TESTING TRADE-OFF THEORY BETWEEN NETWORKING CAPITAL AND FIRM VALUE: EMPIRICAL EVIDENCE FROM VIETNAM

2020 ◽  
pp. 2050013
Author(s):  
DUONG DANG KHOA ◽  
PHAM THI TRAM ANH ◽  
LE THI MY DUYEN
Keyword(s):  
Stock Market ◽  
Empirical Evidence ◽  
Firm Value ◽  
Optimal Level ◽  
Working Capital ◽  
Trade Off ◽  
Empirical Results ◽  
Right Hand ◽  
The Right

This study investigates empirically how net-working-capital (NWC) affects firm value, using a sample of the Vietnamese stock market. Our empirical results indicate an optimal NWC level that maximizes firm value. Our research also shows empirical evidence that deviations from actual and estimated NWC levels (above and below optimal level) can reduce firm value. We show that more than 40% of NWC observations in our sample on the right-hand side of the breakpoint reduce firm value. Managers tend to build up excessive working capital to prevent hiking funding costs after the 2008 crisis. Therefore, our findings help managers determine an optimal level of NWC, which enhances firm value. Our findings are consistent with the trade-off theory.

Adoption of Information Technology Governance in the Electronics Manufacturing Sector in Malaysia

2011 ◽  
pp. 41-60 ◽  
Author(s):  
Wil Ly Teo ◽  
Khong Sin Tan
Keyword(s):  
Information Technology ◽  
Empirical Evidence ◽  
Manufacturing Sector ◽  
It Governance ◽  
Electronics Manufacturing ◽  
Empirical Results ◽  
Technology Governance ◽  
Information Technology Governance ◽  
The Right ◽  
Expected Outcomes

Past studies and surveys of top management in business and information technology (IT) have shown the importance of strong IT governance in delivering results to the business. This research investigates the extent to which empirical results from past studies is applicable to the electronics manufacturing sector in Malaysia. Empirical evidence from 33 organisations in this sector indicates that having the right decision owners making appropriate decision types lead to better IT governance performance. Organisations with growth as their primary goal demonstrate marginally higher IT governance performance, contrary to expected outcomes. The research also shows that awareness of industry IT governance frameworks is not related to IT governance performance. We conclude that adoption of IT governance is on track, though familiarity with technicalities of the available frameworks should be improved.

scholarly journals The intertemporal relation between expected returns and conditional correlations between precious metals and the stock market

2018 ◽  
Vol 7 (1) ◽  
pp. 24
Author(s):  
Ryuta Sakemoto
Keyword(s):  
Stock Market ◽  
Empirical Evidence ◽  
Stock Markets ◽  
Precious Metals ◽  
Asset Market ◽  
Market Condition ◽  
Expected Returns ◽  
Trade Off ◽  
Conditional Correlations

This study explores whether conditional correlations between precious metals and stock markets impact upon expected returns on precious metals. The empirical evidence presents that there is no significant trade–off between conditional correlations and expected returns, which means that high returns on precious metals are not related to a lack of diversification benefits. Interestingly, high absolute values of conditional correlations lead to increases in expected returns, suggesting that the unstable cross-asset market condition is associated with the expected returns. This impact is stronger on silver than on gold.  

scholarly journals Rationale and Design of EU Cohesion Policies in a Period of Crisis

2014 ◽  
Vol 11 ◽  
pp. 11-19
Author(s):  
Roberto Camagni ◽  
Roberta Capello
Keyword(s):  
Winning Strategy ◽  
Economic Recession ◽  
Point Of View ◽  
Economic Downturn ◽  
Short Term ◽  
Trade Off ◽  
Empirical Results ◽  
The Right

The aim of the paper is to reflect on the justifications and design of cohesion policies in a period of deep economic recession. In particular, the paper tackles two important topics. The first topic deals with the justification for structural policies like cohesion policies in a period of economic downturn, since they look less urgent and appropriate than short term demand policies. In this case, cohesion policies are called to rebalance the effects that the ongoing crisis has on the convergence trends of the last two decades. The second topic relates to the most appropriate design that cohesion policies should have. The message that the paper provides from a conceptual point of view, corroborated by empirical results, is that the winning strategy is neither to focus on champions, calling for competitiveness, nor on lagging areas, in favor of cohesion; policies targeted to each regions’ needs are the right policies, able to enlarge and embrace all possible excellences. This strategy demonstrates that the traditional trade-off between efficiency and equity goals may be overcome.

Adoption of Information Technology Governance in the Electronics Manufacturing Sector in Malaysia

2012 ◽  
pp. 887-906 ◽  
Author(s):  
Wil Ly Teo ◽  
Khong Sin Tan
Keyword(s):  
Information Technology ◽  
Empirical Evidence ◽  
Manufacturing Sector ◽  
It Governance ◽  
Electronics Manufacturing ◽  
Empirical Results ◽  
Technology Governance ◽  
Information Technology Governance ◽  
The Right ◽  
Expected Outcomes

Past studies and surveys of top management in business and information technology (IT) have shown the importance of strong IT governance in delivering results to the business. This research investigates the extent to which empirical results from past studies is applicable to the electronics manufacturing sector in Malaysia. Empirical evidence from 33 organisations in this sector indicates that having the right decision owners making appropriate decision types lead to better IT governance performance. Organisations with growth as their primary goal demonstrate marginally higher IT governance performance, contrary to expected outcomes. The research also shows that awareness of industry IT governance frameworks is not related to IT governance performance. We conclude that adoption of IT governance is on track, though familiarity with technicalities of the available frameworks should be improved.

scholarly journals Is There a Non-linear Relationship between Net Trade Cycle and Corporate Performance in Turkey?

2016 ◽  
Vol 9 (6) ◽  
pp. 95 ◽  
Author(s):  
Mehmet Erkan Soykan ◽  
Recep Ulucak
Keyword(s):  
Linear Relationship ◽  
Firm Value ◽  
Capital Investment ◽  
Corporate Performance ◽  
Optimal Level ◽  
Working Capital ◽  
Trade Cycle ◽  
Financial Firms ◽  
Corporate Executives ◽  
Non Linear

<p>The aim of this study is to examine the relationship between working capital management and corporate performance for non-financial firms quoted in Borsa İstanbul for the period 2009-2014. The working capital investment decisions of the firms are utmost important since firms can continue their operations without discontinuance, raise their value and reduce risks as long as working capital level is attentively administered. Our research contributes to the working capital literature by investigating the non-linear relation between net trade cycle (NTC) and firm performance, utilising contemporary data and using system Panel GMM method. Our results indicate that there is a non-linear relationship between NTC and corporate performance. This means that there is an optimal NTC value where firm value is maximised. At this optimal working capital level, costs and advantages are poised. This implies that corporate executives should carefully manage their working capital investment and strive to be close to the optimal level as much as possible.</p>

scholarly journals The Impact of Working Capital Components on Firm Value in US Firms

2017 ◽  
Vol 9 (8) ◽  
pp. 138
Author(s):  
Joseph Brian Cumbie ◽  
John Donnellan
Keyword(s):  
Firm Value ◽  
Economic Value ◽  
Optimal Level ◽  
Future Research ◽  
Curvilinear Relationship ◽  
Working Capital ◽  
Accounts Receivable ◽  
Accounts Payable ◽  
Curvilinear Relationships ◽  
The Impact

Working capital is an important part of any businesses day-to-day operations. However, most businesses do not take into consideration that continuous investment into working capital does not maximize firm value. The specific problem addressed was firm managers that do not understand the optimal level for each component of working capital create sub-optimal value firm; leading to diminished investment returns for shareholders. For this study, 140 firms for the years 2003-2012 were selected from a stratified random sample of firms listed on the Russell 2000 index. Accounts receivable days outstanding, accounts payable days outstanding, and inventory days outstanding were regressed on economic value to determine whether a curvilinear relationship existed. All three models showed a statistically significant relationship to firm value, F(6, 2268), p<.01, R2= .40, F(6, 2268), p<.01, R2= .38, F(6, 2268), p<.01, R2= .39. Recommendations for firm managers included lowering accounts receivable, accounts payable, and inventory days during boom economic times while increasing accounts receivable, accounts payable, and inventory days during recessionary economic times. Consideration for future research into working-capital management and firm value should consider whether different curvilinear relationships exist between firm value and working-capital components during different economic cycles.

scholarly journals Sectors stock indices aggregate correlations and expectations: Evidence from the Greek stock market

2021 ◽  
Vol 11 (2) ◽  
pp. 71-81
Author(s):  
Athanasios Noulas ◽  
Ioannis Papanastasiou ◽  
Simeon Papadopoulos
Keyword(s):  
Stock Market ◽  
Empirical Evidence ◽  
Dynamic Behavior ◽  
Multivariate Garch ◽  
Time Dependent ◽  
Empirical Results ◽  
Market Participants ◽  
Stock Indices ◽  
Multivariate Garch Model ◽  
Low Uncertainty

Based on the cyclical movements of the Athens Stock Market, the paper empirically examines the behavior of seven sectors (markets) namely: industry-services, emporium, construction, petroleum, telecommunications, food-beverages, and banks. Specifically using daily observations from January 2006 to August 2017, we estimate a dynamic equicorrelation multivariate GARCH model (DECO-MGARCH) developed by Engle and Kelly (2012), to analyze the dynamic behavior of these sectors. Furthermore, using time-dependent entropic measures we examine empirically the uncertainty (expectations) regarding the correlation behavior of these seven sectors. The empirical results are in line with previous findings (Tsai & Chen, 2010; Garnaut, 1998) and provide evidence supporting the view of high correlations during periods of crises. In addition, the dynamic entropy shows that the expectations of market participants were more concentrated (less spread out) during these periods of crises. Therefore, the empirical evidence of the paper supports the view that market participants share the same opinions (entropy exhibits low uncertainty) during crises and therefore are acting in a similar fashion (exhibiting high correlation).

scholarly journals CEO Duality and Firm Value: Evidence from Mexico

ENTRAMADO ◽  
2020 ◽  
Vol 16 (2) ◽  
pp. 12-23
Author(s):  
Juan Pablo Dávila-Velásquez ◽  
Diógenes Lagos-Cortés
Keyword(s):  
Corporate Governance ◽  
Least Squares ◽  
Empirical Evidence ◽  
Firm Value ◽  
Regression Models ◽  
Ordinary Least Squares ◽  
Publicly Traded ◽  
Ceo Duality ◽  
Empirical Results ◽  
Board Characteristics

Regulators and corporate governance activists are lobbying companies to eliminate the CEO duality; however, the effectiveness of this recommendation is questioned given that empirical evidence has found conflicting results. This document studied the effects of the CEO’s duality on the value of the company in a sample of 104 Mexican companies that were publicly traded between 2000 and 2013. For this, different regression models were estimated using the ordinary least squares technique. The firm value was measured through Tobin’s Q and ROA. Empirical results showed that there is no relationship between CEO duality and value after controlling for board characteristics such as size and independence.

Editorial Note

1946 ◽  
Vol 11 (1) ◽  
pp. 2-2
Keyword(s):  
Editorial Note ◽  
Speech Sounds ◽  
Left Hand ◽  
Hand Column ◽  
Right Hand ◽  
Infant Speech ◽  
The Right

In the article “Infant Speech Sounds and Intelligence” by Orvis C. Irwin and Han Piao Chen, in the December 1945 issue of the Journal, the paragraph which begins at the bottom of the left hand column on page 295 should have been placed immediately below the first paragraph at the top of the right hand column on page 296. To the authors we express our sincere apologies.

Eosinophilic vasculitis: an inhabitual and resistant manifestation of a vasculitis

VASA ◽  
2010 ◽  
Vol 39 (4) ◽  
pp. 344-348 ◽  
Author(s):  
Jandus ◽  
Bianda ◽  
Alerci ◽  
Gallino ◽  
Marone
Keyword(s):  
Skin Biopsy ◽  
Intravenous Iron ◽  
Small Vessel Vasculitis ◽  
High Dose ◽  
Raynaud Phenomenon ◽  
The Third ◽  
Left Elbow ◽  
Right Hand ◽  
The Right ◽  
Trunk Skin

A 55-year-old woman was referred because of diffuse pruritic erythematous lesions and an ischemic process of the third finger of her right hand. She was known to have anaemia secondary to hypermenorrhea. She presented six months before admission with a cutaneous infiltration on the left cubital cavity after a paravenous leakage of intravenous iron substitution. She then reported a progressive pruritic erythematous swelling of her left arm and lower extremities and trunk. Skin biopsy of a lesion on the right leg revealed a fibrillar, small-vessel vasculitis containing many eosinophils.Two months later she reported Raynaud symptoms in both hands, with a persistent violaceous coloration of the skin and cold sensation of her third digit of the right hand. A round 1.5 cm well-delimited swelling on the medial site of the left elbow was noted. The third digit of her right hand was cold and of violet colour. Eosinophilia (19 % of total leucocytes) was present. Doppler-duplex arterial examination of the upper extremities showed an occlusion of the cubital artery down to the palmar arcade on the right arm. Selective angiography of the right subclavian and brachial arteries showed diffuse alteration of the blood flow in the cubital artery and hand, with fine collateral circulation in the carpal region. Neither secondary causes of hypereosinophilia nor a myeloproliferative process was found. Considering the skin biopsy results and having excluded other causes of eosinophilia, we assumed the diagnosis of an eosinophilic vasculitis. Treatment with tacrolimus and high dose steroids was started, the latter tapered within 12 months and then stopped, but a dramatic flare-up of the vasculitis with Raynaud phenomenon occurred. A new immunosupressive approach with steroids and methotrexate was then introduced. This case of aggressive eosinophilic vasculitis is difficult to classify into the usual forms of vasculitis and constitutes a therapeutic challenge given the resistance to current immunosuppressive regimens.

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