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The purpose of this paper is to investigate the effect of equity market misvaluation on manager behavior. Using a sample of 535 French-listed over 2000–2018, the authors analyze whether corporate investment decision is sensitive to equity market overvaluation.

The study adopts market-to-book (M/B) decomposition developed by Rhodes-Kropf and Viswanathan (2004, RKV) that proxies for market misvaluation at the firm and industry levels. The authors conducted a long-term performance analysis via a portfolio sorting procedure and a Carhart (1997) four-factor pricing model. The authors tested the relationship between equity misvaluation, corporate investment decisions and equity issuance. The authors ran several robustness tests.

The empirical results show that equity market misvaluation affects corporate investment positively as the stock price deviates further away from its fundamental. Based on market timing theory, the authors find that corporate investment occurs in periods of high valuation motivated by equity issuance to benefit from the low cost of capital. This effect is more prominent for financially constrained firms. Consistent with the catering channel, the authors find that the misvaluation-investment nexus is more pronounced in firms with short-horizon investors. By examining the stocks’ long-term performance of misvalued firms, via a sorting portfolio procedure, the authors find that undervalued firms outperform and generate higher abnormal returns (Jensen’s alpha) than overvalued firms, suggesting that mispricing-driven investment appear to be short-lived and lead to lower return in the long term.

Corporate decision-makers and governance structures should pay attention to the rationality of the corporate investment decision in the context of equity market misvaluation. Managers who focus on maximizing the stock market value in the short-run at the expense of its long-term performance must give preference to value-creating investment, not driven by an external mechanism such as equity market mispricing. More generally, investors and portfolio managers must take into account the market mispricing process in decision-making. Nonetheless, from the portfolio sorting perspective, decision-makers must act in terms of high governance quality to mitigate suboptimal investment due to stock market mispricing (Jensen, 2005). Finally, equity market overvaluation, leading managers to invest via equity financing in particular, should be a signal to attract investors’ attention to seize the window of opportunity and embark on a short-term portfolio strategy. Such a strategy promises high returns in the short term.

This paper investigates jointly two theoretical channels: equity market timing and catering. The authors propose for the analysis three components of the M/B decomposition to dissociate market misvaluation at the firm and industry level from the fundamental component of market value (growth). This procedure provides a better understanding of the role of firm and industry misvaluation in explaining corporate investments. The authors provide evidence of the equity market misvaluation via a portfolio sorting procedure and a Carhart (1997) four-factor pricing model. The authors examine the effect of misvaluation on both the investment and the financing decisions.

The purpose of this paper is to explore how a politically connected firm moderates the relationship between media coverage and market value. More specifically, the authors are interested in the interplay of an external corporate governance (CG) mechanism with an internal one. By interacting different mechanisms, this paper advances the empirical setting of application and functions of the corporate governance.

This paper tests the hypotheses presented using panel data with a fixed-effect model, by assembling and exploiting a unique, hand-collected set of data on media coverage consisting of over 164,000 media reports and a politically connected board of directors comprising over 12,000 CVs tracked from 2010 to 2014. Data is originally from Brazil, a country where political connections are highly used by firms and that has been a place of much research on corporate political activity.

The results of this paper suggest that a politically connected board of directors can mitigate the negative effects of media coverage on market value. Overall, the results imply that the validity of a CG mechanism might be affected by other mechanisms.

The findings of this paper imply the need for research focusing on the mutual effects of different CG mechanisms. While CG is understood as a set of mechanisms, new research could focus on the interplay of these mechanisms.

The findings suggest that the presence of former politicians and government officers on the board dissipates bad news reported by the media and boosts market value when media is positive. To maximize investment returns, investors should analyze firms' political human capital.

To the best of the authors’ knowledge, this paper is the first to develop hypotheses on the moderation effects of a politically connected board on the relation between media coverage and market value. This is relevant because this brings insights on how firms could jointly manage these mechanisms.

The purpose of the this paper is to correct a deficiency in the published literature by examining the share price performance of firms that own high-value brands in uptrending, downtrending and sideways markets.

The authors examined stock price performance for an index of firms that owned brands in the Interbrand list of the “Best Global Brands” from 2001 through 2009 using the Fama-French method.

The authors’ index outperformed the Standard & Poor’s 500 when the market was up or downtrending, but not when it moved sideways.

The authors find that an index of firms that own the produced better returns than the Standard & Poor’s 500 market index. Owning highly valued brands may be a marketplace signal to the investing community regarding the firm’s management acumen.

Owning high-value brands seems to influence share price performance, a metric used to judge chief executive officers. Thus, brand investments align with the shareholders’ interest. The authors help alleviate the perception (Challagalla et al., 2014) that marketing managers make investments on an ad hoc basis.

For the first time, the authors evaluate the effect of owning one or more of the world’s most valuable brands on the market value of common stock using data from downtrending, uptrending and no-trend periods. This research is also among the first to introduce volatility into the Fama-French method and it is an important explanatory variable. This paper’s approach has interesting comparisons to other papers taking a similar analytical approach.

The purpose of this paper is to explore and compare the extent of intellectual capital (IC) and its four components among ASEAN countries, and examine the relationship between firms’ IC, market value, and financial performance.

The study uses the data of 213 technology firms listed on five ASEAN stock exchanges. Pulic’s Value Added Intellectual Coefficient model is modified by adding an extra component, namely, relational capital efficiency (RCE). The Kruskal-Wallis one-way ANOVA and multiple regression analysis have been utilized to test the hypotheses.

The results reveal that there is no significant difference in Modified Value Added Intellectual Coefficient (MVAIC) across five ASEAN countries; however, firms in each country tend to place a different degree of emphasis on components of MVAIC to generate corporate value. The results further indicate a positive relationship between IC and market value, confirming that firms with greater IC tend to have greater market value. Likewise, a positive relationship between IC and financial performance measures is confirmed. Specifically, IC is found to be positively associated with margin ratio and return on assets. Capital employed efficiency and human capital efficiency are found to be the most influential value drivers for both market value and financial performance while structural capital efficiency and relational capital efficiency possess less importance.

This study contributes to the IC literature by expanding our knowledge of IC in the emerging economies, and providing a national comparative IC research when such research is limited.

Surveys of senior real estate executives have previously indicated that real estate represents approximately 25 per cent of corporate worth. These surveys, however, relied on self reported estimates of current real estate value. This study uses objective data to investigate the proportionate value that real estate represents on corporate balance sheets. The findings indicate that, when buildings are adjusted for inflation, real estate represents about 40 per cent of total corporate assets. Since corporate worth may also be measured in market value terms, several indexes were constructed to measure the proportion of firm market value represented by real estate assets. With buildings inflation adjusted, real estate represents about 80 per cent of firm market value. Although firm size does have an impact on all the ratios computed in this study, the impact is fairly modest in virtually all cases

This paper aims to investigate the economic determinants and the effects on firm value of the Chief Marketing Officer’s (CMO’s) equity incentives.

The empirical analysis uses 586 firm-year observations corresponding to 227 unique firms collected from Execucomp dataset over the period 2000-2009.

The paper documents that when a firm’s marketing intensity increases, the CMO’s equity incentives significantly increase; CMO’s equity incentives are positively related to shareholder value, and this positive relationship is incremental to that between the Chief Executive Officer’s (CEO)’s equity incentives and firm value; the positive impact of the CMO’s equity incentives on the firm value is partially mediated by marketing investments.

The paper helps understand under which circumstances firms provide the CMO with high-equity incentives and what the performance implications are of providing the CMO with long-term incentives.

Results indicate that companies should try to incent the CMO with equity-based incentives because the CMO can boost shareholder value on a way that is incremental to how the CEO does so. As a consequence, if the board of directors decides not to provide the CMO with sufficient equity incentives, it is likely that this decision will be suboptimal for shareholders.

This paper is the first to analyze the structure and effect on firm value of the CMO’s compensation in answer to calls for research on compensation of executives other than CEOs.

The purpose of this paper is to investigate whether the political setting (civil war versus temporary truce) in a country has an influence on firms' current narrative, visual, and numerical intellectual capital disclosure being included in the current market value of equity.

Using content analysis for data generation, this study identifies narrative, visual, and numerical intellectual capital disclosure in firms' annual reports. Financial data were obtained from firms' annual reports and the stock exchange. Fixed effect panel regression was conducted separately for the civil war period and temporary truce period.

The paper finds that during the period entirely beset by civil war, the current market value of equity includes net book value and current earnings only, and does not include narrative, visual, or numerical intellectual capital disclosure. During the period of temporary truce, the current market value of equity includes net book value, current earnings, and narrative disclosure, but not visual or numerical intellectual capital disclosure.

The findings provide insights into the effectiveness of disclosure strategies in politically unstable environments.

This study analyses the disclosure strategies in a civil war and temporary truce context.

The purpose of this study is to broadly examine the role of marketing–finance interface factors for value creation. Specifically, the study investigates the influence of discretionary expenditures such as advertisement on valuation of brands and firms within the framework of risk factors.

To test the model and hypotheses of this study as it has the possibilities of multiple causations among different variables used in the system. Some independent variables are not truly independent and there is a possibility of biased estimation and inconsistent results. Hence a dynamic simultaneous equation model is used including the instrumental variable approach.

The study provides evidence for direct association between brand value and firm value which is represented by the joint impact of both operating and stock market performance. The results establish the direct relationship between brand and firm value and signify the relevance of intangible value creation.

This study addresses the gap in the research which examines the role of marketing decisions on value creation which jointly impacts both operating and stock market performance.

Previous research and logic indicate that capital markets generally value spending for advertising and promotion; however, empirical results from these studies are far from consistent. While most studies find a positive relationship between a firm's advertising spending and its market value (Hirschey, 1985; Jose, Nichols and Stevens, 1986; Lustgarten and Thomadakis, 1987;Morck, Shleifer and Vishny, 1988; and Morck and Yeung, 1991), others find a negative relationship when control variables are added to the empirical model (Erickson and Jacobson, 1992). Differences in model specification may explain these conflicting results. Previous studies have included a variety of control variables such as return on investment, market share, research and development (R&D) spending, and book value (Erickson and Jacobson, 1992; Chauvin and Hirschey, 1993; Hirschey, 1982) when testing the relationship between promotional expenses and market value. Different firm characteristics (e.g. sales, total assets, book value of equity and price) have been selected as scalers for empirical measures of both the dependent and independent variables. Although these studies investigated an essentially identical theoretical relationship, variation in model specifications renders interpretations different.

This study aims to explore the impact of blockchain announcements on enterprises' stock market value.

Based on resource-based theory, this study constructs a complete framework of the impact mechanism of blockchain announcements on the stock price of the announcing firm using the data of 143 blockchain announcements. An event study methodology is used in this research, and the market model, market-adjusted model and Carhart four-factor model are used to estimate stock abnormal returns after the blockchain announcement; and the cross-sectional regression model is used to test the influencing factors.

Blockchain announcements elicit a significantly positive market reaction on the release day. Compared to announcements not pertaining to technical innovation, blockchain technical innovation announcements exhibit a more positive market reaction towards the announcing companies. Strategic-level announcements exhibit a more positive market reaction than operational-level announcements. Enterprise characteristics, such as enterprise-scale and enterprise innovation ability, do not affect stock market reactions to blockchain announcements.

The findings reveal the economic value of conducting blockchain activities in the Chinese stock market. Findings of this study can help managers understand the value of implementing blockchain activities in a different market environment and guide them on how to improve the market value of their enterprises through the active implementation of blockchain activities.

To the best of the authors’ knowledge, this is the first event study to focus solely on the value of pure blockchain announcements in an emerging market. This study considers multiple resource and capability factors that would influence blockchain technology adoption, improve the current understanding of how blockchain announcements affect corporate stock prices and provide directions for future comparative studies of market reactions to blockchain announcements in different stock markets.