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Book part
Publication date: 24 October 2019

Tarek Ibrahim Eldomiaty, Panagiotis Andrikopoulos and Mina K. Bishara

Purpose: In reality, financial decisions are made under conditions of asymmetric information that results in either favorable or adverse selection. As far as financial decisions…

Abstract

Purpose: In reality, financial decisions are made under conditions of asymmetric information that results in either favorable or adverse selection. As far as financial decisions affect growth of the firm, the latter must also be affected by either favorable or adverse selection. Therefore, the core objective of this chapter is to examine the determinants of each financial decision and the effects on growth of the firm under conditions of information asymmetry.

Design/Methodology/Approach: This chapter uses data for the non-financial firms listed in S&P 500. The data cover quarterly periods from 1989 to 2014. The statistical tests include linearity, fixed, and random effects and normality. The generalized method of moments estimation method is employed in order to examine the relative significance and contribution of each financial decision on growth of the firm, respectively. Standard and proposed proxies of information asymmetry are discussed.

Findings: The results conclude that there is a variation in the impact of financial variables on growth of the firm at high and low levels of information asymmetry especially regarding investment and financing decisions. A similar picture emerges in the cases of firm size and industry effects. In addition, corporate dividen d policy has a similar effect on firm growth across all asymmetric levels. These findings prove that information asymmetry plays a vital role in the relationship between corporate financial decisions and growth of the firm. Finally, the results contribute to the vast literature on the estimation of information asymmetry by demonstrating that the classical and standard proxies for information asymmetry are not consistent in terms of the ability to differentiate between favorable or adverse selection (which corresponds to low and high level of information asymmetry).

Originality/Value: This chapter contributes to the related literature in two ways. First, this chapter offers updated empirical evidence on the way that financing, investment, and dividends decisions are made under conditions of favorable and adverse selection. Other related studies deal with each decision separately. Second, the study offers new proxies for measuring information asymmetry in order to reach robust estimates of the effects of financial decisions on growth of the firm under conditions of agency problems.

Book part
Publication date: 9 February 2023

Jeb Brown, Ashley Simon and Justin Turner

The use of data in the twenty-first century to improve expert decision-making has radically transformed what it means to be an expert in multiple fields, including behavioural…

Abstract

The use of data in the twenty-first century to improve expert decision-making has radically transformed what it means to be an expert in multiple fields, including behavioural healthcare. This chapter summarises the impact on information technology on the field, including use of digital platforms to enable video therapy and online cognitive behavioural therapy programmes. The chapter is intended for practitioners seeking information on how to be a twenty-first century expert, where years of education and experience matter less compared to evidence of performance in the form of solid outcome data. Key to the use of outcome data is expertise in how to use questionnaires in therapy and how to interpret results, both at the individual client level as well as overall results across multiple clients. A twenty-first century expert measures are not simply to measure outcomes but to improve results over time. Failure to incorporate the use of data into routine practice ignores an evidence based practice with decades of evidence as to its effectiveness, potentially resulting in suboptimal care.

Details

Evidence Based Counselling & Psychotherapy for the 21st Century Practitioner
Type: Book
ISBN: 978-1-80455-733-4

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Book part
Publication date: 22 May 2013

Larry Maheady, Cynthia Smith and Michael Jabot

Evidence-based practice (EBP) can have a powerful impact on school-aged children. Yet this impact may not be realized if classroom teachers do not use empirically supported…

Abstract

Evidence-based practice (EBP) can have a powerful impact on school-aged children. Yet this impact may not be realized if classroom teachers do not use empirically supported interventions and/or fail to include the best research available when they make important educational decisions about children. Whether classroom teachers use EBP may be influenced, in part, by what they learned or failed to learn in their preservice preparation programs. This chapter describes recent efforts to assess preservice teachers’ understanding and use of empirically supported interventions and provides four examples of how such practices were taught to preservice general educators in a small, regional teacher preparation program. We discuss four contemporary educational reform movements (i.e., federal policies mandating EBP, state-level policies linking growth in pupil learning to teacher evaluation, clinically rich teacher preparation, and the emergence of a practice-based evidence approach) that should increase interest and use of EBP in teacher education and offer recommendations for how teacher educators might infuse EBP into their traditional teaching, research, and service functions in higher education.

Details

Evidence-Based Practices
Type: Book
ISBN: 978-1-78190-429-9

Book part
Publication date: 14 March 2003

Larry W Cox, Michael D Ensley and S.Michael Camp

This study tests the “Resource Balance Proposition” that is developed from the Resource-Based View (RBV) of strategy. While recent research using RBV to study new ventures has…

Abstract

This study tests the “Resource Balance Proposition” that is developed from the Resource-Based View (RBV) of strategy. While recent research using RBV to study new ventures has focused primarily on the identification and acquisition of resources (Alvarez & Busenitz, 2001; Lichtenstein & Brush, 2001), this investigation examines the deployment of given resources in the pursuit of growth. It argues that the effective management of the resource base is at least as important to long-term survival as securing that base in the first place. Further, it assumes that firm growth is a desirable goal (especially for young firms) but posits that growth is not without cost and highly accelerated growth is particularly costly. Therefore, the hypotheses presented in this paper propose that there is a growth trajectory that optimizes profits and net worth by striking a balance between the resource deployments necessary to fuel growth and those needed to meet current obligations. The findings from this study confirm that both too little and too much growth have detrimental effects on firm vitality. More specifically, the data show a curvilinear relationship between the absolute rate of firm growth and the levels of both profits and net worth. This finding provides significant support for the Resource Balance Proposition, which states that the allocation of firm resources must be properly balanced between current resource positions and future resource positions to maximize wealth creation.

Details

Issues in Entrepeneurship
Type: Book
ISBN: 978-1-84950-200-9

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Book part (4)
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