scholarly journals The determinants of securities trading activity: evidence from four European equity markets

2019 ◽  
Vol 3 (1) ◽  
pp. 47-67
Author(s):  
Silvio John Camilleri ◽  
Francelle Galea
Keyword(s):  
Empirical Evidence ◽  
Generation Process ◽  
Trading Activity ◽  
Cross Sectional ◽  
Content Type ◽  
Listed Firms ◽  
Rigorous Approach ◽  
Prior Literature ◽  
Market Capitalisation ◽  
Securities Trading

Purpose The purpose of this paper is to obtain new empirical evidence about the connections between equity trading activity and five possible liquidity determinants: market capitalisation, dividend yield, earnings yield, company growth and the distinction between recently listed firms as opposed to more established ones. Design/methodology/approach The authors use a sample of 172 stocks from four European markets and estimate models using the entire sample data and different sub-samples to check the relative importance of the above determinants. The authors also conduct a factor analysis to re-classify the variables into a more succinct framework. Findings The evidence suggests that market capitalisation is the most important trading activity determinant, and the number of years listed ranks thereafter. Research limitations/implications The positive relation between trading activity and market capitalisation is in line with prior literature, while the findings relating to the other determinants offer further empirical evidence which is a worthy addition in view of the contradictory results in prior research. Practical implications This study is of relevance to practitioners who would like to understand the cross-sectional variation in stock liquidity at a more detailed level. Originality/value The originality of the paper rests on two important grounds: the authors focus on trading turnover rather than on other liquidity proxies, since the former is accepted as an important determinant of the liquidity-generation process, and the authors adopt a rigorous approach towards checking the robustness of the results by considering various sub-sample configurations.

Integrated thinking, earnings manipulation and value creation: Malaysian empirical evidence

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nor Farizal Mohammed ◽  
Nor Aqilah Sutainim ◽  
Md. Shafiqul Islam ◽  
Norhayati Mohamed
Keyword(s):  
Empirical Evidence ◽  
Value Creation ◽  
Earnings Manipulation ◽  
Fraud Triangle ◽  
Integrated Reporting ◽  
Content Type ◽  
Prior Literature ◽  
Triangle Theory ◽  
Market Capitalisation ◽  
The Relationship

PurposePrior literature proposes that integrated reporting (IR) drives integrated thinking (IT), enabling an organisation to create value for stakeholders in both quantitative (economic performance) and qualitative manners (beyond financially-oriented information). Fraud triangle theory also predicts that earnings manipulation may also affect the creation of value. Thus, this study seeks to provide empirical evidence on the relationship between IT, earnings manipulation and value creation.Design/methodology/approachThis data sample comprises of 497 observations from 2014 to 2018 of the top 100 market capitalisation of Malaysian public listed companies (PLCs) in Bursa Malaysia. This study used an index score for IT variable and Beneish’s M-score as a proxy to detect earnings manipulations and to classify the companies into non-manipulators and manipulator companies. Value creation measurements consist of four variables under shareholder's value creation and one variable represents value creation through innovation.FindingsThe findings show that IT is significantly related to value creation, whereas earnings manipulation had no significant relationship with value creation except for value creation measured using Tobin's Q ratio. The alarming finding is that a fraud predictor, namely earning manipulation, measured by Beneish-M, is not a predictor of whether companies are creating better or less value.Originality/valueThis study is among the early literature that provides empirical evidence of the relationship between IT and value creation. Furthermore, this paper adds to look at the association of earning manipulation and value creation.

scholarly journals Does Demutualization Spur Liquidity?

2020 ◽  
Vol 3 (1) ◽  
pp. 15-26
Author(s):  
Farman Ali ◽  
Man Wang ◽  
Imran Ali ◽  
Syed Tauseef ALi
Keyword(s):  
Social Welfare ◽  
Transaction Cost ◽  
Stock Exchange ◽  
Three Dimensions ◽  
Empirical Literature ◽  
Trading Activity ◽  
Listed Firms ◽  
Market Depth ◽  
Prior Literature ◽  
The Impact

Purpose: The literature on demutualization is confined to efficiency and social welfare issues. Little empirical literature exists on the effect of demutualization on listed firms. This study examines the impact of demutualization on the liquidity of listed firms’ stocks. Methodology: It empirically investigates how the liquidity of listed firms’ stocks is affected by demutualization. Analyzing data of 137 non-financial firms listed on the Pakistan Stock Exchange for 2005 to 2017, we employ fixed effect regression to test the hypotheses. Findings: We find that demutualization has significantly improved liquidity. We analyze all three dimensions of liquidity that are the trading activity, market impact, and transaction cost. We find that demutualization increases trading activity, improve market depth, and has reduced the transaction cost.  Implications: Our findings suggest that demutualization is beneficial not only for listed firms but also for its shareholders as all three dimensions of liquidity are improved by demutualization. Stock exchanges that are not demutualized and are facing liquidity problem, can be improved by changing its structure from mutual to demutualized. Originality: Prior literature focuses on the impact of demutualization on the stock market or social welfare. There is scares research on the effect of demutualization of the listed firm. This study fills this gap by analyzing the impact of demutualization on listed firms' liquidity in a developing economy, such as Pakistan.

Board's characteristics, ownership's nature and corporate tax aggressiveness: new evidence from the Tunisian context

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ahmed Boussaidi ◽  
Mounira Hamed-Sidhom
Keyword(s):  
Board Of Directors ◽  
Financial Stability ◽  
Stock Exchange ◽  
Corporate Board ◽  
Content Type ◽  
Tax Aggressiveness ◽  
Listed Firms ◽  
Road Map ◽  
Prior Literature ◽  
Nonfinancial Firms

PurposeThis study sheds light on the determinants related to the corporate board of directors and the firms’ ownership nature of tax aggressiveness strategies of Tunisian listed firms and what could be their effect on its level in a postrevolution context.Design/methodology/approachOur research considers only nonfinancial firms listed in the Tunisian stock exchange during the 2011–2017 period. It is based on unbalanced panel data.FindingsFindings suggest that women presence on the corporate board, CEO duality, the managerial and institutional ownership regularize significantly the level and the management's behavior of engagement in tax aggressiveness practices and reduce the firm’s overall risks of its consequences in terms of tax positions stability.Research limitations/implicationsOur investigation considers only nonfinancial firms to avoid noisy results and for the significant differences between accounting standards within financial and nonfinancial firms, besides sample homogeneity and comparability considerations.Practical implicationsThis study provides evidence that some governance mechanisms, even reasonably dedicated to consider the risk of tax aggressiveness and to prevent its consequences, have a paradoxical effect and amplify the tax aggressiveness’ level rather than defending the firm’s viability and its financial stability. It offers signals to managers about specific governance attributes that strengthen and/or control the extent of tax aggressive strategies.Social implicationsThis research gives a particular road map for society, investors and practitioners to depict the firms’ level of tax aggressiveness and especially to understand its attributes related to the corporate board of directors and the ownership's nature through evidences from a postrevolution context.Originality/valueOur research contributes to prior literature by examining the effect of corporate board characteristics and different ownership natures on the extent of tax aggressiveness during and after the revolution period in Tunisia and confirms and infers some prior findings of tax aggressive determinants in underdevelopment context.

Revisiting the Solow growth model: new empirical evidence on the convergence debate

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sedat Alataş
Keyword(s):  
Empirical Evidence ◽  
Growth Model ◽  
Point Of View ◽  
Stochastic Convergence ◽  
Club Convergence ◽  
Cross Sectional ◽  
Content Type ◽  
Solow Growth Model ◽  
Convergence Clubs ◽  
Penn World Table

PurposeThis paper investigates income convergence using different convergence concepts and methodologies for 72 countries over the period between 1960 and 2010.Design/methodology/approachThis study applies beta (β), sigma (s), stochastic and club convergence approaches. For β-convergence analysis, it derives the cross-country growth regressions of the Solow growth model under the basic and augmented Cobb–Douglass (CD) production functions and estimates them using cross-section and panel data estimators. While it employs both the widely used coefficient of variation and recently developed weak s-convergence approaches for s-convergence, it applies three different unit root tests for stochastic convergence. To test club convergence, it estimates the log-t regression.FindingsThe results reveal that (1) there exists conditional β-convergence, meaning that poorer countries grow faster than richer countries; (2) income per worker is not (weakly) s-converging, and cross-sectional variation does not tend to fall over the years; (3) stochastic convergence is not found and (4) countries in the sample do not converge to the unique equilibrium, and there exist five distinctive convergence clubs.Research limitations/implicationsThe results clearly show that heavily relying on one of the convergence techniques might lead researchers to obtain misleading results regarding the existence of convergence. Therefore, to draw reliable inferences, the results should be checked using different convergence concepts and methodologies.Originality/valueContrary to the previous literature, which is generally restricted to testing the existence of absolute and conditional β-convergence between countries, to the best of the author’s knowledge, this is the first study to consider and compare all originally and recently developed fundamental concepts of convergence altogether. Besides, it uses the Penn World Table (PWT) 9.1 and extends the period to 2010. From this point of view, this study is believed to provide the most up-to-date empirical evidence.

Governmental customer concentration and audit pricing

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hanmei Chen ◽  
Weishi Jia ◽  
Shuo Li ◽  
Zenghui Liu
Keyword(s):  
Audit Fees ◽  
Audit Pricing ◽  
Cross Sectional ◽  
Content Type ◽  
Listed Firms ◽  
External Monitoring ◽  
Variable Approach ◽  
The Usa ◽  
Using Data ◽  
Treat All

Purpose The purpose of this paper is to examine how the concentration of a specific customer type – governmental customer, affects the pricing of audit services in the USA. Design/methodology/approach This paper applies a standard audit pricing model by regressing audit fees on governmental customer concentration and other common determinants of audit fees. This paper also adopts an instrumental variable approach and performs propensity-score matched sample analyzes to mitigate the potential endogeneity problem. Findings Using data from major customer disclosures of US publicly listed firms from 2000 to 2014, this paper finds that governmental customer concentration is positively associated with audit fees, suggesting that a higher level of governmental customer concentration increases a firm’s audit risks and audit effort. In addition, this paper performs cross-sectional analyzes and show that the association between governmental customer concentration and audit fees is more pronounced for firms with weak internal governance, weak external monitoring and high financial risks. Originality/value This paper furthers the understanding of the interactive relationships in supply chain systems and adds new evidence to the literature on customer concentration. Prior studies on customer concentration typically treat all customer types in a uniform manner. To the knowledge, this is the first study that separates governmental customers from other types of customers in an audit pricing setting. The findings highlight the importance of examining governmental customer concentration when assessing a firm’s audit risks and audit fees.

Impact of corporate characteristics on human resource disclosures

2016 ◽  
Vol 24 (4) ◽  
pp. 390-425 ◽  
Author(s):  
Surinder Kaur ◽  
Venkat A. Raman ◽  
Monica Singhania
Keyword(s):  
Regression Analysis ◽  
Human Resource ◽  
Stock Exchange ◽  
Descriptive Analysis ◽  
Listed Companies ◽  
Annual Reports ◽  
Cross Sectional ◽  
Content Type ◽  
Independent Variables ◽  
Market Capitalisation

Purpose Human resource (HR) disclosures are voluntary in nature in most countries including India. The voluntary nature of HR disclosures results in discrepancy in the HR disclosure practices across companies and industries. The purpose of this paper is to examine the extent of HR disclosures in annual reports of Indian listed companies and to identify their determinants in a three stage analysis. Design/methodology/approach In the first stage a 16 item human resource disclosure index (HRDI) has been constructed for the set of CNX 200 companies listed on National Stock Exchange. Thereafter the effect of various independent variables on HRDI is analysed descriptively. Finally in the third stage HRDI has been regressed against the independent variables using regression analysis technique to identify key determinants of HRDI. Findings The research reveals that there is high variation among sample companies as regard HRDI. The results of descriptive analysis, correlation analysis and multivariate regression analysis establish that government’s participation in ownership and market capitalisation has positive significant effect on HRDI at 1 per cent, presence of separate HR directors committee, presence of more independent directors on board at 5 per cent and cross-list America and profit after tax at 10 per cent level. Implicitly HRDI is positively affected by size of company as measured by market capitalisation. Though contrary to expectations, other variables leverage, number of employees, assets, ownership concentration, type of auditor, age, complexity of business structure, employee expense to total operating expense ratio, industry affiliation, foreign investment and proportion of non-executive directors on board are found to have moderate though insignificant influence on HRDI. Research limitations/implications Cross-sectional design, dependence on annual reports as a primary document for disclosure and subjectivity in HRDI construction are the main limitations of the research. A longitudinal study may be carried to study the pattern of HR disclosures in future. Weighted ranking of different items of disclosures may be studied to improve the understanding of extent of disclosures. Practical implications The HRDI as constructed in the research may be used as a benchmark by companies to improve their HR disclosures. It can also be used by accounting bodies and company regulators while deciding about standards regarding HR disclosures. Investors can also use HR disclosures made by a company as a basis to understand its financial standing and future potentials. Originality/value The study adds to the existing literature by developing 16 item HRDI to measure the extent of disclosures by listed companies in India and thereafter by including some new propositions in the determinants of HRDI have never been tested in the existing studies. These propositions are government’s participation in ownership, separate HR committee of directors, board composition and foreign activity. These propositions have been empirically validated in this research except for foreign activity.

Bitcoin as a new asset class

2019 ◽  
Vol 27 (1) ◽  
pp. 147-168 ◽  
Author(s):  
Asheer Jaywant Ram
Keyword(s):  
Developed Country ◽  
Content Type ◽  
Asset Class ◽  
Prior Literature ◽  
Economic Profile ◽  
Asset Classes ◽  
Sharpe Ratios ◽  
Market Capitalisation ◽  
Class Nature ◽  
Alternative Investment

Purpose Bitcoin is the best-known cryptocurrency which currently holds the largest market capitalisation and is regarded as a standard example of a cryptocurrency. There is, however, no consensus as to the nature of the Bitcoin. The purpose of this paper is to determine whether Bitcoin represents a new asset class by building on prior research. Design/methodology/approach The prior literature on asset classes is explored in detail and then applied to the Bitcoin. Four key criteria of asset classes are discussed, namely, investability, politico-economic profile, correlation of returns and risk-reward profile. Statistical techniques are used to inform the conclusions for the third and fourth criteria. Findings This research finds that the Bitcoin represents a distinct alternative investment and asset class. There are significant opportunities for investment. The politico-economic profile of the decentralised and consensus-based Bitcoin is dissimilar to other asset classes. The Bitcoin shares little or no correlation with other asset classes. Using Sharpe Ratios, it is shown that the Bitcoin provides risk-adjusted returns over and above most asset classes. Research limitations/implications The aim of this research is to present a normative exploration into the asset class nature of the Bitcoin and, as a result, the aim is not to create positivist generalisable conclusions. This paper does not address cryptocurrencies, other than Bitcoin and does not constitute a detailed manual on modern portfolio theory. Originality/value This research adds to finance paradigm research on the Bitcoin by including a developing country perspective on Bitcoin as an asset class as prior studies have concentrated on developed country settings. Further, this research introduces recent economic data (2014 to 2017) in the form of daily observations to enhance prior understanding. It is important to understand if the Bitcoin represents an alternative investment and new asset class as this may affect investment decisions.

Asset growth and the cross-section of stock returns: evidence from Greek listed firms

2017 ◽  
Vol 55 (5) ◽  
pp. 826-841 ◽  
Author(s):  
Georgios Constantinou ◽  
Angeliki Karali ◽  
Georgios Papanastasopoulos
Keyword(s):  
Stock Returns ◽  
Emerging Market ◽  
Balance Sheet ◽  
Firm Level ◽  
Cross Sectional ◽  
Content Type ◽  
Listed Firms ◽  
Asset Growth ◽  
Book To Market Ratio ◽  
Investment Growth

Purpose The purpose of this paper is to examine whether firm-level asset investment effects in returns found for US firms occur within the Greek stock market. Design/methodology/approach The paper utilizes portfolio-level tests and cross-sectional regressions. Findings The authors find that growth in total assets is strongly negatively related to future stock returns of Greek firms. In fact, the relation remains statistically significant, even when the authors control for other strong predictors of future returns (i.e. market capitalization and book-to-market ratio). Furthermore, the authors find that a hedge trading strategy on asset growth rate consisting of a long (short) position in firms with low (high) balance sheet growth generates positive returns, confirming that investment growth has significant predictive power for future returns of Greek listed firms. Originality/value The paper adds to the literature on the generalization of asset pricing regularities attributable to accounting figures in an emerging market.

Redefining vanity sizing: when bigger may be better

2017 ◽  
Vol 21 (4) ◽  
pp. 438-452 ◽  
Author(s):  
Seth Ketron ◽  
Kelly Naletelich
Keyword(s):  
Empirical Evidence ◽  
Social Desirability ◽  
Design Methodology ◽  
Empirical Support ◽  
Purchase Intentions ◽  
Quantitative Approach ◽  
Affective Reactions ◽  
Content Type ◽  
Prior Literature

Purpose Although vanity sizing has often been conceptualized as “smaller is better” in apparel sizing, this perspective is limited in that many products would be more negatively perceived if viewed as smaller in size. In such scenarios, “larger is better” would be a more appropriate heuristic. Thus, vanity sizing should be redefined as a practice in achieving social desirability in size labeling. Namely, vanity sizing actually seeks to induce feelings of either smallness or largeness depending on the context. The purpose of this paper is to address this redefinition. Design/methodology/approach The current research provides initial empirical support of this redefinition with two studies that utilize a blended qualitative/quantitative approach and a hypothetical product scenario in which “larger is better” (bras). Findings Study 1 indicates that consumers seek to feel smaller and larger across different bodily areas. Further, study 2 found that compared to consumers of larger cup sizes, consumers of smaller cup sizes react more favorably to larger-than-typical cup sizes, forming more positive cognitive/affective reactions. Further, these cognitive/affective reactions influence purchase intentions, confirming findings of prior literature concerning attitudes and purchase intentions. Overall, the findings support the need to redefine vanity sizing. Originality/value The present conceptualization of vanity sizing is too narrow and limits understanding of the implications of vanity sizing across all sizing situations. Thus, this paper redefines vanity sizing and furnishes empirical evidence that such redefinition is warranted.

scholarly journals Does family involvement on board of the directors contribute to firm profitability? An empirical evidence from Saudi Arabia

2015 ◽  
Vol 11 (2) ◽  
pp. 159-170 ◽  
Author(s):  
Shehabaddin Abdullah A. Al-Dubai ◽  
Ku Nor Izah Ku Ismail ◽  
Noor Afza Amran
Keyword(s):  
Time Series ◽  
Saudi Arabia ◽  
Empirical Evidence ◽  
Family Involvement ◽  
Family Firms ◽  
Cross Sectional ◽  
Listed Firms ◽  
Firm Profitability ◽  
The World ◽  
Promising Area

Literatures view board of the directors as the cornerstone of firm’s success. Therefore, family involvement on the board and its impact on firm profitability is an issue of interest and need to be addressed. The purpose of this paper lies in the fact that it extracts new empirical evidence from a promising area in the world. The study proceeds with a cross-sectional time-series analysis based on a data of 75 Saudi non-financial public listed firms from 2007-2011(375 firm-year observations) to examine family representing on board of the directors, family chairman, and founder chairman and its impact on firm performance (ROA). The study concludes the outperformance of firms in which family represents heavily on the board. In addition, the results suggest that not all family members are good stewards. Strictly speaking, founder chairman only found to be beneficial to the firm profitability rather than others. However, the results confirmed its robustness against different indicator (EPS) and when family firms only being selected.

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