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1 – 5 of 5Kane Smith, Manu Gupta, Puneet Prakash and Nanda Rangan
Ethereum-based blockchain technology (EBT) affords members of the Enterprise Ethereum Alliance (EEA) a market advantage in deploying blockchain within their organizations…
Abstract
Purpose
Ethereum-based blockchain technology (EBT) affords members of the Enterprise Ethereum Alliance (EEA) a market advantage in deploying blockchain within their organizations, including cybersecurity and operational benefits, that leads firms to strategically invest in this nascent technology. However, the impact of such strategic investments in EBT has yet to be explored in the context of its relationship to firm value. Therefore, this study explores EBT-specific firm-level characteristics that result in a stock market reaction to announcements of strategic investments.
Design/methodology/approach
The authors use the event study methodology, strategic investment literature and signaling theory as contextualizing frameworks for their study. Additionally, the authors explore a new method for examining technology investments as a strategic counter to cybersecurity threats.
Findings
Firms that signal to the market their strong commitment to their strategic investment by developing an EBT proof of concept see significantly higher market returns. Firms that have had prior cybersecurity incidents are rewarded by the market for strategically investing in EBT, and when firms with large undistributed free cash flows utilize this cash for strategic EBT investment, the market is more likely to reward these firms, indicating the market views EBT investment positively in these circumstances.
Originality/value
The results of this study provide new evidence of the value impact of EBT for firms that suffered cybersecurity events in the past. The authors provide empirical evidence of firm-level characteristics that investors use to discern whether a strategic investment in EBT will drive organizational value. Likewise, the authors demonstrate how signaling affects investor perceptions of strategic information technology (IT) investments in EBT.
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Swechha Chada and Gopal Varadharajan
This paper aims to examine the relationship between earnings quality and corporate cash holdings in an emerging economy. Existing literature posits that earnings quality is a…
Abstract
Purpose
This paper aims to examine the relationship between earnings quality and corporate cash holdings in an emerging economy. Existing literature posits that earnings quality is a result of information asymmetry and firms with lower earnings quality increases cash holdings, to shield the firm from future uncertainties. In this paper, the authors propose a ‘private benefits hypothesis’, which suggests that lower earnings quality is an indicator of opportunism and expropriation of resources in the firm, through tunneling or excessive executive compensations. As a result, firms with lower earnings quality increase cash holdings in their control, to increase their private benefits and to avoid the scrutiny of the external stakeholders. The authors further examine the monitoring role played by institutional investors on cash holdings, with varying degrees of earnings quality.
Design/methodology/approach
This study uses an unbalanced panel data sourced from Prowessdx, from 2000 to 2019. The analysis employs 20,231 firm-year observations from 2,421 firms. Earnings quality is calculated following Dechow and Dichev (2002).
Findings
Empirical analysis confirms that the firms with higher earnings quality reduce cash. Further, institutional investors reduce the cash holdings in firms with higher earnings quality. Institutional investors effectively reduce the cash only in firms with at least 10% of equity shareholding. The results are robust to alternative measures of earnings quality and endogeneity concerns.
Originality/value
This study diverges from the information asymmetry hypothesis in the existing literature on earnings quality and cash holdings and highlights the underlying private benefits hypothesis, that will impact cash holdings. Next, the 10% institutional shareholding is important in the Indian context as it represents the minimum threshold at which block holders can request extraordinary general meetings (Section 100 of the Companies Act 2013) or the involvement of the National Company Law Tribunal (NCLT) (Section 213 of the Companies Act 2013). This study highlights that unlike in Anglo-Saxon economies, institutional investors or other minority shareholders are empowered by the Companies Act 2013 to play a vital role in corporate governance with a mere 10% equity.
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Albert Agbeko Ahiadu and Rotimi Boluwatife Abidoye
This study systematically reviewed existing literature on the impact of economic uncertainty on property performance to highlight focus areas and spur future research amid…
Abstract
Purpose
This study systematically reviewed existing literature on the impact of economic uncertainty on property performance to highlight focus areas and spur future research amid unprecedented global uncertainty levels. Conceptually, uncertainty levels and environmental dynamism are related to investors' risk judgement and decision-making.
Design/methodology/approach
Peer-reviewed journal articles published from 2007 to 2022 were assembled and arranged through the Scientific Procedures and Rationales for Systematic Literature Reviews (SPAR-4-SLR) protocol. The initial search produced 2,028 results from the Web of Science and Scopus databases, which were rigorously purified for a final dataset of 70 articles. These records were subsequently assessed through content analysis, bibliographic modelling, topic modelling and thematic analysis. Recurring themes were visualised using the VOSviewer software.
Findings
The existing literature suggests that economic uncertainty negatively impacts investment volumes, returns and performance. Research has also increased since 2018, with a strong emphasis on the housing sector and developed property markets. Commercial property and emerging markets account for only 10 and 8% of previous research, respectively.
Practical implications
These findings highlight the negative impact of economic uncertainties on property performance and investment volumes, which necessitate careful risk assessment. Given the high susceptibility of emerging and commercial property markets to uncertainty, these markets warrant further research amid ongoing uncertainty concerns across the globe.
Originality/value
Given current unprecedented levels of global uncertainty, the effects of economic uncertainty have received renewed interest. This study synthesised the current understanding of how different property markets respond to increased uncertainty and outlined future research directions to enhance understanding. Themes and relationships were also integrated into a conceptual map summarising the reported effects of economic uncertainty on housing, commercial property, investment and behaviour in the property market.
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Apoorva Arunachal Hegde, Ajaya Kumar Panda and Venkateshwarlu Masuna
This paper aims to investigate the non-homogeneity in the speed of adjustment (SoA) of the capital structure of manufacturing companies. It also attempts to study the key…
Abstract
Purpose
This paper aims to investigate the non-homogeneity in the speed of adjustment (SoA) of the capital structure of manufacturing companies. It also attempts to study the key determinants that accelerate the speed of adjustment towards the target leverage level.
Design/methodology/approach
Using the dynamic panel fraction (DPF) estimator on the partial adjustment model, the study captures the heterogeneous SoA of 2,866 firms across eight prominent sectors of the Indian manufacturing industry from 2009 to 2020. To ensure robustness, the empirical inferences of DPF are cross-verified with the estimates of panel-corrected standard errors (PCSE).
Findings
The authors find a combination of the capital structure's slow, moderate and rapid adjustment speed along with the relevance of trade-off theory. Interestingly, the lowest and fastest SoA is recorded by the dwindling textile sector and expanding food and agro sector, respectively. Profitability, firm size, asset tangibility and non-debt tax shields are the key firm-specific parameters that impact the SoA towards the target.
Originality/value
Availing the rarely employed estimator ‘DPF’ and the objective of documenting diverse and non-uniform adjustment speeds across the Indian manufacturing sectors marks a novel addition to capital structure literature.
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Lizbeth Salgado and Dena Maria Camarena
The main objective of this paper is to analyse the relationship between innovation and traditional concepts to explain the phenomenon of traditional food with innovation from a…
Abstract
Purpose
The main objective of this paper is to analyse the relationship between innovation and traditional concepts to explain the phenomenon of traditional food with innovation from a market and consumer behaviour perspective in the Mexican context.
Design/methodology/approach
The research is carried out in two phases: (1) analysis of the offer in distribution and (2) consumer research. First, a mixed observation technique in the offer of traditional foods with innovation was carried out. The data were recollected from 24 companies' websites and was complemented with information from main distribution chains of the city of Hermosillo (Mexico). Second, a survey was carried out with 310 Mexican consumers. The data obtained were analysed using bi-variable and multivariable techniques.
Findings
The findings from the websites showed that there are 19 traditional products with innovation that are marketed through this medium, while 39 traditional products with innovation are offered in distribution chains. Of all foods, 61% showed innovations in ingredients and materials. Also, the consumer evaluations identified three segments: the consumers orientated towards innovations, convenience and health (42.2%), those orientated towards sensory innovations (39%), and those more inclined towards innovations in marketing and availability (18.7%).
Research limitations/implications
The research considers a partial perspective of the agri-food chain and not an integral vision, it is limited to a specific area and to certain traditional foods.
Practical implications
The symbiosis between innovation and tradition is identified from the perspective of supply and demand. The trend that exists in the market regarding the types of innovations and the gaps that exist regarding environmental elements are recognized.
Social implications
The data obtained in the research generate information for business decision-making and entrepreneurship; in addition indicates new dietary and consumption patterns. It also provides knowledge about innovation and tradition, and highlights the relevance of traditional food.
Originality/value
This study tries to fill a gap in the literature by focusing on the market and consumer behaviour perspective for traditional food with innovation.
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