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1 – 10 of 44Jyoti Dua and Anil Kumar Sharma
The mounting focus on environmental, social and governance (ESG) factors in business has sparked substantial curiosity in understanding the nexus between ESG and the companies’…
Abstract
Purpose
The mounting focus on environmental, social and governance (ESG) factors in business has sparked substantial curiosity in understanding the nexus between ESG and the companies’ strategic decisions. This study aims to investigate the influence of firms’ ESG disclosure scores on their dividend payout. Furthermore, it examines the nuanced dynamics of this relationship by exploring the moderating role of the country’s investor protection regulations and regulatory enforcement.
Design/methodology/approach
This study uses pooled ordinary least square regression with year, industry and country effects. It analyzes a balanced panel data set of 192 non-financial firms drawn from the primary equity indices of BRICS nations. This study examined the data of six years spanning 2015–2020.
Findings
The findings discover a significantly positive relationship between ESG scores and dividend payout ratio, conveying that firms with higher ESG scores allocate more of their profits as dividends. Furthermore, the finding reveals that country-level robust investor protection and effective regulatory enforcement mechanisms undermine the positive association between ESG ratings and payouts of dividends, suggesting that the ESG disclosure of firms operating in a setting characterized by enhanced investor safeguards and stricter regulatory oversight will exert less influence on their dividend decisions.
Originality/value
To the best of the authors’ knowledge, this is the first study to concentrate on the ESG–dividend nexus in the BRICS countries. Furthermore, this study used each country’s investor protection index and regulatory enforcement scores to comprehend the influence of country-level legal frameworks in shaping the relationship between ESG and dividend decisions, thus adding value to the existing literature on corporate sustainability.
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Nam Hoang Le, Zhe Li and Megan Ramsey
The purpose of this study is to examine the relationships between chief executive officers (CEOs) with military service and firm dividend and cash holding decisions.
Abstract
Purpose
The purpose of this study is to examine the relationships between chief executive officers (CEOs) with military service and firm dividend and cash holding decisions.
Design/methodology/approach
The authors use a sample of Standard and Poor's (S&P) 1500 firms in the USA over a sample period from 1999 to 2017 and a panel data approach, as well as instrumental variable (IV)analysis. The models control for firm characteristics as well as industry and year-fixed effects.
Findings
The results show CEOs with military service are associated with higher total payout and less cash. Higher dividends appear to drive the total payout result. When cash holdings are split into pure cash and short-term investments, the reduction in cash holdings is driven by a reduction in pure cash. The findings are more pronounced for powerful CEOs and CEOs with low labor mobility. Military CEOs are also associated with less risk, measured by stock return volatility and return on assets (ROA) volatility.
Originality/value
Overall, the results are consistent with military CEOs implementing conservative policies that reduce firm risk, curtailing the demand for precautionary cash and reducing the necessity to forego dividend payouts.
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Muhammad Farooq, Qadri Al-Jabri, Muhammad Tahir Khan, Muhamamad Akbar Ali Ansari and Rehan Bin Tariq
The present study aims to investigate the impact of corporate governance proxies by ownership structure and firm-specific characteristics, i.e. firm size, leverage, growth…
Abstract
Purpose
The present study aims to investigate the impact of corporate governance proxies by ownership structure and firm-specific characteristics, i.e. firm size, leverage, growth opportunities, previous year dividend, firm risk, profitability, and liquidity on dividend behavior of the Pakistan Stock Exchange (PSX) listed firms.
Design/methodology/approach
Final sample of the study consists of 140 PSX-listed firms. The study covers a period of six years, starting from 2015 to 2020. Dividend payout dummy, dividend payout ratio, and dividend yield were used to assess the dividend behavior of the sample firms. The appropriate regression procedures (logistic, probit, ordinary least square (OLS), and fixed effect regression) are used to test the study hypothesis. To check the robustness of the result, a system GMM estimation technique is also used in the present study.
Findings
The study reveals that institutional ownership, foreign ownership, and individual ownership have a significant positive whereas managerial ownership has a significant negative impact on the dividend decision of sample firms. Among firm-specific characteristics, it was found that liquidity, profitability, and the previous year's dividend were significantly positive, while growth opportunities were significantly inversely associated with dividend payout decisions of PSX-listed firms.
Practical implications
This study sheds light on the relationship between dividend policy, ownership structure, and firm-specific factors in the context of an emerging market like Pakistan. The study's findings have important implications for managers, minority shareholders, lawmakers, and investors looking for guidance on the dividend policy of publicly-traded non-financial firms.
Originality/value
The literature lacks studies that together analyze the ownership characteristics and firm-specific variables on dividend decisions, particularly in the context of developing economies. The current study aims to fill this gap.
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The Asian Handicap is a way to bet on soccer matches where payouts depend on an adjustment to the score that favors the weaker team. These bets can feature the possibility of all…
Abstract
Purpose
The Asian Handicap is a way to bet on soccer matches where payouts depend on an adjustment to the score that favors the weaker team. These bets can feature the possibility of all or half the bet being refunded and this makes the calculation of their expected return more complex than for traditional betting on a home win, away win or draw. We examine the behavior of odds in this market.
Design/methodology/approach
In addition to a using well-known publicly available source of information on Asian Handicap betting odds – which provides the average odds across a range of bookmakers – we have also sourced a large dataset of Asian Handicap odds offered by an individual bookmaker.
Findings
We show that bettors systematically lose more money on Asian Handicap bets where refunds are not possible than when it is possible to obtain a half refund. We also show that bets with the possibility of a full refund have the lowest loss rates. We demonstrate that this pattern of differences in loss rates across bets is predictable based on the odds quoted. This pattern could represent preferences, with gamblers disliking bets featuring potential refunds, but we argue the evidence points more towards gamblers incorrectly calculating expected loss rates.
Originality/value
Despite being one of the world's largest betting markets, there has been almost no previous research on the properties of the Asian Handicap soccer betting. Our finding of clear differences in returns on simultaneously available bets on the same team is also a new anomaly previously undocumented in any research on sports betting.
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Songhee Kim, Jaeuk Khil and Yu Kyung Lee
This paper aims to investigate the impact of corporate dividend policy on the capital structure in the Korean stock market. To distinctly discern the voluntariness of changes in…
Abstract
This paper aims to investigate the impact of corporate dividend policy on the capital structure in the Korean stock market. To distinctly discern the voluntariness of changes in corporate dividend policy, we analyze companies that, following a substantial increase, do not reduce dividends for the subsequent two years or, after a significant decrease, do not raise dividends for the following two years. Our empirical findings indicate that companies that increase dividends experience a significant decrease in both book and market leverage, even after controlling for variables such as target leverage ratios. This result suggests that a large increase in dividends can effectively reduce information asymmetry, leading to a lower cost of equity. On the contrary, after a decrease in dividends, both book leverage and market leverage significantly increase, revealing a symmetric relationship between dividend policy and capital structure. In conclusion, large dividend increases in Korean companies not only reduce information asymmetry but also lower the cost of equity capital, resulting in observable changes in the leverage ratio.
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Gurmeet Singh Bhabra and Ashrafee Tanvir Hossain
The purpose of this paper is to investigate the relationship between CEOs' inside debt holdings (pension benefits and deferred compensation) and the operating leverage of the…
Abstract
Purpose
The purpose of this paper is to investigate the relationship between CEOs' inside debt holdings (pension benefits and deferred compensation) and the operating leverage of the firms they manage, with the aim to examine whether CEO incentives play a role in corporate risk-taking.
Design/methodology/approach
The authors investigate the relation between CEO inside debt holdings (CIDH) (pension benefits and deferred compensation) and the operating leverage (DOL) of the firms they manage. Using a sample of 11,145 US firm-year observations over the period 2006–2017, the authors find a strong negative association between CIDH and DOL. Additional analyses reveal that the relationship between CIDH and DOL is more pronounced in firms with heightened agency issues, powerful CEOs and for CEOs with stronger professional networks. The results are robust to various sensitivity and endogeneity tests.
Findings
The authors find strong evidence confirming the expected negative association between CEO inside debt and DOL suggesting that firms with higher inside debt tend to maintain lower levels of operating leverage. These findings continue to hold with the alternative measure for the inside debt and operating leverage, and across a range of tests designed to rule out the possibility that the primary findings are in any way driven by potential endogeneity. In addition, the findings demonstrate that the presence of manager-shareholder agency conflicts can strengthen the inside debt–DOL relationship suggesting the strong role of inside debt in reducing firm risk.
Research limitations/implications
Findings in this paper have implications for design of compensation structures so that corporate boards can establish incentives as a tool for risk management. A limitation of this study is that it is focused on one market, i.e. US listed companies, so the findings may not be applicable on a global scale.
Originality/value
To the best of the authors’ knowledge, this is the first study that links firm-level management of operating leverage through design of CEO inside debt incentives (two obvious choices for risk-reduction at the CEOs’ disposal include reducing financial risk through reduction of firm leverage and reducing operating risk through reduction of operating leverage). While use of firm leverage as an instrument of choice has been explored in the past, use of operating leverage to achieve risk reduction when CEO possess high inside holding, has received very little attention.
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David Syam Budi Bakroh and Heikki Hiilamo
The purpose of the study is to emphasise the urgent need for pension policy reform within Indonesia’s social security system.
Abstract
Purpose
The purpose of the study is to emphasise the urgent need for pension policy reform within Indonesia’s social security system.
Design/methodology/approach
The methodology employed in this research includes qualitative techniques such as in-depth interviews and thematic content analysis.
Findings
The findings suggest various measures for pension reform, including revising eligibility criteria, adjusting benefit designs to cover housing and transportation costs, promoting Defined Benefit Plans, enforcing compliance, addressing insufficient contributions, advocating for transparency, and aligning social assistance programs with pension system enhancements. However, there is a trade-off between the adequacy of pension benefits and the amount of resources required.
Research limitations/implications
This study is limited by the need for more individuals knowledgeable about pension issues in Indonesia, primarily due to their high-ranking positions, making access challenging and potentially compromising the small sample size in research.
Practical implications
The research underscores the importance of maintaining policy consistency. It proposes a gradual increase in pension contributions as a pivotal strategy to ensure sustained financial security for retirees, particularly in the face of fiscal constraints. Also, the government should undertake comprehensive reforms, encompassing the revision of eligibility criteria, adjustment of minimum benefit designs, encouragement of employer contributions and effective management of compliance issues.
Social implications
Social implications emphasise the importance of enhancing the financial security of retirees within Indonesia’s ageing population.
Originality/value
The originality and value of the research lie in guiding pension reform from the viewpoint of key policymakers involved in Indonesia’s pension system.
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Florian Follert and Werner Gleißner
From the buying club’s perspective, the transfer of a player can be interpreted as an investment from which the club expects uncertain future benefits. This paper aims to develop…
Abstract
Purpose
From the buying club’s perspective, the transfer of a player can be interpreted as an investment from which the club expects uncertain future benefits. This paper aims to develop a decision-oriented approach for the valuation of football players that could theoretically help clubs determine the subjective value of investing in a player to assess its potential economic advantage.
Design/methodology/approach
We build on a semi-investment-theoretical risk-value model and elaborate an approach that can be applied in imperfect markets under uncertainty. Furthermore, we illustrate the valuation process with a numerical example based on fictitious data. Due to this explicitly intended decision support, our approach differs fundamentally from a large part of the literature, which is empirically based and attempts to explain observable figures through various influencing factors.
Findings
We propose a semi-investment-theoretical valuation approach that is based on a two-step model, namely, a first valuation at the club level and a final calculation to determine the decision value for an individual player. In contrast to the previous literature, we do not rely on an econometric framework that attempts to explain observable past variables but rather present a general, forward-looking decision model that can support managers in their investment decisions.
Originality/value
This approach is the first to show managers how to make an economically rational investment decision by determining the maximum payable price. Nevertheless, there is no normative requirement for the decision-maker. The club will obviously have to supplement the calculus with nonfinancial objectives. Overall, our paper can constitute a first step toward decision-oriented player valuation and for theoretical comparison with practical investment decisions in football clubs, which obviously take into account other specific sports team decisions.
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