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While the existing studies largely suggest that valuation uncertainty benefits acquirers, who apply discounts to targets' value attributable to information asymmetry, the authors argue that the opposite may be the case.

Through multivariate econometric analysis of transaction data, the authors establish the link between the degree of valuation uncertainty measured by targets' track of public listing and acquisition premia. The authors use text-mining tools to measure acquirer–target similarity and control for its role in intermediating the posited empirical relationships.

Having analyzed 618 acquisitions involving listed targets from China, the authors find that acquirers pay higher valuation premia for the more recently listed and relatively younger companies than for those with a longer history since floatation. Similar patterns apply to valuation multiples. Higher valuations are partially attributable to premia for control, as acquirers are likelier to buy a majority stake in the recently listed firms, especially if the latter are similar to them. Such transactions take less time to complete and involve a transfer of larger share blocks despite the higher degree of information asymmetry and a frequent lack of targets' operational profitability. The authors also observe a significant premium for target–acquirer similarity: acquirers appear to rush deal completion due to possible overestimation of targets' potential and familiarity bias.

The authors show that acquisition premia may be driven by acquirers' proclivity to place risky investment bets on the growth potential of opaque targets. This pattern may partially explain frequent failures of mergers and acquisitions (M&A).

The main purpose of this paper was to evaluate the validation process of food safety control measures.

The validation of control measures has been analyzed at 50 food companies in Serbia. The sample included companies that produce food of both plant and animal origin and have certified food safety management systems. A total of 156 control measures that combat physical hazards (41.6%), followed by microbial hazards (34.0%) and chemical hazards (24.4%), have been analyzed. To enable quantification of the validation protocols, each control measure was assigned a score.

The validation scores showed that the highest level of validation was observed in large companies, as opposed to small and medium-sized companies (p < 0.05). The type of food safety hazards and the food sector did not reveal any statistical differences in-between the scores. The main approach to validating control measures was referring to the technical documentation of equipment used (52.6%), followed by scientific and legal requirements (30.7%). Less than 20% of the analyzed control measures were validated with operational data collected on-site. No mathematical modeling was observed for the sampled food companies. Future steps should include the development of validation guides for different types of control measures and training modules.

This study can serve as an improvement guide for food safety consultants, food safety auditors, certification bodies, inspection services, food technologists and food managers.

This study is one of the first to provide an insight into how food companies validate their control measures to combat microbial, chemical and physical food safety hazards.

This study aimed at exploring the differential effects of different corporate governance (CG) indicators on risk management practices in Islamic financial institutions (IFIs) and conventional financial institutions (CFIs) of Pakistan. It also investigated the moderating role of institutional quality (IQ) in shaping the effects of CG practices on financial institutions of Pakistan.

A sample of 57 financial institutions including commercial banks, insurance companies and Modarba companies over the period 2006–2017 is used to carry out the empirical analysis. The authors applied the robust two-step system-generalized method of moments estimator, which is also called the dynamic panel data estimator. They also built the PCA-based composite index of CG and IQ by using different indicators to investigate the moderating role of IQ. They used three proxies for risk taking, five for CG and one for Shari’ah governance. To test the validity of the instruments, they applied the Arellano and Bond’s (1991) AR (1) and AR (2) tests and the J-statistic of Hansen (1982).

The results provided strong evidence that several individual characteristics of CG and the composite index are significantly related to the operational risk, the liquidity risk and the Z-score (a proxy for solvency risk). The results also revealed that IQ significantly and substantially contributes in reducing the level of risks. Finally, the estimation results indicated that the effects of CG on risk management are significantly different at IFIs and CFIs. This differential impact is mainly attributed to the fundamental differences in business models, operational strategies and contractual obligations of both types of institutions.

The findings of this study are important for enhancing our understanding of how CG relates to risk taking in Islamic and conventional financial services industries and how good quality institutions are important for formulating the governance effects on the risk-taking behavior of financial institutions. The findings suggest that a suitable size of board should be chosen to manage the risk effectively. As the findings show that the risk-taking behavior of IFIs differs from that of CFIs, the regulators and international standard setting bodies should tailor the regulatory frameworks accordingly.

This paper is different from the existing studies in four aspects. First, to the best of the authors’ knowledge, this is the first empirical investigation in Pakistan, which does the comparison of IFIs and CFIs while examining the impacts of CG on risk management. Second, the paper constructs the composite index of CG by considering several different indicators of governance and examines the combined effect of governance indicators on risk management process. Third, this paper adds to the growing literature on the role of IQ by investigating whether it acts as a moderator between CG structures and risk management and if yes, then whether this moderating role is different for IFIs and CFIs. Finally, the paper builds upon the existing research work on the CG effects for different types of financial institutions by proposing a single regression based analytical framework for comparing the effects across two different types of institutions, harvesting the benefits of higher degrees of freedom and avoiding/minimizing the measurement error.

This study aims to examine the influence of stock liquidity on the trade credit of publicly listed companies in Saudi Arabia.

In this study various econometric models were used to test the data of 900 firms listed in Saudi Arabia during the period of 2010–2019.

The robust results of the various econometric models indicate that firms are more willing to offer trade credit to customers when stock liquidity is greater; however, they are less likely to rely on obtaining more payables from suppliers. The findings further indicate that payables and receivables are indeed related, but not exclusively, in the sense that more payables lead to more receivables. The study also reveals a pattern of persistence in payables and receivables during the period of study.

The sample of the present study is only made up of Saudi listed companies. Future research could extend the sample of this study taking into account listed firms in the Middle East and North Africa (MENA) region as a whole so as to gain more insights from the entire region including oil-producing and non–oil-producing countries. More studies are needed to further examine the impact of alternative options for credit access and their linkage to stock liquidity. Finally the difference in difference (DiD) method of analysis as quasi experimental method can be another extension of this research.

The findings would provide implications for managers and investors by recognizing the potential role of stock liquidity in affecting trade credit and understanding the association between the stock liquidity and trade credit. Management of the firms should look for the ways to enhance the stock liquidity of the firms so as to help in reducing the extreme debts usage and therefore, alternative source of funds can be available accordingly. Once the advantage of stock market is identified, firms' managers should search for chances and policies that can promote stock liquidity and hence make use of the advantages of being liquid.

This paper provides new evidence from the emerging market, particularly the Saudi Arabia. The attempt is one of the first in the region to broaden the knowledge about the effects of stock liquidity on trade credit. It provides market participants with insights on the role of stock liquidity in financial flexibility.

This paper deeply investigates the herd behavior of the Egyptian mutual funds under changing and different conditions of the market pre- and post-events and compares the impact of asymmetric risk conditions on the herding behavior of the Egyptian mutual funds in both up and down markets.

We test for the existence of herding for the whole period from 2003 to 2022, as well as for the pre-and post-different Egyptian uprising periods. We employ two well-known models, namely the cross-sectional standard deviation (CSSD) and cross-sectional absolute deviation (CSAD) models. Additionally, we use the quantile regression approach.

We find that the behavior of mutual funds does not change following the different political and social events. For the whole period, we find evidence of herding behavior using only the model of CSAD in down-market conditions. We generalize our finding to be evidence of the existence herding behavior in different quantiles, under only the down market in specific points’ pre, post or both given events throughout the whole series. Conversely, during the upper market, we show a full absence of herding behavior considering all different quantiles. When the market is down, managers are afraid of the condition of uncertainty, neglecting their own private information, avoid acting independently and consequently, following other mutual funds. When the market is up, managers become rational and act fully independent.

Future research should delve deeper into the drivers of herding behavior, assess its longer-term effects, develop risk management strategies and consider regulatory measures to mitigate the potential negative impact on mutual fund performance and investor outcomes.

The study reveals that the behavior of mutual funds remains consistent despite various political and social events, suggesting a degree of resilience in their investment strategies. The research uncovers evidence of herding behavior in both high and low quantiles, but exclusively in down markets. In such conditions of market decline, fund managers appear to forsake their private information, exhibiting a tendency to follow the crowd rather than acting independently.

The study reveals that the behavior of mutual funds remains consistent despite various political and social events, suggesting a degree of resilience in their investment strategies. The research uncovers evidence of herding behavior in both high and low quantiles, but exclusively in down markets. In such conditions of market decline, fund managers appear to forsake their private information, exhibiting a tendency to follow the crowd rather than acting independently. Future research should delve deeper into the drivers of herding behavior, assess its longer-term effects, develop risk management strategies and consider regulatory measures to mitigate the potential negative impact on mutual fund performance and investor outcomes.

The paper investigates the herd behavior of the Egyptian mutual funds under asymmetric risk conditions, the study follows the spectrum of the herding behavior analysis and Egyptian mutual funds, extending the research with imperial analysis of market conditions pre- and post-events including currency floating, COVID-19 and political elections. The study gives substantial recommendations for policymakers and investors in emerging markets mutual funds.

This chapter introduces dividend policy as both financial and business decisions. First, it presents the history of dividend payment, definition of dividend, and typical types of dividend. Dividends originate from liquidating payments of sailing vessels in the early 16th century and become popular with the development of corporations. In this book, a dividend is defined as a cash payment to shareholders. By payment time, there are three typical types of dividend including final dividend, interim dividend, and special dividend. Second, it presents definition, important dates, measures, and patterns of dividend policy. Dividend policy includes two decisions: the first is to pay or not to pay dividends, and the second is the dividend magnitude. Investors have to follow important dates of dividend payments in order to make their investment decisions. Important dates include declaration date, record date, ex-dividend date, and payment date. Dividend payout ratio and dividend yield are two common measures of dividend policy. Common patterns of dividend policy are no dividend policy, residual dividend policy, stable dividend policy, and irregular dividend policy. Finally, dividend policy is both financial and business-related decisions. Therefore, dividend decisions are affected by various levels of business environment such as internal, micro (industry), and macro-environment. Dividend theories are the behind mechanisms to explain the effect of each factor in the business environment on corporate dividend policy. Dividend policy, in turn, determines shareholders' wealth through its impact on stock price.

This paper aims to investigate the relationship between uncertainty and corporate cash holdings with the moderating role of political connections.

We employ fixed effects estimation on a panel dataset of 669 Vietnamese listed firms over the 2010–2020 period, with one- and two-way standard error clustering. We conduct various robustness tests, including two-stage least squares/instrumental variable and generalized method of moments regressions, alternative cash holding measure, and additional controls for macroeconomic conditions and ownership types.

The effect of uncertainty on cash holdings is weakened for firms with political connections relative to those without the connections. Although general firms depend on cash flows to adjust their cash holding behavior when uncertainty increases, our findings suggest that politically connected firms do not rely on internal cash flows to accumulate cash when confronted high uncertainty.

Our findings on the role of political connections in moderating the relationship between cash holding and economic policy uncertainty have practical implications for policymaking. Since political connections serve as a buffer for a firm’s liquidity, firms may want to seek those connections, which can, in turn, lead to increasing informal costs and unfair business environment.

This is the first study investigating the role of political connections to the nexus of cash, cash flow and uncertainty, providing novel evidence regarding the less dependence on internal cash flows to save cash by politically connected firms. Second, the paper enriches the literature on the motives of cash holdings by proposing a modified agency view in the context of weak investor protection. Therefore, our findings strengthen the explanation for the positive effect of uncertainty on firms’ cash holdings in emerging markets.

The purpose of this study is to look at how Shariah-compliant status and Shariah regulation affect the demand for initial public offerings (IPOs) in Pakistan. The Shariah-compliant status, which is seen as a method that offers a credible signal to investors, may explain the anomaly in IPO demand.

This research used multivariate and quantile regression models to assess data from 85 IPOs issued on the Pakistan Stock Exchange between 2000 and 2019.

Shariah-compliant status has a considerable negative association with IPO demand. Nevertheless, there is a considerable positive association among Shariah regulation and IPO demand. Furthermore, the interaction among regulatory quality and Shariah-compliant status has a considerable strong influence on IPO demand. As a consequence, the findings show that Shariah-compliant firms might possibly attract the attention of investors. Investors were found to concur on the amicability of rigorous rules and permissible Shariah-compliance aspects.

Future studies could analyse the financial ratio benchmark (cash and debt) to determine the Shariah-compliant status and Shariah regulation to better understand the problem of IPO demand in the context of Pakistan.

The outcomes of this research are useful for issuers and underwriters in comprehending the characteristics that influence high and early IPO success. Such knowledge may assist issuers and underwriters in responsibly planning and managing the IPO process.

The results may be useful to investors looking for critical information in prospectuses to make the best choice when subscribing to IPOs in Pakistan.

This is one of the first studies to provide empirical data on the links among Shariah-compliant status, Shariah regulation and IPO demand in Pakistan. Furthermore, this research demonstrates the interaction impact of regulatory quality and Shariah-compliant status on IPO demand.

In theory, the impact of debt liquidity risk (DLR) on the firm's future growth is ambiguous. This study aims to examine the empirical relationship between the DLR and firms' growth rate using annual data for USA companies from 1976 to 2020.

Given the longitudinal nature of the data, the author uses OLS (ordinary least squares) regression methodology with fixed effects to control for unobserved characteristics that might affect the dependent variable. Instrument variable regression is also used to address the potential endogeneity problem.

The results show that firms having higher DLR, as proxied by more short-term debt, experience lower growth rate. An increase in firms' short-term debt decreases the firms' future growth rate as evidenced by lower assets, revenue and employee growth rate. Moreover, the authors' results show that small firms or firms with more investment opportunities grow fast if the firms take higher DLR. Finally, cyclical firms with higher DLR exhibit lower growth rate during the credit tighten period. The authors' results hold for both the pre-zero lower bound (ZLB) era and ZLB period.

To the authors' best knowledge, this is one of the earliest studies to carefully examine the effects of DLR on firms' growth rate. While prior research finds that firms with higher growth potential, measured by market-to-book (MTB) ratio, use more short-term debt, the authors' research directly addresses whether DLR affects firms' future growth rate. The authors’ findings also help explain why firms with high growth potential use more short-term debt.