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1 – 8 of 8Gregory S. Anderson, Robin Litzenberger and Darryl Plecas
The purpose of the present study was to identify common stressors and the magnitude of stress reactivity in police officers during the course of general duty police work. Using…
Abstract
The purpose of the present study was to identify common stressors and the magnitude of stress reactivity in police officers during the course of general duty police work. Using heart rate as a primary indicator of autonomic nervous system activation, coupled with observed physical activity data collected through 76 full shift ride‐alongs, this study differentiates between physical and psycho‐social stress. The results, confirming previous research based on self‐report data alone, demonstrate that police officers experience both physical and psycho‐social stress on the job, anticipating stress as they go about their work, while suffering anticipatory stress at the start of each shift. The results demonstrated that the highest levels of stress occur just prior to and during critical incidents, and that officers do not fully recover from that stress before leaving their shift. Overall, the results illustrate the need to consider stress reactivity and repressors in the assessment of police officer stress while clearly demonstrating the need for debriefing after critical incidents and increased training in stress management and coping strategies.
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The amount of debt taken into a company's financial structure is one of the key financial decisions. When too much debt is taken on board, the company is risking technical…
Abstract
The amount of debt taken into a company's financial structure is one of the key financial decisions. When too much debt is taken on board, the company is risking technical bankruptcy if the company's cash inflow falls below the minimum level predicted. If too little debt is taken on, the company's cost of capital becomes unduly high compared with its competitors since it has failed to take advantage of the tax benefit from debt financing. The company's investment programme is impaired and the value of its equity falls on the stock exchange. This scenario might be described as the “conventional wisdom” of debt financing.
The amount of debt taken into a company's financial structure is one of the key financial decisions. When too much debt is taken on board, the company is risking technical…
Abstract
The amount of debt taken into a company's financial structure is one of the key financial decisions. When too much debt is taken on board, the company is risking technical bankruptcy if the company's cash inflow falls below the minimum level predicted. If too little debt is taken on, the company's cost of capital becomes unduly high compared with its competitors since it has failed to take advantage of the tax benefit from debt financing. The company's investment programme is impaired and the value of its equity falls on the stock exchange. This scenario might be described as the “conventional wisdom” of debt financing.
Filipe Sardo, Zélia Serrasqueiro, Elisabete Vieira and Manuel Rocha Armada
This study seeks to analyse if the adjustment towards the target short-term debt ratio of small and medium-sized firms (SMEs) is related to financial distress risk.
Abstract
Purpose
This study seeks to analyse if the adjustment towards the target short-term debt ratio of small and medium-sized firms (SMEs) is related to financial distress risk.
Design/methodology/approach
Data obtained for a sample of Portuguese manufacturing SMEs from 2010 to 2017 were analysed using the system-generalised method of moments (GMM-sys). Using the modified Z-Altman score, the authors classify SMEs according to their exposure to financial distress risk.
Findings
Manufacturing SMEs exposed to a high risk of financial distress rebalance their short-term debt ratio quicker. However, regardless of the financial distress risk level, SMEs distant from the target short-term debt ratio adjust more slowly, suggesting that transaction costs are greater than financial distress costs.
Practical implications
Policymakers should promote the access to external sources of finance with low transaction costs for SMEs, exposed to low levels of financial distress risk, to rebalance their short-term debt ratios quicker. Distressed SMEs far from their target short-term debt ratios, but with capacity to rebalance, need government programmes to access finance with low transaction costs to rebalance their short-term debt ratios.
Originality/value
This paper contributes to deepening our understanding of how SMEs, facing financial risk, rebalance their short-term debt ratios. SMEs, facing high financial distress risk, adjust towards their target short-term debt ratios more rapidly. However, SMEs, distant from the target short-term debt ratio face higher transaction costs than financial distress costs. These firms adjust towards their target short-term debt ratios more slowly, which may aggravate the refinancing risk and, ultimately, announce bankruptcy.
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This paper builds on the “Law and Finance” theory and aims to examine the effect of the legal and institutional environment on the governance–performance relationship in the…
Abstract
Purpose
This paper builds on the “Law and Finance” theory and aims to examine the effect of the legal and institutional environment on the governance–performance relationship in the context of non-US firms. More precisely, it examines whether and how the country’s legal system and the level of investor protection interact with the firm-level corporate governance and affect firm performance.
Design/methodology/approach
The authors used the “G-Index” governance score developed by the Governance Metrics International rating for a sample of 12,728 firm-year observations from 23 countries over the 2009–2016 period.
Findings
The results show that the interaction between the country-level institutions and corporate governance system significantly affect the firm performance. In particular, the findings indicate that firms operating in common law countries tend to exhibit a positive valuation effect and higher performance than firms with a comparable corporate governance level operating in civil law countries. More precisely, the authors find that in common law countries, higher investor protection with enhanced corporate governance is associated with better firm performance. However, firms operating in civil law countries with weaker investor protection and a comparable corporate governance level tend to experience a negative valuation effect.
Originality/value
The findings suggest that the institutional and legal environment is crucial and important in determining the value-maximizing level of good governance practices. Managers and regulators should carefully analyze the cost of these initiatives and should coordinate it with the needs of the country’s legal system. The challenge for the company will be how to adjust its corporate governance strategy according to the needs and demands of the country’s legal system in which the company operates to improve its performance. The regulators should ensure a fit between the specifics of the national legal and institutional environment and corporate governance standards and practices.
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Yogesh Chauhan and Rajesh Pathak
The paper examines how earnings transparency affects dividend payouts for Indian firms. The authors also explore the channels through which earnings transparency affects dividend…
Abstract
Purpose
The paper examines how earnings transparency affects dividend payouts for Indian firms. The authors also explore the channels through which earnings transparency affects dividend payouts.
Design/methodology/approach
The authors employ panel data estimation with fixed effects to examine the role of earnings transparency on dividend payouts. The authors also use path analysis to explore causation. The paper uses a sample of more than 2000 Indian listed firms, over the period 2001–2016.
Findings
The authors report that firms showing grater earning transparency pay more cash dividend. Their results do not support the signaling hypothesis about the dividend. However, these results provide explicit support to the theory that corporate dividend policy is an outcome of information asymmetry. Moreover, the path analysis reveals the effect of earnings transparency on corporate payout through the financial constraint channel. The results are robust to idiosyncratic controls; alternate measures of payout; alternate models; endogeneity concerns; and the alternate channel of returning money to stockholders.
Practical implications
Managers should also examine earnings transparency while formulating an adequate dividend policy for their firms. This study also helps investors to identify dividend-paying stocks.
Originality/value
This study particularly contributes to the literature examining the effect of earnings quality on dividend payouts through its effect on financial constraints. We, therefore, connect two streams of research that contemplate the relation between accounting-based information variables and dividend payouts and the relationship between financial constraints and dividend payouts. Moreover, using path analysis uniquely, the authors provide evidence on the relative importance of both the direct and the indirect link.
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This paper aims to examine the risk premium for investors in a changing information environment in the Taiwan, New York and London real estate markets from March 2006 to November…
Abstract
Purpose
This paper aims to examine the risk premium for investors in a changing information environment in the Taiwan, New York and London real estate markets from March 2006 to November 2014. This study attempts to quantify behavioral expectations regarding (or motivation for) investment in the Taiwanese real estate in a changing information environment.
Design/methodology/approach
This paper uses the rolling generalised autoregressive conditionally heteroskedastic in mean (GARCH-M) methodology which fixes the problem of conventional GARCH-M methodology.
Findings
Empirical evidence suggests that the time-varying risk premium changed for the Taiwan real estate market with a new information set. The risk premium changed from 1.305 per cent per month to −7.232 per cent per month. The study also found persistent volatility shocks from March 2006 to November 2014. No such evidence was found for the New York and London real estate markets. Overall, this study finds evidence of a time-varying risk premium, partly explainable by governmental policies and partly unexplainable.
Research limitations/implications
The use of the index of Standard and Poor’s Taiwan Real Estate Investment Trusts to study the Taiwan real estate industry may have aggregation effects in result.
Practical implications
The present study will provide guidance to investors as well as policymakers regarding the Taiwan real estate market.
Originality/value
This study uses the rolling GARCH-M model, which is a first for the Taiwan real estate market.
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