Innovation, Firm Efficiency and Firm Value: Firm-Level Evidence in Japanese Electricity Machinery Industry

2007 ◽  
Author(s):  
Feng He ◽  
Rong Chen
Keyword(s):  
Firm Value ◽  
Firm Level ◽  
Firm Efficiency ◽  
Machinery Industry

EXPRESS: Despite Efficiencies, M&As Reduce Firm Value by Hurting Customer Satisfaction

2021 ◽  
pp. 002224292110242
Author(s):  
Nita Umashankar ◽  
S. Cem Bahadir ◽  
Sundar Bharadwaj
Keyword(s):  
Customer Satisfaction ◽  
Firm Value ◽  
Negative Relationship ◽  
Dark Side ◽  
Executive Attention ◽  
Firm Efficiency ◽  
Upper Echelons Theory ◽  
Quasi Experimental ◽  
Customer Dissatisfaction ◽  
Investor Returns

Most researchers focus on the effect of mergers and acquisitions (M&As) on investor returns and overlook customer reactions, despite the fact that customers are directly impacted by these corporate transformations. Others suggest that in M&A contexts, a dual emphasis of customer satisfaction and firm efficiency is both likely and beneficial. In contrast, the authors demonstrate that M&As not only do not yield a dual emphasis but also cause a decline in customer satisfaction to the extent that it eclipses any gain in firm value from an increase in firm efficiency. A quasi-experimental difference-in-differences analysis and an instrumental variable panel regression provide robust evidence for the dark side of M&As for customers. The authors use the attention-based view of the firm to demonstrate that post-M&A customer dissatisfaction occurs because of a shift in executive attention away from customers and toward financial issues. In line with the related upper echelons theory, they find that marketing representation on firms’ board of directors helps maintain executive attention on customers, which mitigates the dysfunctional effect of M&As on customer satisfaction. This research identifies a negative M&A-customer satisfaction relationship and highlights executive attention to customer issues and marketing leadership as factors that mitigate this negative relationship.

scholarly journals State Control, Marketization, And Firm Value: Evidence From China

2014 ◽  
Vol 30 (6) ◽  
pp. 1577 ◽  
Author(s):  
Kun Su ◽  
Rui Wan
Keyword(s):  
Panel Data ◽  
Firm Value ◽  
State Control ◽  
Negative Effects ◽  
Firm Level ◽  
Listed Firms ◽  
The Government ◽  
High Degree

<p>Using a firm-level panel data of Chinese listed firms, this paper examines the effects of state control on firm value and the different impacts that have under different degree of marketization deeply. The results show: compared with non-state controlled firms, state controlled firms are imposed by much policy burden and have more serious tunneling or expropriation behaviors. Therefore, firm values in state controlled firms are lower than in non-state controlled firms. For state controlled firms, the lower the government administrative ranks, the more serious the intervention or expropriation behaviors imposed by government, and thus the lower the firm value. Compared with low marketization regions, the negative effects of state control and low government administrative rank control on firm value is relatively smaller in regions with high degree of marketization.</p>

scholarly journals Corporate Governance Mechanisms, Ownership and Firm Value: Evidence from Listed Chinese Firms

2020 ◽  
Vol 8 (2) ◽  
pp. 20 ◽  
Author(s):  
Yusheng Kong ◽  
Takuriramunashe Famba ◽  
Grace Chituku-Dzimiro ◽  
Huaping Sun ◽  
Ophias Kurauone
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Ownership Concentration ◽  
Institutional Setting ◽  
Tobin’S Q ◽  
Governance Mechanism ◽  
Corporate Ownership ◽  
Firm Level ◽  
Tobin's Q ◽  
Negative Effect

This study analyzes corporate ownership as a corporate governance mechanism and its role in creating firm value. Previous research shows that there is no convergence on the firm-value corporate ownership relationship. Most research in this area takes a cross national approach ignoring the uniqueness of each institutional setting particularly those of emerging nations. Using a unique firm level dataset, we investigate how corporate control nature and ownership concentration affect the value of Chinese listed firms. First, non-state owned control is associated with a higher Tobin’s Q while a negative premium is found for state owned. Using the hybrid and the correlated random effects model we confirm a U-shaped non-linear relationship between ownership concentration and Tobin’s Q, implying that firm value first decreases and then increases as block holders own more shares. Further investigation reveals that the negative effect of ownership concentration is weaker when a firm equity nature is non-state owned enterprises (non-SOEs) compared to state-owned enterprises (SOEs). While ownership concentration appears to be an efficient mechanism for corporate governance its effect is weaker for SOEs compared to non-SOEs. The results support privatization of SOEs, sound reforms such as the split share structure reform as crucial for the development of China’s stock market.

Teuer Furniture (A): Discounted Cash Flow Valuation

2017 ◽  
pp. 1-23
Author(s):  
Mitchell A. Petersen
Keyword(s):  
Cash Flow ◽  
Firm Value ◽  
Capital Investment ◽  
Balance Sheet ◽  
The United States ◽  
List Type ◽  
Discounted Cash Flow ◽  
Firm Level ◽  
Income Statement ◽  
Pro Forma

Teuer Furniture is a privately owned, moderately sized chain of upscale home furnishing showrooms in the United States. The firm survived the economic recession and by the end of 2012, it has regained its financial footing. Now that the firm is more secure financially, some of its long-term investors have asked to cash out their investments. This will be the first time that Teuer has repurchased its equity; the company has paid dividends since 2009. Chief financial officer Jennifer Jerabek and her team have been given the task of valuing Teuer using a discounted cash flow approach. The discount rate is given in the case, and the students need to build a pro forma income statement, balance sheet, and cash flow statement and then calculate a per-share value for Teuer. Estimate firm value using a discounted cash flow approach Construct firm-level estimates of the pro forma income statement, balance sheet, and cash flow from assets based on store-level estimates Recognize how forecasts of revenues, costs, and capital investment are constructed, how the individual estimates relate to each other, and how the forecasts depend upon the underlying economics of the business Evaluate and defend the validity of the firm’s forecasts and the valuation model

scholarly journals Does Herding Bias Drive the Firm Value? Evidence from the Chinese Equity Market

2019 ◽  
Vol 11 (20) ◽  
pp. 5583 ◽  
Author(s):  
Shah ◽  
Khan ◽  
Meyer ◽  
Meyer ◽  
Oláh
Keyword(s):  
Behavioral Finance ◽  
Firm Value ◽  
Equity Markets ◽  
Policy Implications ◽  
Stock Exchanges ◽  
Firm Level ◽  
Listed Firms ◽  
Trading Period ◽  
Behavioral Impact ◽  
The Impact

Equity markets play a pivotal role in the sustainability of developing countries, such as China. The literature on the detection of herding biases is confined to the aggregate level (firms, sector/industry and market). The present study adds to the behavioral finance literature by addressing the surprisingly unnoticed phenomena of the behavioral impact of herding bias on firm value (FV) at the firm level, using the sample of A-Shares listed firms at the Shanghai and Shenzhen Stock Exchanges (SSE and SZSE) under panel fixed effect specification. Initially, we detect the existence of investors and managers herding (IHR and MHR) biases at firm-level, and later, we examine their impact (distinct and interactive) upon the FV. The empirical results document the presence of IHR and MHR bias at market, sector and firm-level in both equity markets, which potentially drive the FV, while the impact is more pronounced during the extreme trading period. The findings are robust under different time intervals, and industry classification, therefore, offers useful policy implications to understand the behavioral dynamics of investors and managers.

scholarly journals Review of Corporate Governance Practices and Financial Distress Prediction

2018 ◽  
Vol 7 (4.28) ◽  
pp. 30
Author(s):  
Syed Muhammad Hassan Gillani Ahmad ◽  
Suresh Ramakrishnan ◽  
Hamad Raza ◽  
Humara Ahmad
Keyword(s):  
Corporate Governance ◽  
Financial Distress ◽  
Firm Value ◽  
Agency Cost ◽  
Review Of Literature ◽  
Firm Level ◽  
Country Level ◽  
Financial Distress Prediction ◽  
Good Corporate Governance ◽  
Governance Practices

Good corporate governance practices play an import role in increasing the firm value. Based on the agency theory related to corporate governance, if an agent (management) does not protect interest of principal (shareholders) then, agency cost is occurred and this creates a bad impact on the corporate performance. Therefore, it is necessary to address weak corporate governance practices in early stages otherwise firms can go in financial distress and eventually become bankrupt. The objective of this current study is to conduct a nonsystematic review of literature on theories and models related to corporate governance and financial distress. In the light of thorough review of literature, it is found that corporate governance variables (i.e. ownership concentration, board size, board composition, CEO duality, level of independence of board from management and managerial ownership) are good predictors for predicting financial distress. Moreover, it is also found that these corporate governance variables were not only used separately for predicting financial distress but also used along with others variables (firm level and country level) for the purpose of enhancing quality of financial distress models.

scholarly journals Firm value in crisis: Effects of firm-level transparency and country-level institutions

2014 ◽  
Vol 46 ◽  
pp. 72-84 ◽  
Author(s):  
Ruben Enikolopov ◽  
Maria Petrova ◽  
Sergey Stepanov
Keyword(s):  
Firm Value ◽  
Firm Level ◽  
Country Level

scholarly journals Which aspects of CSR predict firm market value?

2018 ◽  
Vol 2 (1) ◽  
pp. 50-69 ◽  
Author(s):  
Stevan Bajic ◽  
Burcin Yurtoglu
Keyword(s):  
Firm Value ◽  
Fixed Effects ◽  
Market Value ◽  
Ordinary Least Squares ◽  
Specific Aspect ◽  
Social Dimension ◽  
Omitted Variables ◽  
Firm Level ◽  
Content Type ◽  
The Social

Purpose There is evidence that corporate social responsibility (CSR) practices predict higher firm value, but little evidence on which specific aspects of CSR drive this relationship. The purpose of this paper is to study this question in a sample drawn from 35 countries over 2003-2016. Design/methodology/approach The authors employ a research design that analyzes observational data with panel data methods including ordinary least squares, firm-random effects, and firm-fixed effects. Findings The authors find in a sample drawn from 35 countries over 2003-2016 an economically significant relationship between an overall CSR measure and firm value. The overall CSR score builds on data from Asset4 and is comprised of three indices for environmental, social, and corporate governance aspects of CSR. The authors find that the social index consistently predicts higher market value. The authors also show that the use of particular elements of CSR can lead to substantial omitted variables bias when predicting firm value. The results also suggest a similar bias in studies that focus on a single index, which captures a specific aspect of CSR, but omits the remaining aspects. Research limitations/implications The study is subject to limitations common to observational studies. Practical implications The authors find robust evidence that CSR predicts market value using a country-benchmarked overall CSR index. The power to predict firm value comes solely from the social dimension of this measure, which captures firm-level practices related to treatment of employees and stakeholder relations including those with customers and the broader community. Three elements drive the social index: customer/product responsibility, human rights, and employment quality. None of the remaining 12 elements significantly predicts firm vale in an empirical setting with firm-FE and extensive covariates. The authors also show that omitted aspects of CSR can easily lead to an omitted variable bias and that the magnitude of this bias is potentially greater with an OLS specification. Social implications Among the many dimensions of CSR, only a subset drives firm value. Policies that target to improve the CSR performance of firms adopt a broader definition of CSR. Originality/value The authors provide first-hand evidence on which specific aspects of CSR drive firm market value.

scholarly journals How Are Foreign Firms Valued in U.S. Markets? Evidence from Firm and Country Characteristics

2019 ◽  
Vol 8 (4) ◽  
pp. 101
Author(s):  
Xiaoxiao Song
Keyword(s):  
Rule Of Law ◽  
Firm Value ◽  
Firm Growth ◽  
Market Value ◽  
Foreign Firms ◽  
Firm Level ◽  
Country Level ◽  
Cross Listing ◽  
Country Characteristics ◽  
Size Firm

This paper investigates the determinants of foreign firms’ value in U.S. markets by examining both firm and country characteristics. Prior studies have agreed on foreign firms’ value premium when they cross-list stocks in U.S. exchanges. However, little research has pursued evidence regarding how these foreign firms are valued after the cross-listing. I attempt to answer this question by comparing the determinants of firm value for both foreign cross-listing firms and U.S. domestic firms. The results from regression models show that, although foreign firms share similar firm-level determinants with U.S. firms (firm size, firm leverage, and firm growth), they are on average undervalued by U.S. investors. Furthermore, the home countries’ characteristics, such as the rule of law, play an important role in foreign firms’ market value. In fact, the undervaluation is only observed in foreign firms from the weak rule of law countries, but not from strong rule of law countries. Overall, foreign firms’ market value is determined by both firm-level and country-level characteristics after they cross-list in the U.S. markets.

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