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1 – 10 of 768Hedge funds are systemically important participants in financial markets and their preference for leverage amplifies their impact, especially when interest rate changes prompt…
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DOI: 10.1108/OXAN-DB286470
ISSN: 2633-304X
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Samta Jain, Smita Kashiramka and P. K. Jain
The global economy has witnessed an exponential increase in cross-border acquisitions (CBAs) by emerging market companies (EMCs), demanding a relook at their internationalization…
Abstract
Purpose
The global economy has witnessed an exponential increase in cross-border acquisitions (CBAs) by emerging market companies (EMCs), demanding a relook at their internationalization strategy. The purpose of the study is to investigate whether the announcement of CBAs by EMCs creates value for the equity-holders of acquiring firms and identify factors affecting the valuation of acquiring companies.
Design/methodology/approach
The paper investigates the announcement impact of CBAs of CNX Nifty 500 Indian and SSE 380 Chinese companies. The event study analysis of 553 Indian and 125 Chinese acquisitions supports the contention that CBAs are indeed a strategic choice of EMCs for value creation.
Findings
CBAs generate positive and statistically significant abnormal returns for shareholders of both Indian and Chinese acquirers. The markets, however, differ in terms of their motivations; country-level factors have been observed to exert significant influence on the returns of Indian acquirers. Indian companies experience larger value creation on acquiring firms established in developed, institutionally closer and/or economically distant markets. The findings support the asset-seeking motive of Indian companies.
Originality/value
The research work contributes to the evolving stream of CBAs literature with a focus on the globalization strategies of EMCs. The present study is a modest attempt to lay the foundation for a new theoretical framework (asset-seeking perspective) of overseas acquisitions from emerging economies. The existing studies on emerging economies have emphasized, in isolation, either Indian CBAs or international acquisitions by Chinese firms. Being so, the study is unique and original in the sense that it is a comparative study of India and China.
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Ayman Abdalmajeed Alsmadi, Ahmed Shuhaiber and Khaled Saleh Al-Omoush
The purpose of this paper is to investigate the determinants of users' intention to continue to invest in cryptocurrencies. The paper also aims to examine the impact of hedonic…
Abstract
Purpose
The purpose of this paper is to investigate the determinants of users' intention to continue to invest in cryptocurrencies. The paper also aims to examine the impact of hedonic motivation and the legal environment on perceived value in cryptocurrencies.
Design/methodology/approach
A questionnaire was designed to obtain data from 258 respondents in UAE. The Structural Equation Modeling – Partial Least Squares (SEM-PLS) was used to evaluate the research model and test the hypotheses.
Findings
The results of smart PLS path analysis showed that perceived value, hedonic motivation, gambling attitude, and price volatility were significant determinants of the continued intention to invest in cryptocurrency. This study also revealed that hedonic motivation enhances perceived value and improves the perception of cryptocurrencies value from user's perspective.
Originality/value
This study provides new insights into the literature on cryptocurrencies adoption, and delivers advanced understanding about the determinants of user's intention to continue investing in cryptocurrencies. In addition, the study provides important practical implications for cryptocurrencies companies to promote this financial technology to users by enhancing the knowledge of policy makers about how investors think and get motivated towards a continued investment of cryptocurrencies.
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Following the traditions of stakeholder salience theory, this paper aims to contend that some institutional investor activists and tactics have more power, legitimacy and urgency…
Abstract
Purpose
Following the traditions of stakeholder salience theory, this paper aims to contend that some institutional investor activists and tactics have more power, legitimacy and urgency than others.
Design/methodology/approach
The author undertakes an empirical test of a saliency table looking at the effects of institutional investor heterogeneity on portfolio firm responses using ordinal logistic regression.
Findings
This study found heterogeneity for institutional investor type to drive firm responses but not tactic type raising the importance of the attributes of each type of investor activist. The author found a rank ordering of public pension plans, hedge funds and then private multiemployer funds in saliency to portfolio firms. In addition, the use of proxy-based tactics did not help or hurt each investor type. Both findings challenge prior empirical work.
Originality/value
The rank ordering based upon the heterogeneity of institutional investor activists and their tactical interactions are tested providing empirical evidence of the most influential activist investors and tactics in one study, which is rare in the literature.
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Md. Bokhtiar Hasan, Md Mamunur Rashid, Md. Naiem Hossain, Mir Mahmudur Rahman and Md. Ruhul Amin
This research explores the spillovers and portfolio implications for green bonds and environmental, social and governance (ESG) assets in the context of the rapidly expanding…
Abstract
Purpose
This research explores the spillovers and portfolio implications for green bonds and environmental, social and governance (ESG) assets in the context of the rapidly expanding trend in green finance investments and the need for a green recovery in the post-COVID-19 era.
Design/methodology/approach
This study utilizes Diebold and Yilmaz’s (2014) spillover method and portfolio strategies (hedge ratio, optimal weights and hedging effectiveness) for the data starting from February 29, 2012, to March 14, 2022.
Findings
The study’s findings reveal that the lower volatility spillover is evidenced between the green bonds and ESG stocks during tranquil and turbulent periods (e.g. COVID-19 and Russia-Ukraine War). Furthermore, hedging costs are lower both in normal times and during economic slumps. Investing the bulk of the funds in green bonds makes it possible to achieve maximum hedging effectiveness between the S&P green bond (GB) and the S&P 500 ESG.
Practical implications
Both investors and policymakers may use these findings to make wise investment and policy choices to achieve post-COVID environmental sustainability.
Originality/value
Unlike previous research, this is the first to explore the interconnectedness among the major global and country-specific green bonds and ESG assets. The major findings of this study about the lower volatility spillovers and hedging costs between green bonds and ESG assets during the tranquil and turbulent periods may contribute to the post-COVID investment portfolio for environmental sustainability.
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Martin Hoesli, Louis Johner and Jon Lekander
Using data spanning 145 years for Sweden, the authors investigate the benefits of holding multi-family properties for investors who aim to hedge wage growth.
Abstract
Purpose
Using data spanning 145 years for Sweden, the authors investigate the benefits of holding multi-family properties for investors who aim to hedge wage growth.
Design/methodology/approach
The authors assess the risk-adjusted excess return that results from adding multi-family properties to a mixed-asset portfolio that aims to track wage growth. The authors also analyse the macroeconomic determinants of asset returns. Finally, the authors test whether a causal relationship exists between the growth rate of real wages and that of real net operating income.
Findings
The benefits from holding multi-family properties are the greatest for low-risk allocation approaches. For more risky strategies, the role of real estate is more muted, and it varies greatly over time. Holding real estate was most beneficial during the first two decades of the 21st century. Multi-family properties are found to be the only asset class to be positively related to wage growth. The authors show that the net operating income acts as the transmission channel between wages and property returns.
Practical implications
The paper assesses whether the growing interest of pension funds for multi-family properties is warranted in the context of a portfolio that aims to track wage growth.
Originality/value
Using long term data makes it possible to use a rolling windows approach and hence to consider multiple outcomes for an allocation strategy over a typical investment horizon. This permits to assess the dispersion of performance across several periods rather than just one as is commonly done in the literature. The results show that the conclusions that would be drawn from looking at the past two or three decades of data differ substantially from those for earlier time periods.
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Aqila Rafiuddin, Jesus Cuauhtemoc Tellez Gaytan, Rajesh Mohnot and Arindam Banerjee
The aim of this research is to explore multiscale hedging strategies among cryptocurrencies, commodities, and GCC stocks. Particularly, this is done by evaluating the…
Abstract
Purpose
The aim of this research is to explore multiscale hedging strategies among cryptocurrencies, commodities, and GCC stocks. Particularly, this is done by evaluating the connectedness among these asset classes covering a period with COVID-19 implications. Using the wavelet approach, the present study aims to recommend whether there exist different time horizon-based hedging abilities across the asset classes.
Design/methodology/approach
The approach used in this study is a multiscale decomposition of time series based on wavelets of daily prices of 13 asset classes. Since the wavelet analysis allows to decompose the time series into its frequency components at different time scales by a filtering process the study covered 1-day, 8-day, and 64-day time horizons to examine the hedging properties across those asset classes.
Findings
The results of this study show that hedging effectiveness differs among stock markets over time. In some cases, cryptocurrencies may keep their hedging properties across time while in others they switch from safe haven to hedge devices. In almost all cases, the three main cryptocurrencies showed diversifying properties as was observed by the multiscale correlation and hedge ratio estimations. In a competing sense, gold showed safe haven properties across time than cryptocurrencies except at an 8-day time scale where hedge ratios were low, positive and statistically different from zero that could be interpreted as a good hedge device in the medium term.
Research limitations/implications
Though this research has considered a set of thirteen asset classes, it was limited to a period in which most cryptocurrencies started trading for the first time which reduces the number of observations compared to Bitcoin prices and stable coins such as Ethereum, Ripple, and Bitcoin Cash. Also, the research was focused on the GCC stock markets which may have different results as compared to other regional markets of Asia or Latin America. A comparative analysis in future could be another area of research in future.
Practical implications
This study has some significant policy implications. The cryptocurrency market is severely affected by demand and risk shocks to crude oil prices during the COVID-19 period. From the investor's point of view, diversification benefits can be obtained by combining cryptocurrencies along with oil-related products during episodes of financial turmoil and COVID-19 pandemic. The GCC region is constantly endeavoring to adopt more scientific tools and mechanisms of investment, and therefore, this study's results will provide some useful directions to the government, policymakers, financial institutions, and investors.
Originality/value
The current study covers a big bunch of 13 assets spanning across financial and real assets. This is based on literature gap and hence, will be a significant addition to the existing literature. Moreover, the GCC region is emerging as a global investment hub and this study will provide investors dynamic hedging strategies across these asset classes.
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Ayman El-Dessouki and Ola Rafik Mansour
The purpose of this paper is to unveil the main changes in the UAE’s policy towards Iran since its foundation in 1971. The UAE favored strategic hedging, extending its commercial…
Abstract
Purpose
The purpose of this paper is to unveil the main changes in the UAE’s policy towards Iran since its foundation in 1971. The UAE favored strategic hedging, extending its commercial and diplomatic relations with Iran, in addition to developing its military capabilities and maintaining military/security alliances with Saudi Arabia and the USA. However, the UAE started to reorient its policy towards Iran by adopting some sort of balancing strategy in the aftermath of the Arab Spring of 2011. This paper examines how and why the UAE had to change course and explores whether it would revert back to strategic hedging with Iran.
Design/methodology/approach
The study will be carried out based on a theoretical framework drawn from strategic hedging theory, a new structural theory in international relations, to examine the shifts in UAE policy towards Iran. Previous literature suggests that small states prefer hedging over balancing or bandwagoning. The authors also undertake a descriptive analysis and deploy a longitudinal within-case method to investigate changes in UAE policy towards Iran and identify the causal mechanisms behind these changes. That method allows investigating the impact of a particular event on a case by comparing the same case before and after that event occurred.
Findings
The main finding of this study is that the UAE hedging strategy towards Iran allowed maximizing the political and economic returns from the cooperation with Iran and mitigating the long-range national security risks without breaking up the consistent and beneficial ties with other regional and global powers. Hedging achieved the desired outcome, which is preventing direct military confrontation with Iran. Hard balancing, adopted by Abu Dhabi after the 2011 Arab Spring, has proved to have some negative effects, most importantly provoking Tehran. Some recent indicators suggest, though that the UAE may revert back to its long-established hedging policy towards Iran.
Originality/value
Strategic hedging is a new structural theory in international relation, although hedging behavior in states’ foreign policies is far from new. It is new enough, thus, not have been researched sufficiently, strategic hedging still needs theorizing and comparison. This paper highlights the importance of strategic hedging as the most appropriate strategy for small states. It provides an important contribution to the application of the theory to the case of UAE policy towards Iran. The paper also assesses the conventional wisdom that small states prefer hedging over balancing in the light of the changes in the UAE foreign policy since 2011.
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Megan E. Tresise, Mark S. Reed and Pippa J. Chapman
In order to mitigate the effects of climate change, the UK government has set a target of achieving net zero greenhouse gas (GHG) emissions by 2050. Agricultural GHG emissions in…
Abstract
In order to mitigate the effects of climate change, the UK government has set a target of achieving net zero greenhouse gas (GHG) emissions by 2050. Agricultural GHG emissions in 2017 were 45.6 million tonnes of carbon dioxide equivalent (CO2e; 10% of UK total GHG emissions). Farmland hedgerows are a carbon sink, storing carbon in the vegetation and soils beneath them, and thus increasing hedgerow length by 40% has been proposed in the UK to help meet net zero targets. However, the full impact of this expansion on farm biodiversity is yet to be evaluated in a net zero context. This paper critically synthesises the literature on the biodiversity implications of hedgerow planting and management on arable farms in the UK as a rapid review with policy recommendations. Eight peer-reviewed articles were reviewed, with the overall scientific evidence suggesting a positive influence of hedgerow management on farmland biodiversity, particularly coppicing and hedgelaying, although other boundary features, e.g. field margins and green lanes, may be additive to net zero hedgerow policy as they often supported higher abundances and richness of species. Only one paper found hedgerow age effects on biodiversity, with no significant effects found. Key policy implications are that further research is required, particularly on the effect of hedgerow age on biodiversity, as well as mammalian and avian responses to hedgerow planting and management, in order to fully evaluate hedgerow expansion impacts on biodiversity.
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