Search results
1 – 10 of over 26000Marcellin Makpotche, Kais Bouslah and Bouchra M'Zali
This paper aims to investigate the long-run financial and environmental performance of corporate green bond issuers, worldwide.
Abstract
Purpose
This paper aims to investigate the long-run financial and environmental performance of corporate green bond issuers, worldwide.
Design/methodology/approach
The data includes 259 corporate green bond issuers from 2013 to 2020. The authors adopt the matching approach, using the nearest neighbor method to select the control firms. The event-time approach is used to examine corporate green bond issuers’ long-run stock market performance, and robustness tests are conducted using the calendar-time method. The authors examine green bond issuers’ long-run environmental performance and carbon dioxide (CO2) emissions using difference-in-differences estimations.
Findings
In contrast with the earlier long-run event studies, our results reveal that multiple-time issuers, and issuers operating in industries where the natural environment is financially material, perform financially in the long term relative to the control firms. The authors also document that corporate green bond issuers reduce their CO2 emissions, and improve their resource use efficiency and environmental performance, in the long run.
Originality/value
To the authors’ knowledge, this is the first study that looks at the long-run effect of corporate green bond issuance on firms’ stock market performance. It has the particularity to document that corporate green bond issuance is beneficial for investors and positively affects the environment. Our findings help us understand that firms do not issue green bonds for greenwashing.
Details
Keywords
Jesse Alves da Cunha and Yudhvir Seetharam
Opinions have been divided on whether there is a rational explanation to the reason behind seasoned equity offerings (SEOs) or whether the explanation lies within the behavioural…
Abstract
Purpose
Opinions have been divided on whether there is a rational explanation to the reason behind seasoned equity offerings (SEOs) or whether the explanation lies within the behavioural intricacies attributed to stock market participants. The paper aims to discuss these issues.
Design/methodology/approach
This study investigates the long-run performance of firms conducting SEOs on the Johannesburg Stock Exchange (JSE) over the period of 1998–2015, by examining the return performance and operating performance of firms, along with the impact of investor sentiment on these variables.
Findings
The results of this study are inconsistent with the existing literature, which argues that the long-run performance of issuing firms signalled an initial underreaction to SEOs buoyed by over-optimistic investors.
Research limitations/implications
Instead, the long-run performance of issuing firms is adequately explained by the rational models centred on the risk-return framework, implying that investors are reacting swiftly to SEOs in an unbiased fashion.
Originality/value
Investor sentiment does not materially influence the long-run share performance or operating performance of issuing firms, casting doubt on the ability of the market timing theory to explain the long-run performance of SEOs. The authors thus find that SEO performance cannot be explained by behavioural-based reasoning, in contrast to some asset pricing studies on the JSE which indicate the role of sentiment in explaining returns.
Details
Keywords
Marc Goergen, Arif Khurshed and Ram Mudambi
The aim of the paper is to study the long‐run under‐performance of UK initial public offerings (IPOs) by relating it to the pre‐IPO financial performance of the firm as well as…
Abstract
Purpose
The aim of the paper is to study the long‐run under‐performance of UK initial public offerings (IPOs) by relating it to the pre‐IPO financial performance of the firm as well as the managerial decisions taken before the IPO.
Design/methodology/approach
The three‐year share returns of UK IPOs is studied using various methodologies such as buy and hold returns, cumulative abnormal returns and Fama and French three‐factor returns.
Findings
It was found that the percentage of equity issued and the degree of multinationality of a firm are the key predictors of its performance after the IPO. It is also found that small firms behave differently from large firms and suffer from worse long‐run performance than large firms.
Research limitations/implications
There is a great need for future research to focus on ownership structure and long‐run returns. Further, a focus on the level of debt and venture capital financing in the pre‐IPO period may also uncover important relationships with the long‐run performance of a firm.
Practical implications
The results obtained from this study provide important information for the prospective long term investors in new issues. While pre‐IPO performance of a firm cannot predict the post‐IPO performance with certainty, nevertheless the results of this study suggest that long‐term investors should show caution while deciding on long term investment in IPO firms.
Originality/value
The paper explains the post‐IPO underperformance of firms by relating it to the pre‐IPO managerial decisions made in the firm. It also documents the role of multinationality in explaining long run underperformance.
Details
Keywords
Nischay Arora and Balwinder Singh
The purpose of this paper is to study the pattern of long-run performance of small and medium enterprises (SMEs) initial public offerings (IPOs) and examine the firm- and…
Abstract
Purpose
The purpose of this paper is to study the pattern of long-run performance of small and medium enterprises (SMEs) initial public offerings (IPOs) and examine the firm- and issue-related determinants of long-run performance of SME IPOs in India.
Design/methodology/approach
The 3 6, 9 and 12 months share returns of Indian SME IPOs is studied using event time methodologies, i.e. buy and hold returns, cumulative abnormal returns and wealth relatives on a sample of 375 SME IPOs issued during February 2012 to May 2018. Additionally, ordinary least square regression has been used to investigate the determinants of long-run performance of SME IPOs on a reduced sample of 104 because of non-availability of price observations.
Findings
The findings reveal that Indian SME IPOs exhibit long-run overperformance contradicting the international evidences of underperformance, and this overperformance is significantly evident using buy and hold abnormal return (BHAR). Furthermore, based on the divergence of opinion hypothesis, fads theory and windows of opportunity hypothesis, the results reveal that on one hand, issue size and oversubscription negatively affect BHAR, while on the other hand, auditor reputation, underwriter reputation, hot market, underpricing, inverse of issue price, profits prior to listing positively affect long-run performance. However, firm age, firm size, debt equity ratio, volatility and long-run performance computed through BHAR lacks significant relationship.
Research limitations/implications
The study relied on event time methodology of measuring aftermarket performance of one year because of the limited availability of price offerings. Hence, the study could be extended to analyze aftermarket returns over a period of three to five years to enable reaching the vivid conclusions. Calendar time methodology may also be used to compute abnormal returns.
Practical implications
The results based on the study provides an implication to the investors by providing them an opportunity to bank higher long-run returns by engaging in active and timely trading strategies. Nevertheless, the results also show that investors should be cautioned while taking investment decisions.
Originality/value
The study contributes to rising body of international literature by analyzing the larger and recent sample of IPOs issued from 2012 to 2018 listed on SME exchange.
Details
Keywords
In response to calls for the extension of job design research for the strategic team particularly in high-velocity environment, the purpose of this paper is to investigate the…
Abstract
Purpose
In response to calls for the extension of job design research for the strategic team particularly in high-velocity environment, the purpose of this paper is to investigate the moderating roles of job design in the relationships between project team viewed as human capital resources and new product development (NPD) performance in the short and long run. Based on survey data from 117 NPD project teams in high-technology multinational companies (MNCs) in Thailand, this research finds that job design (i.e. autonomous, task identity and feedback) moderates the effects of human capital resources on NPD project success. In addition, job design works in concert with human capital resources to affect managing NPD project-to-project in the long run. Designing jobs by providing autonomy, identity and feedbacks could trigger the stronger contribution not only for fostering knowledge creation in the NPD project team, but also encouraging intrinsic motivation to commit extra effort to achieve NPD goals. This research contributes to the job design literature of how job design works for NPD project team to achieve short-and long-run NPD performance. Implications for these results are discussed.
Design/methodology/approach
Based on survey data from 117 NPD projects in high-technology MNCs in Thailand, this research uses hierarchical regression to do analyses.
Findings
This research finds that job design (i.e. autonomous, task identity and feedback) moderates the effects of human capital resources on the short-run project performance. In addition, job design works in concert with human capital resources to affect managing project-to-project in the long run.
Research limitations/implications
This research contributes to the job design literature of how job design works for NPD project team to achieve short-and long-run NPD performance.
Originality/value
Investigating the moderating roles of job design in the relationship between human capital resources and NPD performance in the short and long run.
Details
Keywords
Madhur Bhatia and Rachita Gulati
The purpose of the paper is to explore the long-run impact of board governance and bank performance on executive remuneration. More specifically, the study addresses two…
Abstract
Purpose
The purpose of the paper is to explore the long-run impact of board governance and bank performance on executive remuneration. More specifically, the study addresses two objectives. First, the authors investigate the long-run relationship between pay and performance hold for the Indian banking industry. Second, the authors explore the moderating role of the board in explaining the relationship between executive pay and performance.
Design/methodology/approach
The study uses multivariate panel co-integration approaches, i.e. fully modified and dynamic ordinary least square, to explain the co-integrating relationship between executive pay, governance and performance of Indian banks. The analysis is conducted for the period from 2005 to 2018.
Findings
The results of co-integration tests reveal a long-run relationship between executive pay, board governance and bank performance. The long-run estimates produce evidence in favour of the dynamic agency theory, suggesting that the implications of asymmetric information can be mitigated by associating the current executive pay with the bank performance in the previous periods. The finding of this study reveals that improvements in the board quality serve as a monitoring tool to constrain excessive pay and moderate the executives’ pay. Furthermore, the interaction of performance and board governance negatively impacts pay, supporting a substitution approach. It implies that setting optimal pay packages for executives necessitates enhanced and efficient board governance practices.
Practical implications
The study recommends significant policy implications for regulators and the board of directors that executive pay significantly responds to the bank’s performance and good board governance practices in the long run.
Originality/value
This paper provides novel evidence of long-run pay-performance-governance relation using a panel co-integration approach.
Details
Keywords
Monica B. Fine, Kimberly Gleason and Michael Mullen
Increasingly, marketing managers are asked to consider the financial implications, in terms of both book and market values, when making strategic decisions. The purpose of this…
Abstract
Purpose
Increasingly, marketing managers are asked to consider the financial implications, in terms of both book and market values, when making strategic decisions. The purpose of this paper is to investigate the role of marketing expenditures in explaining the variation in the aftermarket performance of a sample of firms conducting initial public offerings (IPOs).
Design/methodology/approach
Theories from marketing and finance – market-based assets (MBA) theory and signaling theory respectively – serve as the conceptual basis of this paper. The results of this study, based on a sample of 2,103 IPOs covering the 1996 to 2008 time period, suggest that increased marketing spending positively impacts aftermarket (i.e. stock price) performance.
Findings
The authors find that while short-run aftermarket performance is positively and significantly impacted by pre-IPO marketing spending, long-run firm performance measures do not appear to be impacted by pre-IPO marketing spending. Further, pre-IPO marketing spending does not incrementally reduce underpricing or improve long-run performance when the IPO takes place during extreme market conditions such as recessions or hot markets, and these results are important to the shareholders and potential investors in the firm.
Research limitations/implications
Theoretically this paper advances the literature on the marketing-finance interface by extending the MBA and signaling theories. For practice, the results indicate that spending more money on marketing before the IPO and disclosing this information produces positive bottom-line results for the firm.
Originality/value
While Luo (2008) documents a significant relationship between the firms’ pre-IPO marketing spending and IPO underpricing, few studies explore the impact of marketing spending on stock price performance beyond the first day of trading. This paper makes three unique contributions. First, the authors extend Luo’s study by investigating the effect of marketing expenditures on underpricing during extreme market conditions. Second, the authors are the first to examine IPO performance in the long-run as well as the short-run. Finally, the authors assess how long-run performance is impacted by marketing spending during extreme market conditions. The findings of this study has implications for managers and shareholders of firms considering going public through a traditional IPO.
Details
Keywords
Anlin Chen, Li‐Wei Chen and Lanfeng Kao
The purpose of this paper is to examine the long‐run performance of initial public offerings (IPOs) in Taiwan with a five‐factor model on a calendar time basis.
Abstract
Purpose
The purpose of this paper is to examine the long‐run performance of initial public offerings (IPOs) in Taiwan with a five‐factor model on a calendar time basis.
Design/methodology/approach
Besides the Fama‐French three factors, the paper also incorporates leverage and liquidity into the factor model to measure IPO five‐year performance. The sample consists of 261 IPOs issued in Taiwan over‐the‐counter during 1991 and 2002. The actual data cover the period from January 1991 to December 2007.
Findings
Contrary to findings of previous studies on US IPO markets, the paper finds that Taiwan IPOs experience better long‐run performance than the market even after adjusting for the common factors in the capital markets.
Originality/value
This paper argues that survival rate of Taiwan IPOs would be the reason why Taiwan IPOs do not underperform in the long run.
Details
Keywords
Syed M. M. Shams and Abeyratna Gunasekarage
– The purpose of this study is to examine whether the acquirers of private targets outperform their peers that acquire public targets in the long run.
Abstract
Purpose
The purpose of this study is to examine whether the acquirers of private targets outperform their peers that acquire public targets in the long run.
Design/methodology/approach
Using two samples of acquirers of private and public targets, this paper analyses their short-run market performance and long-run operating performance. Univariate analyses and multiple regressions are used to analyse abnormal stock returns and abnormal cash flow performances of bidders.
Findings
Acquirers of private targets earn significantly higher abnormal return than acquirers of public targets during the announcement period. Similarly, the long-run operating performance of acquirers of private targets is significantly higher than that of the acquirers of public targets. However, the performance difference between two groups is more pronounced when cash flows are scaled by the market value of acquirers.
Originality/value
This is the first Australian study to examine whether the long-run operating performance of acquirers depends on the organisational form of the target acquired.
Details
Keywords
Jake David Hoskins and Abbie Griffin
This research paper aims to investigate detailed relationships between market selection and product positioning decisions and their associated short- and long-term product…
Abstract
Purpose
This research paper aims to investigate detailed relationships between market selection and product positioning decisions and their associated short- and long-term product performance outcomes in the context of the music category: a cultural goods industry with high amounts of product introductions. Market selection decisions are defined by the size, competitiveness and age of market subcategories within an overall product category. Positioning decisions include where a product’s attributes are located spatially in the category (periphery versus the market center), whether a product resides within a single subcategory or spans multiple ones and what brand strategy (single versus co-branding) is used.
Design/methodology/approach
Data are from multiple sources for the US music industry (aka product category) from 1958 to 2019 to empirically test the hypotheses: genres (rock, blues, etc.) correspond to subcategories; artists to brands; and songs to products. Regression analyses are used.
Findings
A complex set of nuanced results are generated and reported, finding that key marketing decisions drive short-term new product success differently and frequently in opposing ways than long-term success. Launching into very new, well-established or very competitive markets leads to the strongest long-term success, despite less attractive short-run prospects. Positioning a product away from the market center and spanning subcategories similarly poses short-run challenges, but long-run returns. Brand collaborations have reverse effects. Short-run product success is found, overall, to be difficult to predict even with strong data inputs, which has substantial implications for how firms should manage portfolios of products in cultural goods industries. Long-run product success is considerably more predictable after short-run success is observed and accounted for.
Originality/value
While managers and firms in cultural goods industries have long relied on intuition to manage market selection and product positioning decisions, this research tests the hypothesis that objective data inputs and empirical modeling can better predict short- and long-run success of launched products. Specific insights on which song characteristics may be associated with success are found – as are more generalizable, industry-level results. In addition, by distinguishing between short- and long-run success, a more complete picture on how key decisions holistically affect product performance emerges. Many market selection and product positioning decisions have differential impacts across these two frames of reference.
Details