A comparative analysis of long-term performance of construction and non-construction IPOs in India

2019 ◽  
Vol 26 (10) ◽  
pp. 2447-2473 ◽  
Author(s):  
Harish Kumar Singla
Keyword(s):  
Maximum Likelihood Method ◽  
Random Effect ◽  
Likelihood Method ◽  
Construction Sector ◽  
Ipo Underpricing ◽  
Content Type ◽  
Robust Estimates ◽  
Long Term Performance ◽  
Term Performance

Purpose The purpose of this paper is to analyze the long-term performance of construction sector initial public offers (IPO) made in India during 2006–2015. The study aims to compare the performance of the construction sector IPOs with the non-construction sector IPOs and finds the determinants of long-term performance of construction sector IPO with a time horizon of three years. The study also attempts to find out, if the long-term IPO underpricing that has been discussed in the literature, really exists or it is a myth. Design/methodology/approach The study uses data of IPOs listed on National stock exchange during 2006–2015. In total, 281 IPOs are considered for the study, among which 44 are construction sector IPOs. IPOs anniversary performance of three successive years is calculated from the date of listing, and a random effect panel regression model with clustered robust estimates using the maximum likelihood method is performed to find out the determinants of IPO performance. The data are also tested for multicollinearity, stationarity and heteroscedasticity to ensure the robustness of results. Findings The results show that in the long-run construction sector IPOs outperform the non-construction sector IPOs, though the performance is below average when compared to market returns. The IPO underpricing is a myth, and IPO underperformance is a reality in India. The performance of construction sector IPOs is driven positively by market return, size of the firm and negatively by liquidity of the firm. Originality/value The paper is the first attempt to analyze the performance of construction sector IPOs, and compare it with non-construction sector IPOs. The study uses a random effect panel regression model with robust estimates using the maximum likelihood method to ensure the robustness of results. This is the first time the performance of IPOs is studied with a panel data approach.

IPO underpricing and long-term performance in China: the perspective of price limit policy

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yuxin Wang ◽  
Guanying Wang
Keyword(s):  
Initial Public Offering ◽  
Stock Exchange ◽  
Ipo Underpricing ◽  
Content Type ◽  
Price Limit ◽  
Good Policy ◽  
Public Offering ◽  
Long Term Performance ◽  
Term Performance

PurposeThe purpose of this paper is to explore how the price limit policy implemented in 2014 affects initial public offering (IPO) underpricing and long-term performance in China.Design/methodology/approachThe data are the IPOs from Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE) between 2004 and 2018. The data are firstly divided into the IPOs before the price limit policy and the IPOs after the price limit policy according to the time of issuance. Then the two groups are divided into 4 subsamples according to the market blocks and the P/E ratio. The authors use multiple regression models to explore the effect of price limit policy in each subsample.FindingsThe first-day price limit system for IPOs is similar to the upward fuse mechanism, the purpose of which is to suppress IPO underpricing. However, this study finds that the policy does not suppress IPO underpricing, but increases the underpricing rate in all subsamples. Besides, the long-term performance in each subsample is different from each other. Main Board stocks’ long-term performance is worse after the policy. The policy makes Small and Medium Enterprise Board (SME Board) and Growth Enterprise Market Board (GEM Board) stocks with high P/E ratios perform better in the long term. For SME Board and GEM Board stocks with low P/E ratios, the policy makes no significant effect.Practical implicationsGood policy intentions may sometimes lead to counterproductive effects. However, since the long-term performance of each subsample is different, it is difficult to judge whether the policy should continue to be implemented or cancelled. Implementing different policies for different subsamples may be a better way to solve this problem.Originality/valueThis paper contributes to the study of IPO underpricing and long-term performance from the perspective of price limit policy.

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2019 ◽  
Vol 35 (10) ◽  
pp. 29-30
Keyword(s):  
Asia Pacific ◽  
Asia Pacific Region ◽  
Content Type ◽  
Pertinent Information ◽  
Short And Long Term ◽  
Long Term Performance ◽  
Performance Gains ◽  
Term Performance ◽  
Practical Implications

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings Hotels in the Asia-Pacific region have yet to fully utilize social media to promote their CSR initiatives. This means there is huge potential for improved stakeholder engagement, leading to short- and long-term performance gains. Originality The briefing saves busy executives, strategists and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

Association of performance with quality initiatives and quality awards: quality initiatives' effect

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Gururaj Upadhyaya ◽  
Subrahmanya Bhat K
Keyword(s):  
Validity And Reliability ◽  
Quality Initiatives ◽  
Content Type ◽  
Quality Awards ◽  
Quality Award ◽  
Research Questions ◽  
Long Term Performance ◽  
Term Performance ◽  
Spearman’S Correlation

PurposeThe purpose of this empirical study intends to explore the contingency effect of the adoption of some specific quality initiatives (QI), on the correlation of some performance measures (PMs) with the “interacting” QI and quality award (QA) models through the continuous improvement (CI) journey of Indian QA winners.Design/methodology/approachA survey questionnaire was administered to the Indian Quality Award winners. Data collected from a survey were followed by validity and reliability analyses of the instrument. Hypotheses were tested using Spearman's correlation test and Fisher's Z-test.FindingsSome specific QI that affected the correlation between PMs and research questions representing the interaction among QI and QA models during different stages of the CI journey of organizations were identified. PMs that correlated with interacting QI and QA models through the above stages of CI journey were also identified.Practical implicationsA preliminary inference on QI to be adopted and the PMs to be focused upon during the different periods of CI journey of Indian organizations was arrived at. This could help practitioners in proper choice of QI and to focus upon “realistic” PM through different stages of the CI journey of organizations.Originality/valueThis study attempts to fill the gap of scarce holistic studies on the long-term performance implications of interacting QI and QA through the CI journey of organizations.

Trade-off between value creation and value appropriation?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Cleo Schmitt Silveira ◽  
Marta Olivia Rovedder de Oliveira ◽  
Rodrigo Heldt ◽  
Fernando Bins Luce
Keyword(s):  
Value Creation ◽  
Generalized Method Of Moments ◽  
Impulse Response Functions ◽  
Value Appropriation ◽  
Trade Off ◽  
Content Type ◽  
Short And Long Term ◽  
Long Term Performance ◽  
Term Performance

PurposeManagers face the challenge of balancing resources needed to support value creation and value appropriation. In this study the authors analyze the impacts of innovation investments (i.e. value creation: VC) on advertising expenditures (i.e. value appropriation: VA), and vice versa, and verify the effects of these options on short- and long-term performance.Design/methodology/approachThe effects of these two activities on short- and long-term performance were analyzed observing a panel of 4,090 companies of Standard and Poor's Compustat database from a 40-year period. The authors adopted the panel vector autoregressive (VAR) approach, using the generalized method of moments (GMM).FindingsAlthough there is a trade-off between the strategic emphases on creating and appropriating value, there is also a synergy between them. The results from the impulse response functions support the argument for a virtuous business circle: companies that choose to intensify their investments in R&D tend to increase advertising expenditures, and vice versa.Practical implicationsManagers, rather than having to deal with a trade-off between allocating resources either on VC or VA activities, can capitalize on synergetic benefits resulting from the interaction among them.Originality/valueThe relationship between the VC and VA activities transcends the trade-off imposed by resource restrictions, since the interaction between them creates additional benefits afforded by the synergy of these activities.

scholarly journals The long-run performance of US firms pursuing IPOs in foreign markets

2018 ◽  
Vol 17 (1) ◽  
pp. 58-77 ◽  
Author(s):  
Robert Killins ◽  
Peter V. Egly
Keyword(s):  
Capital Markets ◽  
Abnormal Returns ◽  
Listed Companies ◽  
Foreign Markets ◽  
Content Type ◽  
Long Run ◽  
The Us ◽  
Long Term Performance ◽  
Term Performance

Purpose The purpose of this paper is to investigate the long-run performance of a unique set of US domiciled firms that have bypassed the US capital markets in pursuit of their initial public offering (IPO) overseas. Additionally, this paper then tests the popular underwriter prestige impact and the window of opportunity hypothesis on this unique subset of IPOs. Design/methodology/approach Using a sample of foreign and purely domestic IPOs made by US firms from 2000 to 2011, this study investigates the long-term performance, one-, two- and three-year by using two measures (buy-and-hold return and cumulative abnormal returns) to test the long-run returns of newly listed companies. Finally, the research incorporates both the traditional matching methodology (issue year and size) along with propensity score matching methodology. Findings FIPOs of US companies underperform DIPOs and their matched DIPOs; furthermore, FIPOs underperform the index of the two listing countries they use the most (UK and Canada). Although the choice of a reputable underwriter mitigates underperformance, the choice of listing in a foreign country only may be a result of possible high valuations accorded by foreign investors who buy US-listed companies on the domestic exchange possibly for reducing exchange rate risk and gaining US diversification without incurring additional costs. It is, thus, possible that US companies that undertake Foreign IPOs not only escape potentially higher Security and Exchange Commission regulations and disclosure but also benefit from higher valuations in the foreign markets. Originality/value To the best of the authors’ knowledge, this is the first study to investigate the long-term performance of US firms bypassing the US capital markets in pursuit of their initial equity offering elsewhere. Caglio et al. (2016) investigated why firms decide to pursue such equity raising activity but fail to investigate the firms’ actual performance after issuing equity. This research fills such a gap in the literature and is important for both academics and practitioners. Practitioners can use this information in assessing the quality of such investments in the long-run, and firms can use such information when determining the different options of issuing equity. Further, regulators should be aware of the implications that increased regulations have on capital raising activities in their domestic market.

The long-term performance of cross-border mergers and acquisitions

2015 ◽  
Vol 9 (3) ◽  
pp. 385-400 ◽  
Author(s):  
Sai Lan ◽  
Fan Yang ◽  
Hong Zhu
Keyword(s):  
Mergers And Acquisitions ◽  
Developed Countries ◽  
Performance Outcomes ◽  
Chinese Firms ◽  
Content Type ◽  
Cross Border ◽  
Study Methodology ◽  
Long Term Performance ◽  
Term Performance

Purpose – The purpose of this paper is to examine Chinese firms’ long-term value creation derived from cross-border mergers and acquisitions (CBMAs). Design/methodology/approach – The authors collected a sample of 140 CBMAs conducted by Chinese firms listed in Shenzhen and Shanghai stock markets between 1997 and 2010. Long-horizon event study methodology was used to test hypotheses. Findings – The authors find Chinese firms gain long-term value from CBMAs. In particular, the authors find that Chinese firms tend to gain more value from targets from developed countries, and Chinese state-owned firms are more capable of gaining value from CBMAs than Chinese private firms. Originality/value – Given Chinese firms are increasingly acquiring targets outside of China in recent years, it is still unclear about whether Chinese firms gain value from these very expensive cross-border deals. This is one of the first studies that address the question: What are the long-term performance outcomes of Chinese CBMAs in recent years?

CSR portfolio characteristics and performance outcomes: examining the impacts of CSR portfolio diversity and dynamism

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kyle Turner ◽  
Craig A. Turner ◽  
William H. Heise
Keyword(s):  
Firm Performance ◽  
Dynamic Range ◽  
Performance Outcomes ◽  
Short Term ◽  
Content Type ◽  
Short And Long Term ◽  
Long Term Performance ◽  
Term Performance ◽  
The Relationship

Purpose The purpose of this paper is to introduce and test a portfolio view of a firm’s corporate social responsibility (CSR) activities. Drawing from stakeholder theory and the dynamic capabilities literature, the authors introduce CSR portfolio diversity and dynamism as key portfolio characteristics that have differential impacts across short- and long-term performance contexts. Design/methodology/approach The study draws from the Kinder, Lydenberg and Domini database to examine CSR portfolio diversity and dynamism across seven dimensions of CSR activities. The authors test the direct and indirect relationships between CSR portfolio characteristics and both short- and long-term performance outcomes to assess the opportunities and challenges associated with managing a diverse and dynamic CSR portfolio. Findings The findings suggest that a diverse portfolio of CSR activities positively impacts long-term performance; however, CSR portfolio diversity yields negative performance outcomes in the short-term. The authors also find that CSR portfolio dynamism moderates the relationship between CSR level and firm performance, such that a dynamic portfolio of CSR positively moderates the relationship between a firm’s CSR level and long-term performance; however, it negatively moderates the relationship between CSR level and short-term performance. Originality/value This study integrates insights from the literature that examine the independent effects of individual CSR activities and the broader perspective that assesses the aggregated summation of CSR activities in relation to firm performance. By taking a portfolio perspective, the present study provides a unique integration of these two research streams to examine the performance implications of engaging in a diverse and dynamic range of CSR activities.

The contrasting moderating effect of exploration on the relationship between stock options/stock ownership and a firm’s long-term performance

2018 ◽  
Vol 56 (9) ◽  
pp. 1956-1968 ◽  
Author(s):  
Gun Jea Yu ◽  
Joonkyum Lee
Keyword(s):  
Stock Options ◽  
Chief Executive ◽  
Moderating Effect ◽  
Stock Ownership ◽  
Content Type ◽  
And Performance ◽  
Long Term Performance ◽  
Term Performance ◽  
The Relationship

Purpose The purpose of this paper is to investigate the contrasting moderating effect of a firm’s exploration on the relationship between the two types of long-term incentives (stock options/stock ownership) for the chief executive officers and a firm’s long-term performance. Even though the two types of incentives are designed to improve long-term performance, the degrees of impact on long-term performance differ. Based on behavioral agency theory, this study theoretically and empirically examines the role of a firm’s exploration on the above relationship. Design/methodology/approach This study used three archival sources to obtain data on stock options, stock ownership, patents and exploration, financial measures, and others. Based on a sample of 1,963 firms in various industries from 1995 to 2006, this study tested the moderating effect of a firm’s exploration on the relationship between stock options/ownership and a firm’s performance. Findings This study reveals the contrasting moderating effect of a firm’s exploration on the relationship between stock options/ownership and a firm’s long-term performance: a positive moderating effect on the relationship between stock options and performance and a negative moderating effect on the relationship between stock ownership and performance. In addition, empirical evidence was added on the inverted U-shaped relationship between stock ownership and a firm’s long-term performance. Originality/value There is little research on a firm’s internal characteristics that strengthen or weaken the effects of stock options and stock ownership on firm performance. This study demonstrates the differential moderating effects of exploration on the relationship between stock options/stock ownership and long-term performance. Such effects of exploration come from the different risk features of stock options and stock ownership. The key implication is that stock options could be more effective than stock ownership to enhance a firm’s long-term performance when a firm has a strong exploration orientation.

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