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Article
Publication date: 27 July 2020

Gretha Steenkamp and Nicolene Wesson

Share repurchases are increasingly employed in South Africa. Disclosure on share repurchases in annual reports is poor, and a high percentage of share repurchases are not…

Abstract

Purpose

Share repurchases are increasingly employed in South Africa. Disclosure on share repurchases in annual reports is poor, and a high percentage of share repurchases are not announced in real time on the Johannesburg Stock Exchange (JSE). A comprehensive database of share repurchases by JSE-listed companies has been created up to 2009, but post-recession repurchase behaviour is not known. This study aims to examine South African share repurchase behaviour (activity, repurchase entity, repurchase type and transparency) in the post-recession period and compare this to the 2000–2009 period.

Design/methodology/approach

Comprehensive share repurchase data for all JSE-listed companies (excluding those in the basic materials and financial industries) were obtained by scrutinising annual reports and JSE announcements.

Findings

The repurchasing of shares reached a peak during the financial recession of 2008/2009, with share repurchases stabilising at a lower level post-recession. Repurchases executed by subsidiaries have decreased post-recession, probably owing to the introduction of dividends tax. However, 45% of the share repurchase value was not announced via the JSE (compared to 22% in 2000–2009).

Practical implications

Real-time JSE announcements of all share repurchases are required to improve transparency.

Originality/value

Owing to low announcement rates, a lack of transparency relating to share repurchases was observed in South Africa post-recession. Enhanced corporate governance requirements could improve transparency.

Details

Journal of Accounting in Emerging Economies, vol. 10 no. 3
Type: Research Article
ISSN: 2042-1168

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Article
Publication date: 15 August 2018

Sedefka V. Beck and Donka Mirtcheva Brodersen

The purpose of this paper is to examine wealth dynamics through the Great Recession along a dimension previously not studied, religious affiliation. Specifically, this…

Abstract

Purpose

The purpose of this paper is to examine wealth dynamics through the Great Recession along a dimension previously not studied, religious affiliation. Specifically, this paper analyzes wealth differentials and relative wealth losses among religious groups at the mean and along the wealth distribution before and after the Great Recession.

Design/methodology/approach

Drawing on data from the Panel Study of Income Dynamics and including a wide array of control variables, the paper analyzes the impact of religious affiliation groups on wealth pre- and post-Recession, using OLS, generalized least squares and quantile regression models.

Findings

The findings show that wealth differentials among religious groups exist both before and after the Recession and that wealth disparities are greater for people at the low end of the wealth distribution, who lost disproportionately more wealth across religious groups.

Social implications

The results suggest that the Great Recession further increased wealth inequality yet along another dimension, religious affiliation. These findings imply that in order to decrease wealth inequality and minimize other harmful effects of adverse macroeconomic events, religious institutions may provide education on financial management strategies, especially to those at the low end of the wealth distribution.

Originality/value

This paper is the first of its kind to build upon two bodies of literature: the research on religion and wealth and the research on wealth losses and the Great Recession. It is also the first paper to explore the religion–wealth relationship after the Great Recession and along the wealth distribution.

Details

International Journal of Social Economics, vol. 45 no. 9
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 10 August 2015

Manveer Mann, Sang-Eun Byun and Yishuang Li

– The purpose of this paper is to examine the range of realignment strategies employed by retailers in the USA in response to the 2008 economic recession.

Abstract

Purpose

The purpose of this paper is to examine the range of realignment strategies employed by retailers in the USA in response to the 2008 economic recession.

Design/methodology/approach

Following the grounded theory approach, National Retail Federation News Briefs published between 2008 and 2011 were analyzed by sorting them into thematic categories and comparing trends in strategic decisions during the recession (2008-2009) and after the recession (2010-2011). Based on the emergent categories, propositions were developed to provide theoretical explanations of the findings.

Findings

The authors found five thematic categories of realignment strategies: promotional, organizational, price, operational, and product realignments. In line with contingency theories, retailers used these strategies to achieve a greater fit with the altered business environment and consumer consumption patterns. While promotional realignment was most prevalent, followed by organizational realignment, different realignment strategies were pursued based on the strategic focus and long-term vs short-term orientation of the retailers.

Originality/value

The contribution of the findings is twofold: filling a critical gap in the literature examining the range of realignment decisions of the US retail industry in response to the recent economic recession; and enhancing the theoretical understanding of underlying factors or mechanisms of specific realignment decisions in the context of a turbulent economic environment.

Details

International Journal of Retail & Distribution Management, vol. 43 no. 8
Type: Research Article
ISSN: 0959-0552

Keywords

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Article
Publication date: 17 August 2015

Pankaj Sinha and Shalini Agnihotri

This paper aims to investigate the effect of non-normality in returns and market capitalization of stock portfolios and stock indices on value at risk and conditional VaR…

Abstract

Purpose

This paper aims to investigate the effect of non-normality in returns and market capitalization of stock portfolios and stock indices on value at risk and conditional VaR estimation. It is a well-documented fact that returns of stocks and stock indices are not normally distributed, as Indian financial markets are more prone to shocks caused by regulatory changes, exchange rate fluctuations, financial instability, political uncertainty and inadequate economic reforms. Further, the relationship of liquidity represented by volume traded of stocks and the market risk calculated by VaR of the firms is studied.

Design/methodology/approach

In this paper, VaR is estimated by fitting empirical distribution of returns, parametric method and by using GARCH(1,1) with Student’s t innovation method.

Findings

It is observed that both the stocks, stock indices and their residuals exhibit non-normality; therefore, conventional methods of VaR calculation are not accurate in real word situation. It is observed that parametric method of VaR calculation is underestimating VaR and CVaR but, VaR estimated by fitting empirical distribution of return and finding out 1-a percentile is giving better results as non-normality in returns is considered. The distributions fitted by the return series are following Logistic, Weibull and Laplace. It is also observed that VaR violations are increasing with decreasing market capitalization. Therefore, we can say that market capitalization also affects accurate VaR calculation. Further, the relationship of liquidity represented by volume traded of stocks and the market risk calculated by VaR of the firms is studied. It is observed that the decrease in liquidity increases the value at risk of the firms.

Research limitations/implications

This methodology can further be extended to other assets’ VaR calculation like foreign exchange rates, commodities and bank loan portfolios, etc.

Practical implications

This finding can help risk managers and mutual fund managers (as they have portfolios of different assets size) in estimating VaR of portfolios with non-normal returns and different market capitalization with precision. VaR is used as tool in setting trading limits at trading desks. Therefore, if VaR is calculated which takes into account non-normality of underlying distribution of return then trading limits can be set with precision. Hence, both risk management and risk measurement through VaR can be enhanced if VaR is calculated with accuracy.

Originality/value

This paper is considering the joint issue of non-normality in returns and effect of market capitalization in VaR estimation.

Details

Journal of Indian Business Research, vol. 7 no. 3
Type: Research Article
ISSN: 1755-4195

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Article
Publication date: 4 January 2016

Binita Tiwari and Usha Lenka

– The purpose of this paper is to illustrate the role of psychological safety in engaging employees at times of economic recession.

Abstract

Purpose

The purpose of this paper is to illustrate the role of psychological safety in engaging employees at times of economic recession.

Design/methodology/approach

Review of literature.

Findings

On perceiving a psychologically safe environment, employees freely share their knowledge, learn, and take risks to build their intrapreneurial abilities that would facilitate their level of engagement toward organization.

Originality/value

Focuses on employee engagement by taking into consideration the key measurements of psychological safety in post-recession.

Details

Development and Learning in Organizations: An International Journal, vol. 30 no. 1
Type: Research Article
ISSN: 1477-7282

Keywords

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Article
Publication date: 19 July 2013

Biju Varkkey and Randhir Kumar

The Indian diamond cutting and polishing (CPD) industry enjoys a global leadership position, but at the same time is vulnerable to economic shifts in the global market…

Abstract

Purpose

The Indian diamond cutting and polishing (CPD) industry enjoys a global leadership position, but at the same time is vulnerable to economic shifts in the global market. Historically, such shocks have resulted in shake down of the industry, including closures, bankruptcies, job losses and labour unrest. Most recently, the vulnerability was experienced during the economic recession of 2008, which impacted both entrepreneurs and diamond workers alike. The shock elicited different adaptation strategies from individual firms. The paper aims to understand the adaptation strategies of large and formally organized diamond enterprises in Surat, India, with particular reference to “labour hoarding” as a strategy for workforce management.

Design/methodology/approach

Using case studies of four large CPD firms, the paper investigates patterns in managerial decision making pertaining to workforce management and adaptation strategies taken during recession. The authors also traced the subject companies' performance post‐recession. The tool used for data collection was semi‐structured, in‐depth interviews with entrepreneurs and human resource managers. For additional inputs and triangulation of findings, content analysis of news reports, along with interactions with several knowledgeable persons from both industry and government, were conducted.

Findings

The authors' study of the sample firms neither supports the popular notion of “workforce retention by large diamond enterprises, in spite of recession” nor the generalized statements about “massive lay‐offs by all”, as reported in popular media. The authors found that, due to recessionary pressure, there was a deep managerial dilemma in the companies about how to strike the right trade‐off between workforce retention (labour hoarding) and downsizing. The paper argues that, post‐recession, the companies whose decisions were pro‐labour retention (hoarding) oriented were able to come back in business stronger and perform better.

Originality/value

The diamond industry of India is ethno‐bound in its functioning, where community and regional/linguistic affiliations of both workers and entrepreneurs traditionally played a vital role. Therefore, the employee management practices adopted do not strictly fall within the general realm of western management practices or popular HRM frameworks. The study shows that context‐dependent employee management strategies, suiting the need for maintaining the traditional ethno‐bound values even during recessionary pressure, created long‐term positive effects for the firm.

Details

International Journal of Organizational Analysis, vol. 21 no. 3
Type: Research Article
ISSN: 1934-8835

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Article
Publication date: 1 April 2004

Kostas G. Mavromaras

This paper investigates the relative remuneration of migrants and German nationals in paid employment in pre‐unification Germany. Using microdata it shows that migrants…

Abstract

This paper investigates the relative remuneration of migrants and German nationals in paid employment in pre‐unification Germany. Using microdata it shows that migrants typically earn higher wages than comparable German nationals. The paper also shows the distinction between genders and skill levels to be crucial in the determination of wage gaps. Wage gaps are decomposed in the standard Oaxaca‐Blinder way and their development is examined using counterfactual analysis. The paper also shows that conventionally defined wage discrimination works in favour of migrants. Counterfactuals show that, largely, the remunerative advantage of migrants survived the 1981‐1983 recession. However, when employment developments are considered, a much bleaker picture arises. The 1981‐1983 recession destroyed jobs that have been traditionally occupied by migrants (manual and skilled jobs). Post‐recession restructuring generated jobs that went almost exclusively to German nationals (salaried jobs).

Details

International Journal of Manpower, vol. 25 no. 3/4
Type: Research Article
ISSN: 0143-7720

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Article
Publication date: 28 January 2020

Muhammad Tahir and Salma Ibrahim

The purpose of this study is to investigate the relative performance of Shariah-compliant companies (SCCs) compared to conventional companies. This study focuses on two…

Abstract

Purpose

The purpose of this study is to investigate the relative performance of Shariah-compliant companies (SCCs) compared to conventional companies. This study focuses on two periods, the first being the recession period of 2007-2010 and the second, the non-recession period of 2011-2014.

Design/methodology/approach

A quantitative approach is adopted using an ordinary least square regression model. The chosen variables are those used by previous researchers in conventional studies of corporate performance. Data are selected from individual companies listed on the FTSE All World Index. This study examines two periods of time: the recession of 2007-2010 and the post-recession years of 2011-2014 to analyse performance measured by accounting returns (return on equity, return on asset and earnings per share) and market returns (stock return and price/earnings ratio).

Findings

The study found that SCCs outperformed non-Shariah compliant companies, in terms of both accounting and market returns during both periods. It was also found that size has a negative effect on performance during both periods. The degree of risk, leverage and growth has no significance in either period, but cash flow from operations has a positive effect on performance in both.

Research limitations/implications

The study could beneficially be extended by the inclusion of corporate governance variables to assess how these affect performance in SCCs.

Originality/value

In contrast to previous research carried out on indices, this study uses data from individual companies listed on the FTSE All World Index. It provides insight into the way Shariah ethics can influence performance and suggests that some of the features could be useful if adopted by conventional companies.

Details

Journal of Islamic Accounting and Business Research, vol. 11 no. 3
Type: Research Article
ISSN: 1759-0817

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Article
Publication date: 14 November 2016

Danielle McCluskey, Lay Cheng Lim, Michael McCord and Peadar Thomas Davis

The purpose of this paper is to analyse the changing nature of commercial leases with specific reference to the landlord and tenant relationship, lease lengths and…

Abstract

Purpose

The purpose of this paper is to analyse the changing nature of commercial leases with specific reference to the landlord and tenant relationship, lease lengths and incentivisation in the post-recessionary UK property market.

Design/methodology/approach

The research applies data analysis utilising the Estates Gazette Interactive database coupled with survey analysis conducted across three UK cities to investigate and compare the changing nature of the commercial property leasing market and the landlord and tenant relationship.

Findings

The empirical analysis highlights that recessionary conditions prevalent in the market from the 2007 global crisis has caused a reassessment of lease structures, leading to shorter lease terms and increased use of incentives, as tenants have been empowered to negotiate more flexible leases due to their stronger market position.

Originality/value

This paper builds upon previous research conducted back in 2005, investigating commercial leases in the market up-cycle. The recent volatility in the commercial property sector requires fresh insights and in-depth analysis of lease patterns, length and covenant strength, which is fundamental for investor decision-making. In addition, past research has tended to consider solely landlord or occupier perspectives, whereas this research offers new insight into the landlord–tenant lease negotiation process.

Details

Journal of Corporate Real Estate, vol. 18 no. 4
Type: Research Article
ISSN: 1463-001X

Keywords

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Article
Publication date: 15 August 2019

Shane Anthony Van Dalsem

The purpose of this paper is to investigate whether family firms (FFs) differ from non-family firms (NFFs) in their propensity and likelihood of repurchasing shares. It…

Abstract

Purpose

The purpose of this paper is to investigate whether family firms (FFs) differ from non-family firms (NFFs) in their propensity and likelihood of repurchasing shares. It focuses on the effects of voting control and managerial control of family members and economic conditions on repurchasing activity.

Design/methodology/approach

This paper employs pooled Tobit and probit models for a sample of 982 US firms for the period 2006 through 2015 and separates the roles of voting control and managerial control on influencing share repurchase decisions.

Findings

This paper provides evidence that FFs have a decreased propensity to repurchase shares relative to NFFs over the sample period. In general, the decreased propensity to repurchase shares is driven by the decision whether to repurchase shares and not the percentage of outstanding market value of equity repurchased.

Practical implications

For critics of share repurchases, this paper provides support for existing literature that FFs provide good long-term stewardship to their firms. In general, it demonstrates that FFs are less likely to repurchase shares than NFFs. Investors that have a preference for or against repurchases can use this information to improve their security selection process.

Originality/value

To date, the effects of family voting and managerial control on share repurchases in the USA has not been considered in the finance literature. This paper adds to the literature by providing evidence that family influence generally results in a lower propensity to repurchase shares.

Details

Managerial Finance, vol. 45 no. 8
Type: Research Article
ISSN: 0307-4358

Keywords

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