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Article
Publication date: 6 July 2020

Edward C. Hoang and Indrit Hoxha

The purpose of this paper is to investigate payout smoothing in two emerging markets – China and Taiwan. The authors conduct a comparative study of two emerging market…

Abstract

Purpose

The purpose of this paper is to investigate payout smoothing in two emerging markets – China and Taiwan. The authors conduct a comparative study of two emerging market economies that have common cultural and historical characteristics but have experienced different government systems and different approach to the market-based system.

Design/methodology/approach

The authors collect firm-level data from Standard and Poor's Compustat Global database, which covers 5,298 public firms in China and Taiwan during the period 1996–2015, and use a variance decomposition methodology to estimate the smoothness of corporate payout in a common empirical framework that includes net income, and debt and investment policies.

Findings

Overall, the empirical findings support recently proposed theories of joint determination of corporate payout behavior with debt and investment policies. The authors find that debt and investment policies absorb the majority of shocks to net income, and that debt policy is the main shock absorber. Furthermore, the authors show that firms in China follow a similar strategy with their counterparts in United States and smooth their payout. In contrast to firms in China and US, the payout of the Taiwanese firms is relatively highly sensitive to net income shocks.

Originality/value

To the best of authors’ knowledge, this study is the first to use a joint model to empirically investigate the extent to which debt and investment policies are used to keep corporate payout smooth in emerging markets.

Details

International Journal of Managerial Finance, vol. 17 no. 3
Type: Research Article
ISSN: 1743-9132

Keywords

Article
Publication date: 2 November 2015

Edward C. Hoang and Indrit Hoxha

– The purpose of this article is to empirically explore the sensitivity of payouts to cash flows and the other financing decisions, such as debt and investment, of firms.

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Abstract

Purpose

The purpose of this article is to empirically explore the sensitivity of payouts to cash flows and the other financing decisions, such as debt and investment, of firms.

Design/methodology/approach

Using panel regressions based on COMPUSTAT data for 7,544 public firms during the period 1973–2013, we estimate the sensitivity of total payouts. Specifically, following the theory presented in Lambrecht and Myers (2012), we test the interdependent financing decisions of the firm. First, we compute total payout as the sum of cash dividends and net stock repurchases; second, we examine the sensitivity of total payouts to changes in the firm’s net income, debt and investment. Furthermore, we present several tests to demonstrate the robustness of our results.

Findings

We suggest evidence in support of the theory in Lambrecht and Myers (2012) showing that there is a negative relationship between total payouts and investment. Furthermore, we find that total payouts are positively associated with net income and debt of the firm.

Originality/value

Previous research has shown how cash flows affect different financing decisions, but it is not clear how total payouts are sensitive to other financing decisions. The focus of this paper is the response of total payouts to investment policy, debt financing policy and changes in cash flows.

Details

Journal of Financial Economic Policy, vol. 7 no. 4
Type: Research Article
ISSN: 1757-6385

Keywords

Article
Publication date: 2 May 2019

Edward Hoang and Indrit Hoxha

The purpose of this paper is to study the payout policy for public firms in different countries. The authors are interested to understand the similarities and differences…

Abstract

Purpose

The purpose of this paper is to study the payout policy for public firms in different countries. The authors are interested to understand the similarities and differences in the behavior of firms across different countries.

Design/methodology/approach

The authors use firm-level data collected from Compustat Global for public firms across the world. The sample consists of more than 23,000 firms for the period 1990–2015 in 94 countries. The authors estimate the corporate payout in an empirical model that incorporates other corporate financing decisions, such as investment and debt policies.

Findings

The findings support recent corporate governance theory, which asserts that payout policy is influenced by investment and debt policies, and cannot be determined independently. Furthermore, the authors find that geographic/cultural/institutional variation influence the response of payout policy to other corporate financing decisions. Additional tests are presented to demonstrate the robustness of the main findings.

Research limitations/implications

The interpretation of the results for certain regions could be limited due to data availability. The authors believe the authors have a good coverage especially for countries in Asia, relative to the other regions.

Originality/value

To the best of our knowledge, this study is the first one to look at payout policy and its relationship with investment and debt policy in such a large scale of firms across the world with coverage of 94 countries and 16 years. The authors document differences in public firms’ attitudes toward payout policy according to geographic/cultural/institutional reasons.

Details

International Journal of Managerial Finance, vol. 15 no. 3
Type: Research Article
ISSN: 1743-9132

Keywords

Article
Publication date: 30 June 2019

Hoang Thai Pham and Hyangsook Lee

A boom in e-commerce in Korea has sparked off high daily-volume demand for small-sized home delivery services, which poses a great challenge to distribution networks…

Abstract

A boom in e-commerce in Korea has sparked off high daily-volume demand for small-sized home delivery services, which poses a great challenge to distribution networks, especially in urban areas where traffic congestion, accessibility, and pollution are serious problems. In addition, security issues for people who live in small townhouses and detached houses without security systems and guards have received increasing attention from the government and society. Thus, the introduction of a new alternative for home delivery services, unmanned parcel lockers, is urgent for residents living in these areas. This paper examines and compares potential socio-economic impacts in terms of costs and benefits when such lockers are installed at selected locations in residential areas. The results show that this policy is worthy of adoption, with several undeniable benefits to local communities. In addition, sensitivity analyses estimate the economic performance of this project at different social discount rates, and they check the sensitivity of economic performance based on variations in the variables. The value of travel time savings was identified as a critical and dominating factor directly affecting economic performance.

Details

Journal of International Logistics and Trade, vol. 17 no. 2
Type: Research Article
ISSN: 1738-2122

Keywords

Book part
Publication date: 10 December 2018

Colleen E. Mills

Creative industries, such as the designer fashion industry (DFI), are among the toughest in which to establish sustainable business ventures. While studies have examined…

Abstract

Creative industries, such as the designer fashion industry (DFI), are among the toughest in which to establish sustainable business ventures. While studies have examined how networks and social capital contribute to independent DFI start-ups and why such businesses fail, these studies have been largely restricted to well-established entrepreneurial spaces like London, which differ in structure and size compared to emerging DFI entrepreneurial spaces in small economies like New Zealand. This chapter addresses this gap in the creative enterprise literature by presenting findings from an examination of 12 New Zealand fashion designers’ accounts of their responses to start-up challenges. The analysis, which paid particular attention to the relationship between social capital and reported strategic practice, revealed that the designers’ challenge profiles and strategic responses were linked to very ‘biographical’ personal networks and their personal enterprise orientations. While those designers with well-established networks started the most resilient businesses, the analysis revealed that even these designers were not necessarily particularly strategic when tapping into the social capital embedded in their networks. Overall, the findings provide further confirmation of the importance of social capital and network management during start-up. Most significantly, they demonstrate why designers need to be forward looking and employ a strategic approach to developing and accessing social capital and when making business decisions. Those who did so were more likely to have viable ventures than those who accessed social capital in order to react to unanticipated challenges.

Details

Creating Entrepreneurial Space: Talking Through Multi-Voices, Reflections on Emerging Debates
Type: Book
ISBN: 978-1-78756-372-8

Keywords

Book part
Publication date: 22 September 2022

David R. Clough and Balagopal Vissa

We advance entrepreneurship research by developing a theoretical model of how founding teams form. Our neo-Carnegie model situates nascent founders in particular

Abstract

We advance entrepreneurship research by developing a theoretical model of how founding teams form. Our neo-Carnegie model situates nascent founders in particular network-structural milieus, engaging in aspiration-driven search for and evaluation of prospective co-founders. The formation of co-founding ties between nascent founders can be divided into four theoretical steps, which we label activation, evaluation, approach, and reciprocation. Successful founding team formation is a consequence of mutually favorable evaluations by nascent founders in a multi-sided matching process. Nascent founders with higher and less flexible aspirations are more likely to undertake distant search for co-founders by seeking referrals, forming ties with strangers, and forming new ties to social foci where they might meet potential co-founders. Churn in newly formed founding teams emerges as a consequence of shifting dominant coalition dynamics in the founding team caused by organic venture evolution and intentional changes in strategic direction. Our theoretical model provides new insights on the formation pathways of founding teams, their initial task and relational resource endowments, and initial team dynamics.

Details

Entrepreneurialism and Society: Consequences and Meanings
Type: Book
ISBN: 978-1-80382-662-2

Keywords

Article
Publication date: 2 April 2019

Dung Phuong Hoang

The purpose of this paper is to expand the Swiss Index of Customer Satisfaction (SWICS) model by investigating the role of customer dialogue in the interrelationships…

Abstract

Purpose

The purpose of this paper is to expand the Swiss Index of Customer Satisfaction (SWICS) model by investigating the role of customer dialogue in the interrelationships among customer satisfaction, customer trust, perceived value and customer loyalty upon Vietnam banking industry.

Design/methodology/approach

The conceptual framework was developed from both an exploratory research with focus group method and the literature. A structural equation model linking customer dialogue to customer satisfaction, customer trust, perceived value and loyalty is tested using data from a sample of 389 Vietnamese individual bank customers.

Findings

The results indicate the key role of customer dialogue in bank marketing since it not only has an independent impact on customer loyalty but also mediates the effect of customer satisfaction on loyalty completely and the relationship between customer trust and loyalty partially. Besides, the central role of customer trust was also highlighted since it mediates totally the effect of perceived value on both of customer dialogue and customer loyalty while explaining partially the path from customer satisfaction and customer dialogue.

Research limitations/implications

First, regarding sample size, the authors have used suitable sampling methods with adequate sample representation. However, a larger sample size with more diverse age range and usage of various banking services may be more helpful and effective for the path analysis and managerial implication. Second, the authors have used only a limited set of measurement items due to the concerns of model parsimony and data collection efficiency. For example, perceived value can be measured upon more detailed dimensions, and yet the author focussed only on some selected measures based mainly on their relevance to the context studied.

Practical implications

The findings imply that building trust and engaging with customers better through communication are keys for Vietnamese commercial banks to gain more customer loyalty in such competitive conditions.

Originality/value

The study is noteworthy that it adds perceived value and customer trust in the SWICS model and investigates the interrelationships between all variables in a single model.

Details

International Journal of Bank Marketing, vol. 37 no. 3
Type: Research Article
ISSN: 0265-2323

Keywords

Book part
Publication date: 7 July 2015

Magdalena Markowska, Charmine E. J. Härtel, Ethel Brundin and Amanda Roan

Despite recognition of the centrality of emotions in entrepreneurship, little attention has been given to role of emotions in the development of entrepreneurial identity…

Abstract

Despite recognition of the centrality of emotions in entrepreneurship, little attention has been given to role of emotions in the development of entrepreneurial identity or enactment of entrepreneurial role. The contribution of the chapter is in the development of a dynamic model of the process leading to identification or dis-identification as an entrepreneur. In this chapter, we develop a dynamic model of the process leading to identification or dis-identification as an entrepreneur. We theorize that the driver behind an individual’s decision to become an entrepreneur, and their significant emotional experiences in the entrepreneurial role, influence the likelihood of following an identification or dis-identification cycle. Specifically, our framework proposes that positive emotions strengthen approach motivation and identification with the role, while negative ones foster avoidance motivation and dis-identification. We argue that contextual embeddedness can prompt transition between these two cycles. Our theorization provides new insights into methods of analyzing the role of emotions in the entrepreneurial process, more specifically in the process of entrepreneurial identity crafting. These insights also can be translated into studying the crafting of any professional identity.

Details

New Ways of Studying Emotions in Organizations
Type: Book
ISBN: 978-1-78560-220-7

Keywords

Book part
Publication date: 19 September 2014

Cheng-Wei Wu and Jeffrey J. Reuer

In M&A markets, acquirers face a hold-up problem of losing the value of investments they make in due diligence, negotiations, and post-acquisition planning if targets…

Abstract

In M&A markets, acquirers face a hold-up problem of losing the value of investments they make in due diligence, negotiations, and post-acquisition planning if targets would pursue the options of waiting for better offers or selling to an alternative bidder. This chapter extends information economics to the literature on M&A contracting by arguing that such contracting problems are more likely to occur for targets with better outside options created by the information available on their resources and prospects. We also argue that acquirers address these contracting problems by using termination payment provisions to safeguard their investments. While previous research in corporate strategy and finance has suggested that certain factors can facilitate an acquisition by reducing a focal acquirer’s risk of adverse selection (e.g., signals, certifications), we note that these same factors can make the target attractive to other potential bidders and can exacerbate the risk of hold-up, thereby leading acquirers to use termination payment provisions as contractual safeguards.

Book part
Publication date: 13 March 2019

Isaac William Martin

The local property tax is the oldest tax in the United States, as well as being the only substantial tax on landed wealth, a major part of the housing expense of most…

Abstract

The local property tax is the oldest tax in the United States, as well as being the only substantial tax on landed wealth, a major part of the housing expense of most American families, and the most important revenue source for local governments. It is also increasingly limited by state law. This chapter presents a synthetic review of the literature on property tax limitation laws. Property taxation is a crucial resource for local governments because it is primarily a tax on real estate, and land is the least mobile tax base. A tax on the market value of real estate may have the effect of transmitting real estate price shocks to individual land users. Property tax limitation laws provide some homeowners with social protection from such market-induced economic shocks, but they do so at the price of a substantial reduction in state capacity. A meta-regression analysis of published studies finds that property tax levy limitations, on average, reduce local government budgets by as much as 5%. The potential implications for provision of other public goods, including social protection for other groups, are discussed.

Details

The Politics of Land
Type: Book
ISBN: 978-1-78756-428-2

Keywords

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