Search results

1 – 10 of over 1000
Article
Publication date: 21 July 2023

Hu Xuhua, Otu Larbi-Siaw and Erika Tano Thompson

Eco-innovations (EIs) are intended to benefit not only the environment but society and firms, but how the relationship is reconciled is unclear, particularly in emerging…

Abstract

Purpose

Eco-innovations (EIs) are intended to benefit not only the environment but society and firms, but how the relationship is reconciled is unclear, particularly in emerging economies. The advancement of EI has resulted in both positive and negative relationships with sustainability, indicating that the association is more complex than a simple linear one.

Design/methodology/approach

Thus, the authors hypothesize that EI has a curvilinear relationship with sustainable business performance (SPB) and that market turbulence (MT) exerts stimulus that reinforces EIs. Accordingly, using the Stata software, the authors apply a moderated regression to a sample size data of 511 manufacturing firms to test the hypothesized assumptions.

Findings

Although the results attest to a positive relationship between EI and SBP, the results are synonymous with an inverted “U” shape that renders EIs unprofitable beyond a certain threshold (rebound effect). Additionally, the authors observe that the moderation stimulus of technology turbulence flattens the inverted U-shaped curve.

Originality/value

Built on the foundations of natural-resource-based view (NRBV) and contingency theory, the authors identify the rebound effect point of EI and SBP and the reinforcing stimulus of MT.

Details

Kybernetes, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0368-492X

Keywords

Article
Publication date: 27 July 2021

Mahfuzur Rahman, Dieu Hack-Polay, Sujana Shafique and Paul Agu Igwe

Internationalisation is considered as a key strategy for the growth of Small and Medium Enterprises (SMEs). The purpose of this paper is to examine the relationship between…

643

Abstract

Purpose

Internationalisation is considered as a key strategy for the growth of Small and Medium Enterprises (SMEs). The purpose of this paper is to examine the relationship between dynamic capability, SMEs internationalisation and firm performance in the context of emerging economies and to evaluate the impact of financial, asset and market expansion on internationalisation of SMEs.

Design/methodology/approach

Using primary data from 212 SMEs from Bangladesh, structural equation modelling and mathematical (hierarchical reflective) model, the analysis enabled the measurement of the casual relationship on the impacts of internationalisation.

Findings

The results revealed that internationalisation of SMEs has significant impact on both financial and non-financial performance of SMEs in an emerging economy- Bangladesh. The paper found internationalisation impacts on two dimensions (financial and non-financial) with eight defined indicators – higher sales, higher profit, assets maximisation, market expansion, competitive advantage, better reputation, better customer service and added knowledge.

Originality/value

Despite several studies that examine the relationship between SME internationalisation and firm performance, limited research exists on emerging economies. This is contrary to the fact that SMEs are one of the main vehicles for growth in those economies such as Bangladesh. In this research, the authors use the theories of dynamic capabilities to conceptualise how internationalisation becomes a core SME capability for SMEs in an emerging economy.

Details

International Journal of Emerging Markets, vol. 18 no. 9
Type: Research Article
ISSN: 1746-8809

Keywords

Book part
Publication date: 19 February 2024

Quoc Trung Tran

As a financial policy, dividend policy significantly affects firm value. This chapter analyzes how stock prices react to dividend decisions. First, a dividend payment is an…

Abstract

As a financial policy, dividend policy significantly affects firm value. This chapter analyzes how stock prices react to dividend decisions. First, a dividend payment is an extraction of value; therefore, stock price theoretically drops by the dividend amount on the ex-dividend day. In practice, the price drop and the dividend magnitude are not equal because of tax clientele, short-term trading, and market microstructure. Investors are indifferent in trading stocks before and after stocks go ex-dividend if they obtain equal marginal benefits from the two trading times. The difference in tax rates on dividends and capital gains leads to the gap between the price drop and the dividend amount. Moreover, if transaction costs are considerable, investors have high incentives to short-sell stocks until they cannot obtain more profits. The final outcome of this short-term trading is the difference between the price drop and the dividend amount. Furthermore, market microstructure factors such as limit orders, bid-ask spread, and price discreteness also create this gap. Second, dividend announcements convey valuable information to outsiders. When firms announce increases (decreases) in dividends, their stock prices tend to increase (decrease). Third, dividend policy is negatively related to stock price volatility. This negative relationship is explained by duration effect, rate of return effect, arbitrage realization effect, and information effect. Empirical evidence for this relationship is found in many countries. Finally, dividend smoothing is also considered as a signal about firms' future earnings. Consequently, firms with stable dividends have higher market value. In other words, dividend stability has a positive effect on stock prices.

Article
Publication date: 22 June 2023

Zied Saadaoui and Salma Mokdadi

This paper aims to improve the debate linking the business models of banks to their riskiness by checking if diversification exerts different impacts on the probability of bank…

Abstract

Purpose

This paper aims to improve the debate linking the business models of banks to their riskiness by checking if diversification exerts different impacts on the probability of bank distress depending on the level of capital buffers.

Design/methodology/approach

The paper focuses on a sample of listed bank holding companies observed between 2007:Q3 and 2022:Q4. The authors use three subindexes of bank diversification. The authors estimate a dynamic model specification using a system generalized method of moments with robust standard errors and consistent estimators under heteroskedasticity and autocorrelation within a panel. Sensitivity and robustness checks are performed.

Findings

Asset and income diversification increase the probability of distress in low-capitalized banks during normal periods (excluding periods of crises and high uncertainty). Concerning crisis periods, a marginal increase in asset diversification during the global financial crisis (GFC) and the COVID-19 pandemic crisis induces a more important increase in the probability of failure of well-capitalized banks relative to low-capitalized ones. Contrary to the results obtained for the GFC period, well-capitalized banks were found to pursue more careful funding diversification in reaction to the sudden increase of uncertainty during the Russia–Ukraine war.

Research limitations/implications

Prudential supervision should concentrate on well-capitalized banks to encompass unexpected excessive risk-taking during crisis periods. Regulatory requirements should constrain fragile banks to avoid pursuing assets and income diversification strategies that increase earnings volatility.

Originality/value

The main originality of this paper is to consider the interaction between three different dimensions of bank diversification and capital regulation during stable and unstable periods using the marginal effect analysis. Moreover, this paper uses, initially, the GFC as the reference crisis period to study the impact of capital buffers and diversification interactions on the probability of bank distress. Then, the authors extend the observation period until 2022:Q4 to include two additional major events, namely, the COVID-19 pandemic and the Russia-Ukraine war.

Details

Journal of Financial Regulation and Compliance, vol. 31 no. 5
Type: Research Article
ISSN: 1358-1988

Keywords

Book part
Publication date: 4 April 2024

De-Wai Chou, Pi-Hsia Hung and Lin Lin

This study focuses on listed and over-the-counter (OTC) companies in the Taiwan Stock Exchange. It found that an increase in the ownership proportion of institutional investors…

Abstract

This study focuses on listed and over-the-counter (OTC) companies in the Taiwan Stock Exchange. It found that an increase in the ownership proportion of institutional investors (INs), including foreign investors, investment trusts, and dealers can enhance the informativeness of stock prices. The relationship between these factors follows an inverted U-shaped pattern, indicating that excessively high ownership ratios can actually lead to a decrease in the informativeness of stock prices. Additionally, increasing the ownership proportions of foreign investors and investment trusts can reduce the risk of stock price collapse, while dealers show no significant relationship in this regard. This study also reveals that the technical variable of the price deviation rate is an important explanatory factor for post-collapse returns. It is positively correlated with the magnitude of the price decline after a collapse, meaning that stocks with weaker pre-collapse performance experience larger post-collapse declines. When the data during the 2020 pandemic period are excluded, changes in foreign ownership ratios show a significant positive correlation with postcrash returns in both the long and short term. The significant correlation in the short term may be due to a high proportion of foreign ownership. Any reduction in this could put pressure on stock prices, and retail investors may follow suit and sell-off, using foreign investors as a reference. The significant correlation in the long term might be due to foreign investors themselves possibly also trying to avoid the pressure that their own short-term sell-offs could exert on stock prices. The changes in the ownership ratios of investment trusts and dealers indicate that medium and long-term changes have a significant impact on postcrash returns, while the changes in the major players' ownership show no significant correlation. When data from 2020 are included in the analysis, the significance of all INs decreases.

Details

Advances in Pacific Basin Business, Economics and Finance
Type: Book
ISBN: 978-1-83753-865-2

Keywords

Article
Publication date: 20 January 2023

Yuanyun Yan, Bang Nam Jeon and Ji Wu

This study tends to investigate how the outbreak of the coronavirus disease 2019 (COVID-19) pandemic has affected banks' contribution to systemic risk. In addition, the authors…

2925

Abstract

Purpose

This study tends to investigate how the outbreak of the coronavirus disease 2019 (COVID-19) pandemic has affected banks' contribution to systemic risk. In addition, the authors examine whether the impact of the pandemic may vary across advanced/emerging economies, and with banks with differed characteristics.

Design/methodology/approach

The authors construct the bank-specific conditional value at risk (CoVaR) and marginal expected shortfall (MES) to measure their contribution to systemic risk and define the outbreak of the COVID-19 pandemic by the timing when countries report more than 100 confirmed cases. The authors use the approach of difference-in-differences to assess the impact of the COVID-19 pandemic on banks' contribution to systemic risk. This sample comprises monthly panel data of around 900 listed commercial banks in 39 advanced and emerging economies.

Findings

The authors find that, firstly, the COVID-19 pandemic increased banks' contribution to systemic risk significantly around the world. Secondly, the impact of the COVID-19 virus was more pronounced in developed countries than in emerging economies. Finally, banks with a larger size and higher loan-to-deposit ratio are more greatly affected by the COVID-19 pandemic, while a higher capitalization for banks is insufficient to shelter them from the adverse impact of such pandemic.

Originality/value

The authors assess the impact of the COVID-19 pandemic on banks' contribution to systemic risk. Using the conditional value at risk (marginal expected shortfall) of banks as the measure, this study’s results suggest that banks' contribution to systemic risk increases by around 25% (48%) amid the COVID-19 pandemic. This study’s findings may shed some light on the potential policies that financial regulators may employ to ameliorate the adverse outcomes of the ongoing pandemic.

Details

China Finance Review International, vol. 13 no. 3
Type: Research Article
ISSN: 2044-1398

Keywords

Article
Publication date: 8 May 2023

Catherine D'Hondt, Rudy De Winne and Aleksandar Todorovic

This paper examines whether target returns act as specific goals that impact risk-taking when individuals make investment decisions.

109

Abstract

Purpose

This paper examines whether target returns act as specific goals that impact risk-taking when individuals make investment decisions.

Design/methodology/approach

Using an experimental setting, the authors assign either a low or a high target return to participants and ask them to make independent investment decisions as the risk-free rate fluctuates around their target return and, for some of them, becomes negative.

Findings

Building on cumulative prospect theory, the authors find that the prevailing reference point of participants is the target return, regardless of the level of the risk-free rate. This result still holds even when the risk-free rate is negative, suggesting that (1) the target return drives risk-taking more than does a zero-threshold and (2) negative rates are limited as a tool to stimulate appetites for risk. In a follow-up study, the authors show that these conclusions remain valid when the target return is endogenously determined.

Originality/value

The authors' original approach, which pioneers the use of target returns in both the positive and negative interest rate contexts, provides insightful results about the “reach for yield” among regular people.

Details

Review of Behavioral Finance, vol. 16 no. 1
Type: Research Article
ISSN: 1940-5979

Keywords

Article
Publication date: 7 November 2023

Mohammed Bouaddi, Omar Farooq and Catalina Hurwitz

The aim of this paper is to document the effect of analyst coverage on the ex ante probability of stock price crash and the ex ante probability stock price jump.

Abstract

Purpose

The aim of this paper is to document the effect of analyst coverage on the ex ante probability of stock price crash and the ex ante probability stock price jump.

Design/methodology/approach

This paper uses the data of non-financial firms from France to test the arguments presented in this paper during the period between 1997 and 2019. The paper also uses flexible quadrants copulas to compute the ex ante probabilities of crashes and jumps.

Findings

The results show that the extent of analyst coverage is positively associated with the ex ante probability of crash and negatively associated with the ex ante probability of jump. The results remain qualitatively the same after several sensitivity checks. The results also show that the relationship between the extent of analyst coverage and the probability of cash and the probability of jump holds when ex post probability of stock price crash and stock price jump is used.

Originality/value

Unlike most of the earlier papers on this topic, this paper uses the ex ante probability of crash and jump. This proxy is better suited than the ones used in the prior literature because it is a forward-looking measure.

Details

Review of Behavioral Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1940-5979

Keywords

Article
Publication date: 18 July 2023

Fabio Gobbi and Sabrina Mulinacci

The purpose of this paper is to introduce a generalization of the time-varying correlation elliptical copula models and to analyse its impact on the tail risk of a portfolio of…

Abstract

Purpose

The purpose of this paper is to introduce a generalization of the time-varying correlation elliptical copula models and to analyse its impact on the tail risk of a portfolio of foreign currencies during the Covid-19 pandemic.

Design/methodology/approach

The authors consider a multivariate time series model where marginal dynamics are driven by an autoregressive moving average (ARMA)–Glosten-Jagannathan-Runkle–generalized autoregressive conditional heteroscedastic (GARCH) model, and the dependence structure among the residuals is given by an elliptical copula function. The correlation coefficient follows an autoregressive equation where the autoregressive coefficient is a function of the past values of the correlation. The model is applied to a portfolio of a couple of exchange rates, specifically US dollar–Japanese Yen and US dollar–Euro and compared with two alternative specifications of the correlation coefficient: constant and with autoregressive dynamics.

Findings

The use of the new model results in a more conservative evaluation of the tail risk of the portfolio measured by the value-at-risk and the expected shortfall suggesting a more prudential capital allocation policy.

Originality/value

The main contribution of the paper consists in the introduction of a time-varying correlation model where the past values of the correlation coefficient impact on the autoregressive structure.

Details

Studies in Economics and Finance, vol. 40 no. 5
Type: Research Article
ISSN: 1086-7376

Keywords

Article
Publication date: 11 August 2022

Milan Čupić, Mirjana Todorović and Slađana Benković

The purpose of the study is to investigate the association of earnings and cash flows with stock prices and returns, and the impact of regulatory changes on the value relevance of…

Abstract

Purpose

The purpose of the study is to investigate the association of earnings and cash flows with stock prices and returns, and the impact of regulatory changes on the value relevance of accounting numbers.

Design/methodology/approach

The authors examine a sample of non-financial firms listed on the Belgrade Stock Exchange from 2005 to 2018 and use three regression models – price, return and differenced.

Findings

The authors find evidence that accounting earnings are more value relevant than cash flows. The authors also find negative relation of earnings changes with stock returns and argue that this is due to the lower persistence of negative earnings levels and changes. Finally, the authors find that the value relevance of accounting information in Serbia increases after the improvements in capital market regulation.

Research limitations/implications

Given the empirical focus on a transition economy, the widespread applicability of the study is limited. The findings, however, call for more research on transition economies to better understand the functioning of capital markets and the way information from financial statements is incorporated into stock prices.

Practical implications

The results imply that policymakers in transition economies should improve the accounting and capital market regulation to provide better investor protection and to improve the capital market conditions.

Originality/value

The authors add to knowledge about the value relevance of accounting information in emerging and transition economies. The results could be of interest to standard setters in their efforts to better understand and improve the quality of accounting information in emerging and transition economies.

Details

Journal of Accounting in Emerging Economies, vol. 13 no. 3
Type: Research Article
ISSN: 2042-1168

Keywords

1 – 10 of over 1000