The LMRDA. Another labor law that benefits firms?

2017 ◽  
Vol 59 (1) ◽  
pp. 2-20
Author(s):  
Steven E. Abraham
Keyword(s):  
Design Methodology ◽  
Labor Law ◽  
Labor Management ◽  
Shareholder Returns ◽  
Content Type ◽  
Study Methodology ◽  
The Law ◽  
The Impact ◽  
Management Reporting ◽  
Event Study Methodology

Purpose This paper aims to examine the impact of the Labor Management Reporting and Disclosure Act (LMRDA). It is expected that returns would have increased in response to the law’s passage, as it imposed a number of restrictions on unions vis-à-vis management and instituted many rules regulating unions’ internal affairs. Design/methodology/approach This paper uses event study methodology, which examines the impact of the law’s passage on the shareholder returns to the firms likely to have been affected by the law. Three different samples are used. Shareholder returns are examined on critical dates associated with the passage of the law to assess whether it benefited the firms in the samples. Findings Shareholder returns to firms expected to have been affected by the LMRDA fell in comparison to their competitors’ returns, indicating that the law was viewed by investors as being beneficial for firms. Presumably, the restrictions the law placed on unions were judged to be more important by investors than the improvement in unions’ image that might have resulted from the law, indicating that the law benefitted firms. Originality/value This is the first paper that has examined the impact of the LMRDA empirically to assess its impact on firms.

scholarly journals Compensation for harm caused by nuclear installations: what’s the damage?

2018 ◽  
Vol 10 (1) ◽  
pp. 17-35
Author(s):  
Robert Lee ◽  
Radek Stech
Keyword(s):  
Design Methodology ◽  
Case Law ◽  
Personal Injury ◽  
Eu Law ◽  
Legal Research ◽  
Property Damage ◽  
Content Type ◽  
The Law ◽  
The Impact

Purpose This paper aims to explain the changes to the liability regime for nuclear installations before reviewing the traditional heads of damage under the 1965 Act. It argues that while there is some welcome clarification of what amounts to an “occurrence” in the purposes of the 1965 Act, disappointingly, little has been done to clarify how concepts of personal injury and property damage under the Act sit alongside traditional tort notions leaving the law highly dependent on earlier, but not always consistent, case law. The paper then goes on to consider the impact of the new categories of compensation, introduced by the Order, evaluating the extent to which these draw upon EU law structures for environmental impairment liability. Again, it questions whether this approach will achieve sufficient clarity and certainty. Design/methodology/approach This paper is a desk-based legal research. Findings This study is a discussion of statutory material and case law. Originality/value This paper is a first in-depth treatment of changes to liability principles in the Nuclear Installations Act 1965.

Depositor discipline and the bank ' s incentive to monitor

2014 ◽  
Vol 6 (2) ◽  
pp. 98-111
Author(s):  
Michael F. Ferguson ◽  
Bradley A. Stevenson
Keyword(s):  
Design Methodology ◽  
Ordinary Least Squares ◽  
Policy Implications ◽  
Bank Loan ◽  
Content Type ◽  
Depositor Discipline ◽  
Study Methodology ◽  
Loan Announcements ◽  
Practical Implications ◽  
Event Study Methodology

Purpose – The aim of this paper is to examine the question of the specialness of banks by addressing concerns raised in the recent studies and deriving policy implications for the future of banking. The specialness of banks has been well documented in the finance literature. More recent research, however, calls into question the special nature of banks. Design/methodology/approach – We use event study methodology to study 423 bank loan announcements from 1988 to 1996 and examine the returns relative to proxies for the bank ' s monitoring incentives and skill using ordinary least squares (OLS) regressions. Findings – Our results indicate borrower abnormal announcement returns are positively related to proxies for the bank ' s monitoring incentives and skill as measured by: the ratio of uninsured deposits to total loans; a risk-adjusted measure of recovered charge-offs; and the relative bank-to-borrower capital ratio. Research limitations/implications – The results reveal how the fragile nature of the bank ' s structure improves the bank ' s incentives to monitor borrowers. Practical implications – Our results can inform the current debates in the Fed and in Congress surrounding reapplying the Glass-Steagall Act and limiting the size of banks. We show that banks were special before the Gramm-Leach-Bliley Act and when fewer banks belonged to the too-big-to-fail category. This suggests that reregulating banks to re-establish their fragile nature will re-establish them as information-generating intermediaries instead of just transactional institutions. Originality/value – Our findings have not previously been documented but are broadly consistent with models developed by Calomiris and Kahn (1991) and especially Diamond and Rajan (2001).

Did the Sarbanes-Oxley Act result in a strategic shift in M&A motives?

2018 ◽  
Vol 44 (2) ◽  
pp. 142-159 ◽  
Author(s):  
Harjeet S. Bhabra ◽  
Ashrafee T. Hossain
Keyword(s):  
Design Methodology ◽  
Capital Investments ◽  
Short Term ◽  
Content Type ◽  
Related Literature ◽  
Value Maximization ◽  
Sarbanes Oxley ◽  
Study Methodology ◽  
Term Performance ◽  
Event Study Methodology

Purpose The purpose of this paper is to examine whether or not the seminal legislation called the Sarbanes-Oxley Act (SOX) influenced a strategic shift in the merger and acquisition (M&A) market. Design/methodology/approach The sample consists of 4,839 completed deals undertaken by US acquirers from the Securities Data Corporation’s US M&As database from January 1, 1996 to December 31, 2009. The authors used the standard event study methodology for short-term performance analysis and the Berkovitch and Narayanan (1993) method to identify merger motives. Findings By following the same acquirers who participated during both pre- and post-SOX periods, the authors find that these acquirers generate 1-1.5 percent more returns for their stockholders around M&A announcement dates and that the motivation has shifted to value maximization (synergy), a notable strategic shift. Research limitations/implications All acquirers and targets are public. Originality/value This paper adds to SOX-related literature as well as to M&A literature. By analyzing M&A deals, often the largest capital investments for acquirers, this paper shows that, despite criticism of SOX, this legislation fundamentally contributed to a strategic shift in the M&A market.

Doping scandals in professional cycling: impact on primary team sponsor’s stock return

2016 ◽  
Vol 17 (1) ◽  
pp. 37-55 ◽  
Author(s):  
Karen Danylchuk ◽  
Jelmer Stegink ◽  
Katie Lebel
Keyword(s):  
Stock Returns ◽  
Stock Return ◽  
Grand Tour ◽  
Content Type ◽  
Time Period ◽  
Study Methodology ◽  
The Impact ◽  
The Relationship ◽  
Professional Cycling ◽  
Event Study Methodology

Purpose – The purpose of this paper is to examine the impact of doping scandals (n=25) in professional cycling Grand Tour events on the primary team sponsor’s daily stock return. Design/methodology/approach – Event study methodology. Findings – Overall it was found that during the time period and events under examination in this study doping scandals had no significant impact on the primary team sponsor’s stock returns. Originality/value – There is limited research to explain the economic impact of widespread doping in cycling and its commercial shareholders. This study addresses this gap by examining the relationship between doping scandals in professional cycling and the daily stock return of the involved team’s primary sponsor.

The impact of a readiness program for implementing and sustaining continuous improvement processes

2016 ◽  
Vol 28 (6) ◽  
pp. 869-886 ◽  
Author(s):  
Carmen Jaca ◽  
Luis Paipa-Galeano ◽  
Elisabeth Viles ◽  
Ricardo Mateo
Keyword(s):  
Continuous Improvement ◽  
Design Methodology ◽  
Case Study Methodology ◽  
Content Type ◽  
Structured Activities ◽  
Study Methodology ◽  
Motivation To Participate ◽  
The Impact

Purpose The purpose of this paper is to describe a readiness programme designed to increase employees’ awareness of order and cleanliness as a way of building the necessary foundation for implementing and sustaining continuous improvement processes. In this paper, the authors propose a new readiness programme based on the principles of 5S, with the aim of strengthening employees’ motivation and involvement prior to 5S being implemented. Design/methodology/approach The research is based on case study methodology, followed by a programme of four structured activities. The validity of the programme is shown through the implementation of the activities in two different organizations. Findings The readiness programme was applied before 5S was successfully implemented. The degree of awareness and motivation of the programme participants improved as a result of these activities. Moreover, the activities increased people’s motivation to participate in improvement activities. Originality/value Applying a readiness programme before implementing 5S can help organizations to achieve and sustain improvement activities, thus increasing worker commitment and motivation.

Pyro terrorism in Greece? Greek forest fires August 2007 and the impact on Greek banks stocks

2018 ◽  
Vol 21 (2) ◽  
pp. 163-170 ◽  
Author(s):  
Spyridon Repousis
Keyword(s):  
Event Study ◽  
Forest Fires ◽  
Banking System ◽  
Market Model ◽  
Terrorist Attacks ◽  
Content Type ◽  
Study Methodology ◽  
Greek Banks ◽  
The Impact ◽  
Event Study Methodology

Purpose The purpose of this paper is to examine Greek forest fires in August 2007 and statements about terrorism (pyro-terrorism) and the impact on Greek banks stocks. Design/methodology/approach Event study methodology and market model is used in this paper and data of all Greek bank stocks prices listed in Athens Stock Exchange are analysed, before and after 17 August 2007, which is when forest fires took place in Greece. Findings Total number of burned acres during a seven-year period, 2000-2006, was 2,530,883, and during only August 2007, burned acres accounted to 2,059,615. The former Minister for Public Order, Vyron Polydoras, stated the fires may be a result of terrorist attacks, as many of the fires started simultaneously and in places where an arsonist could not be seen. The Minister also stated that the country is facing an asymmetric threat, a military term used for terrorist attacks. The findings of event study methodology and market model show that CAARs were slightly negative but not statistically significant and during event date, and average abnormal return (AAR) was slightly positive at 0.0273 per cent. The event caused no influence on the stock market. Practical implications Results are important for banking system, compliance and regulatory authorities, justice system and politicians. Originality/value The impact of Greek forest fires in August 2007 on Greek banks stocks has not been examined so far.

scholarly journals The impact of regulatory fines on shareholder returns

2015 ◽  
Vol 46 (4) ◽  
pp. 85-96 ◽  
Author(s):  
J. Strydom ◽  
M. Ward ◽  
C. Muller
Keyword(s):  
Public Support ◽  
Shareholder Returns ◽  
Share Prices ◽  
Ex Post ◽  
Competitive Behaviour ◽  
Study Methodology ◽  
The Cost ◽  
The Impact ◽  
Event Study Methodology

Corruption has been shown to undermine the efficiency of market-based economies by allowing participants to profit from illegal rent-seeking activities, which decrease public support for business and increase the cost of capital (Zingales, 2015). Over the past decade, the Competition Commission in South Africa has investigated and issued punitive fines amounting to around R8bn to companies engaged in non-competitive behaviour. Using event study methodology, we examine the impact on the share prices of listed companies upon the announcement of an investigation, a fine, and the payment of thefine. We find that shareholder returns were unaffected at the initiation and payment stages of the process, but that the returns were positively affected at the conviction stage. A buy-and-hold longitudinal study was also undertaken to determine if an ex-post portfolio consisting of stocks of convicted companies out-performed an equal-weighted all share benchmark, as well as a portfolio of matched companies which had not been fined. The results reveal that both the portfolio of fined companies and the matched portfolio of non-fined companies out-performed the market benchmark over a 24-year period. However, the portfolio consisting of convicted companies underperformed the portfolio of companies which had not been fined. We conclude that the market anticipated the fines and that the quantum of fines levied was less than expected. We also find that the non-competitive behaviour of convicted companies did not benefit their shareholders in the long-term.

The effects of regulatory announcements on risk and return: the Vietnamese experience

2017 ◽  
Vol 29 (2) ◽  
pp. 152-170 ◽  
Author(s):  
Huy N.A. Pham ◽  
Vikash Ramiah ◽  
Imad Moosa ◽  
Justin Hung Nguyen
Keyword(s):  
Design Methodology ◽  
Equity Market ◽  
Risk Models ◽  
Risk And Return ◽  
Content Type ◽  
Asset Pricing Models ◽  
Study Methodology ◽  
Financial Regulatory ◽  
Event Study Methodology ◽  
Non Parametric

Purpose The purpose of this paper is to test the effects of financial regulatory announcements on risk and return in the Vietnamese equity market. Design/methodology/approach The event study methodology is used for the return analysis, and asset pricing models are adjusted for the risk analysis. Various robustness tests are used, including the Corrado non-parametric ranking test and the Chesney et al. non-parametric conditional distribution test, as well as GARCH, TARCH, EGARCH and PARCH specifications for the risk models. Findings The authors find evidence for both negative and positive reactions as well as risk shifting behaviour in the form of a diamond risk structure. Originality/value This paper fills a major gap in the literature by investigating the market’s reaction to bank regulatory announcements across financial and non-financial sectors in the Vietnamese equity market.

The information content of an increase in federal funds rate from a zero lower bound environment

2018 ◽  
Vol 44 (2) ◽  
pp. 257-277
Author(s):  
Violeta Diaz ◽  
Harikumar Sankaran ◽  
Subramanian Rama Iyer
Keyword(s):  
Rate Increase ◽  
Var Model ◽  
Time Rate ◽  
Federal Funds ◽  
Federal Funds Rate ◽  
Content Type ◽  
Study Methodology ◽  
The Impact ◽  
First Time ◽  
Event Study Methodology

Purpose After a seven-year period of being stuck in the zero lower bound (ZLB) range, the target rate was raised by 25 basis points on December 16, 2015. Prior to the rate hike, the important issues that the Federal Reserve dealt with were the magnitude, timing, and the information conveyed by a first-time rate hike from the ZLB period. The purpose of this paper is to use the data from the ZLB period and simulate the impact of an increase in the proxies for the federal funds rate: effective federal funds rate and shadow rate, and measure the impact on the resulting changes in credit default swap (CDS) spreads across 11 industries. Increases in both proxies predict a significant decrease in CDS spreads which is indicative of an economic recovery. This prediction is confirmed by the announcement effect of the actual rate increase on December 16, 2015 and the three subsequent rate increases. Design/methodology/approach In the absence of target rate changes in the ZLB environment, the authors use a recursive vector autoregressive (VAR) model to simulate the rate increases in proxies for target federal rate and predict the impact on the economy by observing the reaction in CDS spreads and stock returns across 11 industries. Findings The impulse response indicates that an increase of one standard deviation in the effective rate (approximately 25 basis points) results in a statistically significant decrease in the spreads of CDS contracts in 8 of the 11 sectors studied in this research. Similar results obtain for an increase in shadow rate thus providing a robustness check. These results suggest a rate increase from the ZLB period and the resulting dynamics captured in the VAR system is indicative of an economic recovery. Originality/value Prior studies have used the event study methodology to evaluate the impact of rate changes on credit spreads. The ZLB environment does not contain data on target rate changes and renders the event study methodology as ineffective. This paper is the first to simulate the implications of a first-time rate increase from the ZLB environment in the context of a recursive VAR model. The results are very helpful to the Federal Reserve of countries experiencing a ZLB environment such as Japan and Europe.

Do ethical firms create value?

2016 ◽  
Vol 12 (1) ◽  
pp. 54-68 ◽  
Author(s):  
Khondkar Karim ◽  
SangHyun Suh ◽  
Jiali Tang
Keyword(s):  
Corporate Social Responsibility ◽  
Firm Value ◽  
Design Methodology ◽  
Value Relevance ◽  
Abnormal Returns ◽  
Content Type ◽  
Study Methodology ◽  
Corporate Social ◽  
The Relationship ◽  
Event Study Methodology

Purpose – This study aims to examine the value relevance of ethics information. Design/methodology/approach – This study adopts event study methodology to test the market’s reaction around the announcements of World’s Most Ethical Companies (WME), a ranking based on firms’ overall corporate social responsibility performance. The authors calculate the abnormal returns of firms on the WME lists to investigate how stockholders respond to the disclosure of ethical information. Findings – The authors find significant and positive abnormal returns around the announcements of the lists of ethical firms. Specifically, positive market reaction on the first day after the WME announcement (Day 1) is observed. Originality/value – This study contributes to the existing literature of the relationship between business ethics and firm value. The authors provide evidence that ethics can be aligned with firms’ financial goals. Further, this study is the first to use the WME announcement as a proxy for ethical firms.

Sign in / Sign up

Export Citation Format

Share Document