Search results

This study aims to examine the effects of market liquidity on earnings management (EM) of seasoned equity offering (SEO) firms considering external capital access.

This study uses a panel data set of 158 Vietnamese SEO firms from 2007 to 2019. Both real and accrual EM measures are analysed. The study uses two proxies for market liquidity: stock turnover (the ratio of total shares traded over the year divided by total shares outstanding for the year) and high–low spread (estimated following Corwin and Schultz [2012]) and fixed-effects panel and two-stage least squares regression in the analysis.

Firms with high (low) market liquidity report low (high) EM, and the result is robust after controlling for endogeneity. The results hold for both real and accrual-based EM for both market liquidity proxies. However, the results are robust only for firms with low external capital access and non-state-owned companies. The authors find a negative market reaction to earnings manipulation.

This study’s findings help policymakers, investors and managers make better decisions regarding SEO firms and reduce the risk of inaccurate information due to EM.

Among the few studies that test the influence of market liquidity on EM, to the best of the authors’ knowledge, this study is the first to examine the effect of market liquidity on EM in the context of SEO firms considering the impact of capital access.

In this paper we discuss the potential role capital markets will play in health care restructuring. According to theory, agency costs, asymmetric information and strategic interactions cause the cost of capital for nonprofit entities to slope upward. Freestanding nonprofits are particularly disadvantaged in this regard. We conclude that some organizational forms will be less viable due to problems of capital access. Empirical work examines the capital structure of nonprofit entities. Our results indicate that chain hospitals are able to access more debt, both taxable and tax-exempt, than freestanding hospitals. Capital markets also associate for profit market presence with capital risk. We conclude that freestanding hospitals are at a relative disadvantage is accessing capital markets.

Liability of foreignness (LOF) has been one of the central constructs in the field of international business and management. Over the past two decades, a significant body of theoretical and empirical research has accumulated, theorizing on the sources of these LOFs, investigating their magnitude, and prescribing approaches to mitigate these disadvantages. However, much of this research is almost exclusively related to firms expanding their products, services, and operations to other countries as part of their global expansion. The difficulties firms face in foreign product markets is just one dimension of the costs they can face in their attempts to secure resources abroad.

We expand the domain of the LOF construct to include liabilities faced by firms accessing foreign capital markets in light of the increasing integration of capital markets. We identify four sources of LOF in capital markets: regulatory costs, information costs, unfamiliarity costs, and costs arising out of cultural differences. Based on an extensive review of “home bias” in equity markets, we propose four strategies to erase the legitimacy deficits that firms encounter in foreign capital markets: bonding, signaling, adoption of business practices isomorphic with the host country, and certifications and endorsements by third parties. We also offer suggestions for operationalizing and measuring LOF in capital markets as well as several directions for advancing further research on LOF in the context of capital markets.

The purpose of this paper is to investigate the relationship between access to financial resources, working capital with surplus stock returns and value of the company in Iran.

The study population consists of 728 observations and 91 firms listed on the Tehran stock exchange during an eight-year period between 2009 and 2016. The statistical model used in this study is a multivariate regression model; further, the statistical technique used to test the hypotheses is panel data.

The results saw a negative and significant linkage between changes in cash and stock’ excess returns, whereas no meaningful association between changes in working capital and stock surplus returns was seen. In other words, an Iranian rial (Iran’s currency) invested in working capital worth less on average than a rial held in cash. Furthermore, the authors realized that in an inflationary economy, firms mainly pay more dividends so as to illustrate better their financial position and also to attract more investors’ trust. The results also indicated that the final value of working capital in the companies that are faced with financial constraints is more than companies that are not faced with financial constraints. Subsequently, after the elimination of the effects of inflation on stock returns, it was found there is not any significant association between the stock’s real return and firm value.

This is one of the most comprehensive research works in Iran that simultaneously surveys the impacts of access to finance and working capital on firm value. This research warns corporate managers to pay more attention to the importance of keeping cash to finance and manage working capital for profitability and sustainability of their company’s operations. Surely, by understanding the relationship between cash holdings, working capital management and stock surplus return, investors will be able to make appropriate decisions about the optimal choice of funds.

What really will fascinate other scholars about this paper is the time period of the study because there were unprecedented sanctions against Iran market and many manufacturing industries were in financial strain. Without hesitation, the paper will make aware investors and stakeholders of this fact that cash holdings will be a good way in reducing the corporate financial problems in emerging markets, particularly those markets face financial sanctions like Iran.

The present article aims at rising stream of literature about intellectual capital in healthcare organizations, by exploring how knowledge-based activities are designed to promote innovation and create value. This process concerns not only buyers and sellers of industrial products/services but, more widely, larger networks of healthcare actors which include patients, payers and health institutions.

To answer the research question, we adopted a conceptual approach aimed at reaching overall comprehension of healthcare innovation mechanisms. We have tracked the pivotal extant studies for catching the roots and dynamics at the base of diffusion of healthcare innovation. This article demonstrates, based on previous literature and theoretical speculations, the contribution that innovative knowledge-based activities (e.g. market access approach) make to intellectual capital in healthcare organizations to promote innovation and create value.

The results show that three knowledge-based activities of the healthcare ecosystem shape the basis of the proposed conceptual framework. First, a value co-creation strategy to develop capabilities for each health stakeholder is intended as human capital. Second, the market access approach to promote innovation is reported to the relational capital. Third, a digital servitization strategy is referred to the structural capital.

This paper provides implications for the stream of literature about intellectual capital in healthcare organizations. It aims at exploring three knowledge-based activities as value co-creation, market access and digital servitization that respond to different intellectual capital levels components (human, relational, structural).

This article provides a conceptual framework based on the linkage of two fundamental streams of management studies, which correspond to innovation diffusion and intellectual capital management. This offers a more solid conceptualization for managing intellectual capital in healthcare organizations with respect to previous studies and creates value in the ecosystem.

The purpose of this paper is to examine the effects of working capital management on firm valuation, profitability and risk.

The paper uses a panel data set of 497 firms covering the period 2007 to 2016. The authors test the effects of working capital management on firm valuation, profitability and risk using the panel data methodology that includes firm and year fixed effects regressions.

The authors find a significantly negative relationship between net working capital (NWC) and firm valuation, profitability and risk. The results suggest that, in managing working capital, firm managers must make a trade-off between their objectives for profitability and risk control. Working-capital management is of particular importance in firms with less access to capital; it is also important when firms are expanding their investments during periods of economic recovery.

This paper contributes to the literature in several ways. First, to my knowledge, it provides the most comprehensive investigation, to date, on the relationship between working capital management and firm valuation, profitability and risk in an emerging market. Second, this study documents the existence of an optimal level of NWC in an emerging market. Third, firm performance, as measured in both market and accounting value, can be improved with efficient working capital management. Finally, the study includes the impact of the business cycle in an analysis of the effects of working capital management on firm performance.

Low capital market literacy in Indonesian society is the cause of the low investment value in the capital market. It led to the establishment of the Indonesia Stock Exchange (IDX) investment gallery (IG). Its existence as a means of education and socialization is expected to increase capital market inclusion. This study analyzes the impact of the IG’s existence on investment interest in the capital market by taking a sample of West Java as the province with Indonesia’s largest population. The authors find that the public interest in visiting IG increases every year by an average of 38%, this is accompanied by an increase in opening new accounts in the capital market, with an average increase of 48% each year. The statistical tests results show that the greater the number of IGs, the greater the number of transactions in the capital market (p < 0.05). The results of this research can certainly be an input for the IDX to increase the number and activities of IG throughout Indonesia to increase Indonesia’s economy through capital market literacy and inclusion, besides that this research also produces a structured and systematic capital market education model. The research results can also reference countries with developing capital markets to adopt the IDX policies in attracting investors, especially domestic investors.

This study aims to examine the behavior of cash raised through market timing efforts and the success of such efforts in creating value to shareholders.

It is shown that in two quarters, subsequent to raising equity, cash balance of market timers is higher but after that, there is no significant difference between timers and non-timers. Results of speed of adjustment regressions indicate that market timers move faster toward their target cash levels.

Market timers are small firms that suffer from asymmetric information. They have limited access to capital market, and raising external capital is an opportunity that should be timed. The results suggest that, on average, these firms are managed by more able executives, who are 10 per cent more likely to time the market; however, it is found that timing efforts are unsuccessful in creating value to shareholders even after controlling for the mitigating effect of managerial ability. Subsequent to market timing, on average, market timers earn significantly lower abnormal return over different holding periods relative to their comparable non-timer counterparts.

Overall, the results undermine the validity of market timing as a value-maximizing financial policy.