of the public debate around ISDS has focused on a small number of cases that have arisen over the regulation of tobacco packaging, there is a far greater threat posed by the potential use of ISDS by the fossil fuel industry to stall action on climate change. It is hypothesized that fossil fuel corporations will emulate a tactic employed by the tobacco industry – that of using ISDS to induce cross-border regulatory chill: the delay in policy uptake in jurisdictions outside the jurisdiction in which the ISDS claim is brought. Importantly, fossil fuel corporations do not have to win any ISDS cases for this strategy to be effective; they only have to be willing to launch them. The article concludes with three options to reform trade and investment agreements to better align them with climate change mitigation efforts: (i) exclude ISDS provisions; (ii) prohibit fossil fuel industries from accessing ISDS; or (iii) carve out all government measures taken in pursuit of international obligations (for example, under the Paris Agreement on climate change) from challenge under ISDS.
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Flynn, Christopher. "The shifting sands above the oil: commercial and legal tools to manage political risk in emerging markets." APPEA Journal 54, no. 2 (2014): 530. http://dx.doi.org/10.1071/aj13103.
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An increasing number of Australian resources companies are investing in emerging markets, particularly in Africa. Managing an investment in these countries, and the joint ventures invariably formed in them, is an important part of improving shareholder value, raising capital, and managing political risk. These countries typically take a strategic approach to energy security and resource nationalism rather than the more market-focused approach of western states and companies. While the key risk is expropriation, political risk also presents itself in many other ways. During the long term, an investor needs to minimise the likelihood that it becomes cheaper for a government to breach its obligations to the company than it is to comply with them. Doing that requires several important interrelated protections (both legal and commercial) to minimise political risk and ensure that if expropriation does occur, the investor has maximised its chances of recovering its losses. A range of commercial and legal tools—deployable inside and outside of a country—are available to structure these investments, support operations, and minimise political risk in emerging markets. Drawing on his experience advising on energy and resources projects and transactions in more than 50 countries, author Chris Flynn outlines key legal protections to be sought in any contracts with respect to investments made in these countries. He also discusses useful commercial tools to help align the interests of the company, its local partners, and government.
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Palupi, RAtna Diyah, Ira, and Risfandi. "Strategi Pengembangan Wisata Bahari Desa Namu Guna Mendukung Perekonomian Masyarakat Sadar Wisata." MANAJEMEN IKM: Jurnal Manajemen Pengembangan Industri Kecil Menengah 14, no. 1 (2019): 8–14. http://dx.doi.org/10.29244/mikm.14.1.8-14.
Full textAbstract:
The consequence of tourist village is the community's psychology and environmental carrying capacity. Good strategy will be able to realize the welfare of the village community. The purpose of this study is to make a tourism development strategy in the Namu Village. Methods of data collection using sampling techniques through interviews and questionnaires with a total samples of 70 respondents. Characteristics of tourism conditions and potential are analyzed by supply-demand. While demand analysis is used to recognize the pattern of visitor demand. Both of these analyzes are used as reference materials for development strategies by strengths, weaknesses, opportunities, and threats SWOT analyzed. Furthermore, based on the Internal Factor Analysis Summary (IFAS), the beauty of Namu and the waterfall become the main attraction for tourist destination. On the other side the disadvantage is the unpreparedness of the Namu village community make them not enough in economically. External Factor Analysis Summary (EFAS), partisanship of the government enable for Namu to be developing in marine tourism. However the threats was come from outside investor which can reduce the role of the community to improve their economy. Based on the analysis of IFAS and EFAS, the Namu Village's tourism development strategy is to improve the quality of tourism objects, increasing the role of the government, looking for investors especially in the transportation sector, improve community capacity. For instance manufacture of fishery products, souvenirs, and culinary. Finally safeguard ecosystems through waste management