DuPont analysis and dividend policy: empirical evidence from Malaysia

2018 ◽  
Vol 30 (1) ◽  
pp. 52-72
Author(s):  
Samuel Jebaraj Benjamin ◽  
Zulkifflee Bin Mohamed ◽  
M. Srikamaladevi Marathamuthu
Keyword(s):  
Design Methodology ◽  
Dividend Policy ◽  
Explanatory Power ◽  
Return On Assets ◽  
Policy Studies ◽  
Content Type ◽  
Market Participants ◽  
Dupont Analysis ◽  
Asset Turnover ◽  
Practical Implications

Purpose The purpose of this paper is to investigate the informativeness of asset turnover (ATO) and profit margin (PM) of the DuPont analysis in explaining dividend policy. Design/methodology/approach Annual financial data from Compustat for the period 2004-2009 were used to analyze a sample of Malaysian firms. Findings This study finds both PM and ATO to strongly explain contemporaneous dividends. The decomposition of return on net operating assets (RNOA) into PM and ATO also improves the explanatory power of dividends. The results of the predictive model show that PM and ATO are useful in predicting the propensity of firms to pay dividends. The results of the change dividend model, however, do not provide any significant results for PM and ATO. Practical implications Understanding the influence of ATO and PM on dividends could enable managers to realize the importance of these factors when making dividend policy decisions. Other market participants, such as financial analysts and lenders, could also recognize the empirical specifics related to decomposing the profitability measure into its two components, one measuring the asset efficiency and the other measuring the profitability per unit of product, in the context of dividend policy. Originality/value This study extends the empirical specifics of prior dividend policy studies by decomposing the popular profitability measure of return on assets into its two components of PM and ATO.

CFTC overhauls customer protection requirements

2014 ◽  
Vol 15 (1) ◽  
pp. 25-32 ◽  
Author(s):  
Robert M. Brown
Keyword(s):  
Design Methodology ◽  
Commodity Futures ◽  
Regulatory Regime ◽  
Futures Trading ◽  
Content Type ◽  
Regulatory Response ◽  
Market Participants ◽  
Policies And Procedures ◽  
Practical Implications

Purpose – The purpose of the paper is to summarize the Commodity Futures Trading Commission's (CFTC) recent overhaul of its customer protection rules, which regulate how futures commission merchants (FCMs) and derivatives clearing organizations (DCOs) handle customer funds. Design/methodology/approach – The paper summarizes the most significant aspects of the CFTC's October 30, 2013 customer protection rulemaking, explains FCM and DCO obligations under the new regulatory regime, and sets forth a compliance timeline. Findings – The CFTC's recent overhaul of its customer protection rules impose significant new requirements on FCMs and DCOs in their handling of customer funds. Practical implications – All FCMs and DCOs that handle customer funds should review these new rules and begin putting into place policies and procedures to ensure their compliance as each new requirement comes into effect. Originality/value – The CFTC's overhaul of its customer protection regime is new and significant. FCMs and DCOs need to understand their new obligations under the rules. As these new rules are the CFTC's regulatory response to the events that led to the insolvencies of MF Global and Peregrine Financial Group, these developments also should be of interest to futures and swaps market participants generally.

ESMA issues Brexit opinions to EU regulators: a warning shot not only to the UK but also to the EU27

2017 ◽  
Vol 18 (4) ◽  
pp. 50-52
Author(s):  
William Yonge ◽  
Simon Currie
Keyword(s):  
Financial Services ◽  
Design Methodology ◽  
Content Type ◽  
Regulatory Response ◽  
Market Participants ◽  
Financial Firms ◽  
Practical Guidance ◽  
The Uk ◽  
Practical Implications ◽  
The Eu

Purpose To summarize and analyse four opinions issued in May and July 2017 by the European Securities and Markets Authority (“ESMA”) concerning regulatory and supervisory arbitrage risks that arise as a result of increased requests from financial market participants to relocate activities and functions in the EU27 following the UK’s decision to withdraw from the EU, and the expected regulatory response to those risks. Design/methodology/approach Discusses the possible relocation of financial firms, activities and functions following the UK’s decision to withdraw from EU; the resulting cross-sectoral regulatory and supervisory arbitrage risks that ESMA foresees; nine principles that ESMA enumerates to guide its regulatory response to those risks; some common themes that emerge from ESMA’s July Opinions; and the implications for UK firms and trading venues seeking to establish a presence in the EU 27. Findings ESMA foresees regulatory and arbitrage risks in Brexit and a potential “race to the bottom” as certain national regulators jostle for and grab UK market share. Practical implications UK firms and trading venues seeking to establish a presence in the EU27 from which to operate will need to give detailed consideration and focus to the resources and operational substance which will need to be located in the jurisdiction in which that presence is established. Originality/value Practical guidance from experienced financial services, securities and fund management lawyers.

A “family of cycles” – major and auxiliary business cycles

2014 ◽  
Vol 32 (3) ◽  
pp. 306-323 ◽  
Author(s):  
Arvydas Jadevicius ◽  
Simon Huston
Keyword(s):  
Systematic Review ◽  
Business Cycles ◽  
Design Methodology ◽  
Market Dynamics ◽  
Property Market ◽  
Proper Understanding ◽  
Content Type ◽  
Market Participants ◽  
Practical Implications

Purpose – The paper aims to discuss the major and auxiliary types of cycles found in the literature. Design/methodology/approach – The existence of cycles within economy and its sub-sectors has been studied for a number of years. In the wake of the recent cyclical downturn, interest in cycles has increased. To mitigate future risks, scholars and investors seek new insights for a better understanding of the cyclical phenomenon. The paper presents systematic review of the existing copious cyclical literature. It then discusses general characteristics and the key forces that produce these cycles. Findings – The study finds four major and eight auxiliary cycles. It suggests that each cycle has its own distinct empirical periodicity and theoretical underpinnings. The longer the cycles are the greater controversy which surrounds them. Practical implications – Cycles are monumental to a proper understanding of complex property market dynamics. Their existence implies that economies, whilst not deterministic, have a rhythm. Cyclical awareness can therefore advance property market participants. Originality/value – The paper uncovers four major and eight auxiliary types of cycles and argues their importance.

Cross-sectional return patterns in New Zealand’s registered and OTC stock markets

2015 ◽  
Vol 27 (1) ◽  
pp. 51-68 ◽  
Author(s):  
Hamish Anderson ◽  
Ben Marshall ◽  
Xiao Wang
Keyword(s):  
Stock Returns ◽  
Design Methodology ◽  
Explanatory Power ◽  
International Markets ◽  
Stock Exchanges ◽  
Cross Sectional ◽  
Over The Counter ◽  
Content Type ◽  
Pricing Factors ◽  
Practical Implications

Purpose – This paper aims to examine whether the cross-sectional return patterns in New Zealand’s main stock market (NZSX) are also present in the alternative (NZAX) and over-the-counter (Unlisted) markets. Design/methodology/approach – Cross-sectional regressions of monthly stock returns on well-known pricing factors including firm size, book-to-market (B/M) ratio, liquidity and past returns were run. The NZSX sample commenced in 1988 and continued through to 2011, while data are available for the Unlisted and NZAX markets from 2004 to 2011. Findings – The pricing factors that are important in explaining returns in major international markets also influence returns on the NZSX. However, only B/M is consistently priced across all New Zealand stock exchanges, including the alternative NZAX and Unlisted markets. There is evidence of reversal in NZAX stocks, but liquidity effects are not consistent or pervasive in either market. Practical implications – With B/M being the only consistently priced variable across all markets, investors in the NZAX and in particular Unlisted may be concerned with other risk factors. For example, the risks associated with differing levels of investor protection, corporate governance and disclosure may be of more concern to investors than pricing factors such as size, liquidity and past returns in these alternative trading platforms. Originality/value – The paper examines cross-sectional return patterns of the NZAX and Unlisted stocks and is the first paper to jointly test the explanatory power of size, B/M, past returns and liquidity factors for NZSX stocks.

Macro-environment’s effects on onshore outsourcing: the transition costs approach

2018 ◽  
Vol 11 (1) ◽  
pp. 27-38 ◽  
Author(s):  
Guillaume Chanson
Keyword(s):  
Design Methodology ◽  
Transaction Cost Economics ◽  
Explanatory Power ◽  
Secondary Data ◽  
Current Debate ◽  
Content Type ◽  
Body Of Knowledge ◽  
Transition Costs ◽  
Domestic Outsourcing ◽  
Practical Implications

Purpose Through the literature, the effect of macro-environment on onshore outsourcing decisions appears rather unexplored, despite empirical evidence. The purpose of this paper is to address this gap through an extension of Transaction Cost Economics (TCE) (the main theory of domestic outsourcing). Design/methodology/approach This paper develops a framework based on a literature review. It applies this body of knowledge on a new question and provides detailed illustrations (with primary and secondary data). Findings This paper builds a theoretical framework, based on the concept of transition costs. This concept, created as a way to make the economizing approach more dynamic, highlights the influences of the macro-environment. This paper presents a clarification of transition costs. It formulates a theoretical proposition: the environment has an effect on outsourcing through the transition costs. Research limitations/implications This framework deserves to be tested through an empirical study. Practical implications This framework enables domestic providers to take the environment and transition costs into account for the design and timing of outsourced service. Social implications This framework enables to consider the importance of social conflicts and political measures on the domestic outsourcing decisions. Originality/value First, this paper addresses an unexplored question (the effect of macro-environment on onshore outsourcing decisions). Second, it refines an undertheorized TCE concept: the transition costs. Third, it proposes a new direction in the current debate of the evanishing explanatory power of the TCE on outsourcing (by extending this theory).

Deferred revenue changes as a leading indicator for future financial performance

2017 ◽  
Vol 25 (4) ◽  
pp. 549-568 ◽  
Author(s):  
Ke Zhong ◽  
Fang Wang ◽  
Lihui Zhou
Keyword(s):  
Financial Performance ◽  
Stock Markets ◽  
Design Methodology ◽  
Profit Margin ◽  
Sales Growth ◽  
Return On Assets ◽  
Content Type ◽  
Market Participants ◽  
Future Performance ◽  
Leading Indicator

Purpose The purpose of this paper is to investigate whether deferred revenue changes can serve as a leading indicator for firms listed on China’s stock markets, and whether China’s market participants can appropriately incorporate future performance implications of deferred revenue changes. Design/methodology/approach Empirical/archival/regression analysis. Findings The authors find that deferred revenue changes are positively associated with the next two years’ sales growth, gross profit margin, profit margin, and return on assets, suggesting that deferred revenue changes can serve as a valid leading indicator for future financial performance. The authors also find that Chinese investors tend to underweight future performance implications of deferred revenue changes. Originality/value To the authors’ knowledge, this study is among the first research to examine deferred revenue changes as a leading fundamental indicator and market underreaction to reported accounting information for firms listed on China’s stock markets.

A brand foci model to explain achievement needs: a contradictory explanation

2017 ◽  
Vol 29 (4) ◽  
pp. 743-758 ◽  
Author(s):  
Jeremy J. Sierra ◽  
Harry A. Taute ◽  
Byung-Kwan Lee
Keyword(s):  
Purchase Intention ◽  
Design Methodology ◽  
Explanatory Power ◽  
Need For Achievement ◽  
Related Factors ◽  
Content Type ◽  
South Korean ◽  
Brand Pride ◽  
Practical Implications ◽  
Brand Tribalism

Purpose The purpose of this paper is to explore the indirect effect of smartphone-brand tribalism on the need for achievement. Design/methodology/approach Using survey data from 272 South Korean respondents, path analysis is used to evaluate the hypotheses. Findings Only the sense of community dimension of brand tribalism affects brand pride (PRIDE), which in turn leads to a sequential process of brand attitude, purchase intention, and need for achievement (NACHIEVE). Research limitations/implications South Korean data may confine generalizability. As effect sizes in this context are understood, researchers have an additional benchmark for future brand tribalism and PRIDE research. Practical implications The psychological underpinning and, the presence of brand tribes in society cannot be overlooked by strategists. Such tribal-laden following is also evident within smartphone communities. By further understanding brand tribalism outcomes, marketers and brand leaders are in an improved position to develop strategies that appeal to targeted customers, ultimately growing and strengthening their brand tribes. Originality/value Supported by the anthropological view of brand tribalism, this research contributes to the branding literature by examining the indirect effects of brand tribalism on the NACHIEVE through brand-related attitudes and behavioral intentions. Where previous research using westerners indicates the explanatory power of defense of the tribe on brand-related factors, no effect in this regard is found here using eastern smartphone consumers.

Basel III: where should we go from here?

2019 ◽  
Vol 11 (4) ◽  
pp. 457-469 ◽  
Author(s):  
Quang Thi Thieu Nguyen
Keyword(s):  
Design Methodology ◽  
Banking System ◽  
Capital Regulation ◽  
Risk Sensitivity ◽  
Effective Mechanism ◽  
Content Type ◽  
Market Participants ◽  
Basel Committee ◽  
Capital Ratios ◽  
Practical Implications

Purpose This paper aims to propose the directions for potential reforms for the capital regulation. The focus is on the simplicity and comparability of the regulation, in addition to its risk sensitivity. Design/methodology/approach The author reviews the development of the Basel standards and identify the existing issues. On this basis, the recommendations are suggested. Findings The paper found that the capital regulation has become so complexed that it undermines its own efficiency in promoting the safety and soundness of the banking system. In addition, the current framework prevents a comparison of capital ratios across countries and over time. This discourages the market participants to supervise the bank’s operations. Therefore, there are still a need for the capital regulation reform. Practical implications By making the regulation simpler while ensuring the credit sensitivity, the market participants can play the most of their role and support the regulators in supervising banks. Originality/value The directions for the revised framework would be useful for the Basel Committee and central bank governors in designing an effective mechanism to supervise and discipline banks.

Talking inclusion into being: communication as a facilitator and obstructor of an inclusive work environment

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Daniel Wolfgruber ◽  
Lina Stürmer ◽  
Sabine Einwiller
Keyword(s):  
Work Environment ◽  
Organizational Communication ◽  
Interpersonal Communication ◽  
Design Methodology ◽  
Explanatory Power ◽  
Future Research ◽  
Content Type ◽  
Diversity And Inclusion ◽  
Key Factor ◽  
Practical Implications

PurposeThe purpose of this article is to examine the communicative factors that facilitate or hamper the development of an inclusive work environment with an emphasis on the communication about equality, diversity, and inclusion (EDI), while taking diversity characteristics of employees into account.Design/methodology/approachIn total, 84 persons employed in Austria and Germany, who feature various observable and non-observable diversity characteristics, were interviewed following a problem-centered approach.FindingsThe results indicate that employees with (observable) diversity characteristics, who tend to feel less included, observe more excluding and marginalizing communication and practices in their organizations. Moreover, formal interpersonal communication appears to be more important to develop a highly inclusive workplace than informal interpersonal communication and other forms of communication about EDI.Research limitations/implicationsThe sample was rather imbalanced and comprised only employees in Austria and Germany, which limits the study's explanatory power. However, the findings stress the significance of formal interpersonal communication as the cornerstone of an inclusive workplace, which should be followed up in future research.Practical implicationsIn terms of the development of an inclusive work environment the findings suggest that strategic (i.e. formal) organizational communication about EDI issues is key to increase the perception of inclusion.Originality/valueThis paper contributes to the literature by demonstrating the importance of interpersonal communication as a key factor that facilitates, but also hampers an inclusive work environment.

Financial risk perceptions: a consciousness perspective

2014 ◽  
Vol 6 (1) ◽  
pp. 66-74 ◽  
Author(s):  
Robert A. Olsen
Keyword(s):  
Sample Size ◽  
Risk Perceptions ◽  
Financial Risk ◽  
Design Methodology ◽  
Interpersonal Trust ◽  
Human Consciousness ◽  
Content Type ◽  
Market Participants ◽  
Significant Bias ◽  
Practical Implications

Purpose – The purpose of this paper is to investigate the implications of human consciousness relative to financial risk perceptions. Design/methodology/approach – After conceptually identifying that risk perceptions qualify as a Qualia, survey data are gathered from investment experts to clarify the implications. Findings – Financial risk perceptions are Qualia and as such should have a strong affective influence on risk perceptions. This suggests that aggregate market measures of financial risk may be difficult to obtain and utilize. Research limitations/implications – Sample size could be larger and more complete implications need to be investigated. Sample unlikely to exhibit significant bias. Practical implications – Going to be difficult to devise aggregate measures of financial risk across market participants. Social implications – Risk is going to be heavily affective in orientation and interpersonal Trust is a financial risk attribute. Originality/value – Is quite original as the author has never seen another paper look to the implications of consciousness for financial risk perceptions or even Trust. Breaks new ground!

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