scholarly journals Another piece of the puzzle: REIT IPO underpricing after the financial crisis

2017 ◽  
Vol 35 (3) ◽  
pp. 264-276 ◽  
Author(s):  
Bill Dimovski ◽  
Christopher Ratcliffe ◽  
Monica Keneley
Keyword(s):  
Financial Crisis ◽  
Initial Public Offerings ◽  
Global Financial Crisis ◽  
Ipo Underpricing ◽  
Content Type ◽  
Public Offerings ◽  
Industrial Companies ◽  
Retail Investors ◽  
The Global Financial Crisis ◽  
Academic Debate

Purpose The purpose of this paper is to investigate the underpricing of real estate investment trust (REIT) initial public offerings (IPOs) from January 2010 to June 2015, as the sector recovered from the global financial crisis. Design/methodology/approach This study analyses the first day returns of US REIT IPOs in the post financial crisis period. The study then employs regression analysis to examine the factors that influence IPO underpricing. Findings The study observes that underpricing, on average, is not significantly different to zero. Furthermore, the REIT IPOs examined display underperformance in the longer term. In contrast to the earlier data samples of Chen and Lu (2006), the authors do not find that underwriting costs are a direct substitute for the indirect cost of underpricing, instead the authors find that higher underwriting costs are associated with higher underpricing. Also in contrast to the mainstream underpricing literature, the data suggest larger capital raisings require higher underpricing. The authors also find that newly listed REITs provided significant excess dividend returns over the post-listing period. Practical implications For institutional and retail investors, the results will help to further inform investment opportunities in REIT IPOs. Originality/value This paper adds to the ongoing academic debate of the lack of underpricing in REIT IPOs relative to industrial companies. Research has shown periods of underpricing are often replaced with periods of overpricing suggesting that the pattern of behavior in REIT markets is substantially different.

Does disclosure of earnings forecasts regulation affect the valuation of IPOs? Evidence from an emerging country

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Chui Zi Ong ◽  
Rasidah Mohd-Rashid ◽  
Waqas Mehmood ◽  
Ahmad Hakimi Tajuddin
Keyword(s):  
Financial Crisis ◽  
Initial Public Offerings ◽  
Global Financial Crisis ◽  
Earnings Forecasts ◽  
Regulatory Change ◽  
Content Type ◽  
Crisis Period ◽  
Earnings Information ◽  
The Global Financial Crisis ◽  
The Impact

PurposeThis paper aimed to explore the effect of a regulatory change pertaining to earnings forecasts disclosure from a mandatory to a voluntary regime on the valuation of Malaysian initial public offerings (IPOs).Design/methodology/approachThe study employed ordinary least square (OLS) regression and quantile regression to analyse the impact of disclosure of earnings forecasts regulation on the valuation of IPOs which comprised 458 IPOs reported for the period 2000–2017 on Bursa Malaysia.FindingsThis paper revealed that the regulatory change in forecasted earnings disclosure from a mandatory to a voluntary regime, effective from 1 February 2008, had a negative impact on the valuation of IPOs. The regime change did not improve the transparency of firms issuing IPOs. In fact, the absence of forecasted earnings information in most IPO prospectuses caused ex ante uncertainties to increase. Voluntary disclosure, however, had a significant positive relationship with the valuation of the IPOs issued during the global financial crisis period (2008–2010). Firms concealed their poor qualities by excluding forecasted earnings information from their prospectuses in order to have a fair valuation.Practical implicationsThe findings may be used by policymakers as guidance in improving the existing regulation regarding the disclosure of forecasted earnings.Originality/valueThis paper provides new insight on the effect of a regulatory change pertaining to earnings forecasts disclosure from a mandatory to a voluntary regime on the valuation of Malaysian IPOs. It also provides evidence that the regulatory change of earnings forecast disclosure affects the IPOs' values listed during the global financial crisis period.

Financial distress determinants among SMEs: empirical evidence from Sweden

2020 ◽  
Vol 47 (3) ◽  
pp. 547-560 ◽  
Author(s):  
Darush Yazdanfar ◽  
Peter Öhman
Keyword(s):  
Financial Crisis ◽  
Financial Distress ◽  
Large Scale ◽  
Global Financial Crisis ◽  
Binary Logistic Regression ◽  
Data Availability ◽  
Cross Sectional ◽  
Data Set ◽  
Content Type ◽  
The Global Financial Crisis

PurposeThe purpose of this study is to empirically investigate determinants of financial distress among small and medium-sized enterprises (SMEs) during the global financial crisis and post-crisis periods.Design/methodology/approachSeveral statistical methods, including multiple binary logistic regression, were used to analyse a longitudinal cross-sectional panel data set of 3,865 Swedish SMEs operating in five industries over the 2008–2015 period.FindingsThe results suggest that financial distress is influenced by macroeconomic conditions (i.e. the global financial crisis) and, in particular, by various firm-specific characteristics (i.e. performance, financial leverage and financial distress in previous year). However, firm size and industry affiliation have no significant relationship with financial distress.Research limitationsDue to data availability, this study is limited to a sample of Swedish SMEs in five industries covering eight years. Further research could examine the generalizability of these findings by investigating other firms operating in other industries and other countries.Originality/valueThis study is the first to examine determinants of financial distress among SMEs operating in Sweden using data from a large-scale longitudinal cross-sectional database.

Global financial crisis, ownership structure and firm financial performance

2017 ◽  
Vol 34 (4) ◽  
pp. 447-465 ◽  
Author(s):  
Ali Salman Saleh ◽  
Enver Halili ◽  
Rami Zeitun ◽  
Ruhul Salim
Keyword(s):  
Financial Crisis ◽  
Financial Performance ◽  
Ownership Structure ◽  
Family Firms ◽  
Global Financial Crisis ◽  
Ownership Concentration ◽  
Financial Leverage ◽  
Content Type ◽  
Crisis Period ◽  
The Global Financial Crisis

Purpose This paper aims to investigate the financial performance of listed firms on the Australian Securities Exchange (ASX) over two sample periods (1998-2007 and 2008-2010) before and during the global financial crisis periods. Design/methodology/approach The generalized method of moments (GMM) has been used to examine the relationship between family ownership and a firm’s performance during the financial crisis period, reflecting on the higher risk exposure associated with capital markets. Findings Applying firm-based measures of financial performance (ROA and ROE), the empirical results show that family firms with ownership concentration performed better than nonfamily firms with dispersed ownership structures. The results also show that ownership concentration has a positive and significant impact on family- and nonfamily-owned firms during the crisis period. In addition, financial leverage had a positive and significant effect on the performance of Australian family-owned firms during both periods. However, if the impact of the crisis by sector is taking into account, the financial leverage only becomes significant for the nonmining family firms during the pre-crisis period. The results also reveal that family businesses are risk-averse business organizations. These findings are consistent with the underlying economic theories. Originality/value This paper contributes to the debate whether the ownership structure affects firms’ financial performance such as ROE and ROA during the global financial crisis by investigating family and nonfamily firms listed on the Australian capital market. It also identifies several influential drivers of financial performance in both normal and crisis periods. Given the paucity of studies in the area of family business, the empirical results of this research provide useful information for researchers, practitioners and investors, who are operating in capital markets for family and nonfamily businesses.

Shadow prices of non-performing loans and the global financial crisis

2019 ◽  
Vol 20 (5) ◽  
pp. 411-434
Author(s):  
Ameni Tarchouna ◽  
Bilel Jarraya ◽  
Abdelfettah Bouri
Keyword(s):  
Financial Crisis ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Shadow Price ◽  
Market Price ◽  
Shadow Prices ◽  
Content Type ◽  
Managerial Implications ◽  
Bad Loans ◽  
The Global Financial Crisis

Purpose This paper aims to determine the opportunity cost borne by US commercial banks to reduce non-performing loans (NPLs) by one unit within the global financial crisis framework. Design/methodology/approach To achieve this aim, the authors use the directional output distance function to estimate the technical efficiency while considering NPLs as undesirable output. Then, they estimate the shadow prices of NPLs by using the envelope theorem and solving the revenue function. Findings The results indicate that medium-sized banks are the most efficient, while small banks are the most inefficient ones. Moreover, the shadow prices of NPLs of large banks are higher than those of small and medium-sized banks. This implies a more elevated cost when lessening bad loans in large banks. This is more prominent during the crisis given that the shadow prices of NPLs of large banks have risen sharply over that period. Practical implications Shadow prices have important managerial implications given that they display the amounts of required reduced revenues to lessen NPLs. Accordingly, banks’ managers are called to reduce these loans by paying more attention when choosing their customers. Originality/value With the absence of an observable market price for bad loans in financial literature, the shadow price notion offers an adequate measure to evaluate them. To the best of authors’ knowledge, this is the first study that provides an estimation of the shadow price of NPLs in the US banking sector.

scholarly journals Evolution of German corporate governance (1995-2014): an empirical analysis

2019 ◽  
Vol 19 (5) ◽  
pp. 1042-1062
Author(s):  
Andreas Rühmkorf ◽  
Felix Spindler ◽  
Navajyoti Samanta
Keyword(s):  
Corporate Governance ◽  
Financial Crisis ◽  
Global Financial Crisis ◽  
Governance System ◽  
Content Type ◽  
Convergence Process ◽  
Corporate Governance System ◽  
Anglo American ◽  
The Stability ◽  
The Global Financial Crisis

Purpose This paper aims to address the evolution of corporate governance in Germany with a particular regard to whether there can be observed a gradual convergence to a shareholder primacy corporate governance system. Design/methodology/approach To investigate a potential shift of the German corporate governance system to an Anglo-American tiled corporate governance system, the authors have empirically assessed on a polynomial base 52 separate company and corporate governance variables for 20 years (1995-2014). Findings This research suggests that a gradual convergence has taken place prior to the global financial crisis. However, the results suggest that the convergence process experienced a slowdown in the aftermath of the global financial crisis, which may be linked to the stability of the German corporate governance system during the global financial crisis and the political environment during this time. Originality/value This paper contributes to the research by not only analysing the development of the German corporate governance system but also identifying new reasons for this development and explaining why a new convergence process may be observed in the future again.

Proactive and reactive strategies deployed by restaurants in times of crisis

2015 ◽  
Vol 27 (7) ◽  
pp. 1641-1661 ◽  
Author(s):  
María del Mar Alonso-Almeida ◽  
Kerstin Bremser ◽  
Josep Llach
Keyword(s):  
Financial Crisis ◽  
Competitive Advantage ◽  
Dynamic Capabilities ◽  
Global Financial Crisis ◽  
Small Sample ◽  
Content Type ◽  
Organizational Effects ◽  
Subsequent Effect ◽  
One Year ◽  
The Global Financial Crisis

Purpose – This study aims to examine the development of dynamic capabilities and their effect on the competitive advantage of restaurants in 2009, one year after the beginning of the global financial crisis. Design/methodology/approach – The restaurants were personally surveyed to discern the importance of proactive and reactive strategies for the organization. The resulting two organizational effects – cost cutting and the development of dynamic capabilities – were tested for their influence on competitive advantage. Findings – The findings show that both proactive and reactive strategies reduce costs; however, only proactive strategies develop dynamic capabilities that improve competitive advantage. Research limitations/implications – The conclusions are drawn from a small sample of restaurants in Madrid, the capital of Spain. Given that Madrid enjoys a higher standard of living and greater business expenditures than other cities, the results may not be generalizable to the rest of the country or to other southern European capitals. Practical implications – Managers must use proactive strategies for companies to survive during times of crisis. A focus on proactive strategies will improve a company’s competitive position. Social implications – Policy makers should support the development of proactive strategies and provide an adequate infrastructure of counseling and network creation. Originality/value – To the best of our knowledge, no previous research specifically analyzes both the type of strategy deployed and its subsequent effect on dynamic capabilities and the consequences of the strategy on competitive advantage during a financial crisis.

Framing and blaming in times of economic crisis

2014 ◽  
Vol 13 (4) ◽  
pp. 814-836 ◽  
Author(s):  
Jill C. Murray
Keyword(s):  
Life Cycle ◽  
Financial Crisis ◽  
Economic Crisis ◽  
Prime Minister ◽  
Global Financial Crisis ◽  
Diffusion Resistance ◽  
Critical Periods ◽  
Critical Approach ◽  
Content Type ◽  
The Global Financial Crisis

This article takes a critical approach to the language used by Australian politicians during the global financial crisis of 2007–8. Critical periods in history provide a rich substrate for the appearance of new expressions with the potential to frame the debate, influencing the ways events are interpreted and blame attributed. Passing unnoticed into usage, such memes have the potential to become part of unexamined background knowledge and covertly co-opt hearers and users into shared systems of value and belief. The study focusses on one specific neologism deployed by opposition politicians, firstly in an attempt to create the erroneous impression that a recession was occurring and secondly that it was the fault of the Australian Prime Minister, Kevin Rudd. Patterns of occurrence were tracked against local and international events, indicating a life cycle with several distinct phases: chance emergence, a strategic deployment, cross-genre diffusion, resistance and eventual rejection.

Taking the ethical lead

2020 ◽  
Vol 34 (4) ◽  
pp. 37-39
Keyword(s):  
Financial Crisis ◽  
Oil Spill ◽  
Design Methodology ◽  
Reading Time ◽  
Global Financial Crisis ◽  
Content Type ◽  
Lehman Brothers ◽  
Pertinent Information ◽  
The Global Financial Crisis ◽  
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/methodology/approach This briefing is prepared by an independent writer who adds his/her own impartial comments and places the articles in context. Findings Take any financial or environmental scandal perpetrated by a major company – and unfortunately, there are quite a few to choose from – and people will tend to remember what went wrong and some of the fallout from the scandal, but it is unlikely they will know much about why something went wrong. For example, people will remember that Lehman Brothers went bust during the global financial crisis (GFC) in 2008 and can picture its employees leaving its offices with Iron Mountain boxes. They will also perhaps remember the Exxon Valdez oil spill in Alaska in 1989, and the devastation it caused the local wildlife. But does anyone remember exactly why these events occurred? Practical implications This paper provides strategic insights and practical thinking that have influenced some of the world’s leading organizations. Originality/value The briefing saves busy executives 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.

House prices and credit cycles: the case of Cyprus

2020 ◽  
Vol 38 (6) ◽  
pp. 539-550
Author(s):  
Dario Pontiggia ◽  
Petros Stavrou Sivitanides
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
House Prices ◽  
House Price ◽  
Equation Model ◽  
Housing Demand ◽  
Content Type ◽  
Bank Deposits ◽  
The Global Financial Crisis ◽  
Practical Implications

PurposeThe purpose of this paper is to assess whether the rapid accumulation of bank deposits before the global financial crisis and their subsequent drastic reduction was the main driving force of the Cyprus house price cycle over the period 2006–2015.Design/methodology/approachTo this aim we estimate a three-equation model in which house prices are determined by housing loans, among other factors, and housing loans are determined by bank deposits. All equations are estimated using partial adjustment model specifications.FindingsOur findings indicate that housing loans, which capture the effect of credit availability on housing demand, had the smallest effect on house prices, thus providing little support to our proposition of a deposits-driven cycle in house prices.Research limitations/implicationsThe main limitation of the study is the use of the housing loan stock instead of the actual volume of housing loans in each period due to lack of such data. As a result our econometric estimates may not accurately capture the magnitude of the effect of housing loans on house prices.Practical implicationsThe study has important practical implications for policy makers as it highlights the importance of availability of credit in supporting effective demand for housing during periods of economic growth. Furthermore, it highlights the key role of house price increases in combination with the collateral effect in driving the house price cycle.Originality/valueThis is among the few studies internationally and the first study in Cyprus that attempts to link econometrically the credit and house price cycles that were caused by the global financial crisis.

Crisis and organizational change: IASB’s response to the financial crisis

2019 ◽  
Vol 15 (2) ◽  
pp. 278-301 ◽  
Author(s):  
Masaki Kusano ◽  
Masatsugu Sanada
Keyword(s):  
Organizational Change ◽  
Financial Crisis ◽  
Global Financial Crisis ◽  
Accounting Standards ◽  
Governance Structure ◽  
Historical Narrative ◽  
Causal Mechanism ◽  
Thick Description ◽  
Content Type ◽  
The Global Financial Crisis

Purpose The purpose of this study is to examine the International Accounting Standards Board (IASB)’s response to criticism and political pressure at the time of the global financial crisis through the lens of legitimacy theory. Design/methodology/approach This study constructs a thick description about a causal mechanism between social crisis and organizational change using a process-tracing approach that combines a historical narrative and a theoretical consideration. Findings The IASB faced criticism of its accounting standards for financial instruments and its governance structure during the financial crisis. This criticism represented the crises of pragmatic and cultural legitimacy. Facing these legitimacy crises, the IASB adopted such legitimation strategies as normalization and restructuring to repair its legitimacy. Additionally, in these repairing processes, the IASB, as a bonus, became institutionally embedded itself in the global political arena and succeeded to strengthen its legitimacy. Originality/value The study suggests that the financial crisis had a significant impact on the standardization of transnational accounting. Indeed, the crisis was an important turning point of the IASB’s work on revising its accounting standards to reduce complexity and altering its Constitution. Moreover, the authors bridge the gaps in the literature on accounting and legitimacy by examining how the IASB used particular legitimacy repair strategies when facing its legitimacy crises

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