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This study aims to examine whether insider purchases made within 30 days prior to the publication of various kinds of press releases earn higher abnormal returns (AR) than…
This study aims to examine whether insider purchases made within 30 days prior to the publication of various kinds of press releases earn higher abnormal returns (AR) than those in the absence of such announcements. It also attempts to identify the factors that explain ARs.
This study considers data for Canadian insider purchases made on the Toronto Stock Exchange 60 Index. An event study methodology is used to calculate AR, and a mixed regression model is used to evaluate the effect of corporate news on AR.
The empirical results indicate that insiders achieve greater ARs when they purchase stock prior to press releases; findings also show that these returns are specifically related to purchases made before the announcements of mergers and acquisitions, ongoing projects, financial structure, financial results and asset disposals. This is because of the firm effect.
These findings have important implications for Canadian market regulatory authorities, especially the Ontario Securities Commission and other market participants who are interested in corporate governance, such as boards of directors and shareholders.
The present findings show that regulatory bodies must work with companies to raise awareness of improper insider trading.
Most setup management techniques associated with electronic assembly operations focus on component similarity in grouping boards for batch processing. These process…
Most setup management techniques associated with electronic assembly operations focus on component similarity in grouping boards for batch processing. These process planning techniques often minimize setup times. On the contrary, grouping with respect to component geometry and frequency has been proved to further minimize assembly time. Thus, we propose the Placement Location Metric (PLM) algorithm to recognize and measure the similarity between printed circuit board (PCB) patterns. Grouping PCBs based on the geometric and frequency patterns of components in boards will form clusters of locations and, if these clusters are common between boards, similarity among layouts can be recognized. Hence, placement time will decrease if boards are grouped together with respect to the geometric similarity because the machine head will travel less. Given these notions, this study develops a new technique to group PCBs based on the essences of both component commonality and the PLM. The proposed pattern recognition method in conjunction with the Improved Group Setup (IGS) technique can be viewed as an extended enhancement to the existing Group Setup (GS) technique, which groups PCBs solely according to component similarity. Our analysis indicates that the IGS performs relatively well with respect to an array of existing setup management strategies. Experimental results also show that the IGS produces a better makespan than its counterparts over a low range of machine changeover times. These results are especially important to operations that need to manufacture quickly batches of relatively standardized products in moderate to larger volumes or in flexible cell environments. Moreover, the study provides justification to adopt different group management paradigms by electronic suppliers under a variety of processing conditions.
I test empirically the hypothesis that the monitoring role of the board of directors depends on the severity of the agency problems and the amount of information needed to…
I test empirically the hypothesis that the monitoring role of the board of directors depends on the severity of the agency problems and the amount of information needed to monitor. I show that in high growth firms, where the agency conflicts are low and managers are likely to reveal more information to get advice, boards are more independent but less likely to monitor, while in low growth firms, boards are less likely to be independent, but the relationship between firm value and board independence is strong. Overall, boards become more independent but monitor less as firms’ growth opportunities increase, suggesting that managers trade off the amount of information released to the board to get a better advice and to mitigate the monitoring role of the board.
Agency theory starts with the assumption that people act in their own self‐interest, and holds that under normal conditions, the goals, interests, and risks of two actors…
Agency theory starts with the assumption that people act in their own self‐interest, and holds that under normal conditions, the goals, interests, and risks of two actors (principal and agent) are not identical. This means that the agent will not necessarily act according to the interests of the principal. CEO compensation is the type of control mechanism that companies employ to reduce the agency problem. This paper took 201 manufacturing companies in the year 1998 in Taiwan, and used the LISTREL 8 model to analyze the influence of company performance, scale, and board of director control over CEO compensation. The results indicate is that company performance, scale, and control by the board of directors all influence CEO compensation, with company scale the main factor, followed by company performance, and control by the board of directors. I also find that CEO compensation is higher when the board of directors' does not have effective control. Moreover, the board of directors control of a company is diminished when the CTO and chairman of the board are one person, and also when the number of internal directors is great. Conversely, the board of directors' control is increased when their ratio of stock ownership is higher.
The purpose of this paper is to analyze the influence of firm-, industry- and country-level determinants on real annual sales growth in the context of a cross-classified…
The purpose of this paper is to analyze the influence of firm-, industry- and country-level determinants on real annual sales growth in the context of a cross-classified multilevel perspective.
The authors studied 11,381 firms from 17 industries in six Latin American countries based on the data collected up to 2015. Since the data are nested in two levels (level 1: firms; level 2: cross-classification of industries and countries), the authors use a cross-classified multilevel model. The significant variability in all levels of analysis confirms the option for the multilevel model.
Differences in industries account for the largest proportion of variance (77.2 percent). This finding indicates that industry-level characteristics should be explored in the sales growth literature (it seems to the authors that they were neglected). This finding also calls attention to the roles of policy-makers in facilitating firm growth. The final model indicates that the considered variables explain approximately 55 percent of the differences in real annual sales growth in the same industry and country after having accounted for the impacts of the differences in firms. After accounting for the impacts of the differences in firms’ and countries’ characteristics, 43 percent of the variation in average real annual sales growth is due to differences in industries. The obtained results indicate that while firms from countries with higher GDP growth and more effective corporate boards present higher real annual sales growth, firms that operate in commodity producer industries have worse performance in this indicator. With respect to firm’s characteristics, larger firms (contradicting Gibrat’s law) and exporters grew less. Some results could be explained by the decrease in commodities’ prices and global purchases between 2012 and 2015.
The paper fills some gaps in the firm growth literature by testing Gibrat’s law in non-developed countries (not yet done, to the best of the authors’ knowledge) and exploring variables other than size in the explanation of firm growth (rarely used, to the best of the authors’ knowledge). Moreover, the adopted model correctly estimated the origin of the variability in firm growth in its natural cross-classified distinct levels.
Purpose – The purpose of this chapter is to examine the hypothesized effects of board characteristics and performance on directors’ compensation in the Spanish…
Purpose – The purpose of this chapter is to examine the hypothesized effects of board characteristics and performance on directors’ compensation in the Spanish corporations, whose corporate governance is a special example of a unitary board system.
Methodology/approach – In order to test the influence of a set of factors on directors’ compensation levels, we have developed several models based on linear panel data regression. The sample included 76 listed companies on the Spanish computerized trading system or Continuous Market for the period 2004–2009.
Findings – The control mechanisms, like board characteristics and performance and their effect on the level of directors’ compensation, depend on the types of director (executive, independent and proprietary).
Research limitations/implications (if applicable) – This study has certain limitations mainly related to problems associated with obtaining information. The methodology should be complemented by other types of analyses, such as the influence of the characteristics of the board on the remuneration structure in a greater level of disaggregation.
Practical implications (if applicable) – The results of this research chapter give reasons to regulators and investors to be aware of the importance of the board's characteristics as corporate control mechanisms over the directors’ remuneration and the necessity of connection between directors’ compensation and the firm's performance.
Originality/value of paper – Firstly, descriptive empirical evidence on the level of directors’ compensation is provided within a unitary board system for different types of directors. Secondly, an ample panel data set enables the examination of a set of determinants using panel data methods which control for unobserved firm heterogeneity. Finally, the perspective is extended from executive director compensation to other types of directors, such as proprietary or independent, which are very important features of the Spanish board structure.
The empirical relationship between chief executive officer (CEO) compensation, the investment opportunity set (IOS) and corporate governance mechanisms is analyzed for a…
The empirical relationship between chief executive officer (CEO) compensation, the investment opportunity set (IOS) and corporate governance mechanisms is analyzed for a sample of 415 Canadian firms in 1997. Results indicate that firms with high IOS pay higher levels of total compensation to their CEOs. In addition, CEOs of high IOS derive a larger proportion of their compensation from performance‐contingent forms of pay such as bonuses, stock option grants and long‐term incentive plans. However, CEOs with weak boards of directors are compensated more than CEOs with powerful boards. Contrary to our expectation, we find that in high IOS firms with weak boards of directors, CEOs seek to have higher proportions of contingent forms of pay in their compensation. An implication of this result is that contingent compensation practices may be a more value‐enhancing form of remuneration for CEOs.
The insulated gate bipolar transistor (IGBT) is an increasingly used power transistor which has the advantage over the more conventional DMOS structure of achieving a…
The insulated gate bipolar transistor (IGBT) is an increasingly used power transistor which has the advantage over the more conventional DMOS structure of achieving a lower on‐resistance through the high‐injection of electrons and holes into the drift region thereby causing conductivity modulation and a lowering of the electrical resistance.
In the light of failings of the board highlighted by the mid Staffordshire NHS Foundation Trust public inquiry, this paper seeks to offer insights about how boards in general might develop in order to discharge their responsibilities for quality and safety in health care more consistently in the future. The paper also proposes to examine wider questions about the role, purpose, and impact of boards on organisations.
The paper draws on literature from across the social sciences to assess the evidence for effective board working using a contingency and realist approach.
The examination leads to the identification of three key issues surrounding the construction and the development of boards. First, there is no evidence or consensus about an “ideal” board form. The rationale and evidence‐base, for example for the 1991 model for NHS boards in the English NHS, has never been set out in an adequate manner. Second, the evidence about effective board working suggests that there are some key principles but also that local circumstances are really important in steering the focus and behaviours of effective boards. Third, there is an emerging proposition that boards, including in healthcare, need to embody a culture of high trust across the executive and non executive divide, together with robust challenge, and a tight grip on the business of delivering high quality patient care in a financially sustainable way (high trust – high challenge – high engagement).
The paper argues that it is advisable to move away from a tendency to faith‐based and exhortative approaches to guidance, training and development of boards and that it is time for a root‐and‐branch inquiry into the composition, structure, processes and dynamics of healthcare boards in the interests of assuring patient safety.