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1
Venugopal, Merugu, Bhanu Prakash Sharma G., and Ravindar Reddy M. "Impact of Capital Structure on Shareholder Value in Indian Pharmaceutical Industry: An Empirical Approach Through Created Shareholder Value." Global Business Review 19, no. 5 (August 20, 2018): 1290–302. http://dx.doi.org/10.1177/0972150918788741.
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Enhancing shareholder value is one of the primary goals along with the profitability in the competitive world. Top-level management is striving for creating the higher shareholder value by making efficient decisions. Shareholder value as the key objective of the firm and measures such as economic value added, market value added, shareholder value added and created shareholder value (CSV) have gained popularity in measuring the shareholder wealth creation. Among various financing decisions, capital structure decision plays a vital role, that is, mix of debt and equity. Considering the optimal capital structure with the right balance between equity and debt is always a challenge for the financial managers, and also to run the business successfully by gaining higher profits and enhancing shareholder value. An attempt has been made to analyse the capital structure impact on shareholder value by considering CSV as a shareholder value measure in 77 Indian pharmaceutical firms listed in BSE over a period of 9 years from 2007 to 2015. Using the balanced panel data and regression models, we found that determinants such as debt–equity ratio, long-term debt ratio and short-term debt ratios have positive correlation with CSV and negatively related to total debt ratio in the absence of tax.
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Flesch, A. "Shareholder value creation using asset yield swap contracts." Acta Oeconomica 59, no. 3 (September 1, 2009): 261–88. http://dx.doi.org/10.1556/aoecon.59.2009.3.1.
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In this paper, I investigate the shareholder value creation potential of a particular combination of corporate risk and capital structure strategies for a non-financial company. I examine the size of shareholder added value when the company increases its financial leverage while keeping its credit rating constant by hedging its asset yield volatility. Ross (1996) shows that by reducing the asset yield volatility of the company, its debt capacity can permanently be increased, which can create 10–15% additional value for shareholders. With the help of my model, I develop an alternative approach to quantify this impact on shareholder value with better calibration characteristics. Uniquely in the technical financial literature, I derive the shareholder value creation potential from the mean-reversion parameters of the asset yield process. Also, I define the optimal structure of swap-basket needed for efficient hedging of industrial asset yield process, and analyse the sensitivity of shareholder added value to the term and transaction costs of applied swap contracts.
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Sablowski, Thomas, and Joachim Rupp. "Die neue Ökonomie des Shareholder Value." PROKLA. Zeitschrift für kritische Sozialwissenschaft 31, no. 122 (March 1, 2001): 47–78. http://dx.doi.org/10.32387/prokla.v31i122.752.
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In this paper we argue that the growing importance of the stock mark et i s one central element of t he s o called New Economy. W e analyse the economic and political reasons, the mechanisms and consequences of the increasing capital market orientation of enterprises. In the first section we want to show the fundamental difference between the maximisation of the stock price and of the profitability of the corporation. T he r easons o f the increasing c apital m ark et o rientation a re d ealt w ith in the second section. In the third section we are discussing the shareholder value concept. The institutional changes we can find in the German Corporate Governance system which are connected with the shareholder value debate are described in the fourth section. The last section sums up the consequences and the specific contradictions of the increasing capital market orientation like the contradiction between long-term and short-term maximisation of returns, the impending hollowing-out of firm competencies, and the proliferation of cash burning business models.
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Mann, Bikram Jit Singh, and Sonia Babbar. "New product announcements effect on stock prices in India." Journal of Asia Business Studies 11, no. 4 (December 12, 2017): 368–86. http://dx.doi.org/10.1108/jabs-08-2015-0145.
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Purpose The purpose of this study is to study the impact of new product announcements on the shareholder value in India since; there is lack of perceptive results regarding the impact. Also, an attempt has been made to analyse the determinants of value creation, by industry type, which has so far escaped the attention of researchers. Design/methodology/approach First, standard event study methodology has been used to measure the abnormal gains/losses of the announcing firms for the new product introductions. Second, regression analysis has been conducted to find out the relationship between the shareholder value and the firm and industry characteristic variables. Findings The results of the study show that the announcing companies in India have got significant positive returns during the announcement of the new product. The value stands at 0.00455 for the event day. In the second part, the application of the regression test has found that firm size, R&D intensity, free cash flow, debt ratio and market size are significant variables in the determination of the shareholder value. Originality/value The present study goes a step further in establishing the reasons for value creation when new product announcements are made by the Indian firms. The analysis has been carried out industry wise to identify the determinants of shareholder value in different industries. This would guide the decision makers at the strategic level and players of the stock market at large in taking much more informed decisions.
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Nwoke, Uchechukwu. "Corporations and development." International Journal of Law and Management 59, no. 1 (February 13, 2017): 122–46. http://dx.doi.org/10.1108/ijlma-07-2015-0042.
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Purpose This paper aims to examine the nature and role of contemporary CSR in the current neoliberal age. It offers an insight into the tension that exists between the ideologies of “neoliberal” shareholder value and that of “effective” CSR, and argues that both ideologies are fundamentally antithetical. It aims to identify and analyse the inter-connected but distinguishable barriers (ideological, practical and political) that militate against the realization of effective CSR. Design/methodology/approach The method applied is a critical evaluation of concepts and a thorough review of existing literature on neoliberalism, shareholder value and contemporary CSR. It uses existing literature to highlight the inability of contemporary CSR to transform into an effective mechanism for development. Findings The paper emphasizes the failure of contemporary CSR to equate to a successful mechanism for development. It concludes that the existence and operations of these barriers militate against the realization of an effective CSR regime capable of leading to development. Practical implications Given the current dominance of the “maximizing shareholder value” model of corporate governance internationally, it appears unreasonable to pin too much hope on contemporary CSR as a mechanism for development, especially in emerging economies. Neither the culture of corporations nor the pressures to which they are currently subjected encourage socially responsible behaviour. Originality/value The paper extends the body of knowledge in the area of contemporary CSR, by identifying and analysing the inter-connected but distinguishable barriers that render the CSR practices of corporations ineffective.
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Bhimavarapu, Venkata Mrudula, Shailesh Rastogi, and Rebecca Abraham. "The Influence of Transparency and Disclosure on the Valuation of Banks in India: The Moderating Effect of Environmental, Social, and Governance Variables, Shareholder Activism, and Market Power." Journal of Risk and Financial Management 15, no. 12 (December 16, 2022): 612. http://dx.doi.org/10.3390/jrfm15120612.
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Research on the impact of transparency and disclosures (TD) on the firm’s valuation presents an ambiguous result. The effect of disclosure on value is a concern because disclosure is not an economic activity. It grows further due to the embellishment of positive disclosures and the suppression of hostile facts. This situation has motivated the authors to conduct the current research. The study aims to empirically find the influence of TD on the valuation of banks in India while the Environmental, Social, and Governance Index (esgi), Shareholder activism index (shai), and Lerner Index (li) act as moderators. A panel data regression (PDR) is adopted to analyse the data in the study. Panel data for 31 public/private banks for ten years (2010–2019) are collated. The authors used econometric models to understand the linear, quadratic, and interaction association of Transparency and Disclosure (TD) with the valuation of the banks in India. It is empirically found that TD alone does not impact the valuation of banks but is positively associated with a bank’s value under the influence of the moderators, Environmental, Social, and Governance variables (esgi), and shareholder activism (shai).
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Pham, Peter Kien, Jo-Ann Suchard, and Jason Zein. "Corporate governance and alternative performance measures: evidence from Australian firms." Australian Journal of Management 36, no. 3 (December 2011): 371–86. http://dx.doi.org/10.1177/0312896211413035.
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We examine the extent to which individual monitoring mechanisms enhance firm performance and shareholder value. We use a sample of Australian firms, from 1994 to 2003, to analyse the relationship between firm performance and corporate governance. This provides a long time series of governance data by international standards and allows us to study governance–performance dynamics over an extensive period. We use Stern Stewart & Co’s economic value added (EVA) as an alternative performance measure and provide a comparison to Tobin’s Q. However, similar to the international evidence, we do not find a significant relationship between either of the performance measures and corporate governance. Using various econometric techniques we show that our results are also robust to endogeneity biases that can arise in the governance–performance relation.
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Temirbayev, Abzal, and Alikhan Abakanov. "Changes in corporate governance in Kazakhstan and its impact on financial market growth: an empirical analysis (1991-2017)." Corporate Governance: The International Journal of Business in Society 19, no. 5 (October 7, 2019): 923–44. http://dx.doi.org/10.1108/cg-07-2018-0238.
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Purpose Since its independence, Kazakhstan has been improving its corporate governance system according to recommendations of international organizations. It was promised that the adoption of shareholder primacy approach would have a positive impact on its financial market growth. Therefore, the purpose of this paper is to quantitatively analyse whether Kazakhstani corporate governance is moving towards a shareholder primacy corporate governance approach and its impact on financial market growth. Design/methodology/approach The paper will conduct a quantitative analysis. Firstly, the changes in corporate governance that occurred between 1991 and 2017 will be analysed using 52 corporate governance variables. Thus, a questionnaire will be used to collect data. When the questionnaire is completed, all data will be converted into numbers. Then, multiple liner regression will be used to estimate the impact of change in corporate governance. Findings The paper finds that Kazakhstan is successfully adopting shareholder-friendly corporate governance standards and so-called convergence has also occurred. Moreover, it is suggested that reforms in Kazakhstani corporate governance system have not yet brought the desired result of prosperous financial market and high flows of foreign investments. Originality/value Analysis specifically considers the changes in Kazakhstani corporate governance system and uses quantitative methods, whereas there is a lack (if not complete absence) of quantitative studies regarding Kazakhstani corporate governance.
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PLATONA (ELENES), Iulia. "CORPORATE GOVERNANCE, RESEARCH AND ECONOMIC GROWTH IN EUROPEAN COUNTRIES." ANNALS OF THE UNIVERSITY OF ORADEA. ECONOMIC SCIENCES 30, no. 2 (December 2021): 42–46. http://dx.doi.org/10.47535/1991auoes30(2)004.
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The german continental model of corporate governance is long term oriented satisfying the different interest of stakeholders-the state, the employees, the society in general and the anglo-saxon model is short term oriented to the purpose of creating value for the shareholders of the company. The research and development objective are corelated with the objective of german model of stakeholder value or of the objective of the anglo-saxon model of shareholder value. We use Eurostat data for European countries for regression analysis to find the relation between gross domestic product as measure of economic growth with the general expenditure for research and development for businness, goverment and academia. We analyse if fixed effects or random effects are more appropriate for our model. The regression analysis shows that the fixed effects model fitts better to our research model.
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Rose, Caspar. "Medarbejdervalgte bestyrelsesmedlemmer i." Tidsskrift for Arbejdsliv 7, no. 3 (September 1, 2005): 34. http://dx.doi.org/10.7146/tfa.v7i3.108484.
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danske virksomheder — Konsekvenser for corporate governance og stakeholder teori I diskussionen af god corporate governance diskuteres, om ledelsen udelukkende bør maksimere aktionærernes økonomiske afkast, eller alternativt også varetage hensynet til andre interessenter, også benævnt stakeholders. Artiklen beskriver hovedresultaterne i en ny empirisk analyse, som belyser i hvor høj grad de medarbejdervalgte bestyrelsesmedlemmer vægter forskellige stakeholder hensyn i forhold til bestyrelsen som sådan. Det vises, at de medarbejdervalgte selv mener, at de vægter hensynet til lokalsamfundet og miljøet signifikant højere end bestyrelsen som sådan. Der argumenteres med, at de medarbejdervalgte udgør en sund modvægt mod en for snæver fokusering på ejernes interesser, også betegnet shareholder value.
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Miglietta, Nicola, Enrico Battisti, and Alexeis Garcia-Perez. "Shareholder value and open innovation: evidence from Dividend Champions." Management Decision 56, no. 6 (June 11, 2018): 1384–97. http://dx.doi.org/10.1108/md-04-2017-0408.
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Purpose The purpose of this paper is to analyse the companies listed on the US stock market in order to investigate for the selected companies, called the Dividend Champions, the introduction of an open innovation practice. Design/methodology/approach This study is based on a mixed-methods sequential explanatory design. This research is based on an empirical analysis undertaken with 65 listed companies in order to examine, in the first phase, the Dividend Champions. These firms have increased their dividend yield for at least the past 40 years. In a second phase, this research studies the application of an open innovation practice for those listed companies that have systematically paid increased dividends for 60 years and have, at the same time, beat the market. Findings This study reveals seven listed companies that, for more than 60 years, have regularly paid growing dividends and, at the same time, have beat the yield of the market (i.e. six out of the seven companies). The latter include: American States Water, Dover Corporation, Emerson Electric, Genuine Parts Co., Parker-Hannifin Corporation and Procter & Gamble Co. All of these corporations have adopted or implemented a practice of open innovation. Originality/value To the authors’ knowledge, this is among the first pioneer research work, based on the potential relationship between shareholder value and open innovation. In particular, this paper highlights the fact that US-listed companies can create more value for shareholders over a long period and, at the same time, beat the market by adopting different open innovation practices.
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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 (June 8, 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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Christner, Carl Henning, and Ebba Sjögren. "How accounting creates performative moments and performative momentum." Accounting, Auditing & Accountability Journal 35, no. 9 (September 6, 2022): 304–29. http://dx.doi.org/10.1108/aaaj-02-2018-3378.
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PurposeThis paper aims to analyse the longitudinal performative effects of accounting, focusing on how accounting shapes the stability/instability of economic frames over time.Design/methodology/approachTo explore the performative effects of accounting over time, a longitudinal case study narrates the transformation of a large, listed manufacturing company's financial strategy over 20 years. Using extensive document collection, the authors trace the shift from an “industrial” frame to a “shareholder value” frame in the mid-1990s, followed by the gradual entrenchment of this shareholder value frame until its decline in the wake of the financial crisis in 2008.FindingsOur findings show how accounting has different performative temporalities, capable of precipitating sudden shifts between different economic frames and stabilising an ever-more entrenched and narrowly defined enactment of a specific frame. We conceptualise these different temporalities as performative moments and performative momentum respectively, explaining how accounting produces these performative effects over time. Moreover, in contrast to extant accounting research, the authors provide insight into the performative role of accounting not only in contested but also “cold” situations marked by consensus regarding the overarching economic frame.Originality/valueOur paper draws attention to the longitudinal performative effects of accounting. In particular, the analysis of how accounting entrenches and refines economic frames over time adds to prior research, which has focused mainly on the contestation and instability of framing processes.
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Pietsch, Gotthard. "Wertorientierte Personalarbeit zwischen Mythos und Mikropolitik." German Journal of Human Resource Management: Zeitschrift für Personalforschung 20, no. 2 (May 2006): 160–82. http://dx.doi.org/10.1177/239700220602000205.
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Aufgrund eines verstärkten ökonomischen Legitimationsdrucks und des zunehmenden Einflusses des Shareholder-Value-Denkens wuchs in größeren Unternehmen das Interesse der Personalpraxis an Konzepten wertorientierter Personalarbeit. Obwohl die zugrunde liegenden indikatorengestützten Messkonzepte mit erheblichen methodischen Einwänden konfrontiert sind, sollen sie den Nachweis personalwirtschaftlicher Beiträge zur Steigerung des Eigentümerwerts ermöglichen. Der Aufsatz analysiert die Gründe für die – ungeachtet der methodischen Einwände – zunehmende Verbreitung der Konzepte wertorientierter Personalarbeit aus einer organisationstheoretischen Perspektive. Letztere verbindet unter Rückgriff auf die Idee der Strukturdualität die Analyse organisationaler Rationalitätsmythen mit der Betrachtung zentraler Akteursinteressen. Vor diesem Hintergrund erweist sich der Erfolg wertorientierter Personalarbeit nicht zuletzt als das Resultat einer umfassenden sozial-organisationalen Integrationsleistung, die kollektive Mythen mit individuellen Akteursinteressen organisationsstrukturell koppelt.
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Dejon, Renan, and Andre Carvalhal. "The influence of private equity in the governance of Brazilian companies." Corporate Ownership and Control 15, no. 4 (2018): 213–21. http://dx.doi.org/10.22495/cocv15i4c1p8.
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The private equity (PE) investors usually seek opportunities in the target companies in order to earn high returns. One opportunity explored by PEs is the potential that the company has to improve its governance and provide a better structure for the investor, which results in the generation of shareholder value and improve market value. For this, PE enhances the adoption of good corporate governance practices with the goal of creating value for their investment. This study explores how PE improves the governance of target companies in Brazil. The quality of corporate governance is measured by a firm-level corporate governance index, by cross-listing shares in the U.S., and by listing on New Market, a special governance segment in Brazil. We estimate different panel regression and probit models to analyse the relation between PE and governance. We also test different governance metric as dependent variables and use various firm characteristics as control variables. Our results show a positive influence of PE in improving corporate governance in Brazil.
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Inoue, Kotaro, and Robert Ings. "Do cross-border acquisitions create more shareholder value than domestic deals for firms in a mature economy? The Japanese case." Corporate Ownership and Control 15, no. 3-1 (2018): 268–81. http://dx.doi.org/10.22495/cocv15i3c1p10.
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In this paper, we analyse the shareholder wealth effect in domestic and cross-border acquisitions involving Japanese acquiring firms over the period from 2000 to 2010. The results of our study reveal that cross-border acquisitions create larger returns for the acquirers’ shareholders than domestic deals. Furthermore, although acquisitions of firms in G7 countries create larger value than other acquisitions in the period between 2000 and 2003, in the period between 2008 and 2010, which corresponds to a period of slow economic growth in G7 countries after the US financial crisis, acquisitions involving target firms in non-G7 countries created greater wealth gains for shareholders than deals that targeted firms in G7 countries. Our results highlight the growing importance of M&A target firms in growing markets for mature firms in advanced and slow-growth economies.
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Ben Lahouel, Béchir, Jean-Marie Peretti, and David Autissier. "Stakeholder power and corporate social performance." Corporate Governance 14, no. 3 (May 27, 2014): 363–81. http://dx.doi.org/10.1108/cg-07-2012-0056.
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Purpose – This paper aims to explore the power of one of the primary organizational stakeholders (shareholders) in the development of a corporate social performance (CSP) score. Few research works in the CSP empirical literature have studied the relationship between stakeholder power and CSP. Design/methodology/approach – Stakeholder theory is used as a theoretical framework to explain how shareholder voting power can influence the CSP level of French publicly listed companies. Stakeholder theory is tested through the operationalization of Ullmann’s (1985) three-dimensional model. Hypotheses related to shareholder voting power, strategic posture and financial performance are formulated through a literature review. A Data Envelopment Analysis approach was presented as a strong tool to measure CSP level. Multiple linear regressions were undertaken to test the hypotheses in a sample of 129 French companies between 2006 and 2007. Findings – The results indicate that companies with dispersed ownership and high proportion of institutional shareholders record a high score of CSP. Strategic posture measured by the implementation of environmental certification standard was positively and significantly related to CSP. Financial performance does not affect significantly the level of CSP. Originality/value – This paper is the first to empirically analyse the relationship between Ullmann’s three-dimensional model and CSP level in the French context. It offers to managers a better understanding of the power that certain stakeholders can use to acquire satisfaction.
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Byrka-Kita, Katarzyna, Mateusz Czerwiński, Agnieszka Preś-Perepeczo, and Tomasz Wiśniewski. "CEO succession puzzle in the Polish capital market." Baltic Journal of Management 13, no. 4 (October 1, 2018): 582–604. http://dx.doi.org/10.1108/bjm-08-2017-0238.
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Purpose The purpose of this paper is to analyse the market reaction to the appointments of chief executive officers (CEOs) in companies listed on the Warsaw Stock Exchange. The authors focussed on the relationship between the characteristics of a newly appointed CEO and the shareholders’ reactions to the appointment of a CEO. Design/methodology/approach To measure shareholder reaction, the authors apply an event study methodology. The determinants of reaction are identified on the basis of multi-regression analysis. Findings The results reveal a negative market reaction to all CEO appointments, both new appointments and reappointments. Investor reaction is driven more by the financial condition of the company, the company’s market performance and the free float, than by the characteristics of a newly appointed CEO. Neither the origins and generation (age) nor the gender of a CEO influence share prices. The relationship between the educational background of a CEO and shareholders’ reactions is mixed. Furthermore, the appointment of an inexperienced CEO seems to be preferred by investors. Research limitations/implications The study is restricted by certain limitations related to the adopted measures, the single-market research, data gaps and the selection of variables for regression analysis. A further cross-country study including Central and Eastern Europe and/or the transition economies of the Baltic Region is recommended. The relationship between the operating performance of a firm and its internal control mechanisms could be explored. Practical implications The findings might influence the decisions made by company owners and supervisory boards when appointing top executives, and might contribute to a better understanding of how CEO appointments can affect shareholder value creation. The results also provide important guidelines for institutions that oversee the financial system. Originality/value The findings of this study are expected to the findings are expected to contribute to the literature on the empirical analysis of the shareholder wealth effect, on signalling theory, on the phenomenon of information asymmetry and on corporate governance. The study covers a full economic cycle of the capital market, including the financial crisis and financial bubbles, and it fills a gap in the research regarding emerging markets and transition economies in Europe.
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Mann, Bikram Jit Singh, and Harmeet Kaur. "Sustainable Supply Chain Activities and Financial Performance: An Indian Experience." Vision: The Journal of Business Perspective 24, no. 1 (October 7, 2019): 60–69. http://dx.doi.org/10.1177/0972262919863189.
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The purpose of the article is to study the impact of sustainable supply chain management (SSCM) on the financial performance of the firms in India. The empirical analysis used data from the top 100 listed companies by market capitalization on BSE. Content analysis is conducted to analyse the principle ‘life cycle sustainability of goods and services’. Hierarchical linear regression is used to test the hypotheses. The results reveal that sustainable sourcing and resource utilization are the two SSCM activities that have a significant positive impact on the financial performance of the firm. The article offers insights for focusing on the activities that increase the shareholder value. It is the initial study that has focused on the sustainable supply chain activities at the micro level as mandated by the regulators of sustainability reporting and studies the impact of such activities on the financial performance of the Indian firms.
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Lakatos, Zsolt. "Do larger boards improve shareholder value creation? – Effects of the board size on business performance in Eastern Central Europe." Society and Economy 42, no. 3 (September 2020): 245–79. http://dx.doi.org/10.1556/204.2020.00007.
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AbstractThe aim of this study is to analyse the impact of board size on a firms' operational and market performance at the largest East Central European listed non-financial, non-public utility firms. The literature debates the effects of the size of the board. While the resource dependency theory supports a positive effect, the agency theory supports a negative impact on firm value. This question is rarely investigated in two-tiered corporate governance models. This paper estimates the effects of management board and supervisory board size, between 2007 and 2016. The results indicate that the effect of management board size depends heavily on the size of the observed company. In both fixed effects and GMM-type dynamic panel regression models, using Tobin's Q, market-to-book ratio, total shareholder value and ROA as firm performance measures, increase in management board size has a significant positive impact on firm performance; however, in the case of larger firms, the effect is significantly negative. Moreover, the increase in the ratio of outside directors has a positive impact on the firm's performance in all dynamic panel regression models and this effect is even more significant in Tobin's Q and market-to-book ratio models. This can indicate the effective monitoring role of the supervisory board.
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Aggarwal, Puja, and Sonia Garg. "Restructuring through spin-off: impact on shareholder wealth." Managerial Finance 45, no. 10/11 (October 14, 2019): 1458–68. http://dx.doi.org/10.1108/mf-11-2017-0487.
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Purpose The purpose of this paper is to analyse the impact of spin-off announcements on the parent firm’s share prices. Also, it is studied that during which period the announcement impacts the share prices significantly thereby affecting the shareholder wealth. Design/methodology/approach A sample of 76 Indian firms has been taken which announced the spin-off of their one or more divisions during 2010–2011 to 2015–2016. The authors have used the event study methodology with an event window period of −35 to +35. Estimation window of 256 (−290, −35) days is considered in the study. S&P BSE 500 is used as a market index. Findings The authors found that spin-offs have a significantly positive influence on the share prices of the parent firm. The authors also found that average abnormal return (AAR) of all the 76 companies taken together have been highest on day 0 and the cumulative AAR is highest for day +1. These results are in consonance with what had been concluded by Hite and Owers (1983), Cusatis et al. (1993), Miles and Rosenfeld (1983) and Rosenfeld (1984). All these studies are based on the data derived from the USA. Outcome of this study substantiates the same results when Indian spin-offs are analysed. Originality/value This paper provides the first comprehensive analysis of the impact of Indian spin-offs on the shareholder’s wealth.
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Banerjee, Dwaipayan, and James Sargent. "Therapies Out of Reach: Anticancer Drugs and Global Trade Regimes." Science, Technology and Society 23, no. 3 (May 1, 2018): 371–87. http://dx.doi.org/10.1177/0971721818762909.
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Medical policy analysts and oncologists have cautioned against the high price of anticancer drugs. They argue that the current drug development model that relies on patents and short-term shareholder value is proving unsustainable, since the cost of the new generation of drugs puts many of them out of reach for the average consumer. The high price of cancer drugs is especially troubling in the context of middle- and low-income countries, where the burden of cancer carries disproportionate impact. To analyse the pricing of anticancer drugs, we examined legal controversies, regulatory treaties and documents, as well as the history of pricing data in India. We also conducted interviews with policy consultants and surveyed financial data filings of major global and Indian pharmaceutical corporations. Our research revealed that global trade agreements have become key barriers to lowering anticancer drug prices. This article argues that in the shadow of the World Trade Organization (WTO) and with Trans-Pacific Partnership (TPP) imminent, serious policy changes are necessary to ensure the survival of generic production in the market for anticancer drugs.
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Starling, S. W. "CREATING COMPETITIVE ADVANTAGE FROM KNOWLEDGE MANAGEMENT AND INFORMATION SHARING." APPEA Journal 40, no. 1 (2000): 587. http://dx.doi.org/10.1071/aj99038.
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Petroleum companies are being challenged to exploit complex reservoirs, operate in remote regions and employ advanced technology to meet stock market demands for increased shareholder value.However, many companies face these challenges with a diminished pool of experienced staff due to organisation downsizing, outsourcing of activities and the retirement of older employees.To combat this erosion of experience, knowledge management programs that aim to formalise the generation and leverage of expertise and skills are becoming an important means of creating and sustaining competitive advantage.To be effective, these knowledge management programs must be driven by the business needs and bring together people, processes, and technology to focus on how knowledge creates value for the organisation.An important consideration for many organisations is bringing about a cultural change which encourages knowledge management and promotes information sharing. Successful change requires leadership, resources, and appropriate rewards.The case studies presented describe how an Australian production company is planning systems to manage the capture, organisation, and sharing of knowledge, and how a multinational exploration company is implementing technology to facilitate information sharing initiatives to access, analyse, and apply knowledge around the world.
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Samanta, Navajyoti. "Convergence to shareholder primacy corporate governance: evidence from a leximetric analysis of the evolution of corporate governance regulations in 21 countries, 1995-2014." Corporate Governance: The International Journal of Business in Society 19, no. 5 (October 7, 2019): 849–83. http://dx.doi.org/10.1108/cg-07-2018-0249.
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Purpose For the past two and half decades, there has been a marked shift in the corporate governance regulations around the world. The change is more remarkable in developing countries where countries with little or no corporate governance regime have adopted “world class” standards. While there can be a debate on whether law in books actually translates into law in action, in the meantime it might be interesting to analyse the law in books to understand how the corporate governance regime has evolved in the past 20 years. This paper quantitatively tracks 21 countries, most of them being developing and emerging economies, over a period of 20 years. The period covers 1995 to 2014; thus, it traverses the pre and post crisis period in 1999 and 2008. Thus, the paper also provides a snapshot of the macrolegal changes that the countries engage in hoping to stave off the next crisis. The paper uses over 50 parameters modelled on the OECD Principles of Corporate Governance. The paper confirms the suspicion that corporate governance norms around the developing economies are converging on shareholder primacy end of the continuum. The rate of convergence was highest just before the financial crisis of 2008 and has since then slowed down. Design/methodology/approach The paper uses data collected from experts. They filled up detailed questionnaire which quizzed them on the rules relating to corporate governance norms in their country and asked them to retrospectively check their data every five years for the past 20 years. This provided an excellent overview as to how the law has evolved in the past two decades on corporate governance. The data were then tabulated using a scoring sheet and then was put together using item response theory (IRT) which is a Bayesian method similar to factor analysis. The paper then follows a comparative approach using heatmaps to analyse the evolution of corporate governance in developing countries. Findings Corporate governance norms around the developing economies are converging on shareholder primacy end of the continuum. The rate of convergence was highest just before the financial crisis of 2008 and has since then slowed down. Originality/value This is the first time that corporate governance panel data analysis has been carried out on top developing countries across so many parameters for such a long period. This paper also uses Bayesian IRT modelling to analyse the evolution which is novel in its approach especially in the corporate governance literature. The paper thus provides a clear view on the evolution of corporate governance norms and how they are converging on a particular ideology.
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Omar, Mahomed Shoaib, and Jeremiah Madzimure. "Exploring the performance of shared-value banking at discovery bank: a leadership perspective." EUREKA: Social and Humanities, no. 2 (March 31, 2022): 36–45. http://dx.doi.org/10.21303/2504-5571.2022.002330.
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The concept of shared value was born out of a determined effort to find methods for the corporate sector and society to grow while being sustainable. Often, banks are criticised for focusing on maximising shareholder value and not addressing societal issues or creating value for society. However, corporate shared value in banking is beginning to be embraced in the financial banking sector. Discovery Bank is a new-to-market entrant in the South African banking sector that has implemented shared-value banking to distinguish itself from competitors and create value for society. There are limited studies that explore the performance of shared-value banking in South Africa and whether implementation is viable or provides a competitive advantage. This study aimed to explore the performance of shared-value banking based on the perceptions of Discovery Bank leaders using a qualitative study methodology. The population in this study comprised 300 employees of Discovery Bank that was involved in the implementation of Discovery Bank since 2019. The target population of this research inquiry was 30 leaders of Discovery Bank. From the target population, 8 participants were chosen as the appropriate sample size to obtain the necessary data to address research objectives through interviews. Computer-assisted qualitative data analysis software, NVivo version 1.5.2 (946), was used to analyse data. Study findings were used to draw up recommendations to Discovery Bank South Africa management regarding improvement areas to meet performance objectives. The findings of the study revealed the following: Discovery Bank has created its shared-value banking model that deviates from the academic framework, it has created a new market of highly desirable clients who exhibit healthy financial behaviours and enhancing client engagement through client communication may yield greater success. Limitations and areas of future research was addressed in this study.
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Djindjic, Srdjan. "Taxation and forms of organizing business activities." Ekonomski anali 58, no. 196 (2013): 133–56. http://dx.doi.org/10.2298/eka1396133d.
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This paper takes sample tax regimes and tendencies from the developed countries in the EU-15 and the USA, and uses them to analyse the influence of taxation on the choice of organizational form of profit-oriented entities in Serbia. In order to understand how the procedure of taxation affects the sphere of business decision-making it is necessary to focus on the tax status of business losses and valorization and the effects of the double taxation of dividends. The rule of successive deduction of losses ensures the fiscally transparent entity receives a tax saving in the form of a reduction of the present value of the total paid tax. Meanwhile the corporation is handicapped because it postpones loss deductions, that is, it postpones tax saving, which directly influences the level of the present value of saved tax. The global trend of gradually moving from the classical system towards shareholder relief provision, above all in the form of a reduced withholding tax rate on dividends, has two opposing features: it simplifies the tax procedure while neglecting the distributional aims (consequences) of taxation. The analysis of a particular practical example from the Serbian tax context enables us to draw a conclusion in relation to the relative taxes paid by entrepreneurs versus enterprises. The developed countries favour fiscally transparent entities, whereas Serbia allocates tax privileges to enterprises.
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Mioduchowska-Jaroszewicz, Edyta, and Malwina Szczepkowska. "Analysis of the Medical Companies Operating in the Polish Capital Market." Problemy Zarządzania - Management Issues 2/2020, no. 88 (October 20, 2020): 84–102. http://dx.doi.org/10.7172/1644-9584.89.5.
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Purpose: The aim of the paper is to analyse the activity of medical companies operating in the Polish capital market through the analysis of their investment attractiveness. Two measures taking into account two different perspectives were used for efficiency evaluation: financial-internal (EVA) and external-market (TSR). Design/methodology/approach: Two measures of evaluation of financial and market results of medical companies were used to achieve the aim of the paper. These two measures take into account two different perspectives: financial-internal (EVA) and external-market (TSR). Economic value added (EVA) is based on a preconception that maximisation of the value of an enterprise is the best possible way to increase competitiveness. The second formula, Total Shareholder Return (TSR), measures shareholder value creation in the most direct way: not only shareholders’ value but also their wealth. The second part of the paper focuses on the characteristics of the private medical sector in terms of the family influence on the functioning of the selected companies. The Substantial Family Influence indicator proposed by S. Klein was used, which determines the level of ownership and the involvement of the family in the researched companies. Findings: The analysis of the results of the examined group of medical companies, using two different measures from two different perspectives, shows different results. Hence, it is difficult to determine which of the examined companies is an attractive investment – a reliable source of income from investment. The second part of the paper identifies the listed medical companies in terms of their family nature. The SFI index was used, in which the participation of family members in management boards and supervisory boards was additionally taken into account. The calculations allowed for identifying four family businesses, one of which, Enel-Med, may be specified as a company with a significant family impact. The EVA measure was used for comparison of the financial results obtained by the companies, dividing them into family and non-family enterprises; however, no differences have been observed between the groups. The findings obtained do not confirm that family businesses achieve better financial results. Research limitations/implications: The private medical market is going to develop and may be attractive from the point of view of investors not only for patients. Globalisation of the market, emergence of big businesses and, the need to consolidate the sector make it necessary for the Polish medical companies to search for external sources of financing and to enter the stock market. Hence the question whether investing in capital medical companies is profitable. The paper looked for the answer by conducting research on 19 companies and their financial results from 2016 and 2017. Two measures were used, taking into account two different perspectives: financial-internal (EVA) and external-market (TSR). The results obtained were different, so it is difficult to determine which of the examined companies is an attractive investment – a reliable source of income from investment. In light of this, it is worth considering whether the analysis carried out in the long term or with the use of other indicators would give more unambiguous results. Originality/value: The aim of the paper is to analyse the activity of medical companies operating in the Polish capital market through the analysis of their investment attractiveness, which is a new approach in the assessment of the operation of the private medical sector. Also, the analysis of the private medical sector, taking into account the influence of the family and using the SFI indicator on the functioning of individual companies, is an original approach.
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Miravitlles, Paloma, Toni Mora, and Fariza Achcaoucaou. "Corporate financial structure and firm’s decision to export." Management Decision 56, no. 7 (July 9, 2018): 1526–40. http://dx.doi.org/10.1108/md-08-2017-0788.
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Purpose The purpose of this paper is to analyse the decision to export in relation to financial issues, specifically the impact of corporate financial structure on a firm’s export propensity (the likelihood of a firm becoming an exporter) by firm size. Design/methodology/approach A multivariate probit model is applied to a sample of 8,019 Spanish manufacturing firms drawn from the Iberian Balance Sheet Analysis System (SABI). The analysis is performed separately for small, medium and large firms. Findings The paper evidences, by firm size, a positive link between ownership concentration and export propensity, although for SMEs if shareholder concentration is very high it can be counterproductive. In addition, a high degree of liquidity influences the probability of entering export markets, while those firms that face high costs as result of their export activity may need to become indebted in order to secure the necessary financial resources. However, the strength of these latter effects differs in SMEs. Originality/value This paper broadens the understanding of the relationship between firms’ export propensity and their financial health and ownership concentration, an internal factor not previously considered in the international business literature despite its relevance for firm’s decision to export. The paper highlights that their influence is not uniform but affects firms of different sizes in different ways. This is of interest and value to scholars, investors and policy makers worldwide, since handling corporate financial structure and international strategies needs to be addressed in today’s global business environment.
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Gordini, Niccolò, and Elisa Rancati. "Gender diversity in the Italian boardroom and firm financial performance." Management Research Review 40, no. 1 (January 16, 2017): 75–94. http://dx.doi.org/10.1108/mrr-02-2016-0039.
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Purpose This study aims to analyse the relationship between board gender diversity and firm financial performance in Italy, where the recently enforced Law 120/2011 prescribes gender quotas for boards of directors. Design/methodology/approach Panel data analysis was used to examine the gender diversity–firm financial performance relationship in an unbalanced panel of 918 Italian listed companies during the years 2011-2014. Findings Gender diversity, as measured by the percentage of women on a board and by the Blau and the Shannon indices, has a positive and significant effect on Tobin’s Q, while the presence of one or more women on the board per se has an insignificant effect on firm financial performance. Practical implications The results suggest that board gender diversity is not a simple “numbers game”, greater gender diversity may generate economic gains, greater gender diversity does not destroy shareholder value, investors do not penalize companies that increase female representation on their boards and Italian companies should focus their efforts on the right mix of men and women rather than on simply the presence of at least one woman on a board of directors. Originality/value Most articles on this topic use data from countries with a legal system based on common law; this paper analyses Italy, a country with a civil law system. This is almost certainly the first study to examine the effect of board gender diversity on firm financial performance in the Italian market.
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Dagnes, Joselle, and Angelo Salento. "The Italian way to financial accumulation. Personal networks and informal practices of the Italian economic elites." Sociologija 58, no. 2 (2016): 181–202. http://dx.doi.org/10.2298/soc1602181d.
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This paper challenges the belief that Italian capitalism is a static and unchanging one. Italian capitalism has retained some unique characteristics: an elitist structure, close personal relationships, a high degree of informality. However, far from being just the characteristics of an unchanging capitalism, these peculiarities were the resources that Italian capitalism exploited to change its mode of action. First, we identify the network of interlocking actors in the Italian stock market and their set of informal practices, illustrating the paramount role of families and informal relationships. Second, we show why these characteristics did not prevent Italian capitalists to enter an era of financial accumulation. Resilience is the keyword, understood both as adaptation to changing conditions and as active reaction, a proper transformation. As an example of adaptation, we analyse how Italian capitalism has faced some institutional changes preserving its traditional power structure. As an example of transformation, we show how Italian capitalism adopted patterns of financial accumulation and maximization of shareholder value. Finally, we argue that informality and the dissemination of personal relationships are not impediment to change: in the practical logic of social and economic actors they are rather resources to be exploited when it comes to make changes without sacrificing the status quo.
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Chen, Ding, Navajyoti Samanta, and James Hughes. "Does regulation matter? Changes in corporate governance in China and its impact on financial market growth: an empirical analysis (1995-2014)." Corporate Governance: The International Journal of Business in Society 19, no. 5 (October 7, 2019): 985–98. http://dx.doi.org/10.1108/cg-07-2018-0256.
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Purpose Over the past two decades, China’s stock market has experienced rapid growth. This period has seen the transplantation of many “OECD principles of corporate governance” into the Chinese corporate regulatory framework. These regulations are dominated by shareholder values. This paper aims to discover whether there is a causal relationship between the changes in China’s corporate governance and financial market growth. Design/methodology/approach This paper uses data from 1995-2014 to create a robust corporate index by looking at 52 variables and a financial index out of five financial market parameters. Subsequently, data are subject to a panel regression analysis, with the financial market index as the outcome variable, corporate governance index explanatory variable and a variety of economics, social and technological control variables. Findings This paper concludes that changes in corporate regulation have in fact had no statistically significant impact on China’s financial market growth, which must therefore be attributed to other factors. Originality/value The study is the first in the context of Chinese corporate governance impact studies to use Bayesian methodology to analyse a panel dataset. It uses OECD principles as the anchor to provide a clear picture of evolution of corporate governance for a 20-year period which is also longer than previous studies.
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A. Griffin, Paul, David H. Lont, and Yuan Sun. "Supply chain sustainability: evidence on conflict minerals." Pacific Accounting Review 26, no. 1/2 (April 8, 2014): 28–53. http://dx.doi.org/10.1108/par-04-2013-0023.
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Purpose – This study aims to examine the economic cost imposed by capital markets of section 1502 of the Dodd-Frank Act of 2010 on conflict minerals (CM). The authors analyse a sample of first-time CM disclosures made by US companies in 2010-2012. Design/methodology/approach – The authors measure the market response to these disclosures and compare it to the response of a matched control sample of non-disclosers. An overall negative response could arise from regulatory costs, changes in management decision making, or customers' social concerns about CM. An overall positive response could reflect the benefits of disclosure transparency. Findings – The authors find that the negative effects of the disclosures outweigh any positive effects. The authors also find more limited negative effects for the control sample, since they are likely to be future CM disclosers. Research limitations/implications – Because companies' balance sheets do not report these negative effects, the results imply that investors price supply chain activities related to CM as an off-balance sheet liability. Practical implications – The results agree with companies' assertions of a substantial cost to implement the CM provision. The authors estimate an aggregate loss of shareholder value for the sample of $6.5 to $13.1 billion. Social implications – These results show that regulators' and stakeholders' demands for increased transparency can be costly to shareholders when the disclosures induce changes in management decision making and raise customers' social concerns about supply chain sustainability. Originality/value – The study is the first to examine the economic effects of companies' initial disclosures about CM under the Dodd-Frank Act of 2010.
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Baidoo, Dennis Amponsah. "Factors Influencing Capital Structure: An Empirical Evaluation of Major Oil and Gas Producing Companies Operating in Ghana." International Journal of Finance Research 3, no. 4 (December 1, 2022): 294–311. http://dx.doi.org/10.47747/ijfr.v3i4.937.
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A company's choice of capital structure determines how successfully it will operate. This choice heavily depends on the understanding and optimisation of the capital structure factors necessary to increase industry-specific profitability and, consequently, market value. Therefore, the goal of this study is to analyse the factors that determine the capital structure of six significant oil producing companies operating in Ghana, namely: Hess Corporation, Kosmos Energy, Tullow Oil and Ghana National Petroleum Company from 2010 to 2018. In the analysis of panel data for this study, random effect estimation is used. Size, liquidity, tangibility, crude oil price, and profitability are used in conjunction with pertinent literature to describe the factors that determine capital structure, which is proxied by the debt-to-capitalisation ratio (leverage). The findings demonstrated that profitability, firm size, crude oil price, and liquidity are major capital structure factors that have a markedly adverse connection with leverage. The main finding of this study implies that, in accordance with the pecking order theory, consideration of debt may ultimately be the last resort, whereas the management of these major oil and gas companies in Ghana must exercise discretion when considering funding based on debt and rely more on generated profits (retained earnings) and shareholder equity. Appropriate crude oil price hedging instruments are recommended to minimise the impact of commodity price volatility on decisions on capital structure strategies.
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Ntongho, Rachael Ajomboh. "Culture and corporate governance convergence." International Journal of Law and Management 58, no. 5 (September 12, 2016): 523–44. http://dx.doi.org/10.1108/ijlma-04-2015-0016.
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Purpose This paper aims to analyse the link between culture and corporate governance. In particular, it demonstrates the impact of culture in inhibiting convergence of corporate governance. Overall, the paper provides an appraisal of corporate governance laws in stakeholder-oriented states that have endured market pressure for convergence. Design/methodology/approach The paper utilises historical trend in analyzing changes in corporate governance regulation in six countries covering three continents with stakeholder-oriented corporate governance model to determine the effect of culture in the convergence or divergence of corporate governance. Findings The view that corporate governance is converging towards the shareholder model largely ignores cultural differences in states. An appraisal of corporate governance rules and principles that have endured Anglo-American influence reveals a strong propensity for cultural norms to dictate areas where changes occur. This paper demonstrates nominal changes in corporate governance regulation and ideologies, as states still turn to design corporate governance rules around their cultural philosophy. The paper also reveals weak political authority for convergence vis-à-vis market forces. Practical implications Laws are strongly embedded in the corporate philosophies of states. Thus, the market and managers need to incorporate national culture into corporate practices for effective implementation. Originality/value Few studies have examined the effect of culture on the convergence of corporate governance regulation, especially across different countries. This study does not only analyze corporate governance in developed countries but also examines emerging nations in Africa where research on convergence is very scarce.
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Pletz, Stefanie, and Joan Upson. "The normative evolution of corporate governance in the UK: an empirical analysis (1995-2014)." Corporate Governance: The International Journal of Business in Society 19, no. 5 (October 7, 2019): 1015–41. http://dx.doi.org/10.1108/cg-07-2018-0239.
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Purpose This paper aims to analyse normative corporate governance evolution in the UK between 1995 and 2014 against the benchmark of Organisation for Economic Co-Operation and Development (OECD) regulatory principles. Design/methodology/approach Methodologically, the authors conduct an empirical, longitudinal data set analysis of the formative years of UK normative corporate governance development between 1995 and 2014. We provide a qualitative discussion of the empirical evidence that links the type of UK regulatory corporate governance development to financial market growth thereby adopting a mixed approach based on quantitative and qualitative research methods. Findings The authors find that compared to the OECD model of corporate governance, the UK model is less rigid following a more self-regulatory approach based upon a “comply or explain” paradigm. Thus it is scored below corporate governance systems that follow a compulsory implementation model. However, even with such “low” tilt towards formal shareholder primacy norms, the UK has the best performing financial market. As a quasi-empirical study, the authors suggest that there are several historical and economic reasons for this, which together with a robust rule of law in the UK contribute to this performance – and the law especially the type or tilt is less relevant. Originality/value This is the first of its kind empirical, longitudinal data set analysis with qualitative elements that links empirical evidence to regulatory developments in the wider context of UK corporate governance evolution.
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Mukherjee, Tutun, Pinki Gorai, and Som Sankar Sen. "Financial performance analysis of GIC Re." Vilakshan - XIMB Journal of Management 17, no. 1/2 (December 3, 2020): 181–95. http://dx.doi.org/10.1108/xjm-08-2020-0071.
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Purpose This study aims to analyse the following: first, the financial performance of General Insurance Re (GIC Re) using performance ratios (PRs); second, the uniformity of different financial performance indicators of GIC Re; third, the internal growth capacity of GIC Re; and finally, the likelihood of GIC Re going into financial distress. Design/methodology/approach As a sample, GIC Re, the lion shareholder in Indian Reinsurance Industry has been considered in the present study. All the necessary data have been extracted from the secondary sources over a time period of 16 years. The financial performance of GIC Re is assessed using five standard ratios, and the uniformity of different financial performance indicators of GIC Re has been examined using Kendall’s Coefficient of Concordance (W). To assess the internal growth capacity of GIC Re internal growth rate has been used, and the likelihood of GIC Re going into financial distress is analysed using multivariate discriminant approach, namely, modified Altman’s Z-score model and logit analysis technique, namely, Ohlson’s O-score model. Findings The results exhibit that financial performance of GIC Re is somewhat satisfactory over a few considerable areas. However, no notable degree of uniformity has been observed amongst the varied financial performance indicators, namely, performance ratio, expense ratio, return on assets, risk retention ratio and combined ratio of GIC Re. The results also reveal GIC Re is lacking ability of growing internally. Moreover, there remains a significant possibility of GIC Re going into financial distress in the near future and so. Originality/value This study is one of the first empirical research studies in India that examines the financial performance of GIC Re from different perspectives.
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Lipai, Zhang. "Does Shareholding Heterogeneity on First Major Shareholder Incentively Affect Audit Characteristics?-Evidence From Tobacco and Non-tobacco Enterprises." Tobacco Regulatory Science 7, no. 4 (July 31, 2021): 474–96. http://dx.doi.org/10.18001/trs.7.4.1.1.
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Objectives: This study is to examine the effect of first major shareholders on audit characteristics, and emphasize their incentives towards corporate reform. In addition, we also emphasize on the tobacco industry that is totally state-owned by Chinese central government, as their internal audits are mainly conducted by the State Council. Methods: Taking A-share listed enterprises in Chinese Shanghai and Shenzhen Stock Exchange as samples, this paper analyzes the changes in corporate audit characteristics, which are caused by the holding heterogeneity on the first major shareholders. Then a series of endogenous and robustness tests are to confirm the baseline results. Based on the results of population, we specifically analyze and forecast the tobacco industries. Results: This positive relationship remains significant. Also, the channels for the first major shareholder to reduce non-standard audit opinions originate from their constraints and incentives, which reflect on enhanced supervision, sustainable business operation and market competition. These contribute to their revised managerial behavior. Finally, additional tests illustrate that the effect of strengthened equity is heterogeneous in terms of size, equity nature and growth stage of enterprises. Conclusion: The study domestrates the importance of equity structure and first major shareholders, which calls attention to managerial motives and behavior. The marginal effect is supposed to be shrunk in tobacco business as it is initially in absolute control by public authority. The already economic profits have made it reached favorable audit report. The enhanced shareholdings of first major shareholders could alleviate managerial myopia and moral hazard, and give the inspiration to enterprises in the reform of the ownership structure. Research limitations/implications-Effect of increasing first major shareholders’ holdings on audits is required to be applied in certain situations. However, the unavailable data and minimal samples of listed tobacco enterprises make it hard to clearly estimate the shareholding effect in this certain industry. Therefore, we have to qualitatively analyse tobacco business based on average population. Originality/value-This paper enlarges the role of major shareholders in audit characteristics, and emphasizes their managerial behavior towards audit process. The study indicates that stronger first major shareholdings tend to obtain qualified and standard audit opinions, pay higher audit fees and select high-quality auditors. The results and anlyses could enlight the tobacco and non-tobacco industries.
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Larrán Jorge, Manuel, Francisco Javier Andrades Peña, and Maria Jose Muriel de los Reyes. "Analysing the inclusion of stand-alone courses on ethics and CSR." Sustainability Accounting, Management and Policy Journal 8, no. 2 (May 2, 2017): 114–37. http://dx.doi.org/10.1108/sampj-05-2015-0033.
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Purpose This paper aims to examine how the Master of Business Administration (MBA) curricula of top-ranked business schools are offering stand-alone courses on ethics and corporate social responsibility (CSR). To provide additional evidence, this study tests some hypotheses to contrast the effect of different variables on the inclusion of stand-alone courses on ethics and CSR. Also, the paper provides a comparative analysis in two ways: one comparison aims to analyse how the presence of ethics and CSR stand-alone courses in the MBA programmes over the past 10 years has evolved, and the other comparison seeks to explore whether there are differences between different rankings with regard to the inclusion of ethics and CSR stand-alone courses in the MBA curricula. Design/methodology/approach A Web content analysis was conducted on the curricula of 92 of the top 100 global MBA programmes ranked by the Financial Times in their 2013 ratings. Findings The findings show that there is a trend towards the inclusion of stand-alone courses on CSR and ethics as electives. Empirically, the findings suggest that the presence of ethics and CSR elective stand-alone subjects in the MBA programmes is explained by the following variables: public/private, business school’s accreditation and cultural influence. Comparatively, the findings suggest that requiring CSR and business ethics stand-alone courses in the MBA programmes ranked by the Financial Times have not increased over the past 10 years. In addition, when we have compared the results of this study with other rankings, we have appreciated that there are important differences between top MBA programmes in accordance with the aims and scope of rankings. Originality/value The findings of this study seem to suggest that business schools included in the Financial Times ranking have not changed their view based on a shareholder approach, which is focused on providing an economics-centred training.
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Barroso Del Toro, Alberto, Laura Vivas Crisol, and Xavier Tort-Martorell. "The Sustainability Narrative: A Multi Study Using Event Studies to Analyse the American Energy Companies Shareholder’s Reaction to Sustainability News." International Journal of Environmental Research and Public Health 19, no. 23 (November 22, 2022): 15489. http://dx.doi.org/10.3390/ijerph192315489.
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This study investigates how shareholders of leading US energy companies value sustainability narratives. Leveraging the Global Database of Events (GDELT) from 2017 to 2019, 207,386 news items were extracted, 4101 event studies were performed, 3393 cumulative average abnormal returns (CAAR) were analysed, and 708 Abnormal volatilities (AV) were analysed. The magnitude of the analysis and further segmentation of the viral news by tone, type of energy, and environmental consequence help us to understand shareholders’ investment decisions and narrative. We proved that the sustainability narrative has a significant impact on shareholder value. There is a clear negative bias on sustainability news, impacting negatively on the market. More importantly, we’ve identified positive news about fossil fuels impacting the market more than positive renewable energy news. These results provide empirical evidence for the case of greenwashing in businesses. There must be a common shareholder’s narrative to penalise and reduce incentives for highly polluting investments to push forward an effective ecological transition. These results provide an objective for regulators to develop further regulations and incentives to fight against false sustainability news.
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Biondi, Yuri, and Imke J. Graeff. "Between Prudential Regulation and Shareholder Value: An Empirical Perspective on Bank Shareholder Equity (2001-2017)." Accounting, Economics, and Law: A Convivium, February 4, 2020. http://dx.doi.org/10.1515/ael-2019-0083.
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AbstractWe analyse the effects of changes in regulatory capital requirements under Basel III on the dynamic evolution of bank shareholder equity over time. Evidence from managerial and regulatory reports shows that bank shareholder equity stands between micro-prudential regulatory capital requirements and managerial pursuit of equity economising strategies. Shareholder value strategies see shareholders as the equity investment remuneration recipients. Micro-prudential regulators, in turn, address them as equity investment providers. With opposing cash streams, one orientation puts the other to a test. The article visualises this conflict by analysing the actual shareholder contribution to the bank equity position in nine case studies of European financial institutions between 2001 and 2017; our evidence-based financial analysis applies an innovative method to data directly extracted from financial statements, in order to measure this equity position evolution and assess bank equity dynamics in light of revised regulatory capital requirements and persistent assurance of shareholder value thriving in managerial reports. The choice of in-depth analysis of a sample of relevant case studies overcomes the absence of detailed data on changes in bank equity in existing databases.
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Velte, Patrick, and Jörn Obermann. "Compensation-related institutional investor activism – a literature review and integrated analysis of sustainability aspects." Journal of Global Responsibility ahead-of-print, ahead-of-print (September 18, 2020). http://dx.doi.org/10.1108/jgr-10-2019-0096.
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Purpose This paper aims to analyse whether and how different types of institutional investors influence shareholder proposal initiations, say-on-pay (SOP) votes and management compensation from a sustainability perspective. Design/methodology/approach Based on the principal-agent theory, the authors conduct a structured literature review and evaluate 40 empirical-quantitative studies on that topic. Findings The traditional assumption of homogeneity within institutional investors, which is in line with the principal–agent theory, has to be questioned. Only special types of investors (e.g. with long-term and non-financial orientations and active institutions) run an intensive monitoring strategy, and thus initiate shareholder proposals, discipline managers by higher SOP dissents and prevent excessive management compensation. Research limitations/implications A detailed analysis of institutional investor types is needed in future empirical analyses. In view of the current debate on climate change policy, future research could analyse in more detail the impact of institutional investor types on proxy voting, SOP and (sustainable) management compensation. Practical implications With regard to the increased shareholder activism and regulations on SOP and management compensation since the 2007/2008 financial crisis, firms should be aware of the monitoring role of institutional investors and should analyse their specific ownership nature (time- and content-driven and as well as range of activity). Originality/value To the best of authors’ knowledge, this is the first literature review with a clear focus on institutional investor range and nature, shareholder proposal initiation, SOP and management compensation (reporting) from a sustainability viewpoint. The authors explain the main variables that have been included in research, stress the limitations of this work and offer useful recommendations for future research studies.
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Marti, Emilio. "Investing for a Property-Owning Democracy? Towards a Philosophical Analysis of Investment Practices." Analyse & Kritik 35, no. 1 (January 1, 2013). http://dx.doi.org/10.1515/auk-2013-0117.
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AbstractIn this article I show why investment practices matter for a property-owning democracy (POD) and how political philosophers can analyse them. I begin by documenting how investment practices influence income distribution. Empirical research suggests that investments that force corporations to maximise shareholder value, which I refer to as ‘shareholder value investing/ increase income inequality. By contrast, there is evidence that socially responsible investing (SRI) could bring society closer to a POD. Following that., I sketch how financial regulation fosters investment practices and discuss how SRI could be boosted if regulation attempted to influence investment decisions, although many people in the public discourse would see this as exceedingly patronising. Finally, I outline how political philosophers can evaluate financial regulation. I argue that drawing on Hegel or Rawls helps to justify efforts to influence investment decisions and that proponents of a POD should therefore develop and support regulatory ideas which foster SRI.
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De Wet, J. H. v. H., and A. D. Das. "Secondary tax and its effect on the cost of capital and shareholder value of South African JSE listed companies." Acta Commercii 8, no. 1 (December 7, 2008). http://dx.doi.org/10.4102/ac.v8i1.85.
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Background: The introduction of a secondary tax on companies (STC) and the lowering of the normal income tax rate in 1993 constituted a dramatic change in the tax structure of South African organisations. The original intention of these changes was to encourage organisations to re-invest profits to make use of capital investment opportunities. It was also anticipated that these tax changes would lower the cost of capital of organisations. Problem investigated: Announcements during the 2007 budget again raised questions about how the proposed changes in STC would affect the value of organisations. The impact of these tax changes has been the topic of some speculation in the absence of concrete research results to date. Purpose: The purpose of this study was to investigate the effect of these tax changes and all subsequent changes since 1993 on the cost of capital and shareholder value. Approach: A model of a hypothetical company, representing the 'average' listed South African organisation was used to determine the effect of the introduction of STC and the changes to the STC and company tax rate on the cost of capital and the value of the organisation. Findings: The study found that, contrary to expectations, the tax changes actually caused the cost of capital to go up. Overall, the combined effect of the higher cost of capital and the lower company tax rate caused the theoretical value of organisations to increase, constituting an improvement of shareholder value. Value of research: It is the first local study that endeavoured to analyse and quantify the impact of the introduction of STC and the lowering of the company tax rate on the cost of capital and the value of organisations. Conclusion: The introduction of STC in and the lowering of the company tax rate in 1993, as well as changes to these two forms of taxes since then, seem to have been justified in terms of shareholder value creation.
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Michael James, Rahul Sharma, and Dr. Amalanathan Paul. "A COMPARATIVE STUDY ON SELECTED INDIAN BANKS' FINANCIAL RATIOS FOR THE PERIOD FROM FY 2017–2021." EPRA International Journal of Multidisciplinary Research (IJMR), October 28, 2022, 273–84. http://dx.doi.org/10.36713/epra11616.
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The main aim of this paper is to analyse how an organisation or a companys financial performance can be determined using the financial ratios. This research examines the performance of the commercial banking industry from FY 2017 to FY 2021. For the stated time periods, financial statements of Indian banks including SBI, PNB, BOI, HDFC, ICICI, and YES Bank were retrieved from databases including annual reports, EMIS, money control, yahoo finance, and Google finance. A financial ratio is a mathematically defined connection between two accounting data (or simply as a ratio). Ratios aids in the qualitative assessment of the firms financial performance and the summarization of vast amounts of financial data. In this study, financial measures for liquidity, activity, leverage, profitability, and market value will be used to analyse the financial statements of these institutions. For the liquidity test we are using: CR(Current ratio), and QR(Quick ratio). The following metrics were used to determine profitability: NPM (net profit margin), PM (profit margin), ROE (return on shareholder equity), ROA (return on assets). PE ratios and EPS were used to assess market-based activity. KEYWORDS: Performance analysis, financial ratios, Dupont Analysis, Public sector banks, Private sector banks
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Randhawa, Trilok Singh, and Sapna Singh. "Critical Review: Professional Development Skill for Operational Excellence in Context to Financial Sector." International Journal of Scientific Research in Science and Technology, June 15, 2019, 13–20. http://dx.doi.org/10.32628/ijsrst196331.
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The researcher stated a significant approach of critical review with respect to professional development skill for operational excellence in context to financial sector, to sustain in the market and grow it has been become necessary for the Financial sector organisations to achieve Operational Excellence, which leads to Higher customer satisfaction, Lower operational costs, Increased shareholder value, Economies of scale etc. which leads to a more sustainable organization. This requires a skilled and upgraded employee. Many companies in India other than multi-nationals are not meeting the employee demands with reference to training and development and ultimately the gap is found in the required skills for achieving Operational Excellence vis-a-vis attained skills. Training needs Analysis is an organizational approach to analyse and asses that is derived from the foundation containing gap analysis. The analysis and assessment of the difference between the skillset, knowledge, habits and attitudes that needs to be attained by the organisational employee to achieve organisational objectives of profitability, knowledge, productivity and skillset that the current employees in the organisation possess. In this research article the researcher represented a critical review of professional development skill for operational excellence in context to financial sector.
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Gomez-Conde, Jacobo, Ernesto Lopez-Valeiras, Fabricia Silva Rosa, and Rogério João Lunkes. "The effect of management control systems in managing the unknown: Does the market appreciate the breadth of vision?" Review of Managerial Science, November 28, 2022. http://dx.doi.org/10.1007/s11846-022-00601-0.
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AbstractWe examine the extent to which broad-scope management control systems (MCS) mitigate the negative impact of a crisis with extreme uncertainty on investor and shareholder expectations and the potential role of boundary systems in this link. We use the COVID-19 pandemic as research setting to analyse this link and market value as a proxy for expectations. Our hypotheses are tested using a combination of survey and archival data from large organizations listed on the Brazilian Stock Exchange, resulting in a panel of 6257 organization-week observations. Our main results are consistent with the hypotheses. We also conduct a series of sensitivity tests to check the robustness of our main findings. Our results remain significant across specifications: alternative identification strategy, or additional control variables. In an additional analysis, we also examine the role of lenders. Overall, we extend the scarce prior literature on the effectiveness of MCS under crisis management and provide new evidence for signaling theory, thus connecting both streams of literature. The COVID-19 pandemic provides an optimal context for researching this topic because, in contrast to past economic downturns or financial crises, it has required organizations across industries to adapt quickly and respond to new demands with unpredictable economic, behavioural, and societal consequences.
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Husnin, Azrul Ihsan, Anuar Nawawi, and Ahmad Saiful Azlin Puteh Salin. "Corporate governance and auditor quality – Malaysian evidence." Asian Review of Accounting 24, no. 2 (March 18, 2016). http://dx.doi.org/10.1108/ara-11-2013-0072.
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Purpose The purpose of this paper is to conduct an investigation into the relationship between a firm’s corporate governance mechanisms (audit committee composition and operation, block shareholder, CEO duality, financial state, ownership dominance, political connection, share price, and family control) and auditor quality selection in Malaysia, for periods before and after the introduction of Malaysian Code of Corporate Governance in 2007 (MCCG 2007). Design/methodology/approach 300 companies listed on the Malaysian Stock Exchange from 2006 to 2008 were selected. A Binary regression method was used to analyse the data collected from both annual reports and financial databases. Findings The study has found that in general, MCCG 2007 influenced auditor selection through restructuring of corporate governance tools, such as audit committees and internal audit functions. Research limitations/implications Results have provided evidence that the restructuring of corporate governance may contribute and drive company to enhance the quality of the audit performed by selecting better quality auditor and/or improvising the audit related functions within the company such as formalising internal audit function. This study, however, employed an archival method of study and only used three years (2006, 2007 and 2008) of data analysis. Future research should analyse data from a longer period and utilize a field survey to understand reasons for auditor selection from the company perspective. Originality/value Building on previous studies, this study contributes to the current body of knowledge as it also considers the objective from the perspective of the revised MCCG 2007. It examines whether the introduction of new or revised corporate governance guidelines may immediately impact company auditor selection. Therefore, it compares the auditor quality of the company from pre-MCCG 2007 (2006) and post-MCCG 2007 (2008).
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Tanna, Sailesh, Ibrahim Yousef, and Matthias Nnadi. "Probability of mergers and acquisitions deal failure." Journal of Financial Economic Policy ahead-of-print, ahead-of-print (May 9, 2020). http://dx.doi.org/10.1108/jfep-09-2019-0182.
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Purpose The purpose of this paper is to investigate whether the probability of deal success/failure in mergers and acquisitions (M&As) transactions is influenced by a range of deal, firm and country-specific characteristics which tend to affect acquirers’ shareholder returns. The specific hypotheses under investigation relate to the method of payment (cash versus stock), target status (listed versus non-listed), diversification (domestic versus cross-border and industry-wide) and acquirers’ prior bidding experience. Additionally, the authors also investigate whether announced deals reflect an expectation about likelihood of deal completion. Design/methodology/approach The authors analyse the probability of deal success/failure in M&As by combining event study and probit regression-based methods. The authors use the standard event study methodology to calculate acquirers’ abnormal returns for up to 10 days before and after the announcement date. In the probit model, the dependent variable is the probability of deal i being failure depending on four sets of explanatory variables: method of payment, target status, diversification and acquirer bidding experience, along with a set of control variables. Findings The findings from event study confirm that market reaction is indifferent to whether announced deals are likely to be successfully completed or not, consistent with the efficient markets hypothesis. However, the results from cross-sectional, cross-country regressions confirm that the aforementioned deal characteristics, as well as certain firm and country level attributes do influence the likelihood of whether an announced deal is subsequently completed or terminated. Originality/value In examining whether the specific characteristics affecting the likelihood that M&A transactions, once announced, will ultimately succeed or fail, it seems natural to ask whether the market reaction at the time of deal announcement reflects an expectation regarding deal completion. This could be associated with specific deal or firm-level characteristics influencing shareholder returns or risk, and represents a unique contribution of this study, over and above the use of a global sample of M&A data. The empirical analysis investigates these issues by using an extensive, global sample of 46,758 M&A transactions from 180 countries and 80 industries, which took place between the years 1977 and 2012.
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Wood, Benjamin, Phil Baker, Gyorgy Scrinis, David McCoy, Owain Williams, and Gary Sacks. "Maximising the wealth of few at the expense of the health of many: a public health analysis of market power and corporate wealth and income distribution in the global soft drink market." Globalization and Health 17, no. 1 (December 2021). http://dx.doi.org/10.1186/s12992-021-00781-6.
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Abstract Background Many of the harms created by the global soft drink industry that directly influence human and planetary health are well documented. However, some of the ways in which the industry indirectly affects population health, via various socio-economic pathways, have received less attention. This paper aimed to analyse the extent to which market power and corporate wealth and income distribution in the global soft drink market negatively impact public health and health equity. In doing so, the paper sought to contribute to the development of a broad-based public health approach to market analysis. A range of dimensions (e.g., market concentration; financial performance; corporate wealth and income distribution) and indicators (e.g., Herfindahl Hirschman Index; earnings relative to the industry average; effective tax rates; and shareholder value ratios) were descriptively analysed. Empirical focus was placed on the two dominant global soft drink manufacturers. Results Coca-Cola Co, and, to a lesser extent, PepsiCo, operate across an extensive patchwork of highly concentrated markets. Both corporations control vast amounts of wealth and resources, and are able to allocate relatively large amounts of money to potentially harmful practices, such as extensive marketing of unhealthy products. Over recent decades, the proportion of wealth and income transferred by these firms to their shareholders has increased substantially; whereas the proportion of wealth and income redistributed by these two firms to the public via income taxes has considerably decreased. Meanwhile, the distribution of soft drink consumption is becoming increasingly skewed towards population groups in low and middle-income countries (LMICs). Conclusions Market power and corporate wealth and income distribution in the global soft drink market likely compound the market’s maldistribution of harms, and indirectly influence health by contributing to social and economic inequalities. Indeed, a ‘double burden of maldistribution’ pattern can be seen, wherein the wealth of the shareholders of the market’s dominant corporations, a group over-represented by a small and wealthy elite, is maximised largely at the expense of the welfare of LMICs and lower socioeconomic groups in high-income countries. If this pattern continues, the appropriate role of the global soft drink market as part of sustainable economic development will require rethinking.