Business service outsourcing in manufacturing firms: an event study

2017 ◽  
Vol 28 (3) ◽  
pp. 476-498 ◽  
Author(s):  
Andreas Eggert ◽  
Eva Böhm ◽  
Christina Cramer
Keyword(s):  
Event Study ◽  
Firm Value ◽  
Abnormal Returns ◽  
Manufacturing Firms ◽  
Business Service ◽  
Manufacturing Companies ◽  
Service Outsourcing ◽  
Business Services ◽  
Content Type ◽  
The Impact

Purpose Many manufacturing firms entrust partners to provide services on their behalf. However, it is not clear whether and when firms can capture the potential value advantages of outsourcing business services. The purpose of this paper is to investigate the effects of different types of business service outsourcing on firm value. Design/methodology/approach The paper uses event study methodology to estimate the impact of business service outsourcing announcements on abnormal returns of publicly traded manufacturing companies in Europe. Findings External service outsourcing that directly affects the company’s customers leads to more favorable outcomes than internal service outsourcing. This effect is contingent on the strategic outsourcing intention, the service’s reliance on technology, and the choice of the outsourcing partner. Research limitations/implications Findings show that firm value depends critically on the service value it delivers to customers. Future research could explore further contingency variables, and investigate the role of service outsourcing networks and relationships. Practical implications The insights of this study help managers to decide why, how, and to whom they should outsource their business services, as well as how to justify their outsourcing decisions, and how to communicate them toward the financial markets. Originality/value This research sheds light on the value implications of outsourcing decisions. Two types of business service outsourcing are distinguished, namely, internal and external. Furthermore, the study enhances our understanding of a contingency perspective on service outsourcing decisions.

New product announcement: spokesperson a manifestation of increasing firm value

2018 ◽  
Vol 13 (6) ◽  
pp. 1635-1655
Author(s):  
Bikram Jit Singh Mann ◽  
Sonia Babbar
Keyword(s):  
Event Study ◽  
Firm Value ◽  
Source Credibility ◽  
Shareholder Value ◽  
Abnormal Returns ◽  
New Product ◽  
Content Type ◽  
Study Methodology ◽  
The Impact

Purpose Before introducing new products, companies make announcements regarding the launch of the product which influences stock market yields of the announcing companies. Information content of the new product announcement has never been an exclusive focused stream of research. Therefore, an assessment of the impact of the content characteristics of the new product announcement on the shareholder value and the impact of source credibility (spokesperson) in making such announcements is a major gap in the existing literature. The paper aims to discuss these issues. Design/methodology/approach First, the standard event study methodology has been employed on the sample to measure the abnormal gains/losses accruing to the announcing firms. Second, moderated regression analysis (MRA) is employed to identify the characteristics of the new product announcement and to check the role of the spokesperson in creating shareholder value. Findings The results of the event study indicate that the abnormal returns are generated during the new product announcement. The results of MRA disclose the variables having a positive and a significant influence on the effective returns of the announcing companies. Likewise, the role of the spokesperson has come out brightly as a credible communicator. Originality/value The research provides a direction to the announcing companies regarding the content of the announcement leading to a positive perception among the investing community. Likewise, it also provides direction to the investor community about the characteristics of the announcement content they give weight age in forming a perception of strength in evaluating the new product announcement, to which they are largely unaware.

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.

How does reverse factoring affect operating performance? An event study of Chinese manufacturing firms

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yongyi Shou ◽  
Jinan Shao ◽  
Weijiao Wang
Keyword(s):  
Event Study ◽  
Cost Efficiency ◽  
Operating Performance ◽  
Manufacturing Firms ◽  
Content Type ◽  
Performance Effect ◽  
Study Results ◽  
Operating Margin ◽  
The Impact ◽  
The Relationship

PurposeAs a popular supply chain finance (SCF) strategy, reverse factoring has been widely adopted by buyer firms. However, the extant literature provides scant empirical evidence on the performance effect of reverse factoring. The purpose of this study is to seek to narrow this gap by empirically examining the relationship between reverse factoring and operating performance and the contingency conditions of this relationship.Design/methodology/approachBased on a sample of 167 announcements of reverse factoring implementation made by publicly listed Chinese manufacturing firms between 2014 and 2018, this paper employs a long-term event study approach to analyze the operating performance effect of reverse factoring as well as the moderating effects of production and innovation capabilities.FindingsThe event study results indicate that reverse factoring has a positive effect on buyer firms' operating performance in terms of cost efficiency and operating margin. In addition, both production and innovation capabilities positively moderate the relationship between reverse factoring and operating margin. However, neither of them moderates the relationship between reverse factoring and cost efficiency.Originality/valueThis is the first study that empirically examines the impact of reverse factoring on operating performance based on secondary data. Furthermore, it sheds light on the SCF literature by providing insights into the contingency effects of production and innovation capabilities, which also extends our understanding of the application of extended resource-based view in SCF research.

Differences in the impact of AMO bundles of line managers and frontline workers on the performance of manufacturing firms

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Alberto Bayo-Moriones ◽  
Alejandro Bello-Pindado
Keyword(s):  
Manufacturing Industry ◽  
Manufacturing Firms ◽  
Manufacturing Companies ◽  
Linear Regression Models ◽  
Line Managers ◽  
Content Type ◽  
Frontline Workers ◽  
Hrm Practices ◽  
Manufacturing Performance ◽  
The Impact

PurposeThe purpose of this paper is to analyse the impact on manufacturing performance of human resource management (HRM) practices across two job levels within manufacturing firms in Argentina and Uruguay: that of line managers and frontline workers. HRM practices are categorised into three bundles defined by the AMO theoretical framework: ability, motivation and opportunity.Design/methodology/approachThe article uses data from a survey to 301 manufacturing plants in Uruguay and Argentina. Given the characteristics of the dependent variable, linear regression models have been estimated in order to test the hypotheses.FindingsThe results show that the ability and opportunity bundles for line managers are positively associated with manufacturing performance. However, only the motivation bundle affects manufacturing performance for frontline workers.Research limitations/implicationsThe main limitations are the use of cross-sectional data, the focus on two specific countries and the analysis of two employee categories that are not completely homogenous. The paper extends the contingency perspective in HRM by examining the relevance of job level as a contingent factor in the HRM-performance relationship in the manufacturing industry.Practical implicationsThe results suggest that manufacturing companies should target HR investments more towards line managers than to frontline employees. More specifically, they should concentrate efforts on the ability and opportunity bundles.Originality/valueThe article contributes to the very limited empirical evidence on the impact of HRM differentiation on firm performance by analysing sub-dimensions in a context not previously analysed.

Supply chain integration and firm performance: an empirical study of Swedish manufacturing firms

2014 ◽  
Vol 24 (1) ◽  
pp. 20-31 ◽  
Author(s):  
Hooshang M. Beheshti ◽  
Pejvak Oghazi ◽  
Rana Mostaghel ◽  
Magnus Hultman
Keyword(s):  
Supply Chain ◽  
Financial Performance ◽  
Well Being ◽  
Survey Instrument ◽  
Global Market ◽  
Manufacturing Firms ◽  
Supply Chain Integration ◽  
Manufacturing Companies ◽  
Content Type ◽  
The Impact

Purpose – This article aims to explore the impact of supply chain integration on the financial performance of Swedish manufacturing firms. Design/methodology/approach – The literature review provided the foundation for the development of the survey instrument and hypotheses for the study. In addition, the survey instrument was tested by the experts in the field and modified before it was sent to the managers in the survey group. Findings – The findings show that supply chain integration at any level is beneficial to the financial well being of the firm. Companies with total supply chain integration reported the highest level of financial performance. Research limitations/implications – Data were collected from Swedish manufacturing firms without regard to the size of the firm. The results show that supply chain integration is beneficial at any level. Practical implications – The findings will assist managers with decisions regarding supply chain integration and its role as a critical factor in improving the financial performance of manufacturing companies. Originality/value – Limited empirical studies have been conducted in this area, especially in Sweden. This study provides insight for manufacturing managers with regard to the importance of supply chain management and the competitive nature of business in the global market.

Celebrity endorsements and branding strategies: event study from India

2015 ◽  
Vol 24 (6) ◽  
pp. 633-645 ◽  
Author(s):  
Saravana Jaikumar ◽  
Arvind Sahay
Keyword(s):  
Event Study ◽  
Economic Value ◽  
Abnormal Returns ◽  
Celebrity Endorsements ◽  
Stock Market Returns ◽  
Content Type ◽  
Study Results ◽  
Branding Strategies ◽  
The Impact ◽  
Corporate Brands

Purpose – The purpose of this study is to evaluate the economic value of celebrity endorsements to Indian firms based on their branding strategy – corporate or house-of-brands – and their “congruence” or “fit” with the celebrity. The overall economic value of endorsements to firms in India, a moderately collectivist culture, is also assessed. Design/methodology/approach – Standard “event study” methodology is used to evaluate the economic value of endorsements under different branding strategies (47 endorsement announcements – 25 corporate brands and 22 house-of-brands). The impact of the level of congruence (assessed using brand personality scales) on abnormal returns is also examined. Findings – Event study results indicate significant positive abnormal returns for corporate brands and insignificant returns to house-of-brands. Moreover, the level of congruence is found to have an insignificant effect on endorsement announcement returns. Overall, celebrity endorsements result in positive economic value to Indian firms. Originality/value – This study evaluates the differences in the effectiveness of celebrity endorsements (which might form a significant part of advertising costs) to firms following different branding strategies. Findings from this study indicate that celebrity endorsement announcements from house-of-brands do not lead to any significant stock market returns (in terms of market value). Further, contrary to current literature, the results indicate that the congruence between brand and celebrity has no impact on returns to endorsements in India, warranting further examination of whether congruence or likeability is important in endorsements.

Learning from press releases: implications for hospitality innovation

2018 ◽  
Vol 30 (1) ◽  
pp. 95-113 ◽  
Author(s):  
Florian J. Zach ◽  
Dejan Krizaj ◽  
Brian McTier
Keyword(s):  
Event Study ◽  
Firm Value ◽  
Organizational Factors ◽  
Press Releases ◽  
Publicly Traded ◽  
Strategic Development ◽  
Content Type ◽  
The Usa ◽  
Hospitality Firms ◽  
The Impact

Purpose The purpose of this study is to test the usefulness of the literature-based innovation output (LBIO) approach to identify innovation types from press releases of hospitality firms and to evaluate if the typology captures the effect of innovation on firm value. Design/methodology/approach The LBIO approach was applied to three years of press releases from two publicly traded lodging firms in the USA announcing innovations. A database of lodging and innovation relevant terms was compiled. Starting with classifications found in the innovation literature, the researchers coded each announcement. Coded announcements were clustered into innovation types using pairwise similarity analysis. Event study analysis assessed the efficacy of the overall method to find types that were useful to measure the impact on firm value from the company’s adoption of an innovation. Findings Cluster analysis identified four lodging innovation types: property and location, marketing, strategic development and guest experiences. These types corresponded closely with the innovation classification suggested by the Oslo Manual. The event study found that the typology was useful in determining the market value effects of an innovation. Research limitations/implications This study focused on innovation; future studies might test other organizational factors. The study uses data from two large, publicly traded hospitality firms and may not extend to smaller, privately held businesses. A key implication is that human coding is sufficient to identify innovation types that correspond closely with existing classifications and affect firm value. Originality value This study successful learns from hospitality press releases to identify a hospitality innovation typology and tests type impact on firm value.

The impact of the Food Safety and Modernization Act on firm value

2016 ◽  
Vol 76 (2) ◽  
pp. 233-245 ◽  
Author(s):  
Mark Steven Johnson ◽  
Tolani Lawson
Keyword(s):  
Food Safety ◽  
Firm Value ◽  
Factor Model ◽  
Abnormal Returns ◽  
Market Value ◽  
Capital Asset Pricing ◽  
President Obama ◽  
Content Type ◽  
Time Period ◽  
The Impact

Purpose – The purpose of this paper is to determine the impact of the passage and signing of P.L. 111-353, the Food Safety Modernization Act (FSMA), on the market value of agribusiness firms. Design/methodology/approach – The authors conduct an event study of the shareholder value effects of FSMA. The short-window analyses estimate the three-, five-, and seven-day market responses to three key event dates: passage by the House, passage by the Senate, and the signing of FSMA by President Obama. The long-window analyses examine a time period that encompasses the three informational events, as well as the 30 months after the signing of FSMA. To control for the effects of market-wide fluctuations, the authors use two alternative models of the returns generating process to calculate abnormal returns, the Capital Asset Pricing Model (CAPM) and the Fama-French three-factor model. Findings – The short-window analyses show no evidence of a significant reaction to the passage of FSMA by the House or the Senate, but evidence of a significant negative reaction to the signing of FSMA by President Obama. The long window results which span the of passage by House, passage by the Senate and signing by the President indicate a decline in the average market value of agribusiness firms on the order of – 10 percent over the period. Additionally, the authors find some evidence that this effect is not evenly spread out across different types of agribusiness firms (wholesale, grocery, and processing). Originality/value – The study is the first to examine the impact of P.L.111-353 on the market value of agribusiness firms.

How does capital market respond to Certified Emission Reductions (CERs) announcements in India

2019 ◽  
Vol 45 (7) ◽  
pp. 950-965 ◽  
Author(s):  
Praveen Kumar ◽  
Mohammad Firoz
Keyword(s):  
Event Study ◽  
Stock Prices ◽  
Abnormal Returns ◽  
Share Price ◽  
Emission Reductions ◽  
Content Type ◽  
Share Prices ◽  
The Mean ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to analyze the relationship between Certified Emission Reductions (CERs) information and a firm’s stock prices. Design/methodology/approach The present study is based on 193 CERs announcements by Indian firms over a 13-year period 2005–2017. The event study methodology is used to examine the impact of CERs announcements on a firm’s share prices. Findings The study suggests that the issuance of CERs did not produce any significant abnormal return. More specifically, the outcomes of event study shows that over a two-day event window from the event day to the day after the event (i.e. days 0 to 1), the mean and median of AARs are −0.25 and −0.34 percent, respectively. The abnormal returns on day 1 are not statistically significant as per the t-test. Moreover, the mean and median of abnormal returns after one day (−1) are negative, indicating that investors react negatively to CERs announcements. However, the mean and median of CAARs over both the two-day (i.e. days −1 to 0 and days 0 to +1) and three-day (i.e. days −1 to +1) event windows are positive, but not statistically significant based on the t-test. Research limitations/implications The findings of the study are quite comprehensive, relatively used only market-based criteria of a firm’s financial performance, e.g., share price, at times, inhibits generalizing the results. Originality/value To the best of the author’s knowledge, the present study is a first of its kind to investigate the relationship between the CERs information and a firm’s stock prices.

Executive malfeasance: Surprisingly, honesty may not be the best policy

2019 ◽  
Vol 14 (3) ◽  
pp. 217-227
Author(s):  
Candace M. TenBrink
Keyword(s):  
Crisis Management ◽  
Event Study ◽  
Firm Value ◽  
Design Methodology ◽  
Abnormal Returns ◽  
Content Type ◽  
Long Run ◽  
Crisis Recovery ◽  
Short Run ◽  
Practical Implications

Purpose Research indicates honesty, ethics and leadership are critical during a crisis. This paper aims to examine that ideology by analyzing the role acceptance or denial of executive malfeasance has on firm value after a crisis. Design/methodology/approach This is an event study that examines crises attributed to executive malfeasance. These qualitative crises data are blended with an analysis of abnormal returns to assess differences between executive actions. Findings These results indicate that ethical and timely acceptance of a firm’s role in malfeasance does not appear to be rewarded by stockholders. These data also show that there is no reward for a delayed acceptance of malfeasance. Therefore, ethics and honesty do not appear to differentiate post-crisis recovery. Research limitations/implications This research focuses on a major factor of firm success – its value. It would be interesting to explore how stakeholders, beyond those that invest in the firm, impact the value over the long run. Practical implications While prior research indicates that honesty is prudent, this examination indicates that obfuscation does not impact firm value during a recovery. This study promotes questioning one’s ethical compass as a stock or stakeholder in malfeasance-mired firms. Originality/value In conflict with crisis-based research, this study reveals that honesty in crisis management does not always offer an advantage. The results indicate that value is multidimensional, and it may not be based on trust and ethics in the short run.

Sign in / Sign up

Export Citation Format

Share Document