Search results

Thomson financial database reports a monthly consensus measure of analysts’ forecasts in the third week of every month, and firms’ earnings announcement dates are usually different from the last consensus calculation date. Thus, there is a gap between the last consensus calculation date and the earnings announcement date of firms. This study aims to address the question: “Do analysts issue forecasts that are slightly higher than the consensus number to increase the accuracy of their forecasts?”

This study is based on a sample of 91,172 quarterly earnings forecasts of various firms from 1990 to 2007 made between the last consensus calculation date and quarterly earnings announcement date. Descriptive statistics and statistical tests were used to analyze the data.

The findings propose that contrary to expectation, analysts’ forecasts between the last consensus calculation date and earnings announcement date are smaller than the consensus number. Also, the forecasts made between the last consensus and earnings announcement date is not as informative as forecasts made at other times as they could merely reflect the analysts’ herding behavior resulting from their career concerns.

This study provides a link between the literature that studies firms’ meet or beat analysts’ earnings phenomenon and analysts’ forecast decision-making context. This study also provides useful implications for the literature on the information content of analysts’ forecasts.

The purpose of this study is to examine the effects of non-commercial banking institutions’ simultaneous holdings of equity and debt in the same firm (hereafter, dual holdings) on financial covenants in debt contracts.

By using the DealScan database, this study tests how dual holdings affect the number of financial debt covenants.

This study finds that the presence of dual holders is positively associated with the number of financial covenants in general, suggesting that the use of financial covenants is reduced when the interests between shareholders and creditors are aligned. This study also finds that dual holder participation does not reduce the number of financial covenants in leveraged loans as much as it does in investment-grade loans. Additionally, when a dual holder has a large portion of equity stakes and loan claims in a borrowing firm, the effect of dual holdings on financial covenants is more pronounced.

This study contributes to debt market research by showing that dual holder participation reduces the number of financial covenants in debt contracts.

The aim of this paper is to use a new approach of performance evaluation, grey relation analysis (GRA), which is a concept borrowed from the study of industry and is increasingly applied to commerce. GRA is used to evaluate the relative performance of three of Australia's major banks The result of the study indicates that although the sample size is small and the distribution of data is unknown, GRA can still be successfully used in evaluating bank performance. In addition, this paper compares the GRA results with the financial statement analysis and shows that the same result can be obtained.

Several studies have observed that stocks tend to drop by an amount that is less than the dividend on the ex-dividend day, the so-called ex-dividend day anomaly. However, there still remains a lack of consensus for a single explanation of this anomaly. Different from other studies, this dissertation attempts to answer the primary research question: how can investors make trading profits from the ex-dividend day anomaly and how much can they earn? With this goal, I examine the economic motivations of equity investors through four main hypotheses identified in the anomaly's literature: the tax differential hypothesis, the short-term trading hypothesis, the tick size hypothesis, and the leverage hypothesis.

While the U.S. ex-dividend anomaly is well studied, I examine a long data window (1975–2010) of Thailand data. The unique structure of the Thai stock market allows me to assess all four main hypotheses proposed in the literature simultaneously. Although I extract the sample data from two data sources, I demonstrate that the combined data are consistently sampled. I further construct three trading strategies – “daily return,” “lag one daily return,” and “weekly return” – to alleviate the potential effect of irregular data observation.

I find that the ex-dividend day anomaly exists in Thailand, is governed by the tax differential, and is driven by short-term trading activities. That is, investors trade heavily around the ex-dividend day to reap the benefits of the tax differential. I find mixed results for the predictions of the tick size hypothesis and results that are inconsistent with the predictions of the leverage hypothesis.

I conclude that, on the Stock Exchange of Thailand, juristic and foreign investors can profitably buy stocks cum-dividend and sell them ex-dividend while local investors should engage in short sale transactions. On average, investors who employ the daily return strategy have earned significant abnormal return up to 0.15% (45.66% annualized rate) and up to 0.17% (50.99% annualized rate) for the lag one daily return strategy. Investors can also make a trading profit by conducting the weekly return strategy and earn up to 0.59% (35.67% annualized rate), on average.

This paper aims to quantify the (syndicated) loan exposure to elevated environmental risk sectors of the banking system in the USA, EU, China, Japan and Switzerland at US$1.6tn and to highlight its importance, which ranges from 3.8 (USA) to 0.5 per cent (China) in terms of total national banking assets. The paper highlights the relevance of exploring prudential policy responses, including a harmonized taxonomy, statistical and reporting framework that could contribute to internalizing the negative externalities associated with climate risks by both banks and their supervisors. Among the prudential supervisory tools, credit registers facilitate the assessment of environmental risk drivers in “carbon stress tests.” This paper also presents a framework of analysis for the regulatory treatment of climate-related risks.

Similarly to Weyzig et al. (2014), this paper uses financial databases on the banks’ role as book runners for syndicated loans; that is, as the lead arrangers who also provide a large share of the actual lending. Loans are outstanding on December 31, 2014, and the paper assumes linear amortization of loans issued before that date and with maturity after that date. This study includes the largest banks from the above-mentioned countries with financial information available in SNL Financial and EU banks with financial information available in the ECB database on December 31, 2014. By assessing the relative share of the ten largest (or total reporting if less) banks’ exposure to each high environmental risk sector in relation to their total assets, these findings can be extrapolated across sectors in the respective country.

This paper quantifies the loan exposure to elevated environmental risk sectors of the banking system in the USA, EU, China, Japan and Switzerland in US$1.6tn, broadly in line with the findings of Battiston et al. (2017) and Weyzig et al. (2014). This paper also explores prudential policy approaches and tools. In addition to the lack of taxonomy of “brown” vs “green,” the paper identifies the limitations to assess the risks involved in the transition to a low-carbon economy: supervisory reports that do not make full use of the existing international statistical framework (e.g. EU COREP and FINREP); lack of harmonized reporting requirements of environmental risks; lack of credit registers as tools to perform carbon stress-testing; and supervisors’ governance framework that do not internalize environmental risks (e.g. proposed revision of the Basel Core Principles of Banking Supervision). As per the stress-testing, the paper presents two examples. The paper presents a framework of analysis for the regulatory treatment of climate-related risks. The author identifies two critical elements of such framework if prudential regulation of environmental risks is to be considered: the consideration or not of climate risk as credit risk and the impact of environmental risks over probabilities of default over the entire business cycle.

No internationally accepted “official” taxonomy of high environmental risk sectors exists. This paper uses Moody’s (2015a) classification of sectors according to their environmental risk exposure. This paper’s exposures do not reflect the real risk exposure of these institutions and the banking industry as a whole because, as explained in Page 6, these values are without regard to bilateral loans and guarantees and securitizations of loans; in the case of loans to power generation companies, renewable sources are not excluding and, similarly, for the production of electric vehicles, loans are not excluded. Furthermore, this paper does not assess banks’ exposures to sovereigns subject to high environmental risks and bonds and equity issued by corporations operating in high environmental risk sectors.

Contribution to the present policy debate on how to regulate banks’ exposure to high environmental risk and how to manage the transition to a low-carbon economy.

This paper can increase awareness of the banking sector transition risks to a low-carbon economy.

This paper quantifies banks direct exposures to high environmental risk sectors using an ample definition of sectors exposed to environmental risk. The author suggests policy actions to assess the environmental risks. The author defines a regulatory framework for banks to internalize the negative externalities of environmental risks.

The purpose of this paper is to examine the incentives of controlling shareholders in the market for corporate control. The author investigates the takeover premiums paid by a sample of European acquiring firms with voting rights structures that are highly concentrated. The results show a positive relationship between takeover premiums and the bidder’s concentration of both voting rights and excess voting rights over cash-flow rights. The author argues that with higher levels of entrenchment, takeover premiums reflect the private benefits of control which controlling shareholders in bidding firms seek to extract from a public transaction.

This paper uses cross-sectional regression analyses to examine the relationship between takeover premiums and the extent to which bidding firm shareholders exert control as well as the arrangement which underlie this. The sample is composed by 210 deals. The data are collected from various databases (Thomson Financial’s Mergers and Acquisition; Faccio and Lang’s (2002); Datastream/Worldscope, LexisNexis).

The premium paid in European M&A transactions is affected by the level of ownership exerted by the controlling shareholder. The results show premiums are positively and significantly associated with higher levels of voting rights, as well as, the level of separation of ownership and control when controlling shareholder ownership is low. Pyramiding structure seems to be the means of separation the most associated with takeover premiums.

This paper can be improved by other specifications. First, it would be interesting to analyze premiums paid by firms with dispersed ownership structure and to compare these premiums with those paid by firms with controlling shareholders. Second, the author suggests to examine whether a controlling shareholder occupy the seat of a CEO or a chairman. In these cases, the author assumes that the controlling shareholder can benefit from more discretion and can extract more private benefits. Third, the author suggests extending the sample period to 2007 at least to include the sixth wave. This wave was even more significant than the high-tech wave and has not been studied much. In these cases, the author assumes that the controlling shareholder can benefit from more discretion and can extract more private benefits.

Previous studies show that the premium reflects the private benefits of control in privately negotiated transactions (mainly block transactions). In the present study, the author shows that the premium can also reflect private benefits in public merger transactions.

We examine the effect of firm ownership status on three environmentally relevant variables: energy efficiency, toxic emissions, and spending on pollution abatement. Prior research has demonstrated that public firms invest less than private firms and suggests this difference is due pressure from investors to strongly favor short over long-term earnings. We extend this logic to other firm behavior, examining whether publicly owned facilities invest in energy efficiency and pollution reduction differently than privately owned facilities. Using data from the US Census of Manufactures from 1980 to 2009, information on pollution from the Environmental Protection Agency Toxic Release Inventory (TRI) and pollution abatement spending from the Pollution Abatement Costs and Expenditures survey, we find that facilities switching to public ownership are less energy efficient and spend less on pollution abatement than their privately owned counterparts. However, we also find that facilities switching to public ownership have lower toxic emissions than other facilities. We also examine how different sources of external pressures alter these results and find that increased regulatory scrutiny is correlated with increased energy efficiency, toxic emissions, and abatement spending. More concentrated institutional ownership in public firms is associated with lower energy efficiency as is a greater brand focus. These latter results are broadly consistent with the idea that publicly owned firms respond to pressures from investors with a reduced focus on environmentally relevant variables. However, since facilities switching to public ownership have lower toxic emissions, this suggests that there are two competing pressures in publicly owned facilities: cost pressures, consistent with lowered energy efficiency, and public perceptions, consistent with lower toxic emissions, particularly since TRI data became available. In this sense, the combination of ownership and transparency of information appears to influence how firms prioritize different stakeholders.

This paper aims to analyze the impact of brand management system (BMS) practices on subjective and objective performance in both service- and product-oriented sectors.

Based on a “grounded-in-practice” approach to BMS, a comprehensive formative BMS scale is developed and its validity is assessed. The impact of BMS on subjective brand performance (i.e. predictive validity) and on objective financial performance is assessed. Data are collected from a sample of 298 brand managers and marketing directors in five business sectors (cosmetics, convenience goods, industry, bank/insurance and media) and from a financial database. Path analysis and multigroup analysis are performed to test mediating and moderating effects.

The results reveal that subjective brand performance (perceived brand performance) mediates the relationship between the BMS and objective financial performance of the firm and on each of the three BMS dimensions; and product-oriented (vs service-oriented) sector positively moderates the relationship between the BMS and subjective brand performance.

The paper offers insights into adapting brand management practices along all BMS dimensions to achieve better business performance and improve objective financial performance in product-oriented activities. It highlights the role of brand management implementation, as well as the role of brand management in hierarchical relationships, in improving performance in service activities.

The formative BMS scale offers a tool which can be used to improve strategic decisions and give practical guidance on product vs service sector specificities. The indirect impact of a BMS on financial objective performance reinforces the legitimacy of brand managers and marketing managers.

This paper shows the impact of the BMS on objective financial performance by using a “grounded-in-practice” BMS scale. It also affords explanation on sectoral effects of brand management practices and their consequences on subjective and objective performance.

The purpose of this paper is to explore and evaluate the main segments of existing empirical literature related to Sovereign Wealth Funds (SWFs) and provide a thorough investigation of their research questions, theoretical frameworks, data selections and research methodologies.

The literature on SWFs has been split into three main streams: qualitative studies with theoretical contributions aiming to conceptualize the phenomenon of SWFs; normative assessments of the optimal asset allocations of SWFs; and empirical works that aim to investigate different perspectives of SWFs. The paper attempts to review the state of existing literature relating to these areas by answering specific questions.

Despite their significant size and potential impact, the literature on SWFs seems to be still in its infancy. The paper collects insights from previous literature, addresses its difficulties and challenges.

The characteristics of the previous empirical literature and the challenges facing this line of research offer an insightful thought for the future research works in this topic.

The paper offers a thorough assessment of the existing empirical research on SWFs and shade some light on the techniques and procedures used.