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Article
Publication date: 1 November 2011

John M. Geppert, Stoyu I. Ivanov and Gordon V. Karels

The purpose of this paper is to examine the shocks to firm's beta around the event of addition or deletion from the S&P 500 index.

Abstract

Purpose

The purpose of this paper is to examine the shocks to firm's beta around the event of addition or deletion from the S&P 500 index.

Design/methodology/approach

The total derivative of beta and Campbell and Vuolteenaho decomposition of beta methodologies are used, on monthly and daily basis, to examine the behavior of beta around the event.

Findings

Results show a significant increase in correlations of the event firms' returns and the market proxy returns and cash‐flow betas, and decrease in discount‐rate betas for added firms and the opposite effects for deleted firms. Robustness tests indicate that the total derivative changes effects are typical for the event firms industry but that the cash‐flow correlation changes are specific to the firm. These findings suggest that addition or deletion from the S&P 500 index is not an information free event.

Research limitations/implications

The Campbell and Vuolteenaho methodology has limitations – it is conditional on the selection of state variables. In future research it would be beneficial to use different state variables in the beta decomposition framework. Another relevant question for a future research is: what are the effects of the event on the Fama‐French factor model loadings?

Originality/value

The paper's findings contribute to the ongoing debate in the literature of the information hypothesis for addition or deletion from the S&P 500 index.

Details

Review of Accounting and Finance, vol. 10 no. 4
Type: Research Article
ISSN: 1475-7702

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Article
Publication date: 7 January 2014

Richard A. DeFusco, Lee M. Dunham and John Geppert

– The purpose of this paper is to examine the dynamic relationships among investment, earnings and dividends for US firms. The sample period is 1950-2006.

Abstract

Purpose

The purpose of this paper is to examine the dynamic relationships among investment, earnings and dividends for US firms. The sample period is 1950-2006.

Design/methodology/approach

The authors use a firm-level vector auto-regression (VAR) framework to examine the firm-level dynamics among investment, earnings and dividends. The firm-level VAR yields Granger causality results, impulse response functions, and variance decompositions characterizing the dynamics of these three variables at the firm level.

Findings

For the average firm in the sample, Miller and Modigliani dividend policy irrelevance is not supported, even in the long run; the shocks to dividends do have long-run consequences for investment and vice versa. Dividend changes are an ineffective signal of future earnings in both the short and long-term. The cost of an increased dividend is on average an immediate decrease of $3 in investment for every dollar increase in dividends and the effect is persistent up to six years after the increase in dividends.

Research limitations/implications

The firm-level VAR used in the study requires that sample firms have long histories of investment, earnings and dividend data. The study addresses the interaction between dividends and investment and therefore necessitates examining dividend-paying firms. By the nature of the research question, the sample firms will not be representative in all respects to the universe of firms. The most striking difference between the sample and the universe of firms is firm size. As such, the study's conclusions are most applicable to larger, stable, dividend-paying firms. The study is also limited to dividend payout. Alternative payout policies, such as share repurchases, are not considered in this work.

Practical implications

In theory, increases in dividends can signal higher future earnings; however, the evidence does not support this hypothesis. When capital markets are constrained or incomplete, increases in dividends come at a cost to investment. Firms should consider alternative methods of signaling future earnings that have less of an impact on investment. Investors should carefully evaluate the possible impact of an increase in dividends on investment and future earnings growth.

Originality/value

This study is the first to examine the dynamics of earnings, dividends and investment at a firm level and over such a long sample period. By including the dynamics of earnings, the authors emphasize the potential opportunity costs that increasing dividends has on investment when capital markets are imperfect. The dynamic system also allows the authors to consider long-run effects as well as immediate responses to system shocks.

Details

Managerial Finance, vol. 40 no. 2
Type: Research Article
ISSN: 0307-4358

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Book part
Publication date: 17 February 2017

Giuseppe Delmestri and Mara Brumana

Kostova, Roth and Dacin called in 2008 for the advancement of a theoretical conception of the multinational corporation (MNC) that takes into account both power…

Abstract

Kostova, Roth and Dacin called in 2008 for the advancement of a theoretical conception of the multinational corporation (MNC) that takes into account both power relationships among actors and the structure of its internal institutional field. While micro-political scholars of MNCs have started to answer the former part of the call regarding power, the second part has not been thoroughly addressed yet. Furthermore, the agentic aspects typical of power games and the structural aspects characterizing institutional fields have not been fully combined in a multi-level perspective of MNCs so far. Leaning on Bourdieu, we suggest an answer to the pending call. We theorize the MNC as a playing field of power emerging around the issue of finding a meta-rate of conversion of the actors’ capitals constituted in national fields. We conceive such issue field in a dynamic state due to the constant entry and exit of new players (e.g. through mergers, acquisitions or divestitures). This results in the need to continuously test the validity of exchange rates. The role of the metainstitutional field level of the MNC as a global category is also discussed.

Details

Multinational Corporations and Organization Theory: Post Millennium Perspectives
Type: Book
ISBN: 978-1-78635-386-3

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Book part
Publication date: 17 February 2017

Juha Laurila

Previous research has been relatively insensitive to the potential combined effects that the shared industry background and country of origin might play in the development…

Abstract

Previous research has been relatively insensitive to the potential combined effects that the shared industry background and country of origin might play in the development of MNCs. This is although there are various external constituents that pose distinctive demands especially on such groups of MNCs. The 15-year period of internationalization of three major Finnish paper companies examined in this study represents MNC development as a collective endeavor in which individual companies are especially influenced both by each other and by their joint external constituents. These influences materialize in analogous timing and patterns of internationalization across individual companies. In its entirety, the study thus suggests that the development of MNCs which operate in the same line of industry and originate from the same country can be considered an outcome of a mutual process that involves interaction both with each other and their shared external constituents. This also means that MNCs then are not only competitors, but simultaneously also a source of mutual support in their ever-continuing evolution.

Details

Multinational Corporations and Organization Theory: Post Millennium Perspectives
Type: Book
ISBN: 978-1-78635-386-3

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Article
Publication date: 1 August 2002

Pawan Budhwar, Andy Crane, Annette Davies, Rick Delbridge, Tim Edwards, Mahmoud Ezzamel, Lloyd Harris, Emmanuel Ogbonna and Robyn Thomas

Wonders whether companies actually have employees best interests at heart across physical, mental and spiritual spheres. Posits that most organizations ignore their…

Abstract

Wonders whether companies actually have employees best interests at heart across physical, mental and spiritual spheres. Posits that most organizations ignore their workforce – not even, in many cases, describing workers as assets! Describes many studies to back up this claim in theis work based on the 2002 Employment Research Unit Annual Conference, in Cardiff, Wales.

Details

Management Research News, vol. 25 no. 8/9/10
Type: Research Article
ISSN: 0140-9174

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Book part
Publication date: 17 February 2017

Abstract

Details

Multinational Corporations and Organization Theory: Post Millennium Perspectives
Type: Book
ISBN: 978-1-78635-386-3

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Article
Publication date: 1 April 2005

Mike Geppert

This paper develops a deeper understanding of the origin, development and implementation of overall change management strategies in multinationals and their implications…

Abstract

Purpose

This paper develops a deeper understanding of the origin, development and implementation of overall change management strategies in multinationals and their implications for competence development and learning practices in UK and German subsidiaries.

Design/methodology/approach

The cross‐national research project applies mainly qualitative research methods.

Findings

Despite increased integrative attempts by headquarters, especially in two out of three cases, significant differences were found between German and UK subsidiaries in key capabilities and strategic competences as well as in knowledge sharing and learning.

Research limitations/implications

Future research should focus more on micro‐political issues of learning and knowledge sharing, a topic hardly addressed in international management research.

Originality/value

This study shows the enduring influence of national institutional diversity on the management of the MNC.

Details

Personnel Review, vol. 34 no. 2
Type: Research Article
ISSN: 0048-3486

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Article
Publication date: 1 June 2003

Mike Geppert and Ed Clark

The aim of this article is to develop the foundations of an actor‐centred, processual approach to examining the influence of cross‐border knowledge transfer and management…

Abstract

The aim of this article is to develop the foundations of an actor‐centred, processual approach to examining the influence of cross‐border knowledge transfer and management learning on transnational institution building in post‐socialist countries. We argue that there is a need for more research to understand how key social actors go about (re)structuring, (re)defining and sharing knowledge within new international ventures. We contend that social actors can play a significant role in creating and structuring the “transnational social space” in which the new venture takes shape, exercising strategic choice that can mediate, adapt or even reject the apparently constraining effects of technical‐economic or cultural‐institutional factors. The role of social actors is conceptualized as a socio‐political sensemaking process, a perspective that would complement the current structuralist bias in the discussion about the emergence of transnational social space in international management research literature.

Details

Management Decision, vol. 41 no. 5
Type: Research Article
ISSN: 0025-1747

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Book part
Publication date: 11 February 2003

William A. Pasmore and Richard W. Woodman

Abstract

Details

Research in Organizational Change and Development
Type: Book
ISBN: 978-1-84950-195-8

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Book part
Publication date: 17 February 2017

Rebecca Piekkari and D. Eleanor Westney

The multilingual MNC provides a promising territory for enhancing the dialogue between organization theory and International Business. We draw parallels between research…

Abstract

The multilingual MNC provides a promising territory for enhancing the dialogue between organization theory and International Business. We draw parallels between research on the multinational corporation and that on the multilingual corporation. Our review shows that the changing conceptualizations of the MNC toward a network model have carved space for language-sensitive research in International Business. We scrutinize this stream of research from the viewpoint of three organization theory lenses: the role of language in organizational design and architecture, in identity building and culture, and in organizational political systems, and comment on future research.

Details

Multinational Corporations and Organization Theory: Post Millennium Perspectives
Type: Book
ISBN: 978-1-78635-386-3

Keywords

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