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This paper aims to examine the relationship between the conditional variance of the factors from the Fama–French three‐factor model and macroeconomic risk, where macroeconomic risk is proxied by the conditional variance for a default risk premium and real gross domestic product (GDP) growth.

A generalised autoregressive conditional heteroscedastic model is used to generate the conditional volatilities and bivariate Granger causality tests are used to examine the empirical relationship between the risk measures.

Past values of the conditional variance for a default risk premium have information that is precedent to the conditional volatility for value premium and the small stock risk premium, and the conditional variance for the market risk premium has information about the future volatility of macroeconomic risk, as proxied by the conditional variance for GDP growth.

The implications are that conditional volatility associated with default is related to current and future volatility in value premium; however, volatility associated with the market risk premium appears to be a predictor of future macroeconomic risk. A caveat is that the results are dependent on the proxies used for macroeconomic risk and more refined measures of macroeconomic risk may yield different results.

This paper suggests that examination of the relationship between the volatility of macroeconomic factors and the explanatory factors in asset‐pricing models will help to further understanding of the relationship between risk and expected return.

This paper focuses directly on the links between risk associated with the Fama–French factors and macroeconomic risk. This added knowledge is beneficial to practitioners and academics whose interest lies in asset price modelling.

The aim of this paper is twofold. First, it aims to provide better understanding for the main sources behind the value premium in the UK. Second, given that the value factor (HML) in the Fama‐French three‐factor model is itself a proxy for value premium, this paper seeks to illustrate the component of HML responsible for explaining UK portfolio returns.

For the period July 1991 to June 2006, value premium is broken into two components: one is related to small stocks and the other to big stocks. Then monthly time‐series regressions are used to test which component of value premium provides better explanatory power for UK portfolio returns.

The empirical results indicate that the value premium in average returns is due to small market capitalization stocks. Moreover, value stocks do not seem riskier than growth stocks according to their market beta. Furthermore, the significance of the value factor (HML) in explaining UK portfolio returns is mainly due to its small stock component (HMLS). The paper suggests a revision for the Fama‐French three‐factor model that replaces HML by HMLS.

Academics are interested in understanding the main sources of value premium and the reasons behind the significance of the value factor in explaining UK portfolio returns. Investors and fund managers who wish to exploit the value premium will tilt their portfolios towards value stocks that have low‐market capitalization. Both academics and practitioners may consider altering the Fama‐French model, as suggested by the paper, when estimating the cost of capital.

From a target perspective, this paper aims to examine the impact of environmental, social and governance (ESG) performance on mergers and acquisitions (M&A) transaction valuations.

This paper uses a sample of 629 international transactions conducted between 2002 and 2020. Ordinary least squares (OLS) regression was applied by using ESG aggregate score and the three ESG pillars: environment, social and governance.

This paper finds that the ESG performance of targets has a negative and significant impact on acquisition premiums. However, this paper finds that targets receive lower premiums by increasing their ESG score, suggesting that targets would do better to focus on ESG to increase shareholder wealth. Thus, results of this paper support the view that ESG-focused firms create shareholder value through the M&A process. Furthermore, results of this paper indicate that environmental and social aspects of ESG drive the acquisition premium. The governance score does not seem to be related to acquisition premiums.

To the best of the authors’ knowledge, this study is the first study to assess whether ESG performance impacts the valuation of M&A transactions by decomposing ESG into its three components.

The primary aim of this study is to resolve a longstanding debate concerning the impact of takeover premiums on post-acquisition performance. Specifically, we aim to examine how acquirers' marketing capabilities and payment methods moderate the relationship between takeover premiums and post-acquisition performance.

This study employs linear regression to examine the relationship between acquirers' marketing capabilities, payment methods, takeover premiums and post-acquisition performance in the Chinese manufacturing industry. Data for the analysis were collected from both mergers and acquisition (M&A) announcements and the China Stock Market & Accounting Research Database (CSMAR), covering 1,169 acquisitions from 2012 to 2021.

The results indicate that acquirers' marketing capabilities moderate the impact of takeover premiums on post-acquisition performance. When acquirers possess strong marketing capabilities, takeover premiums increase post-acquisition performance. Conversely, when acquirers lack strong marketing capabilities, takeover premiums are not significantly related to post-acquisition performance. Additionally, it is noteworthy that takeover premiums show a positive correlation with post-acquisition performance, irrespective of the payment methods employed by acquirers for target firms.

Given that takeover premiums are essential for acquiring resources from target firms, it is crucial to maximize the value of these acquired resources. Our findings suggest that acquirers with weaker marketing capabilities before the deal should consider a more conservative approach to pricing target firms.

As the cost of completing a transaction, the green merger and acquisition (M&A) premium paid on mergers can influence whether the acquisition creates value or not. However, studies linking M&A premiums to firm value have had mixed results, even fewer studies have examined the effect of green M&A premiums on bidders’ firm value. The purpose of this paper is to investigate whether and how green M&A premiums affect firm value in the context of China’s heavy polluters.

Using 323 deals between 2008 and 2019 among China’s heavy polluters, this paper estimates with correlation analysis and multiple regression analysis.

Green M&A premiums are negatively associated with firm value. The results are more significant when firms adopt symbolic rather than substantive corporate social responsibility (CSR) strategies. Robustness and endogeneity tests corroborate the findings. The negative relation is stronger when acquiring firms have low governmental subsidy and environmental regulation, when firms have overconfident management, when firms are state-owned and when green M&A occurs locally or among provinces in the same region. This study also analyzes agency cost as an intermediary in the relationship between green M&A premium and firm value, which lends support to the agency-view hypothesis.

This study provides systemic evidence that green M&A premiums damage firm value through agency cost channel and the choice of CSR strategies from the perspective of acquirers. These findings enrich the literature on both the economic consequences of green M&A premiums and the determinants of firm value and provide a plausible explanation for mixed findings on the relationship between green M&A premiums and firm value.

The purpose of this paper is to provide an understanding of how backward intelligence and forward-looking intelligence interact and impact decision making in the context of acquisitions. Past experiences provide essential information used for decision making, however, the ex ante nature of premiums, which require forward-looking intelligence, can change how experience is utilized.

The authors utilize a fixed effects model to examine acquisitions conducted by US public firms during the period of 1993–2015.

The authors find that as past acquisition returns increase, acquirers are likely to adopt a backward-looking perspective of past performance that leads to higher premiums, as opposed to a forward-looking perspective of consequences. The relationship between past performance and premium is moderated by differences in the target's industry and the target's slack levels relative to the acquirer. The study findings suggest that forward-looking intelligence can alter attention and ultimately behavior based on backward-looking intelligence. By focusing on how these two contrasting perspectives interact, our findings extend research on the tension between backward-looking and forward-looking logics of decision making.

Unlike extant literature of acquisition premiums that have mainly focused on the valence and magnitude of experience, the authors focus on how backward-looking decision behavior changes when the firm's expectations of the future are incorporated. The authors empirically demonstrate how a lower acquisition premium is achieved when the decision of how much to pay is an interaction of the past and the future.

In this paper, the knowledge-based view of the firm is applied to theoretically elucidate and empirically examine the influence of target industry growth on premium payments in cross-border acquisitions. This study aims to extend internally driven Mergers and Acquisitions research efforts of acquirers to industry contingencies of targets by analyzing cross-border acquirers located within the group of seven (G7) countries.

This study’s investigation covers 209 cross-border acquisitions from 2012 to 2019 undertaken by firms located within the G7 countries. This paper used generalized estimation equations method to test the hypotheses applying Gaussian distribution for the dependent variable, an identity link function, exchangeable correlation structure and robust standard errors.

This study’s results reveal that target industry growth determines premiums. Furthermore, this study shows that acquirer industry growth, as well as acquirer slack, moderates this relationship. This study is built on the notion that industry contingencies influence premiums even when target firms are based in foreign countries.

To the best of the authors’ knowledge, unlike other studies, this is the first to explicitly focus on premiums for multiple cross-border acquisitions by hand selecting nine years of industry sale figures for 53 industries separately in each of the G7 nation countries (leading to 371 separate downloads of data samples). This study contends that industry growth of cross-border targets matters for premium payments.

This paper aims to investigate the key characteristics of parent brands and the relationships among customer perceived value (a second-order construct containing financial, functional, individual and social attributes), parent brand loyalty and the willingness to pay for a premium extended brand. Moreover, the moderating effect of self–brand integration on the influences in the model is examined.

Data were collected in two countries, the USA (n = 535) and China (n = 511), through an online survey. Structural equation modeling and a multi-group analysis were used to analyze the data.

The results show that perceived quality and premium brand authenticity are two important predictors of perceived value. The relationships among perceived value, parent brand loyalty and willingness to pay for an extended premium brand were significantly supported. In addition, self–brand integration was found to moderate the relationship between perceived value and loyalty to the parent brand.

Wine marketers and managers can use recommendations to establish effective brand extension strategies to help the industry know what essential characteristics of a parent brand to focus on and maintain sustainable development through the customer–extended brand relationship.

Previous researchers have discussed wine consumption behaviors or branding strategies. By limiting combining two theories (flow theory and the theory of planned behavior), this paper proposes a chain of behaviors to optimize customer experience to develop a brand extension strategy based on key characteristics of the parent brand.

The purpose of this study was to empirically investigate the role of e-service quality factors in predicting e-satisfaction. The study context was spirituality and well-being over-the-top services. The e-service quality factors consisted of perceived functional completeness, perceived performance, perceived quality of interface and interaction, perceived quality of content and information and perceived quality of customer support. The study goal was to ascertain over-the-top services customers’ behavioral intention toward upgrading to premium subscription and the spread of electronic word of mouth.

This study was based upon the integrated stimulus-organism-response framework where e-service quality represented the stimulus, e-satisfaction the organism, behavioral intention and electronic word of mouth as the response. The study used a moderated-mediation approach with e-satisfaction as the mediator and the price value of a premium subscription as the moderator. To empirically test the model, the authors collected data from 312 spirituality and well-being over-the-top services users in India. Partial least squares-structured equation modeling was used to analyze the collected data.

The findings of the study supported the association between e-service quality factors and e-satisfaction while using spirituality and well-being over-the-top service. The results furthermore indicated that satisfied spirituality and well-being over-the-top customers were willing to upgrade to the premium subscription and spread favorable electronic word of mouth. The moderated-mediation study results revealed that the price value of premium subscriptions moderated the relationship between e-service quality and e-satisfaction but did not moderate the relationship between e-satisfaction and behavioral intention, and e-satisfaction and electronic word of mouth.

This study offered a comprehensive stimulus-organism-response theoretical model by using the five e-service quality measurement factors as “stimuli” for motivating the internal state of spirituality and well-being over-the-top subscribers. This was toward sustained usage in over-the-top services subsequent to the end of the freemium period. Furthermore, in this study, both e-service quality theory and user satisfaction theory were integrated into the stimulus-organism-response model. This helped to better comprehend the impact of e-service quality factors in driving e-satisfaction among spirituality and well-being over-the-top service users.

This study revealed the significance of differentiating premium over-the-top subscriptions based on price value. To ensure a high level of e-satisfaction from a premium subscription, a greater emphasis on the e-service quality dimensions was required. This study provided insights to managers regarding the role of favorable electronic word of mouth in fostering effective customer acquisition.

This was one of the first studies which concurrently integrated perceived value of the premium subscription and e-satisfaction with customers’ behavioral intention and electronic word of mouth through the theoretical lens of stimulus-organism-response.

This study aims to increase the understanding of the emergence of a values-based (VB) premium private label (PL) brand reputation within a multiple-tier PL brand portfolio in retailing.

By building on the research on PLs, brand image, brand reputation and consumer values, this study creates a conceptual foundation for the emergence of VB PL brand reputation within a multiple-tier brand portfolio among consumers and examines the emergence of such reputation empirically using interpretive exploratory qualitative laddering interviews in the context of fast-moving consumer goods.

The findings of this study illustrate that the VB reputations of the premium PL product brand and the PL brand store intertwine, ultimately relating to two terminal values: pleasure and doing good. These reputations differ remarkably from the VB reputations of the economy PL brand and the umbrella brand of the retail chain (not doing good and financial security).

This study explains the emergence of VB brand reputation within a multiple-tier brand portfolio and introduces the use of the laddering technique in such research.

This study reminds brand managers to carefully design the relevant brand strategy for brands and their relationships under a brand umbrella.

Although much is known about PL brands and brand reputation, to the best of the authors’ knowledge, this study might be the first to increase the understanding of how a VB premium PL brand reputation emerges and accumulates from brand images within a multiple-tier brand portfolio.