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Article
Publication date: 27 May 2021

Terence Tai-Leung Chong and Siqi Hou

This study is a pioneer in the academic literature to investigate the relationship between Valentine’s Day and stock market returns of major economies around the world.

Abstract

Purpose

This study is a pioneer in the academic literature to investigate the relationship between Valentine’s Day and stock market returns of major economies around the world.

Design/methodology/approach

Specific control variables for Valentine's Day are introduced to eliminate the potential influence of other effects.

Findings

The findings indicate that stock returns are higher on the days when Valentine's Day is approaching than on other days for most cases, showing “the Valentine Effect” in the stock market.

Originality/value

Unlike other holiday effects in the previous literature, the Valentine's Day effect cannot be explained by many conventional theories, such as tax-loss selling and the inventory adjustment hypothesis.

Details

Review of Behavioral Finance, vol. 14 no. 5
Type: Research Article
ISSN: 1940-5979

Keywords

Article
Publication date: 7 August 2018

Wei Ge and Henry Kinnucan

The purpose of this paper is to test hypotheses about the effects of economic and weather factors on the inventories of cattle, sheep and goats in Inner Mongolia…

Abstract

Purpose

The purpose of this paper is to test hypotheses about the effects of economic and weather factors on the inventories of cattle, sheep and goats in Inner Mongolia Autonomous Region (IMAR).

Design/methodology/approach

An equilibrium displacement model of livestock products is combined with an inventory relation proposed by Rucker et al. (1984) to deduce hypothesis about the effects of expected price and feed costs, weather, and supply and demand shifters on herd size. Dynamics are incorporated using the partial adjustment and adaptive expectations models originally proposed by Nerlove (1956). The hypotheses are tested using both the structural equations implied by the model, and the reduced form.

Findings

Results suggest livestock inventories in IMAR in general are more responsive to weather conditions than to economic conditions. This is especially true for cattle and sheep, where isolated 1 percent changes in weather variables, namely precipitation and radiation, were found to have a much larger effect on inventory than isolated 1 percent changes in expected price and forage costs. The effects of the weather variables, moreover, were found to be different for goats than for cattle and sheep, with goat numbers decreasing with improvements in weather, and cattle and sheep numbers increasing. This suggests herders respond to poor weather in part by substituting goats for cattle and/or sheep. Price was found to have a negative effect on cattle inventory, and no effect on sheep and goat inventory. Forage costs were found to have a positive effect on cattle and sheep inventories, and no effect on goat inventory. These results suggest policies to protect grassland by controlling inventory levels must be designed carefully if they are to be effective.

Originality/value

The paper makes a methodological contribution in that the livestock inventory relation proposed by Rucker et al. (1984) is extended to include supply and demand shifters for livestock products in a partial-equilibrium setting where the industry in question is a net exporter of livestock products. The paper makes an empirical contribution in that additional evidence is provided on the role that price plays in inventory behavior.

Details

China Agricultural Economic Review, vol. 10 no. 3
Type: Research Article
ISSN: 1756-137X

Keywords

Article
Publication date: 1 February 1984

HEYDAR POURIAN

The level of inventories, particularly the finished‐goods inventories, is a good gauge of adjustment in inputs and outputs of the firms in a market economy and plays an…

Abstract

The level of inventories, particularly the finished‐goods inventories, is a good gauge of adjustment in inputs and outputs of the firms in a market economy and plays an important role in business fluctuations (see, e.g., Abramovitz, 1950, and Stanback, 1962).

Details

Studies in Economics and Finance, vol. 8 no. 2
Type: Research Article
ISSN: 1086-7376

Article
Publication date: 31 December 2007

Colin. R. Dey, John R. Grinyer, C.Donald Sinclair and Hanaa El‐Habashy

In recent years, Egypt has been developing rapidly from a socialist to a fully developed market‐based economy. One may expect that this economic transition towards a more…

Abstract

In recent years, Egypt has been developing rapidly from a socialist to a fully developed market‐based economy. One may expect that this economic transition towards a more capitalist orientation will influence the country’s cultural and socio‐economic environment, and consequently the behaviour of its corporate managers. The increasing separation of ownership and control of capital could be expected to increase agency problems associated with managerial decisions. In these circumstances, it should be interesting to identify whether ‘positive accounting’ hypotheses would apply in such an environment. Therefore, this paper examines the relevance to financial reporting in Egypt of some established positive accounting theory hypotheses in addition to a new hypothesis related to taxation. The evidence of the study is consistent with the validity of the conventional ‘bonus’ and ‘debt’ hypotheses and the new ‘taxation’ hypothesis. These conclusions are also consistent with recent empirical studies of cultural and socio‐economic change in Egypt.

Details

Journal of Applied Accounting Research, vol. 8 no. 3
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 26 October 2012

Harri Lorentz and Olli‐Pekka Hilmola

This conceptual paper aims to shed light on the nature and determinants of managerial behaviour when affected by supply chain disruptions. It aims to argue that the…

1445

Abstract

Purpose

This conceptual paper aims to shed light on the nature and determinants of managerial behaviour when affected by supply chain disruptions. It aims to argue that the managerial decision‐making process is an important component in determining the eventual long‐term impact of a supply chain disruption.

Design/methodology/approach

The paper introduces a continuous simulation model that is based on a Bayesian robot decision‐maker. Using the system dynamics approach, it illustrates the process of evaluating competing hypotheses of functional vs dysfunctional supply chain design in a disruption scenario. Model validity is assessed by means of a case study based on secondary data.

Findings

The model provides insight into the drivers of decision‐maker confidence dynamics that are used when evaluating the competing hypotheses. Furthermore, it identifies the psychological distortions that make actual managerial inference processes different from the Bayesian robot and incorporate these adjustments into the system dynamics model. Several propositions about the nature and determinants of decision‐maker confidence are stated.

Practical implications

For policy makers, the paper clarifies the important moderating role of confidence in the realisation of wider implications of supply chain disruptions, especially from the perspective of industrial development, and trade and transport facilitation.

Originality/value

The research enhances understanding of the wider implications of supply chain disruptions, contributing to behavioural research in logistics and supply chain management.

Abstract

Details

Quantitative and Empirical Analysis of Nonlinear Dynamic Macromodels
Type: Book
ISBN: 978-0-44452-122-4

Article
Publication date: 28 September 2012

Alireza Daneshfar and Henry Adobor

The purpose of this paper is to extend the line of research on the ex ante valuation of the economic payoff from strategic alliances. The paper links a firm's related…

451

Abstract

Purpose

The purpose of this paper is to extend the line of research on the ex ante valuation of the economic payoff from strategic alliances. The paper links a firm's related pre‐alliance situation to an alliance announcement, to predict how investors value the alliance.

Design/methodology/approach

The researchers collected data on marketing alliances in the biotechnology and pharmaceutical industries. Using an empirical model, three hypotheses predicting how investors value alliances in the light of their knowledge of how the firm is doing before the alliance announcement were tested.

Findings

The findings indicate that investors assign higher value to marketing alliances for firms with lower inventory liquidity and product demand. Investors, in fact, rewarded firms with weak pre‐alliance positions, indicating that the alliance was perceived as a useful strategy to turnaround the weak situation.

Research limitations/implications

As is common with other event study research, the study is unable to predict the long‐term relationship between alliance announcements and performance of the alliance. A positive evaluation at the time of the announcement may not necessarily translate into long‐term success.

Practical implications

This research provides an important lesson for firms hoping to reap financial rewards from their alliance announcements. Firms may do well to time such alliance announcements to correspond with their internal situations.

Originality/value

This paper is believed to be one of the first to consider an additional piece of firm information in addition to an alliance announcement to gauge investor valuation of alliances. The research therefore extends existing research and offers a more complete understanding of how investors value alliances at their formation. The findings should be of interest to firms contemplating alliances, and enhance understanding of investor decision making.

Details

Competitiveness Review: An International Business Journal, vol. 22 no. 5
Type: Research Article
ISSN: 1059-5422

Keywords

Abstract

Details

Economics, Econometrics and the LINK: Essays in Honor of Lawrence R.Klein
Type: Book
ISBN: 978-0-44481-787-7

Article
Publication date: 1 April 2006

Eric J. Levin and Robert E. Wright

The purpose of the analysis is to estimate price elasticities of demand for individual FTSE‐100 stocks between 1 August 1994 and 31 July 1995.

1852

Abstract

Purpose

The purpose of the analysis is to estimate price elasticities of demand for individual FTSE‐100 stocks between 1 August 1994 and 31 July 1995.

Design/methodology/approach

This paper measures excess demand in order to measure the slope of the demand curve for individual stocks. An econometric approach is adopted that models the slope of the excess demand curve within an econometric framework using signed market maker transactions data between 1 August 1994 and 31 July 1995.

Findings

The findings confirm that the demand curves for individual stocks do slope downwards. For example, the mean estimated percentage fall in stock price caused by a new share issue that is 1 per cent of the existing number of outstanding shares is −5.6.

Practical implications

Downward sloping demand curves pose difficulties for theories in finance that rely on the law of one price and price‐takers in competitive markets. For example, the dividend policy and capital structure irrelevance theorems of corporate finance, and the efficient markets hypothesis assumption that the price of a stock is determined only by information about future cash flows and the discount rate are not consistent with a downward sloping demand curve.

Originality/value

The slope of the demand curve is estimated using an econometric model and market makers' transactions data for specific stocks. This approach identifies observable unexpected shifts in the demand for a stock as unexpected changes in market makers' inventories. This approach is superior to event studies because it provides multiple observations that enable the slope of the demand curve to be quantified with sufficient confidence to calculate the price elasticity of demand for the stock.

Details

Studies in Economics and Finance, vol. 23 no. 1
Type: Research Article
ISSN: 1086-7376

Keywords

Article
Publication date: 3 August 2015

Yan Yang, Fengli Wang and Shou Chen

The paper aims to address how firms make strategic adjustment to the changing resource availability in different monetary policy conditions and how the stickiness of cost…

Abstract

Purpose

The paper aims to address how firms make strategic adjustment to the changing resource availability in different monetary policy conditions and how the stickiness of cost influences the strategic adjustment, and to dig out the major internal and industrial factors that influence the relationship between strategic change and monetary policy conditions.

Design/methodology/approach

The mechanism of how monetary policy affects strategic change is expounded by resource-based view and transaction cost theory. The balanced panel data of 422 companies of manufacturing industry listed in Chinese A share market before the end of 2003 from 2004-2013 are selected as sample to test the theoretic hypotheses.

Findings

It was found that looser monetary policy results in greater strategic change than the tighter one for the high adjustment cost. External capital dependence and industrial competition intensity strengthen the positive correlation between monetary policy condition and strategic change. Private firms are more susceptible to money supply condition change compared with state-owned enterprises. Companies tend to expand investment on fixed asset but to shrink investment on R & D and trademark in looser money supply condition.

Practical implications

Companies make bigger strategic adjustment in looser monetary policy condition for the greater availability of financial resources and lower market risk, but smaller adjustment in the tight one. However, owing to the sunk cost and the high adjustment cost, companies are not suggested to make aggressive strategic adjustment in the loose monetary conditions so as to avoid overcapacity and financial risk in tight monetary policy condition. For the policy-maker, as loose monetary policy cannot stimulate innovation but boost expansion on capacity, it is better to strengthen the resources configuration mechanism of monetary policy when making monetary policy.

Originality/value

This paper fulfils a theoretic gap to study the mechanism of how monetary policy influence corporate strategic resource reconfiguration via affecting the resource base of a company by combining resource-based view and transaction cost theory.

Details

Chinese Management Studies, vol. 9 no. 3
Type: Research Article
ISSN: 1750-614X

Keywords

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