The impact of changes in regulations on Malaysian IPOs

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rasidah Mohd-Rashid ◽  
Ahmad Hakimi Tajuddin ◽  
Karren Lee-Hwei Khaw ◽  
Chui Zi Ong
Keyword(s):  
Initial Public Offering ◽  
Ordinary Least Squares ◽  
The Body ◽  
Quadratic Term ◽  
Cross Sectional ◽  
Content Type ◽  
Body Of Knowledge ◽  
Public Offering ◽  
Logit Regression Model ◽  
The Impact

Purpose This study aims to examine the changes in equity guidelines and initial returns in the Malaysian initial public offering (IPO) market. Design/methodology/approach The study uses cross-sectional data over 16 years from 2000 to 2016. It uses ordinary least squares for the baseline model and incorporates an interaction term, quantile regression, quadratic term, break test and logit regression model for further analysis. Findings The results support the propositions that lockup provisions signal commitment and demand increase initial returns. The revision in the Bumiputera equity requirement means that issuers no longer need to discount offer prices to entice investors. Finally, the revised Sharīʿah-compliance screening requirement ensures that stocks are better in quality and more transparent, leading to a higher demand that drives prices upwards. Research limitations/implications This study’s findings provide insights into how issuers can secure good subscriptions. Besides, policymakers should ensure that firms disclose the required information in their prospectuses. Originality/value This study adds to the body of knowledge on whether and how the regulatory requirements affect IPO initial returns.

Does prospectus information matter in IPO pricing?

2018 ◽  
Vol 9 (4) ◽  
pp. 514-530 ◽  
Author(s):  
Rasidah Mohd-Rashid ◽  
Mansur Masih ◽  
Ruzita Abdul-Rahim ◽  
Norliza Che-Yahya
Keyword(s):  
Initial Public Offering ◽  
Institutional Investors ◽  
Ordinary Least Squares ◽  
Quadratic Model ◽  
Cross Sectional ◽  
Content Type ◽  
Ipo Pricing ◽  
The Government ◽  
Public Offering ◽  
Lower Uncertainty

Purpose The purpose of this study is to identify selected information from the prospectus that might signal the initial public offering (IPO) offer price. Design/methodology/approach This study uses cross-sectional data for a 14-year period from 2000 to 2014 in examining hypotheses relating to Shariah-compliant status, institutional investors, underwriter ranking and shareholder retention, with respect to their associations with the offer price of the IPOs. Further, this study uses ordinary least squares (OLS) for all models, including the models for both subsamples of Shariah- and non-Shariah-compliant IPOs. As for robustness, this study incorporates the quantile regression and quadratic model. Findings The results tend to provide support for the argument that firms with Shariah-compliant status reflect lower uncertainty and project better signalling of quality due to greater scrutiny by the government and thus are able to offer IPOs at higher prices. Similarly, firms with a higher proportion of shareholder retention indicate lower risks as insiders forego their options to diversify their portfolio, and hence could price their IPOs higher. Finally, the involvement of institutional investors and higher underwriter ranking could be used by firms to disregard information asymmetry, and therefore, the issuer might have to discount the IPO offer price. Research limitations/implications This study focuses solely on information in the prospectus that should not be disregarded by the investors in valuing the appropriateness of the IPO offer price. This study contributes in terms of providing a better understanding of the determinant factors of the IPO offer price of the firms which are Shariah-compliant. Originality/value This paper provides evidence for the determinants of the IPO offer price in a fixed pricing mechanism for both Shariah-and non-Shariah-compliant IPOs.

Impact of IPO grading on earnings management

2015 ◽  
Vol 13 (2) ◽  
pp. 142-158 ◽  
Author(s):  
Yogesh Maheshwari ◽  
Khushbu Agrawal
Keyword(s):  
Earnings Management ◽  
Initial Public Offering ◽  
Design Methodology ◽  
Discretionary Accruals ◽  
Alternative Measure ◽  
Cross Sectional ◽  
Content Type ◽  
Public Offering ◽  
The Impact ◽  
First Time

Purpose – This paper aims to examine the impact of initial public offering (IPO) grading on earnings management by Indian companies in their IPOs. Specifically, it investigates whether earnings management significantly differs in the pre-IPO grading regime and post-IPO grading regime. Further, it examines whether earnings management significantly differs between high-graded and low-graded IPOs. Design/methodology/approach – The cross-sectional modified Jones model is used to obtain the discretionary accruals, a proxy for earnings management. The impact of IPO grading on earnings management is assessed using multiple regression analysis. Findings – Earnings management is significantly lower in graded IPOs as compared to the ones that are not graded. Further, among the graded IPOs, the high-graded IPOs exhibit lower earnings management as compared to the low-graded IPOs. The findings are robust to the use of an alternative measure for discretionary accruals. Originality/value – IPO grading in India is a unique certification mechanism, introduced for the first time in any market. This paper establishes the efficacy of this mandatory certification mechanism in reducing earnings management. The findings could be valuable to issuer companies, investors and market regulators.

scholarly journals The impact of boardroom internationalisation on online disclosures of S&P 500

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Esam Shehadeh ◽  
Doaa Aly ◽  
Ibrahim Yousef
Keyword(s):  
Firm Value ◽  
Scoring System ◽  
Positive Impact ◽  
Ordinary Least Squares ◽  
The Body ◽  
Board Members ◽  
Cross Sectional ◽  
Content Type ◽  
The Impact ◽  
First Time

Purpose The purpose of this study is to analyse the level of online disclosure of firms in the USA and to evaluate the impact of diversity in terms of director nationality (boardroom internationalisation) on online disclosure. Design/methodology/approach The authors apply, for the first time, a new modified scoring system to measure online disclosure levels by securing more detailed information on each of the items in the voluntary disclosure index. Regarding the percentage of foreign board members, unlike in previous research, the authors calculate two additional proxies to more accurately specify the level of international diversity on the board: the Blau Index and the Shannon Index. Moreover, the authors use a cross-sectional model for the sampled non-financial S&P500 firms using both ordinary least squares (OLS) and heteroskedasticity-corrected estimates to analyse the impact of boardroom internationalisation on the level of online disclosure. Findings The findings reveal that the average online disclosure level for the sample in question is 64% for the 0–1 index and 57% for the 0–4 index. In addition, the results of the regression analysis confirm the study’s proposed hypothesis, which is that the presence of international board members correlates with an improvement in the level of online disclosure. This can be attributed to the fact that foreign directors bring unique skills and knowledge from their home countries and thus, increase board discussion, creativity and innovation, which has a positive impact on the level of online disclosure. Research limitations/implications Financial firms are subject to capital requirement regulations; consequently, disclosure practices can be influenced. Therefore, these firms were excluded from the sample of the study. Originality/value This research contributes to the body of literature on nationality diversity of firm boards and corporate online disclosure in several respects. Firstly, the study adds an international dimension to the existing literature. Secondly, this study provides new evidence that foreign diversity on the board can improve firm value, insofar as the corresponding enhancement of online disclosure leading to positive capital market implications. Thirdly, the authors use, for the first time, a new scoring system approach to measure the level of online disclosure. Finally, it contributes to the corporate governance literature by basing its analysis on a multi-theoretical approach.

scholarly journals Signalling IPO quality through female directors

2019 ◽  
Vol 15 (5) ◽  
pp. 719-743 ◽  
Author(s):  
Bazeet Olayemi Badru ◽  
Nurwati A. Ahmad-Zaluki ◽  
Wan Nordin Wan-Hussin
Keyword(s):  
Initial Public Offering ◽  
Ordinary Least Squares ◽  
Regression Technique ◽  
Negative Effects ◽  
Content Type ◽  
Conditional Mean ◽  
Market Participants ◽  
Female Directors ◽  
Public Offering ◽  
The Impact

Purpose The purpose of this paper is to investigate whether or not the presence of female directors at the time of an initial public offering (IPO) can be considered as a signal of IPO quality. Design/methodology/approach A sample of 220 Malaysian IPOs over the period of 2005–2015 was used. This study employed the mean regression technique (ordinary least squares and White’s heteroskedasticity-consistent standard errors) and the median regression technique (quantile regression) to examine the signalling power of female directors on the board at the time of an IPO. Findings The results show that the presence and proportion of female directors at the time of the IPO have negative effects on IPO initial returns (IR). The negative effects occur at both the conditional mean and the dispersion of IPO IR. These results are robust to endogeneity bias. Practical implications The findings of this study suggest that female directors on the board at the time of an IPO can be considered as a desirable signal of IPO quality. As a result, IPO issuers can consider signalling the quality of their IPOs by having female directors on their boards. Likewise, market participants can use female directors as an instrument to value an IPO. Originality/value Studies on the impact of female directors on the board have largely been centred on established companies. Thus, this study contributes to the literature by examining the signalling role of women at the time of an IPO, which is considered as a significant milestone in the lifecycle of a company.

scholarly journals A bibliometric analysis of greenwashing research: a closer look at agriculture, food industry and food retail

2021 ◽  
Vol 123 (13) ◽  
pp. 547-560
Author(s):  
Antonio Montero-Navarro ◽  
Thais González-Torres ◽  
José-Luis Rodríguez-Sánchez ◽  
Rocio Gallego-Losada
Keyword(s):  
Bibliometric Analysis ◽  
Food Industry ◽  
The Body ◽  
Intellectual Structure ◽  
Food Retail ◽  
Content Type ◽  
Academic Literature ◽  
Body Of Knowledge ◽  
Major Development ◽  
The Impact

PurposeThis paper aims at providing an overview and synthesis of the existing body of knowledge about greenwashing. Special attention is paid to the articles directly linked with agriculture, food industry and food retail.Design/methodology/approachA bibliometric analysis was performed over 351 documents extracted from the WoS database, using SciMAT and VOSviewer software programs.FindingsThree periods in the academic literature about greenwashing can be distinguished: ground-setting (2003–2010), trail-blazing (2011–2015) and remarkable growth (2016–2020). Along this evolution, a body of knowledge which stemmed from the literature about CSR has achieved a major development, deploying different research lines such as stakeholders' management, marketing and communication and audit. A specific analysis of the academic literature about greenwashing in agriculture, food industry and food retail has been carried out, showing a need for further development.Social implicationsThe development of scientific knowledge about greenwashing puts this social claim on the spotlight of business management studies, helping to fight greenwashing and, this way, to reduce the environmental impact of corporate activities. Studying greenwashing will help to reduce its frequency and, therefore, heal the planet.Originality/valueSome previous studies have provided systematic reviews of the literature using different approaches, but they did not untangle the intellectual structure and the evolution of the body of research about greenwashing. This article originally provides a thorough analysis of these aspects, as well as a closer look at the impact of greenwashing practices in the academic literature regarding agriculture, food industry and food retail.

The effect of the financial crisis on audit quality: European evidence

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Maria I. Kyriakou
Keyword(s):  
Financial Crisis ◽  
Audit Quality ◽  
Ordinary Least Squares ◽  
Least Squares Regression ◽  
Cross Sectional ◽  
Accounting Firms ◽  
Content Type ◽  
Financial Firms ◽  
The Impact ◽  
Big Four

Purpose This paper aims to examine the impact of the recent financial crisis on audit quality by analysing discretionary accruals. Design/methodology/approach This study considers a sample of German, French, Italian and Spanish non-financial firms from 2005 to 2013 to investigate the auditor’s independence. It uses a cross-sectional and time-series ordinary least squares regression model to control for other predictors of the auditor’s independence when the financial crisis produces a decrease in audit quality. Findings The proportion of the non-financial firms having lower audit quality was higher during the financial crisis. In addition, during the crisis auditors were less likely to provide a higher audit quality for these non-financial firms. The level of audit quality returned to normal levels during the post-crisis years when the crisis had ceased. Originality/value These findings contribute to the literature on the impact of economic and financial changes on audit quality. In addition, this research finds that the Big Four accounting firms provide a higher audit quality in different circumstances from non-Big Four accounting firms, and that audit quality decreased during the crisis and returned to normal in the post-crisis period.

Relationship between prestige signals and over-subscription ratio

2019 ◽  
Vol 15 (4) ◽  
pp. 564-579 ◽  
Author(s):  
Ali Albada ◽  
Othman Yong ◽  
Soo-Wah Low
Keyword(s):  
Initial Public Offering ◽  
Design Methodology ◽  
Executive Board ◽  
Cross Sectional ◽  
Content Type ◽  
Underwriter Reputation ◽  
Reputational Capital ◽  
Public Offering ◽  
The Relationship ◽  
Institutional Participation

PurposeThe purpose of this paper is to examine whether initial public offering (IPO) over-subscription is a function of firm’s prestige signals conveyed by third parties with reputational capital such as underwriter, auditor and independent non-executive board member.Design/methodology/approachThe relationship between prestige signals and over-subscription ratio (OSR) of IPOs is analysed using a cross-sectional regression based on a sample of 393 IPOs issued between January 2000 and December 2015.FindingsThe results indicate that IPOs underwritten by reputable underwriters have lower OSR than those underwritten by non-reputable underwriters. While issuer engages reputable underwriter to certify firm quality to reduce information asymmetry, the action brings with it lower initial returns for its IPO. Investors interpret the signal conveyed by issuer’s choice of underwriter from under-pricing perspective and respond accordingly by reducing IPO demand. This implies that investors regard under-pricing as a more valuable signal than firm quality signal associated with underwriter reputation. The findings also indicate that over-subscription increases in IPOs that have above average initial returns and higher institutional participation. Issuing firms that go public in a period of high IPO volume are associated with low OSR.Originality/valueThis is the first paper to examine the relationship between the prestige signals and OSR of IPOs in the Malaysian context.

scholarly journals Branded premiums in tourism destination promotion

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shasha Wang ◽  
Arnold Japutra ◽  
Sebastián Molinillo
Keyword(s):  
Experimental Design ◽  
Design Methodology ◽  
The Body ◽  
Brand Name ◽  
Tourism Destination ◽  
Content Type ◽  
Body Of Knowledge ◽  
The Impact ◽  
Practical Implications

Purpose The purpose of this paper is to test the influence of branded premiums or branded free gifts (e.g. a free of charge suitcase of a well-recognised brand) on tourism destination promotion. Specifically, the impact of brand name and price value of a branded premium on promoting a tourism destination was examined. Design/methodology/approach This research uses two experiment-based studies, applying a between-group experimental design. Findings The results revealed that appreciation leads to intention to visit the promoted destination when the branded promotion is offered. When a destination promotional offer contains a branded premium, consumers respond more favourably to the brand name of the premium than the price value of the premium. This finding applies to consumers’ responses to both the destination and the premium. Research limitations/implications This research adds to the body of knowledge on tourism destination promotion and the branding literature, specifically with promotional and branded premiums. Practical implications Mutual benefits can be obtained by both tourism destination marketers and premium marketers. Originality/value This research highlights the importance of branded premiums in tourism destination promotional offers. This research also shows the influence of the price value of a premium’s brand name in a tourism destination promotional offer.

scholarly journals Does Leverage Constrain Real and AEM Around IPO Corporate Event? Evidence from the Emerging Market

2019 ◽  
Vol 20 (2) ◽  
pp. 354-367
Author(s):  
Sani Hussaini Kalgo ◽  
Bany-Ariffin A.N. ◽  
Hairul Suhaimi Bin Nahar ◽  
Bolaji Tunde Matemilola
Keyword(s):  
Earnings Management ◽  
Initial Public Offering ◽  
Emerging Market ◽  
Order Theory ◽  
Agency Cost ◽  
Free Cash Flow ◽  
Cross Sectional ◽  
Pecking Order Theory ◽  
Public Offering ◽  
The Impact

The article investigates whether Malaysian initial public offering (IPO) firms engage in real and accrual earnings management (AEM) and examines the impact of leverage on the earnings management’s discretionary behaviour of the firms for the period of 2003–2013. The Dechow, Sloan, and Sweeney (1995, The Accounting Review, 70[2], 193–225) cross-sectional modified Jones model was used to estimate discretionary accruals, while Roychowdhury’s (2006, Journal of Accounting and Economics, 42[3]), 335–370) cross-sectional models were used to investigate abnormal real activity discretionary behaviour. The results indicate Malaysian IPO firms engage in real and accrual discretionary behaviour. The graphical presentations of the earnings’ management proxies indicate higher real and AEM for high-leverage firms. Similarly, the multivariate analysis indicates a positive relationship between leverage and earnings management, which is in tandem with the agency cost of free cash flow theory and debt hypothesis. It is also consistent with the pecking-order theory of capital structure. This study suggests that regulatory agencies and standard setters should continue to improve quality of accounting reports in order to protect investors’ invested capital.

An analytical study of stakeholders relevance based on their perceived preference in terms of climate strategy proactivity (CSP)

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nikhil Kant
Keyword(s):  
Developing Countries ◽  
Online Survey ◽  
Analytical Study ◽  
Sampling Method ◽  
Cross Sectional ◽  
Content Type ◽  
Body Of Knowledge ◽  
Self Bias ◽  
Stakeholder Perspective ◽  
The Impact

Purpose The purpose of this study is to evaluate empirically the perceptions of the stakeholder regarding their relevance based on their perceived preference in terms of climate strategy proactivity (CSP) which is an outcome of the importance and influence of the category of the stakeholders of Indian companies. Revolutionized by the liberalization–privatization–globalization, the practices and strategies of the companies in the developing country such as India have been marked by dynamic changes in the several past decades. In these circumstances, it has become imperative to understand the relevance of the stakeholders in terms of CSP displayed by these companies to seek help in developing appropriate strategies in the emerging competitive market. Design/methodology/approach This paper used a research design comprising descriptive analytical method using non-probability purposive sampling method to collect data from a sampled 701 respondents representing eleven categories stakeholders, with the help of a cross-sectional, self-administered online survey questionnaire. Findings The findings of the study detail the evaluation of the stakeholders relevance based on their perceived preference in terms of CSP attaching significance to the stakeholders’ perception as a useful tool. While the findings hint at the incessant growth of stakeholder awareness urging corporations to analyze effects and adopt appropriate strategies in developing countries, they also evaluate empirically the perceptions of the stakeholder regarding their relevance based on their perceived preference in terms of CSP which is an outcome of the importance and influence enjoyed by the category of the stakeholders of Indian companies. The findings confirmed the adequate level of awareness of the stakeholders of Indian companies responsible for making them adopt CSP. Research limitations/implications This study had the limitations such as collection of information through a self-reported questionnaire which might have the impact of self-bias despite all the preventive and corrective measures, and the risk of creation of a subjective viewpoint due to the assessment of the perceptions of varied stakeholders. Nonetheless, meeting the objective of this study, the study succeeds in providing a stakeholder perspective to the existing body of knowledge with respect to CSP, a stakeholders-centric concept which is in infancy in the context of developing countries and their corporations. Originality/value The paper is original as it adds value by providing empirical evidence from the perspective of different stakeholders, including but not limited to managers or shareholders only, like majority of previous studies. By doing so, it successfully attempts to contextualize them indicating the need to unlock huge potentialities and substantial significance for other developing countries.

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