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1 – 10 of 814Maurizio d'Amato, Malgorzata Renigier Bilozor and Giampiero Bambagioni
Ordinary direct capitalization is normally considered procyclical in its present form (De Lisle Grissom, 2011); for this reason, an alternative approach to direct capitalization…
Abstract
Purpose
Ordinary direct capitalization is normally considered procyclical in its present form (De Lisle Grissom, 2011); for this reason, an alternative approach to direct capitalization may be useful in the determination of a robust opinion of value. The valuation standards propose an alternative determination of terminal value in the discounted cash flow analysis, recommending that for cyclical assets, the terminal value should consider … “the cyclical nature of the asset and should not be performed in a way that assumes “peak” or “trough” levels of cash flows in perpetuity” (IVS 105 Valuation Approaches and Methods para 50.21 lett e).
Design/methodology/approach
The introduction in International Valuation Standards (IVS) of Cyclical Assets raises several questions for the community of real estate professionals and academicians (IVS, 2022, 105 Valuation Approaches and Methods para 50.09 lett d). Cyclical assets can be defined as property whose value is “influenced by upturn and downturn of the market in a significant way” (d’Amato et al., 2019).
Findings
The paper proposes different solutions to the problem. The determination of the exit value using cyclical capitalization allows for a prudent assessment of the value and may be used either as a valuation procedure or a risk analysis method.
Research limitations/implications
The valuation comparison with the traditional valuation techniques will be based on an iteration of exit value in order to determine the effects of the valuation procedure on the opinion of value.
Practical implications
The implication of the valuation procedure is the introduction of a countercyclical valuation method to determine the exit value in order to reach stable and reliable valuations for income-producing properties.
Social implications
These models may have a social implication, providing valuation for income-producing properties that may deal with the property market cycle in a more efficient way, providing efficient valuation for banks and institutions.
Originality/value
The paper is the first application of such a valuation procedure to the determination of exit value.
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Mondher Bouattour and Anthony Miloudi
The purpose of this paper is to bridge the gap between the existing theoretical and empirical studies by examining the asymmetric return–volume relationship. Indeed, the authors…
Abstract
Purpose
The purpose of this paper is to bridge the gap between the existing theoretical and empirical studies by examining the asymmetric return–volume relationship. Indeed, the authors aim to shed light on the return–volume linkages for French-listed small and medium-sized enterprises (SMEs) compared to blue chips across different market regimes.
Design/methodology/approach
This study includes both large capitalizations included in the CAC 40 index and listed SMEs included in the Euronext Growth All Share index. The Markov-switching (MS) approach is applied to understand the asymmetric relationship between trading volume and stock returns. The study investigates also the causal impact between stock returns and trading volume using regime-dependent Granger causality tests.
Findings
Asymmetric contemporaneous and lagged relationships between stock returns and trading volume are found for both large capitalizations and listed SMEs. However, the causality investigation reveals some differences between large capitalizations and SMEs. Indeed, causal relationships depend on market conditions and the size of the market.
Research limitations/implications
This paper explains the asymmetric return–volume relationship for both large capitalizations and listed SMEs by incorporating several psychological biases, such as the disposition effect, investor overconfidence and self-attribution bias. Future research needs to deepen the analysis especially for SMEs as most of the literature focuses on large capitalizations.
Practical implications
This empirical study has fundamental implications for portfolio management. The findings provide a deeper understanding of how trading activity impact current returns and vice versa. The authors’ results constitute an important input to build and control trading strategies.
Originality/value
This paper fills the literature gap on the asymmetric return–volume relationship across different regimes. To the best of the authors’ knowledge, the present study is the first empirical attempt to test the asymmetric return–volume relationship for listed SMEs by using an accurate MS framework.
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Udemezue Ndubuisi Nnakee, Chi Aloysius Ngong, Chinyere C. Onyejiaku, Shadrack Moguluwa and Josaphat Uchechukwu Joe Onwumere
This paper aims to examine the long-run relationship between stock market development and Nigerian economic growth from 1980 to 2020.
Abstract
Purpose
This paper aims to examine the long-run relationship between stock market development and Nigerian economic growth from 1980 to 2020.
Design/methodology/approach
Market capitalization, number of listed companies, total value traded ratio and turnover ratio are used. An autoregressive distributed lag model is used for the analysis.
Findings
The market capitalization ratio and turnover ratio have positively significant links with economic growth. The number of listed companies has a negative and non-significant impact on economic growth. Total value traded ratio has a negatively significant link with economic growth in the short run. The positive but insignificant relationship between traded value ratio and turnover ratio in the long run growth means that the Nigerian stock market is growth inducing and on the right track as stock market liquidity drives growth.
Research limitations/implications
The government and Security Exchange Commission should increase the market liquidity level by improving the trading infrastructure. The government and regulatory authorities should improve and effectively implement the existing policies that would ensure stock market growth. This facilitates the investors’ speed to purchase and sell shares. The Securities and Exchange Commission should reduce transaction costs to encourage active trading activities. The market should be diversified with investment instruments such as derivatives, futures and swap options which would limit the adverse effect of listed companies in the market. To increase the stock market liquidity, the Security and Exchange Commission should apply moral suasion to bring private companies that have met certain financial thresholds to convert to public companies. Government should improve on the legislation to encourage more private companies to list on the stock exchange.
Originality/value
The study findings add value in that stock market development has a positive impact on economic growth in Nigeria.
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Nilufar U. Babakhanova, Sonya M. Sultanova, Ayjan B. Djumanova, Maxim K. Kodirov and Saltanat T. Seytbekova
This chapter aims to study international experience and prospects for improving accounting practices to enhance the competitiveness of enterprises. The research is based on a…
Abstract
This chapter aims to study international experience and prospects for improving accounting practices to enhance the competitiveness of enterprises. The research is based on a sample from 202 countries for 2019–2022, relying on World Bank statistics. The authors ranked the factors related to accounting practices in terms of their significance in ensuring the global competitiveness of enterprises. The most significant factors are the detalization of accounting, communication with tax inspectors, and accounting digitalization of accounting. The least significant and contradictory factor was the inclusivity of top management. The theoretical significance lies in the fact that its results revealed previously unknown influences of accounting practices (managerial factors) on the competitiveness of enterprises. The scientific novelty of the obtained results lies in the rethinking of the process of managing the global competitiveness of enterprises in the accounting system through the prism of Sustainable Development Goals (SDGs), substantiating that this management most actively supports the implementation of SDG 16 and SDG 17, generally supports SDG 9, and slightly contributes to SDG 5. The practical significance is associated with the perspective of enhancing the competitiveness of enterprises through the improvement of accounting practices (using Uzbekistan as an example). It demonstrates that even with low activity and small market capitalization of domestic enterprises on the stock market, improving accounting practices can significantly increase this activity and capitalization. The author's recommendations will help improve accounting practices and ensure the growth of the global competitiveness of enterprises in Uzbekistan in the medium term until 2026.
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Mirza Muhammad Naseer and Tanveer Bagh
Corporate social responsibility (CSR) promotes society, reduces risk, and encourages ethical business practices. Due to its relevance, we study how CSR influences firms'…
Abstract
Corporate social responsibility (CSR) promotes society, reduces risk, and encourages ethical business practices. Due to its relevance, we study how CSR influences firms' sustainable development. We analyze data from 427 New York Stock Exchange (NYSE)-listed firms from 2008 to 2022. The Refinitiv environmental and social score is used to measure CSR, whereas for firms' sustainable development we rely on corporate sustainable growth rate (SGR) and market-based metrics. The analysis employs various econometric techniques, including ordinary least square, fixed effect regression, two-stage least square, generalized method of moment, and simultaneous quantile regression. The results indicate that CSR has a positive and significant effect on firms' sustainable development across all models. This relationship supports the notion that socially responsible business can contribute to long-term financial sustainability in line with “stakeholder theory”, indicating that companies should accommodate the concerns of various stakeholders, including society and the environment, to achieve sustainable development. We evaluate how the conditional distributions of SGR and firms’ value are affected by CSR, categorizing them into high, moderate, and low regimes. The quantile regression estimates indicate that the effect of CSR is more pronounced at upper quantiles, followed by moderate and low regimes. These findings underscore the importance of considering CSR in assessing the SGR and enterprises market value. We also confirm that our results are robust under range of different econometrics' methods. Finally, we enlighten current literature, and our research has useful policy implications for management and investors.
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Yilmaz Bayar, Valentin Toader, Marius Dan Gavriletea and Oguzhan Yelkesen
Sustainable development is considered a key factor in addressing environmental issues, global inequalities and poverty. This study aims to investigate the impact of stock market…
Abstract
Purpose
Sustainable development is considered a key factor in addressing environmental issues, global inequalities and poverty. This study aims to investigate the impact of stock market indicators on sustainable development across 16 emerging markets from 2003 to 2020.
Design/methodology/approach
The research uses causality and cointegration analyses to explore the relationships between stock market indicators and sustainable development.
Findings
Univariate causality analysis reveals a bidirectional causal relationship between the stock market turnover ratio and sustainable development, as well as a unidirectional relationship from sustainable development to stock market capitalization and total value traded. Panel-level cointegration analysis suggests that only stock market capitalization has a weak positive influence on sustainable development. However, the impact of stock market indicators on sustainable development varies significantly among countries, as revealed by country-level cointegration analysis.
Research limitations/implications
While this study provides valuable insights, it is not without limitations. The findings are limited to the selected emerging markets and the specified timeframe (2003–2020). The complexity of factors influencing sustainable development suggests the need for further exploration in diverse contexts.
Practical implications
Understanding the nuanced relationships between stock market indicators and sustainable development can offer valuable insights for policymakers, investors and stakeholders.
Originality/value
This research contributes to the existing literature by examining the multifaceted connections between stock market indicators and sustainable development, focusing on country-specific causality relationships. The study highlights the reciprocal nature of this relationship, where financial market development can both influence and be influenced by a country's progress toward sustainability. This approach provides a more nuanced understanding of the complex interaction between stock market maturity and sustainability goals.
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This study aims to examine the various internal and external factors affecting the financial stability of Indian Commercial Banks. The aim is to improve the effectiveness of the…
Abstract
Purpose
This study aims to examine the various internal and external factors affecting the financial stability of Indian Commercial Banks. The aim is to improve the effectiveness of the Indian banking system in facilitating the transmission of monetary policy and to strengthen its resilience in the event of a banking crisis.
Design/methodology/approach
A panel data regression analysis is employed on unbalanced panel data of Indian commercial banks including public sector, private sector and foreign sector banks for the period of 2005–2022.
Findings
This study revealed that Indian banks with higher profits and high capitalization are more stable than others. However, banks with large bank size and high management costs are less stable as compared to other banks. In the case of macroeconomic variables, foreign exchange reserves have a significant positive impact on banking stability. Moreover, the unemployment rate has a significant negative impact on the banking stability of India.
Research limitations/implications
Research identifies relevant micro and macroeconomic drivers pertaining to India’s banking stability, a developing economy. These findings have significant implications and can attract the attention of analysts, regulators, bankers and academicians in this area. Nevertheless, the scope of the study is limited to the variables chosen to evaluate their contribution to banking stability, but other variables may influence Indian banking conditions.
Practical implications
Indian banks are advised by the research to place a high priority on profitability, capitalization and effective risk management. Customers and investors should choose banks with strong metrics. The priorities for policymakers should be preserving robust reserves and tackling unemployment with focused initiatives. Adopting digitalization can improve banks’ customer service and operational effectiveness, which is important for overcoming economic obstacles. These tactics provide doable measures to improve the resilience and stability of the banking industry in India and other emerging nations.
Originality/value
This research differentiates from the rest by focusing solely on the Indian banking system, in contrast to previous ones that often treated India as part of a bigger part like the BRICS or South Asia continent. It acknowledges the need to comprehending the unique traits and difficulties faced by the Indian banking system. Moreover, the current study distinguishes itself by focusing on the combined impact of microeconomic and macroeconomic indicators in the Indian context, unlike earlier research that concentrated on assessing the effects of individual variables. The current study also investigated new variables like corporate governance and foreign exchange reserves in the context of Indian banking which have not been explored by existing literature. Research is also crucial in the context of the analysis’s time frame, since it captures the period of economic transformation that included demonization, implementation of GST, major mergers and global COVID-19 pandemic.
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Emerging nations strive to diminish their ecological impact to meet net-zero targets, yet encounter formidable hurdles in curbing their environmental footprint. This purpose…
Abstract
Purpose
Emerging nations strive to diminish their ecological impact to meet net-zero targets, yet encounter formidable hurdles in curbing their environmental footprint. This purpose necessitated the study into impact of stock market, renewable energy and international investment on the ecological footprint in emerging countries from 1990 to 2020.
Design/methodology/approach
The study used augmented mean group (AMG) estimator, cointegration and heterogenous panel causality approach.
Findings
Results from the AMG show that renewable energy consumption reduces environmental pollution in most countries except Mexico. The study disclosed that stock market capitalization decreases ecological footprint in emerging countries. Using both the Kao and Pedroni cointegration methods, the study affirms the existence of stable equilibrium relationship in the long term. The causality test concluded a bidirectional relationship between stock market and ecological footprint and a unidirectional link between international investment, clean energy and ecological footprint.
Research limitations/implications
The research is limited to only emerging countries. Therefore, future research should examine the environmental impacts of renewable energy consumption in different countries and regions, taking into account the local environmental conditions, policies and practices. This would help to identify the best practices and standards for minimizing the ecological footprint of renewable energy technologies and maximizing their benefits for environmental sustainability.
Practical implications
The study found that stock market capitalization reduces ecological footprint in Brazil, China, Turkey and India. To foster a culture of sustainability in stock market development impact, academic policies should emphasize the integration of environmental education across disciplines. By promoting awareness of the ecological consequences of stock market activities, societies can cultivate a mindset that values responsible economic practices. This, in turn, can lead to informed decision-making at individual and institutional levels.
Social implications
First, since the study found that clean energy reduces ecological footprint, advocating for utilization of clean energy sources could be a key priority in emerging countries. Governments should incentivize the development and adoption of renewable energy technologies, such as wind and solar power, by providing subsidies and tax benefits. Furthermore, increasing awareness among residents about the benefits of clean energy and promoting its utilization in both residential and commercial environments can expedite the transition to a more environmentally friendly energy combination.
Originality/value
First, it pioneers an exploration into the interplay between stock market capitalization, international investment, clean energy and ecological footprint in emerging countries. Secondary unlike, unlike prior research, this study uses methodologies that account for cross-sectional dependencies and a unique characteristic specific to each country. In addition, by using common correlated effects mean group, AMG, cointegration and causality procedures, this study distinctly isolates and analyzes empirical findings for each country, leading to policy-oriented outcomes.
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Asif Ali and Omar Masood
The primary objective of this study is to determine how concentrated ownership affects stock returns by country and scale (by market capitalization), like large, medium, and…
Abstract
Purpose
The primary objective of this study is to determine how concentrated ownership affects stock returns by country and scale (by market capitalization), like large, medium, and small-cap firms in selected developed economies of the world.
Design/methodology/approach
Using a dataset comprising 12,751 annual observations from 850 listed companies from developed economies from 2004 to 2018, the study employs panel data models and instrumental variable estimation to mitigate endogeneity bias.
Findings
The findings reveal a significant and positive correlation between ownership concentration and expected returns on corporate equities in developed economies. Furthermore, the study categorizes firms into distinct size categories and finds nuanced differences in the relationship between ownership concentration and stock returns across large, medium, and small-cap enterprises. The results of the study reveal that ownership concentration (by country) and scale (Large, medium, and small) have a significant and positive impact on the stock returns of firms in developed economies.
Practical implications
the practical implications of this study extend to investors, firms, policymakers, regulators, and other stakeholders involved in the financial markets. By considering these implications, stakeholders can make informed decisions to enhance market efficiency, investor protection, and overall market integrity.
Originality/value
To the authors' understanding, this study is the first to examine the impact of concentrated ownership on excessive stock returns across countries and scales, with an explicit focus on large, medium, and small companies in select developed economies worldwide.
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Joyce Njoroge, Lori Solsma and Kent Hu
This paper documents the Government Accounting Standards Board (GASB) 34 literature, primarily in the areas of (1) accountability and improved reporting, (2) government-wide…
Abstract
Purpose
This paper documents the Government Accounting Standards Board (GASB) 34 literature, primarily in the areas of (1) accountability and improved reporting, (2) government-wide financial statements and accrual accounting and (3) infrastructure asset capitalization and the modified approach. The paper also evaluates the state of the research, recognizes implications for practice and standard setting, identifies knowledge gaps and proposes avenues for future research.
Design/methodology/approach
The authors identified the articles in this narrative review by searching Google Scholar and EBSCO for the years 2000 through 2023, using the keywords GASB 34, government-wide financial statements, government fund statements, infrastructure assets and modified approach.
Findings
This review finds that GASB 34 requirements improved accountability and reporting, but GASB can still make improvements. The addition of the MD&A section requirement improved readability but placed a burden on preparers. Analysis of government-wide statement research indicates that the accrual-based Statement of Net Assets provides value in credit decisions, while the accrual-based Statement of Activities does not. The research on infrastructure accounting requirements shows limited adoption of the modified approach and some comparability issues with choices involving capitalization thresholds, baselines and asset management systems (AMSs). Based on this review, the authors also present suggestions to further this line of research.
Originality/value
To the best of the authors’ knowledge, this is the first article that reviews over 20 years of GASB 34 related literature. The review and suggestions for future research are timely as GASB is in the process of reexamining some of GASB 34's requirements.
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