The effect of explanations and CEO presence on stock market reactions to downsizing

2019 ◽  
Vol 32 (4) ◽  
pp. 441-456 ◽  
Author(s):  
Agnes Zdaniuk ◽  
Nita Chhinzer
Keyword(s):  
Organizational Leaders ◽  
Negative Consequences ◽  
Market Reactions ◽  
Content Type ◽  
Average Return ◽  
Different Types ◽  
Fairness Theory ◽  
Psychology Literature ◽  
Stock Market Reactions ◽  
The Impact

Purpose The purpose of this paper is to examine whether the type of explanation (excuses, justifications, apologies and denials) provided for downsizing and the source of the announcement (CEO vs other organizational members) influences shareholders’ market reactions to downsizing announcements. Design/methodology/approach In total, 388 media-based downsizing announcements from 2006–2015 were coded for explanation type and source of message. Cumulative average return was used to assess the impact of downsizing on market reactions the day after the announcement. Findings As predicted, and consistent with predictions drawn from fairness theory, excuses triggered positive market reactions, whereas justifications, apologies and denials triggered negative reactions. Additionally, shareholders reacted more negatively to excuses and apologies when the announcement came from CEOs vs other organizational members. Research limitations/implications The current research bridges the literature on market reactions to downsizing with the organizational psychology literature to advance a novel theoretical framework for predicting shareholders’ reactions to downsizing announcements. In doing so, the authors provide a more refined understanding of why different types of explanations may differentially influence shareholders’ reactions. The current research also sheds light on when the presence of the CEO in downsizing announcements may have potentially negative consequences for organizations. Originality/value The findings contribute to the sparse literature examining variations in the content of downsizing announcements on shareholders’ reactions. The present research is also the first to examine whether shareholders would react less negatively if downsizing explanations came from top organizational leaders (e.g. CEOs).

scholarly journals Fear vs humor appeals: a comparative study of children's responses to anti-smoking advertisements

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Valentina Nicolini ◽  
Fabio Cassia
Keyword(s):  
Behavioral Intentions ◽  
Social Issues ◽  
Healthy Lifestyle ◽  
Fear Appeal ◽  
Negative Consequences ◽  
Youth Smoking ◽  
Lifestyle Habits ◽  
Content Type ◽  
Different Types ◽  
The Impact

PurposeThis study aims to examine the different effects that the fear and humor appeals in anti-smoking advertisements for children have on their affective reactions to the advertisements, on their beliefs about smoking and on their behavioral intentions to smoke.Design/methodology/approachThis paper presents the findings of a qualitative research study conducted in Italy with children aged from 8 to 11 years.FindingsThe results indicated that the humor appeal is a useful method for conveying a social theme in a pleasant way and creating a likable character that becomes an example for children to imitate; however, it is necessary to employ the fear appeal to make children reflect carefully about the negative consequences of smoking.Research limitations/implicationsThis study examined only children's behavioral intentions derived from anti-smoking advertisements, but future research should also examine their real behaviors after a period following repeated viewing of public service announcements about smoking prevention or other social issues.Practical implicationsUnderstanding how different types of appeals can influence children represents an important result for the prevention of youth smoking and the promotion of healthy lifestyle habits during childhood.Social implicationsUnderstanding how different types of appeals can influence children represents an important result for the prevention of youth smoking and the promotion of healthy lifestyle habits during childhood.Originality/valueFew studies have examined the impact of social advertisements on children, and particularly little is known about the effectiveness of fear appeals on this group.

Managers' sexually-oriented behavior and firm performance: linking media reports to stock market reactions and legal risk

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Amy Nicole Baker ◽  
David King ◽  
Michael Nalick ◽  
Melissa Tempio ◽  
Vishal K. Gupta ◽  
...  
Keyword(s):  
Sexual Harassment ◽  
Stock Market ◽  
Market Reaction ◽  
Market Reactions ◽  
Content Type ◽  
Stock Market Reaction ◽  
Workplace Romance ◽  
Media Reports ◽  
Stock Market Reactions ◽  
The Impact

PurposeThe goal of this study is to examine the association between managers' sexually-oriented behavior in publicly traded firms and subsequent stock market reactions. Both sexual harassment and nonharassing sexually-oriented behavior (i.e. workplace romance) are associated with negative shareholder reactions. The authors also examine factors that may alter the stock market reaction and those that may reduce the risk of lawsuit in sexual harassment cases.Design/methodology/approachInformation about incidents of sexually-oriented behavior was collected from media reports and content coded. An event study with a stock market reaction was used to measure the impact of disclosed sexually-oriented behaviors. Logistic regression was used to assess the relationship between incident characteristics and sexual harassment lawsuits.FindingsDisclosure of managers' sexually-oriented behavior is associated with a negative stock market reaction. Interestingly, the reaction was not more severe for sexual harassment disclosures compared to nonharassing behavior (i.e. workplace romance). Results also suggest that terminating a manager prior to disclosure of an event is negatively related to a harassment lawsuit.Originality/valueThe authors report this as the first study to focus on the stock market reaction of sexually-oriented harassing and nonharassing behavior of managers. This work complements research that documents the negative impact of sexual harassment on individuals by demonstrating these behaviors are associated with loss and risk at an organizational level.

scholarly journals Do all CSR news affect market value equally?

2019 ◽  
Vol 16 (8) ◽  
pp. 1107-1123
Author(s):  
Andrea Pérez ◽  
Carlos López-Gutiérrez ◽  
María del Mar García de los Salmones
Keyword(s):  
Media Coverage ◽  
Design Methodology ◽  
Abnormal Returns ◽  
Market Value ◽  
Market Reactions ◽  
Content Type ◽  
Different Types ◽  
Corporate Social ◽  
The Impact ◽  
Managerial Perspective

Purpose The purpose of this study explores the effects that media coverage of corporate social responsibility (CSR) news related to primary stakeholders (e.g. customers, employees and investors) and secondary stakeholders (e.g. community) have on the market value of companies, measured as the impact generated in the positive and negative abnormal returns for those companies. Design/methodology/approach Using a sample of 195 online papers published in the most important Spanish business newspaper during 2015, the authors implement an event study and a regression analysis that confirm the importance of CSR news for corporate financial goals. Findings The findings show that negative CSR news related to primary stakeholders such as investors and customers generate significant abnormal returns for companies that are notably larger than the abnormal returns generated by secondary stakeholders (e.g. community). Similarly, positive news related to primary stakeholders such as employees are the only positive news that affect market reactions significantly. Originality/value The study provides an empirical analysis that clarifies how media coverage of different types of CSR news affect the market value of companies. In doing so, the paper contributes to previous literature significantly because scant research exists that has compared the differential effects of CSR news focused on primary and secondary stakeholders. The findings are discussed under the premises of the managerial perspective of stakeholder theory.

When I am old I shall wear purple: a qualitative study of the effect of group poetry sessions on the well-being of older adults

2016 ◽  
Vol 20 (4) ◽  
pp. 195-198 ◽  
Author(s):  
Richard Seymour ◽  
Michael Murray
Keyword(s):  
Older People ◽  
Assisted Living ◽  
Well Being ◽  
Content Type ◽  
Short Period ◽  
Different Types ◽  
Poetry Reading ◽  
The Impact ◽  
Health And Well Being ◽  
Practical Implications

Purpose There is increasing evidence that participation in various art forms can be beneficial for health and well-being. The purpose of this paper is to examine the impact of participating in a poetry reading group on a group of older residents of an assisted living facility. Design/methodology/approach Six poetry sessions, each on a different theme, were conducted with a group of volunteer participants. These sessions, those of pre- and post-study focus groups and interviews with the group facilitator and staff contact were audio-recorded. The transcripts of the recordings were then subjected to a thematic analysis. Findings Overall the participants were enthused by the opportunity to participate in the project and the benefits were confirmed by the support staff. In addition, reading poetry on particular themes promoted different types of discussion. Research limitations/implications The number of participants in this study was small and the study was conducted over a short period of time. Practical implications This paper confirms the impact of poetry reading for older people. The challenge is to explore this impact in more detail and over community as well as residential settings. Originality/value This paper is the first empirical report on the value of poetry reading for older people.

Market reactions to the inclusion of people with disabilities

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Claudia Araceli Hernández González
Keyword(s):  
Event Study ◽  
Stock Prices ◽  
Stock Price ◽  
Abnormal Returns ◽  
People With Disabilities ◽  
Market Reactions ◽  
Content Type ◽  
Study Methodology ◽  
Research Advance ◽  
The Impact

PurposeThis study aims to provide evidence of market reactions to organizations' inclusion of people with disabilities. Cases from financial journals in 1989–2014 were used to analyze the impact of actions taken by organizations to include or discriminate people with disabilities in terms of the companies' stock prices.Design/methodology/approachThis research is conducted as an event study where the disclosure of information on an organization's actions toward people with disabilities is expected to impact the organization's stock price. The window of the event was set as (−1, +1) days. Stock prices were analyzed to detect abnormal returns during this period.FindingsResults support the hypotheses that investors value inclusion and reject discrimination. Furthermore, the impact of negative actions is immediate, whereas the impact of positive actions requires at least an additional day to influence the firm's stock price. Some differences among the categories were found; for instance, employment and customer events were significantly more important to a firm's stock price than philanthropic actions. It was observed that philanthropic events produce negative abnormal returns on average.Originality/valueThe event study methodology provides a different perspective to practices in organizations regarding people with disabilities. Moreover, the findings in this research advance the literature by highlighting that organizations should consider policies and practices that include people with disabilities.

Islamic calendar and stock market behaviour in India

2018 ◽  
Vol 45 (11) ◽  
pp. 1550-1566
Author(s):  
Dharani Munusamy
Keyword(s):  
Stock Market ◽  
Least Square Method ◽  
Least Square ◽  
Stock Market Returns ◽  
Content Type ◽  
Ordinary Least Square ◽  
Average Return ◽  
Year Effect ◽  
The Common ◽  
The Impact

Purpose The purpose of this paper is to examine the behavior of the stock market returns in the different days of the week and different months of the year in accordance with the Islamic calendar. Further, the study estimates the risk-adjusted returns to test the performance of the indices during the Ramadan and non-Ramadan days. Finally, the study investigates the impact of Ramadan on the returns and the volatility of the stock market indices in India. Design/methodology/approach Initially, the study applies the Ordinary Least Square method to test the day-of-the-week and the month-of-the-year effect of the common and Shariah indices. Next, the study employs the risk-adjusted measurement to examine the underperformance and over-performance of the indices for both the periods. Finally, the study estimates the GARCH (1,1) and GJR-GARCH (1,1) models to observe the impact of Ramadan on the returns and the volatility of the Shariah indices in India. Findings The study finds that an average return of the indices during the Ramadan days are higher than non-Ramadan days. Further, the average returns of the Shariah indices are significantly higher on Wednesday than other days of the week. In addition, the highest and significant mean returns and mean risk-adjusted returns of the indices during the Ramadan days are observed. Finally, the study finds an evidence of the Ramadan effect on the returns and volatility of the indices in India. Originality/value The study observes evidence that the Ramadan effect influences the Shariah indices, but not the common indices in the stock market of the non-Muslim countries. It indicates that the Ramadan creates the positive mood and emotions in the investors buying and selling activities. The study suggests that investors can buy the shares before Ramadan period and sell them during the Ramadan days to get an abnormal return in the emerging markets.

Value creation through expanding the online distribution channel

2020 ◽  
Vol 120 (4) ◽  
pp. 714-729
Author(s):  
Frank Wiengarten ◽  
Hugo K.S. Lam ◽  
Di Fan
Keyword(s):  
Supply Chain ◽  
Stock Market ◽  
Value Creation ◽  
Distribution Channel ◽  
Chain Process ◽  
Market Reactions ◽  
Content Type ◽  
Creation Process ◽  
Stock Market Reactions ◽  
Value Creation Process

PurposeCurrent literature provides limited insights into the supply chain contexts within which e-commerce can create higher value for firms. To address this literature gap, this research explores the value potential, and thus value creation process, of e-commerce initiatives for supply chain distribution channel expansions.Design/methodology/approachUsing secondary data collected from multiple sources, this research conducted an event study to examine the stock market reactions to the announcements of e-commerce initiatives of Chinese firms.FindingsThe results indicate that the e-commerce initiatives increase average firm value by CNY 295.29 million in a three-day window around the initiative's announcement date. Moreover, we find that such stock market reactions are more positive for firms with poor operating performance, and more negative when firms deploy initiatives on their own (rather than third-party) platforms. Further, companies that integrate or complement their online sales with an offline sales channel experience more positive stock market reactions.Originality/valueThis study provides new insights into the value creation process of e-commerce from an operation and supply chain process perspective.

Investigating microblogging addiction tendency through the lens of uses and gratifications theory

2018 ◽  
Vol 28 (5) ◽  
pp. 1228-1252 ◽  
Author(s):  
Qian Li ◽  
Xunhua Guo ◽  
Xue Bai ◽  
Wei Xu
Keyword(s):  
Causal Relationship ◽  
Uses And Gratifications ◽  
Theoretical Perspective ◽  
Research Model ◽  
Negative Consequences ◽  
Psychological Outcome ◽  
Content Type ◽  
Different Types ◽  
Key Drivers ◽  
Practical Implications

Purpose Considering the popularity and addictive attributes of microblogging, the purpose of this paper is to explore the key drivers of the microblogging addiction tendency, and to investigate the causal relationship between microblogging usage and addiction tendency through the lens of the uses and gratifications (U&G) theory. Design/methodology/approach By extending the U&G theory to accommodate the negative consequences of gratification, a research model that explains the relationships among microblogging use, gratification and addiction tendency was developed and empirically examined based on the data collected from 520 microblogging users in China. Findings The results showed that different types of microblogging use lead to different categories of gratification to different extents, while different categories of gratification play different roles in determining the level of addiction tendency. Specifically, the effect of content gratification on addiction is marginal, while social gratification has significant effects on all dimensions of addiction tendency. Originality/value The present study has both theoretical and practical implications. From a theoretical perspective, unlike many previous studies applied the U&G theory to explore the positive outcomes of media uses, this paper extends the U&G by including addiction tendency as a negative psychological outcome of U&G., resulting a research framework (use-gratification-addiction framework). Meanwhile, this paper contributes to the extending literature by examining the constructs of U&G at a granular level and investigated the causal relationship between “uses” and “gratifications.”

The impact of online reviews on product returns

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Xiaofei Li ◽  
Baolong Ma ◽  
Hongrui Chu
Keyword(s):  
Structural Equation ◽  
Secondary Data ◽  
Online Reviews ◽  
Quantitative Model ◽  
Negative Consequences ◽  
Product Returns ◽  
Content Type ◽  
High Expectations ◽  
Product Return ◽  
The Impact

PurposeThe value of online reviews has been well documented by academics and practitioners. However, to maximise the benefits of consumer reviews, online sellers must avoid the negative consequences associated with customer feedback, such as reputation loss, or product returns after purchase. In developing a better understanding of the relationships between online reviews and their potential for negative impacts, this research aims to explore product returns. Through a quantitative model, this research demonstrates why online reviews can result in product return behaviours.Design/methodology/approachThe hypotheses were tested via two studies. In Study 1, the authors examine the direct effects of review valence and review volume on product returns by analysing secondary data on 4,995 stores on China's Taobao.com. Study 2 further extends and validates the findings of Study 1 with a survey sample of 795 participants across several online shopping platforms. This analysis examines the mechanics and conditions that influence the relationships between online reviews and product returns through partial least squares-structural equation modelling (PLS-SEM).FindingsThe results show that both review valence (i.e. average star ratings) and the number of reviews can increase the probability of product returns due to the high expectations that result from positive online reviews. Further, the effect of review valence on product returns is stronger for first-time purchasers at a store. In terms of mitigation, the analysis shows that bilateral communications between sellers and buyers can temper the unrealistic expectations set by positive reviews, leading to fewer product returns.Originality/valueThis research adds to the literature on online reviews by exploring the negative consequences of online reviews and the role they play in online purchasing decisions. The findings also provide direct evidence as to why online reviews can result in more product returns, adding clarity to extant research which contains conflicting conclusions as to how online reviews affect product return behaviours.

Innovation in the aftermath of downsizing: evidence from the threat-rigidity perspective

2020 ◽  
Vol 49 (9) ◽  
pp. 1859-1877
Author(s):  
José Fernández-Menéndez ◽  
Óscar Rodríguez-Ruiz ◽  
José-Ignacio López-Sánchez ◽  
María Isabel Delgado-Piña
Keyword(s):  
Regression Models ◽  
Negative Impact ◽  
Content Type ◽  
Logistic Regression Models ◽  
Marketing Innovation ◽  
Different Types ◽  
Threat Rigidity ◽  
The Impact ◽  
Research Show ◽  
Innovation Outcomes

PurposeThe purpose of this paper is to study how job reductions affect product innovation and marketing innovation in a sample of 2,034 Spanish manufacturing firms in the period 2007–2014.Design/methodology/approachPoisson and logistic regression models with random effects were used to analyse the impact of downsizing on some innovation outcomes of firms.FindingsThe results of this research show that the stressful measure of job reductions may have unexpected consequences, stimulating innovation. However downsizing combined with radical organisational changes such as new equipment, techniques or processes seems to have a negative impact on product and marketing innovation.Originality/valueThis research has two original features. First, it explores the unconventional direction of causality from the planned elimination of jobs to innovation outputs. Secondly, the paper looks at the combined effect of downsizing and other restructuring measures on different types of innovation. Following the threat-rigidity theory, we assume that this combination represents a major threat for survivors that leads to lower levels of product and marketing innovation.

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