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1 – 10 of over 2000Bart Frijns, Farshid Navissi, Alireza Tourani‐Rad and Lana Tsai
This paper aims to investigate whether completed vs withdrawn equity offerings result in different stock price performance prior to announcement and between announcement and…
Abstract
Purpose
This paper aims to investigate whether completed vs withdrawn equity offerings result in different stock price performance prior to announcement and between announcement and withdrawal or completion.
Design/methodology/approach
Investigates stock price performance prior to equity offerings announcements and between the announcement and actual completion or withdrawal. Stock price performance is measured by cumulative abnormal returns (CARs).
Findings
It was found that stock price performance is strong only for firms that later complete the offerings. Firms that withdraw their offerings have poor stock price performance even before the announcement. Additionally, it was found that stock price performance for both the completed and the withdrawn offerings is poor after the announcement. Contrasting with prior research, the results show that firms complete their equity offerings, even though their stock price performance deteriorates. The fact that this deterioration is significantly smaller (approximately one‐third) than that of withdrawn offerings indicates that there is an acceptable level of deterioration that firms tolerate.
Originality/value
The paper evaluates short‐run stock price performance for a number of firms in the period 1984‐2000.
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Yasir Abdullah Abbas, Nurwati A. Ahmad-Zaluki and Waqas Mehmood
This paper examines the relationship between the extent and quality of the four dimensions of corporate social responsibility disclosure (CSRD) namely community, environment…
Abstract
Purpose
This paper examines the relationship between the extent and quality of the four dimensions of corporate social responsibility disclosure (CSRD) namely community, environment, workplace and marketplace with the long-run share price performance of Malaysian initial public offering (IPO) companies.
Design/methodology/approach
This study utilised secondary data by the content analysis of the annual reports and Datastream of 115 IPOs listed from 2007 to 2015 in Malaysia. The IPO’s performance was determined by calculating the return measures under the equally weighted and value-weighted schemes of the mean abnormal returns and buy-and-hold abnormal returns covering the three years post-listing using the event-time approach.
Findings
The findings demonstrate that Malaysian IPOs experience substantial overperformance and underperformance when both the IPO performance measures are benchmarked against the matched companies and market. The results indicated that the extent and quality of the community and environment CSRD dimensions are positively and significantly correlated to the IPO’s performance. On the other hand, the extent and quality of the workplace and marketplace CSRD dimensions are negatively and significantly correlated to the IPO performance.
Practical implications
Malaysian regulators could benefit from these findings in their endeavour to carry out a reform process on CSRD to improve its quality. The results of this study are important to investors, regulators, non-government organisations, communities and policymakers. They also enhance the understanding of companies about the importance of disclosing greater CSR information to improve their performance and profitability.
Originality/value
To the researchers' best knowledge, this study provides new insights into the association between CSRD and the performance of Malaysian IPO companies, which is considered important.
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Yasir Abdullah Abbas, Nurwati A. Ahmad-Zaluki and Waqas Mehmood
This paper aims to examine the relationship between the community and environment disclosures and the long-run share price performance of Malaysian initial public offering (IPO…
Abstract
Purpose
This paper aims to examine the relationship between the community and environment disclosures and the long-run share price performance of Malaysian initial public offering (IPO) companies.
Design/methodology/approach
This study used secondary data through the content analysis of the annual reports and DataStream of 115 sampled IPOs listed on Bursa Malaysia from 2007 to 2015. The present study incorporated weighted least squares and quantile least squares to evaluate the relationship between the community and environment disclosures and IPO performance.
Findings
The results show a positive and significant relationship between the extent and quality of community disclosures and IPO performance; while the extent and quality of environment disclosures have a negative and positive relationship, respectively, with IPO performance. These results suggest that community and environmental activities can be considered an effort to enhance Malaysian IPOs.
Practical implications
These results suggest that Malaysian IPO companies should be involved consistently in corporate social responsibility disclosure, i.e. community and environmental activities, as they have a significant impact on the performance of Malaysian IPOs. The findings can facilitate financial institutions and regulatory agencies in driving companies to be more responsible regarding community and environmental disclosures.
Originality/value
To the best of the authors’ knowledge, this study provides new insights into the relationship between the community and environment disclosures and the performance of Malaysian IPO companies.
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Bradley T. Gale and Richard Klavans
In the long run, higher quality captures a larger market share and results in higher profits. But with technology constantly changing, today's quality products may not be…
Abstract
In the long run, higher quality captures a larger market share and results in higher profits. But with technology constantly changing, today's quality products may not be tomorrow's. By assessing how customers perceive quality, one can formulate sound strategies and commit to long‐term investment with greater confidence.
Chih-Hsiang Chang, Hsu-Huei Huang, Ying-Chih Chang and Tsai-Yin Lin
– The purpose of this paper is to investigate how stock characteristics influence investor trading behavior and psychological pitfalls.
Abstract
Purpose
The purpose of this paper is to investigate how stock characteristics influence investor trading behavior and psychological pitfalls.
Design/methodology/approach
This study employs the methods of Solt and Statman (1989) and Kumar (2009) to examine investor trading activities.
Findings
Good companies do not usually have good stocks, while lottery-type stocks show better price performance than other stocks. Due to the representativeness and affect heuristics, the stocks of good companies are frequently transacted, while the low-priced stocks are infrequently transacted. Moreover, investors may display the gambler’s fallacy in the trade of stocks of good companies and the overconfidence and self-attribution bias in the trade of lottery-type stocks.
Research limitations/implications
Investors trading lottery-type stocks demonstrate greater maturity than those that trade stocks of good companies; however, psychological pitfalls still dominate investor trading behavior.
Practical implications
The representativeness heuristic of “stocks of good companies are good stocks” results in the inclusion of stocks of good companies in a portfolio and poorer price performance, whereas the inclusion of lottery-type stocks in a portfolio brings higher returns within a short period of time.
Originality/value
Compared to earlier studies that focussed on the price performance of stocks of good companies and investor trading behavior in relation to lottery-type stocks, this study aims to investigate the influence of stock characteristics on price performance, trading activities, and psychological pitfalls.
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Lars Hendrik Achterberg, Maktoba Omar, Ambisisis Ambituuni and Oliver Roll
The purpose of this paper is to analyse the external antecedents of pricing information acquisition in an integrative manner. The study develops understanding of determinants of…
Abstract
Purpose
The purpose of this paper is to analyse the external antecedents of pricing information acquisition in an integrative manner. The study develops understanding of determinants of information acquisition as a crucial prerequisite of successful pricing strategies within German small and medium enterprises (SMEs).
Design/methodology/approach
A large scale survey of sampled 2,542 SMEs was conducted. A total of 220 questionnaires were completed, reflecting a response rate of 9 per cent. This was acceptable considering the sensitivity of pricing issues. A final sample of 173 usable questionnaires were obtained.
Findings
The result indicates that external antecedents of pricing information acquisition practices have a positive impact on SME pricing performance, and pricing performance is positively related to firm performance.
Practical implications
The study indicates that external antecedents of pricing information acquisition are strategic pricing capabilities, which should receive attention by SME managers.
Originality/value
This study bridges significant obstacle to knowledge generation and theory development of the important issues of pricing information acquisition in SMEs.
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Richard A. Lord, Yoshie Saito, Joseph R. Nicholson and Michael T. Dugan
The purpose of this paper is to examine the relationship of CEO compensation plans and the risk of managerial equity portfolios with the extent of strategic investments in…
Abstract
Purpose
The purpose of this paper is to examine the relationship of CEO compensation plans and the risk of managerial equity portfolios with the extent of strategic investments in advertising, capital expenditures and research and development (R&D). The elements of compensation are salary, bonuses, options and restricted stock grants. The authors proxy the design of CEO equity portfolios by the price performance sensitivity of the holdings and the portfolio deltas.
Design/methodology/approach
The authors use the components of executive compensation and portfolio risk as the dependent variables, regressing these against measures for the level of strategic investment. The authors test for non-linear relationships between the components of CEO compensation and strategic investments. The sample is a broad cross-section from 1992 to 2016.
Findings
The authors find strong support for non-linear relationships of capital expenditures and R&D with CEO bonuses, option grants and restricted stock grants. There are very complex relationships between the components of executive compensation and R&D expenditures, but little evidence of a relationship with advertising expenditures. The authors also find strong complex relationships in the design of CEO equity portfolios with advertising and R&D.
Originality/value
Little earlier research has considered advertising, capital expenditures and R&D in a unified framework. Also, testing for non-linear associations provides much greater insight into the relationship between the components of executive compensation and strategic investment. The findings represent a valuable incremental contribution to the executive compensation literature. The results also have normative policy implications for compensation committees’ design of optimal annual CEO compensation packages to incentivize or discourage particular strategic investment behavior.
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The purpose of this paper is to determine the extent to which Canadian companies have embraced value‐based management (VBM) methods, identify the characteristics of these…
Abstract
Purpose
The purpose of this paper is to determine the extent to which Canadian companies have embraced value‐based management (VBM) methods, identify the characteristics of these companies and of the executives responsible for the introduction of VBM in their organisations and assess the stock price performance of the companies that use VMB vs. those that do not.
Design/methodology/approach
The study is based on a survey of CEOs of a large sample of Canadian companies and examines the relation of a number of explanatory variables, including stock price performance, to the probability of using VBM versus not using VBM via a regression analysis of qualitative choice, namely logit analysis.
Findings
The study finds that value‐based management methods are widely used in Canada, with the likelihood of usage being higher for larger companies with younger and more educated executives with an accounting/finance background. The statistical analysis that follows the tabulation of survey results indicates companies that used EVA had a better stock price performance than those not using EVA. Moreover, our logit regression analysis shows that companies with better stock market performance exhibited higher likelihood of using EVA.
Practical implications
The study implies that the lower usage of EVA in Canada, especially at the corporate level, provides some explanation for the stock market under‐ performance of the Canada market vis‐à‐vis the USA in the 1990s.
Originality/value
To our knowledge, this study serves as the first widespread evaluation of VBM methods in Canada and their effect on company and stock price performance.
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This study examines the price performance of Greek IPOs in the period 1993‐1997. The Greek IPO market presents several particularities in respect to regulation and procedural…
Abstract
This study examines the price performance of Greek IPOs in the period 1993‐1997. The Greek IPO market presents several particularities in respect to regulation and procedural arrangements that make its study interesting in the context of the international evidence regarding IPO price performance. We find that Greek IPOs had on average large positive initial returns, an evidence of under pricing. This evidence is also supported by the positive one‐year returns in relation to offer prices. Returns computed one year after listing in relation to the first trading day price are positive, inconsistent with international evidence. Annual analysis reveals, however, differential patterns in price behavior.
Michael C.H. Quek and Seow Eng Ong
There is currently no real estate investment trust (REIT) listed in China. As of date, only two REITs – GZI REIT of Hong Kong and CapitaRetail China Trust (CRCT) of Singapore …
Abstract
Purpose
There is currently no real estate investment trust (REIT) listed in China. As of date, only two REITs – GZI REIT of Hong Kong and CapitaRetail China Trust (CRCT) of Singapore – have securitised Chinese property assets. The purpose of this paper is to examine the driving forces and the obstacles surrounding China REITs, and evaluate REIT securitisation as an exit strategy for Chinese properties.
Design/methodology/approach
The paper analyses the performance of the two cross‐border REITs and investigates whether REITs holding Chinese assets outperform other listed REITs.
Research limitations/implications
CRCT outperforms GZI REIT as well as some of the other Singapore REITs, while GZI REIT ranked second lowest in terms of price performance when compared to other Hong Kong REITs. The limited history of CRCT suggests that when a well‐structured REIT holding Chinese assets can perform very well. We also infer that performance is closely linked to portfolio composition and diversification, growth story and originator reputation.
Originality/value
The study shows that there is indeed a strong local demand for China REITs, and that REITs can provide an alternative source of real estate financing for Chinese developers and promote a better regulated Chinese real estate market.
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