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Article
Publication date: 11 November 2014

Shahid Mohammad Khan Ghauri

Over the past many years ago, lot of work has been completed by the researchers trying to understand the relationship between different factors and stock exchange prices. The…

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Abstract

Purpose

Over the past many years ago, lot of work has been completed by the researchers trying to understand the relationship between different factors and stock exchange prices. The author has tried to explain different factors that affect share prices. The purpose of this paper is to know about the impact of size, dividend, profitability, asset growth of 15 Pakistani banks on share price on the basis of previous behavior of all the variables with each other.

Design/methodology/approach

A sample of 15 banks has been selected from Karachi stock exchange for the period of 2008-2011, Arch-Garch and unit root cannot be applied to check the stationarity and volatility due to small sample size. The analysis utilized fixed effect regression model, the test includes regressing the dependent variable SP (share price) and independent variables size, DY (dividend yield), ROA (return on asset), and AG (asset growth).

Findings

Results show that “size” has a positive significant relationship with the share price while the other variables have insignificant relationship.

Originality/value

This paper helps in determination of the factors that affect share price fluctuations in banking sector of Pakistan. The similar affects can be observed in financial sector in other countries.

Details

Journal of Economic and Administrative Sciences, vol. 30 no. 2
Type: Research Article
ISSN: 1026-4116

Keywords

Book part
Publication date: 1 February 2007

Serdar Sayman and Jagmohan S. Raju

Abstract

Details

Review of Marketing Research
Type: Book
ISBN: 978-0-7656-1306-6

Article
Publication date: 7 September 2015

Thomas W. Sproul, Jaclyn D. Kropp and Kyle D. Barr

Community supported agriculture (CSA) programs allow consumers to buy a share of a farm’s production while providing working capital and risk management benefits for farmers…

1005

Abstract

Purpose

Community supported agriculture (CSA) programs allow consumers to buy a share of a farm’s production while providing working capital and risk management benefits for farmers. Several different types of CSA arrangements have emerged in the market with terms varying in the degree to which consumers share in the farm’s risk. No-arbitrage principles of futures and options pricing suggest that CSA shares should be priced to reflect the degree of risk transfer. The paper aims to discuss these issues.

Design/methodology/approach

The authors evaluate the three most common share types using a cross-sectional data set of 226 CSA farms from New England to determine if there is empirical evidence in support of the theoretical price relationship between share types.

Findings

The degree of risk transfer from farmers to consumers has a significant effect on the share price. There are statistically significant returns to scale and higher prices for organics. Farm characteristics and product offerings predict which type of shares is offered for sale.

Research limitations/implications

The data set does not contain information pertaining to actual deliveries, expected deliveries, variance of expected deliveries, or covariance information; thus differences in share prices could be due to differences in these uncontrolled factors.

Originality/value

This paper provides empirical evidence that CSA share prices reflect the degree of risk transferred from the producer to the consumer. It also highlights challenges in conducting empirical work pertaining to CSA contracting.

Details

Agricultural Finance Review, vol. 75 no. 3
Type: Research Article
ISSN: 0002-1466

Keywords

Article
Publication date: 24 May 2013

António Martins

The purpose of this paper is to analyze how share buybacks can be, in Portuguese small privately held firms, a source of tax‐based conflicts between shareholders and tax…

Abstract

Purpose

The purpose of this paper is to analyze how share buybacks can be, in Portuguese small privately held firms, a source of tax‐based conflicts between shareholders and tax administrations. Two issues are of particular relevance: the favored tax treatment of capital gains relative to dividends, and the use of valuation formulae to compute prices used in such transactions. The paper intends to present some advice to firms and consultants regarding equity valuation in privately held firms, to avoid tax based litigation. An extended analysis of the issue and its relevance to other jurisdictions is also presented.

Design/methodology/approach

The paper is based on a conceptual discussion of the usual approach taken by the Portuguese tax authorities to challenge share buybacks in small, privately held, firms. The arm's length principle in transfer pricing rules is the cornerstone of the topic analysed. The paper compares the merits of alternative pricing basis, and shows the economic and legal problems that each alternative presents.

Findings

The paper finds that the lack of tax neutrality between dividends and capital gains in Portugal can induce tax motivated transactions in small firms. The tax administration try to challenge these transactions on transfer pricing grounds. The alternative valuation strategy used by tax authorities is flawed, and puts the taxpayers in a good litigation position. However, a sensible valuation put forward by the firm can avoid such legal battles, which consume time and other resources of small owners.

Practical implications

The owners of privately held firms and the tax authorities should use valuation methods in very sensible terms. Cash flow valuation rests on several assumptions. These assumptions should not be used to produce prices that are easily questioned and increase litigation between firms and taxpayers.

Originality/value

The paper can be a source of practical advice for small business owners and advisors, as far as share transactions and share valuation are concerned. It is useful not only for the Portuguese managers and tax authorities, but also for any country where taxation of dividends and capital gains induces tax motivated buybacks.

Details

Journal of Applied Accounting Research, vol. 14 no. 1
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 1 March 1976

Michael Firth

The purpose of this paper is to discuss briefly the types of research that have been undertaken, to reference a number of American and British studies and to summarise some work…

Abstract

The purpose of this paper is to discuss briefly the types of research that have been undertaken, to reference a number of American and British studies and to summarise some work in this general area that has been completed by the author whilst at Bradford University and subsequently at Stirling University.

Details

Managerial Finance, vol. 2 no. 3
Type: Research Article
ISSN: 0307-4358

Article
Publication date: 4 August 2022

Nazar Habeeb Abbas

The purpose of this research is to determine the nature of the relationship between sporting, financial performance and a stock price of football clubs by adopting the quarterly…

Abstract

Purpose

The purpose of this research is to determine the nature of the relationship between sporting, financial performance and a stock price of football clubs by adopting the quarterly financial statements of the European clubs that represent the research sample: Juventus, Borussia Dortmund and Olympique Lyonnais, which helps clubs’ managers in evaluating the sporting and financial performance effect on the share price at the quarterly level.

Design/methodology/approach

The research is performed using the panel data technique, for Juventus, Borussia Dortmund and Olympique Lyonnais (2007–2016). The sporting performance is represented by the quarterly rate of the number of goals scored by the club to the number of goals scored against it; the quarterly rate of the number of wins to the total number of matches played by the club in local and international competitions. At the same time, financial performance is represented by the quarterly rate of current ratio, the quarterly rate of the leverage ratio, and the quarterly rate of earnings per share (EPS).

Findings

The analysis of the results was distributed at two levels: macro and micro. The analysis at the macro-level dealt with the correlation and influence between the sports performance indicators and the financial performance indicators of the three clubs combined on the share prices of those clubs. The micro-level performance is analyzed separately from the macro analysis. The results indicated that there was an effect on macro analysis. As for the microanalysis, the results showed no effect of the sporting performance of the three clubs on their share price.

Research limitations/implications

The main implications of this research reveal the weakness of the correlation between the clubs' share price in the financial market, possibly due to the quarterly rate of the data. But there is a slight change for Juventus. There is a moderate correlation between the quarterly sporting performance indicators of this club and the quarterly average of its share price in the market.

Practical implications

The main implications of this research reveal the weakness of the correlation between the clubs' share price in the financial market, possibly due to the quarterly rate of the data. But there is a slight change for Juventus. There is a moderate correlation between the quarterly sporting performance indicators of this club and the quarterly average of its share price in the market.

Social implications

The social implications of the current research are clear by dealing with the relationship between the sports and Financial performance of football clubs and its relationship to the price of its shares in the financial market. The success of football clubs in achieving sporting victory attracts more fans. This leads to an increase in the club's profits and consequently to an increase in the price of its shares in the financial markets. Therefore, the societal benefit will be achieved by increasing the enjoyment of the audience and increasing the revenues of the club and the city to which it belongs.

Originality/value

The originality of this research is represented in its use of quarterly data to clarify the relationship between the sporting and financial performance of a sample of European football clubs with the price of its shares in the financial markets. Therefore, this research differs from previous research that used only daily and annual data for clubs to clarify the relationship between their sporting and financial performance.

Details

Review of Behavioral Finance, vol. 15 no. 3
Type: Research Article
ISSN: 1940-5979

Keywords

Article
Publication date: 16 September 2013

Dhiaa Shamki and Azhar Abdul Rahman

The paper aims to examine the influence of financial disclosure (FD) level and time on the value relevance of earnings, book value, and cash flows relative to three share price

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Abstract

Purpose

The paper aims to examine the influence of financial disclosure (FD) level and time on the value relevance of earnings, book value, and cash flows relative to three share price proxies, namely average annual share price, annual closing share price, and share price after a three-month period following the financial year-end for Jordanian companies.

Design/methodology/approach

The paper employs price model to examine the influence of FD level and time on the value relevance of three accounting variables relative to three share price proxies for 91 Jordanian companies (consisting of 5,460 observations) within 2004-2009.

Findings

Relative to three share price proxies, the findings proved that FD level and time have a significant influence on the value relevance of book value, but not for cash flows. Also, FD level and time have a significant influence on the value relevance of earnings relative to annual closing share price, while they are not relative to share price after a three-month period following the financial year-end. FD time has a significant influence on the value relevance of earnings relative to the average annual share price. Annual closing share price is the most reliable in indicating value relevance of accounting information.

Originality/value

The paper confirms that there is a shift away from earnings towards book value as the basis for firm valuation. Market participants might be able to conclude the firm value through the value relevance of accounting information influenced by company's FD.

Details

Education, Business and Society: Contemporary Middle Eastern Issues, vol. 6 no. 3/4
Type: Research Article
ISSN: 1753-7983

Keywords

Open Access
Article
Publication date: 5 April 2022

Yang Liu and In-Mu Haw

For Chinese companies that cross-list in Chinese A share and Hong Kong (H share) markets, the H share price has been consistently lower than the A share price by an average of 85…

Abstract

Purpose

For Chinese companies that cross-list in Chinese A share and Hong Kong (H share) markets, the H share price has been consistently lower than the A share price by an average of 85% in recent years. This is puzzling because most institutional differences between the two markets have been eliminated since 2007. The purpose of this study is to explain the puzzle of the price difference of A+H companies.

Design/methodology/approach

Using all A and H share Chinese firms in the period 2007–2013 and a simultaneous equations approach, this study identifies three new explanations for the recent price difference.

Findings

First, utilizing a unique earning quality measure that is directly related to non-persistent components of fair value accounting under International Financial Reporting Standards (IFRS), this study finds that the lower the earnings quality, the lower the H share price relative to the A share price, and hence the greater the price difference. Second, the higher the myopic investor ownership in A share firms, the larger the A share price relative to the H share price. Third, the short-selling mechanism introduced to the A share market since 2010 helps reduce the price difference.

Originality/value

First, this study identifies three new explanations for the puzzle of the AH price difference which remains substantial even after the institutional and accounting standards differences between the two markets were eliminated. Second, we examine the impact of the implementation of fair value accounting under IFRS in an emerging market on the pricing difference of cross-listed shares and reveal that it can induce an unintended negative consequence on the pricing difference of cross-listed shares. Third, this study contributes to the literature on short sales by providing its mitigating role in pricing differences across two different markets. Finally, this study makes improvements in research design, which utilizes a unique measure of earnings quality that is directly related to the implementation of IFRS and a simultaneous equations approach that minimizes endogeneity concern.

Details

China Accounting and Finance Review, vol. 24 no. 2
Type: Research Article
ISSN: 1029-807X

Keywords

Article
Publication date: 7 April 2015

Marna De Klerk, Charl de Villiers and Chris van Staden

The purpose of this paper is to examine the association between share prices and the level of corporate social responsibility (CSR) disclosure of large UK companies, using CSR…

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Abstract

Purpose

The purpose of this paper is to examine the association between share prices and the level of corporate social responsibility (CSR) disclosure of large UK companies, using CSR data from an independent firm and a time period and setting (the UK) that coincides with increased legislation and increased public awareness of corporate social and environmental issues. Against a background of increased interest by investors in CSR disclosure, prior mixed results on the association between CSR disclosure and share prices suggest the need for further research that overcome some of the identified limitations of the extant literature.

Design/methodology/approach

A modified Ohlson (1995) model is used to examine the relationship between CSR disclosure and share prices among the 100 largest UK companies. Three different measures of CSR disclosure are used to ensure robustness of results.

Findings

The paper finds that higher levels of CSR disclosure are associated with higher share prices. Furthermore, the paper provides evidence that CSR disclosure by companies operating in environmentally sensitive industries show a stronger association with share prices than CSR disclosure by companies operating in other industries. The paper concludes that CSR disclosure provides incremental value-relevant information to investors beyond financial accounting information.

Originality/value

To the best of our knowledge, this is the first paper to provide evidence of the incremental value of CSR disclosure to share price determination in the UK, a country where CSR disclosure is high on the agenda. Our findings provide evidence that CSR disclosures by companies and, in particular, disclosures following the global reporting initiative(GRI) guidelines, are useful to investors and shareholders, as it is related to share price information.

Article
Publication date: 1 October 1999

Georgios I. Zekos

Defines “insider trading” and looks at the effects of insider trading on an economy. Considers the factors which have caused legislation and the rationale behind insider trading…

Abstract

Defines “insider trading” and looks at the effects of insider trading on an economy. Considers the factors which have caused legislation and the rationale behind insider trading. Compares the economic and financial approaches to the problem. Outlines the European, UK and US positions covering legislation, arguments, prohibitions and penalties. Cites important cases in the USA, which have caused changes in the law. Concludes that there is a need for standardization, together with better access to timely information but highlights that the markets require freedom within which to work effectively and accepts that there will always be an element of insider trading in any market.

Details

Managerial Law, vol. 41 no. 5
Type: Research Article
ISSN: 0309-0558

Keywords

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