Search results
1 – 10 of 35Emmanuel C. Mamatzakis, Lorenzo Neri and Antonella Russo
Since February 2022, the conflict between Ukraine and Russia has significantly influenced global financial markets, altering investor behavior and increasing market volatility…
Abstract
Purpose
Since February 2022, the conflict between Ukraine and Russia has significantly influenced global financial markets, altering investor behavior and increasing market volatility. Western countries’ sanctions on Russia have influenced market uncertainty. Academic literature has deeply investigated the market’s reaction to the conflict and demonstrated a diverse range of impacts. Our study delves into how corporate decisions to remain in or exit Russia during the conflict influence analyst sentiment.
Design/methodology/approach
Leveraging data on analysts' revision scores (ARS) from Eikon, Refinitiv, our analysis underscores the importance of analysts during periods of uncertainty (Kacperczyk and Seru, 2007; Loh and Stulz, 2018). Using static and dynamic panel analysis, we examine the impact of Russia exposure on ARS while controlling for key variables.
Findings
Companies that retain a presence in Russia tend to enhance the overall ARS score, contributing to increased optimism among analysts regarding forecasts for the firms in question. Controlling for endogeneity and underlying dynamics in ARS does not alter the main findings. All in all, the results confirm the absence of an impact on the companies' returns post-announcement to continue or leave Russia after the start of the conflict (Balyuk and Fedyk, 2023).
Originality/value
This research sheds light on the complex relationship between geopolitical events, corporate decisions and investor sentiment, offering valuable insights for stakeholders, policymakers and regulators.
Details
Keywords
Jiandong Yang, Zhiqiang Li, Hongbo Hao and Jinxu Li
This paper aims to investigate the corrosion kinetics and corrosion behavior of NdFeB magnets with the addition of heavy rare earth dysprosium (Dy) for its inhibitory activity on…
Abstract
Purpose
This paper aims to investigate the corrosion kinetics and corrosion behavior of NdFeB magnets with the addition of heavy rare earth dysprosium (Dy) for its inhibitory activity on poor corrosion resistance of NdFeB magnets.
Design/methodology/approach
To study the effect of dysprosium addition on corrosion behavior of NdFeB magnets and investigate its mechanism, potentiodynamic polarization, scanning electron microscopy (SEM), electrochemical impedance, energy dispersion spectrum (EDS) and scanning Kelvin probe force microscopy (SKPFM) were applied in the research. Besides, microstructures were observed by SEM equipped with EDS. Atomic force microscopy was introduced to analyze the morphology, potential image as well as the contact potential difference. The SKPFM mapping scan was applied to obtain the contact potential around Nd-rich phase at 0.1 Hz. The magnets were detected via X-ray diffraction.
Findings
Substitution of Nd with Dy led to improvement of corrosion resistance and reduced the potential difference between matrix and Nd-rich phase. Corrosion resistance is Nd-rich phase < the void < metal matrix; maximum potential difference between matrix and Nd-rich phase of Dy = 0, Dy = 3 and Dy = 6 Wt.% is 411.3, 279.4 and 255.8 mV, respectively. The corrosion rate of NdFeB magnet with 6 Wt.% Dy is about 67% of that without Dy at steady corrosion stage. The addition of Dy markedly enhanced the corrosion resistance of NdFeB magnets.
Originality/value
This research innovatively investigates the effect of adding heavy rare earth Dy to NdFeB permanent magnets on magnetic properties, as well as their effects on microstructure, phase structure and most importantly on corrosion resistance. Most scholars are studying the effect of element addition on magnetic properties but not on corrosion resistance. This paper creatively fills this research gap. NdFeB magnets are applied in smart cars, robotics, AI intelligence, etc. The in-depth research on corrosion resistance by adding heavy rare earths has made significant and outstanding contributions to promoting the rapid development of the rare earth industry.
Details
Keywords
Neetu Kumar and Jacqueline Symss
The purpose of the study is to examine factors influencing cash holding of firms during periods of crisis. In recent times, the level of cash holdings in firms has seen a steady…
Abstract
Purpose
The purpose of the study is to examine factors influencing cash holding of firms during periods of crisis. In recent times, the level of cash holdings in firms has seen a steady rise across industries for diverse reasons. However, the need to study cash holding becomes even more compelling during geopolitical instability as it causes firms to hold greater cash reserves for precautionary reasons.
Design/methodology/approach
This paper systematically reviews literature from 1984 to 2024 by organising the findings thematically based on the relationship between corporate cash holdings (CCH) and firm performance in times of war. The paper used 47 research articles from the Scopus database and Google Scholar. Literature connected to CCH, firm performance and war times was explored. The title and abstract analysis were conducted using VOSviewer software. As a result, the predetermined body of literature was visualised, and six theme-based clusters were identified.
Findings
This paper systematically reviews empirical studies, categorising them into six theme-based groups. These clusters encompass CCH and Determinants, Optimal Cash Holding Levels, Cash Holding Adjustment Speed and Theory, Cash Holding and Firm Value, Cash Holding and Firm Performance, Cash Holding in the Context of the Ukraine War and the adaptive financial strategies of firms in response to economic conditions by using cash holding as a hedging instrument. Inflation prompts adjustments in cash-holding strategies at a macro level. During crises, lower interest rates lead to increased cash holdings. Various motives influence firms’ cash-to-assets ratios. According to the pecking order theory, geopolitical risk negatively affects cash holdings. Exposure to pandemics prompts an increase in cash reserves. War shocks have a profound impact on economies, markets and stability; hence, geographic diversification can reduce the need for precautionary cash. In times of uncertainty, the financial stress of firms can get elevated, and therefore, having a well-diversified geographical portfolio of a firm’s investments can aid in meeting any financially distressing situation.
Originality/value
The literature on CCH has been phenomenal. This paper attempts to structure the issues surrounding cash holding and firm performance in wartime, like the Ukraine war, using the VOSviewer software. This study endeavours to highlight the reasons for cash holding during crises and understand how cash holding affects firm performance. Finally, this paper also tries to comprehend whether cash holding helps as a hedging instrument in times of war.
Details
Keywords
Dany Adi Saputra and Doddy Setiawan
This study examines the role of industry competition, market capitalization, and debt levels in the relationship between profitability and firm value (FV). The sample included…
Abstract
This study examines the role of industry competition, market capitalization, and debt levels in the relationship between profitability and firm value (FV). The sample included companies listed on the Indonesia Stock Exchange (IDX) in the manufacturing sector in 2017–2019. This study provides empirical evidence that the high level of industrial competition (IC), low level of market capitalization (market value of equity, MVE), and high levels of debt (debt-to-assets ratio, DAR) weaken the effect of profitability as measured by return on assets (ROA) on FV as measured by Tobin’s Q. Profitability is not even related to FV for firms facing high industry competition. In addition, profitability only has a marginal positive relationship with FV for firms with relatively small market capitalizations. These findings suggest that the relationship between profitability and FV is not monotonous but is influenced by the level of industry competence, market capitalization, and debt.
Details
Keywords
Balagopal Gopalakrishnan, Aravind Sampath and Jagriti Srivastava
In this study, we examine whether work from home (WFH) had an impact on firm productivity during the COVID-19 period.
Abstract
Purpose
In this study, we examine whether work from home (WFH) had an impact on firm productivity during the COVID-19 period.
Design/methodology/approach
We employ a panel fixed-effect model using 79,201 firm-quarter observations in a cross-country setting of 68 countries.
Findings
First, we find that firms that employed WFH contributed to real sector growth during the pandemic due to greater capital expenditure compared to otherwise. Second, we find that WFH amenable firms turned over assets better than less WFH amenable firms.
Originality/value
To the best of our knowledge, this is the first study to examine the impact of WFH on firms’ investment and efficiency using a cross-country setting.
Details
Keywords
Harmono Harmono, Sugeng Haryanto, Grahita Chandrarin and Prihat Assih
This chapter focuses on testing optimal capital structure theory: The role of intervening variable debt to equity ratio (DER) on the influence of the financial performance…
Abstract
This chapter focuses on testing optimal capital structure theory: The role of intervening variable debt to equity ratio (DER) on the influence of the financial performance, Ownership Structure of Independent Board of Commissioners (IBCO), Audit Committee (ACO), and Institutional Ownership on Firm Value. The research design was explanatory research using path analysis. Using purposive sampling, 61 manufacturing companies, observation period from 2014 to 2018 with 286 N samples. The research novelty empirically can prove the role of intervening variable DER on the effect of return on assets (ROA) on firm value and shows the market response to the ROA is fully reflected by DER, indicating the existence of an optimal capital structure. The role of DER on the effect of ROE and IBCO on firm value is a partial mediation with the inverse direction. This phenomenon shows that the mechanism of forming a balance between the responses of investors and creditors relates to debt financing.
Details
Keywords
The research is devoted to the theoretical foundations of capital management efficiency based on the existing management problems in joint-stock companies. The author develops…
Abstract
The research is devoted to the theoretical foundations of capital management efficiency based on the existing management problems in joint-stock companies. The author develops conclusions and recommendations for improving the efficiency of capital management. The research analyzes the capital management status of a joint-stock company using indicators that show the enterprise's capital efficiency, the seasonality of the chemical industry, low profitability, high turnover of working capital, and other peculiarities. The methodology presented in this research allows chemical enterprises to assess capital efficiency. In this research, the author created a regression model based on the financial data of enterprises, approaching the existing methodology in the world, and analyzed the specific situation that affects the growth of enterprise assets. According to the six-year financial data for “Farg'onaazot” Joint Stock Company (JSC) and “Bekabadcement” JSC, the author concludes that the ratio for the last three years shows a satisfactory level in the remaining indicators despite recording a good result, indicating that capital management is not reasonable. The practical significance of this research is that the results obtained will serve to improve the financial management of enterprises in the chemical industry.
Details
Keywords
Nedal Assad, Aziz Jaafar and Panagiotis D. Zervopoulos
This study aims to comprehensively examine the relationship between financial reporting quality (FRQ) and investment efficiency (IE). The central thrust of this research endeavor…
Abstract
Purpose
This study aims to comprehensively examine the relationship between financial reporting quality (FRQ) and investment efficiency (IE). The central thrust of this research endeavor is to empirically analyze the impact of FRQ on diverse facets of investment, including overinvestment, underinvestment and overall IE.
Design/methodology/approach
Using a sample of 13,902 firm-year observations from publicly listed US companies, this study uses the generalized method of moment (GMM) in conjunction with three distinct measures for FRQ under three different investment settings, considering firm liquidity and industry performance.
Findings
This study offers interesting insights into the intricate relationship between FRQ and IE. The results indicate a strong positive relation between the two constructs. In particular, the research reveals a negative link between FRQ and underinvestment, and an inverse relationship between FRQ and overinvestment. These findings suggest that FRQ is one of the key drivers of IE and that by enhancing FRQ, businesses can better optimize their investments.
Practical implications
This study highlights the significant implication of the effect of FRQ on IE, as it enables businesses to optimize their investments by improving their decision-making processes and better risk assessment of associated projects, resulting in more efficient capital allocation. A higher degree of FRQ increases investors’ confidence in a company’s financial statements, resulting in higher liquidity. It can benefit regulators to set higher standards and promote transparency.
Originality/value
The study examines the relationship between FRQ and IE. The study finds a strong positive relation between FRQ and IE, with FRQ being a key driver of IE. The paper’s original contribution lies in its comprehensive examination of the complex relationship between FRQ and IE, using robust analytical techniques by applying GMM and taking into consideration firms liquidity and industry performance.
Details
Keywords
Muhammad Tariq Khan, Abdul Rashid, Mushtaq Hussain Khan, Asif Zaman and Shahid Ali
This paper aims to examine the effects of oil price uncertainty on corporate investment of Islamic stocks during the COVID-19 pandemic.
Abstract
Purpose
This paper aims to examine the effects of oil price uncertainty on corporate investment of Islamic stocks during the COVID-19 pandemic.
Design/methodology/approach
The study uses a panel data set that covers 398 listed Islamic stocks from seven major Asia Pacific countries over the period of five years from 2017 to 2021, yielding 1,990 observations. Specifically, this paper investigates the said association by combining the real options theory regarding investment and the panel data-based econometric method that captures the dynamic relationship, the generalized method of moments estimators.
Findings
The findings show that the relationship between the oil price volatility and corporate investment of Islamic stocks is significant and nonlinear in nature, suggesting the presence of both the growth options and the waiting options. Overall, the results reveal that corporate investment of Islamic stocks is hindered during the unprecedented corona crash, when oil price increases at exponential rates.
Practical implications
The findings suggest that considering the information caused by unprecedented events like the COVID-19 pandemic is crucial for investment decisions of Islamic stocks. Therefore, policymakers and regulators should incorporate the impact of oil price uncertainties caused by unprecedented events like the COVID-19 pandemic on firm’s investment expansion and diversification strategies.
Originality/value
To the best of the authors’ knowledge, this paper is the first to examine the relationship between the investment of Islamic stocks and the oil price uncertainty under compound options theory in top Asian oil-importing countries.
Details
Keywords
This study examines the relationship between oil price uncertainty (OPU) and corporate inventory investments using a sample of 6,072 USA manufacturing firms from 1992 to 2019.
Abstract
Purpose
This study examines the relationship between oil price uncertainty (OPU) and corporate inventory investments using a sample of 6,072 USA manufacturing firms from 1992 to 2019.
Design/methodology/approach
The author's study employs a panel dataset to examine the relationship between OPU and corporate inventory investments. The author uses several alternative specifications such as fixed effects models, an instrumental variable analysis, an impact threshold for confounding variable (ITCV) analysis, alternative measures, additional control variables and the percent bias analysis to account for endogeneity issues.
Findings
Corporate inventory investments decrease in response to high OPU. This decrease in inventory investments happens regardless of firms' expected stockout costs, information environment and reliance on external financing. As a potential mechanism, an uncertainty-induced increase in cash holdings contributes to this reduction in inventory investments. Also, the effect of OPU is non-linear and asymmetric. In response to the volatility of positive (negative) oil price changes, inventory investments decrease (increase) up to a certain point and increase (decrease) after that. Further, uncertainty-induced adjustments in inventory investments positively influence the operating performance of firms.
Originality/value
The author's study adds to the growing literature that examines the impact of OPU on corporate outcomes. Inventory investments directly affect business operations and could better reflect firms' responses to an uncertain environment.
Details