Wealth effects of dividend regulation: Evidence from China

2020 ◽  
pp. 031289622093594
Author(s):  
Chao Kevin Li
Keyword(s):  
Natural Experiment ◽  
Investor Protection ◽  
Jel Classification ◽  
Share Price ◽  
Wealth Effects ◽  
Regulatory Change ◽  
Regulatory Body ◽  
Implicit Contract ◽  
Research Designs ◽  
Contract Failure

By exploring a natural experiment where the Chinese regulatory body introduced a dividend regulatory change in 2012, this article investigates the wealth effects of dividend regulation which increases firms’ dividends. I find that firms’ share price reacted positively (negatively) to regulatory events increasing (decreasing) investors’ expectation of dividends. The effects are more pronounced for firms with low dividends or domiciled in weak legal environments, robust to different research designs. The findings are consistent with the notion that low dividends in China are a manifestation of implicit contract failure. Dividend regulation provides remedies to low investor protection arising from weak legal environments. JEL Classification: G14, G35, G38, K22

Investor Reaction to Auditors' Going Concern Emphasis of Matter: Evidence from a Natural Experiment

2018 ◽  
Vol 38 (2) ◽  
pp. 27-55 ◽  
Author(s):  
Jean Bédard ◽  
Carl Brousseau ◽  
Ann Vanstraelen
Keyword(s):  
Trading Volume ◽  
Natural Experiment ◽  
Abnormal Returns ◽  
Data Availability ◽  
Financial Statement ◽  
Regulatory Change ◽  
Price Response ◽  
Going Concern ◽  
Incremental Value ◽  
Investor Reaction

SUMMARY Using a “natural experiment” provided by a change in Canadian auditing standards requiring an emphasis of matter paragraph in the auditor's report (GC-EOM) when the financial statements include a going concern uncertainty disclosure (GC-FS), this paper examines the incremental investor reaction to the auditor's report over the related GC-FS. Conditioning on the linguistic severity of the GC-FS (weak and severe), we first document a negative price response to severe but not to weak GC-FS before the regulatory change. This implies that investors react to financial statement disclosures and account for their degree of interpretability in the absence of a GC-EOM. When the uncertainty disclosure is accompanied by a GC-EOM, we find incremental negative abnormal returns and lower abnormal trading volume only for weak GC-FS. Collectively, these findings imply that an emphasis of matter paragraph in the auditor's report can have incremental value to investors. JEL Classifications: M42; G12; G14. Data Availability: Data used are available from public sources identified in the study.

scholarly journals Is the relation between non-controlling interests and parent companies misleading?

2020 ◽  
pp. 031289621989638
Author(s):  
Ana Isabel Lopes ◽  
Isabel Costa Lourenço ◽  
Mark T Soliman ◽  
Manuel Castelo Branco
Keyword(s):  
Investor Protection ◽  
Jel Classification ◽  
Negative Association ◽  
Share Prices ◽  
Corporate Entity ◽  
Parent Companies ◽  
Different Levels

This article investigates whether different levels of investor protection affect the equity market’s valuation of non-controlling interests (NCIs) in a consolidated corporate entity. Using a set of publicly listed European firms, our findings suggest a positive (negative) association of NCIs with parent companies’ share prices in countries with low (high) levels of investor protection. We interpret the findings as evidence that when non-controlling investors are not well-protected, parent companies have an opportunity to extract rents from non-controlling owners, leading to a positive valuation of NCIs’ equity. However, in countries where non-controlling investors are well-protected, parent companies are not able to extract rents but still must monitor and govern the related subsidiary; thus, NCIs become a net cost, and the relation inverts. JEL Classification: M41, M48

scholarly journals Overreaction Market Analysis, Dividend Policy, Firm Size, and Seasonality to Price Reversal Phenomena

2017 ◽  
Vol 2 (2) ◽  
pp. 73-77
Author(s):  
Sulaeman Rahman Nidar ◽  
Nurul Ulfa
Keyword(s):  
Firm Size ◽  
Capital Market ◽  
Dividend Policy ◽  
Relevant Information ◽  
Jel Classification ◽  
Good News ◽  
Share Price ◽  
January Effect ◽  
Market Anomalies ◽  
Price Reversal

Objective - In an efficient capital market, the price of a stock reflects the outstanding and relevant information. However, some studies find that is the capital markets are not always efficient. Sometimes investors put too high a price, good news and vice versa. That's why there are variety of capital market anomalies such as the price reversal. This research, test share return following one day a big change of the share price in the Indonesia capital market. Methodology/Technique - The unit of analysis in this study are the stocks that listed in the Jakarta Islamic Index. Then we used purposive sampling method for sampling and 21 samples obtained shares. These samples, then classified into 11 shares 10 shares winner and a loser. Analysis the user is paired sample t-test and doubled regression. In addition, double regression analysis with market overreaction, dividend policy, firm size and the January effect as independent variables and price reversal as the dependent variable. Findings - Regression test showed that in the group winner stocks, market overreaction, firm size and January effect have an effect on signs of price reversal. And dividend policy has no significant influence. For the group of loser stocks, market overreaction, dividend policy, firm size and January effect affect both simultaneously and partially on price reversal. Novelty - The study contributes decision making of investors in Indonesia financial market with its evidences. Type of Paper: Empirical Keywords: Market Overreaction; Dividend Policy; Firm Size; January Effect; Price Reversal. JEL Classification: G11, G14, M41.

Evaluating the Evolution of the Personal Financial Planning Industry: Mutualism, Commensalism, or Parasitism

2021 ◽  
Vol 6 (2) ◽  
pp. 72-81
Author(s):  
Bryan Teoh Phern Chern
Keyword(s):  
Financial Planning ◽  
Conflicts Of Interest ◽  
General System ◽  
Jel Classification ◽  
Regulatory Body ◽  
Investment Strategies ◽  
Financial Health ◽  
The Past ◽  
Industry Standards ◽  
Personal Financial Planning

Objective – The personal financial planning and advice industry has been a growing industry for the past years and will continue to experience growth as the general wealth of the public increases, along with the economic recovery post Covid-19. This industry includes registered investment advisors (RIA) which are licensed by a locally approved institution, and financial educators and influencers that do not require licensing by a regulatory body. Methodology – There are many benefits that these parties can bring towards the financial health of their clients and viewers such as having a thorough personal financial plan, investment strategies, and retirement planning. However, this industry has also received many negative feedbacks and experiences from clients regarding the general system of the industry or specific areas within the sector. One of the objectives of this article is to evaluate the evolution of the personal financial planning industry over the years, how it has transitioned from traditional methods into current industry standards, and where it might be heading in the coming years. Findings– The findings of the paper provide clarity and insight into the mature industry which can benefit current and potential consumers, promoting healthier industry development. Novelty – The next objective is to investigate the risk and rewards of the current personal financial planning and advice industry towards consumers. This paper will critically review the past literature and evaluate contemporary views from various perspectives to achieve the above objectives. Type of Paper: Review JEL Classification: G20 I22 Keywords: Conflicts of interest; Financial advice; Financial planning; Influencers; Personal finance

scholarly journals Severe Prenatal Shocks and Adolescent Health: Evidence from the Dutch Hunger Winter

2021 ◽  
Author(s):  
Gabriella Conti ◽  
L H Lumey ◽  
Stavros Poupakis ◽  
Govert E Bijwaard ◽  
Peter Ekamper
Keyword(s):  
World War Ii ◽  
Natural Experiment ◽  
Survival Rates ◽  
World War ◽  
Difference In Differences ◽  
Objective Health ◽  
Military Recruits ◽  
Research Designs ◽  
Multiple Shocks ◽  
Scarring Effects

This paper investigates impacts, mechanisms and selection effects of prenatal exposure to multiple shocks, by exploiting the unique natural experiment of the Dutch Hunger Winter. At the end of World War II, a famine occurred abruptly in the Western Netherlands (November 1944 - May 1945), pushing the previously and subsequently well-nourished Dutch population to the brink of starvation. We link high-quality military recruits data with objective health measurements for the cohorts born in the years surrounding WWII with newly digitised historical records on calories and nutrient composition of the war rations, daily temperature, and warfare deaths. Using difference-in-differences and triple differences research designs, we show that the cohorts exposed to the Dutch Hunger Winter since early gestation have a higher Body Mass Index and an increased probability of being overweight at age 18, and that this effect is partly accounted for by warfare exposure and a reduction in energy-adjusted protein intake. Moreover, we account for selective mortality using a copula-based approach and newly-digitised data on survival rates, and find evidence of both selection and scarring effects. These results emphasise the complexity of the mechanisms at play in studying the consequences of early conditions.

scholarly journals Diagnostic Laboratories - Are These Radiation Safe?

2017 ◽  
Vol 3 (2) ◽  
pp. 99-127
Author(s):  
R. Rajan ◽  
Paul Rajan Rajkumar
Keyword(s):  
Comparative Analysis ◽  
Best Practices ◽  
Diagnostic Imaging ◽  
Radiation Exposure ◽  
Sufficient Evidence ◽  
Regulatory Change ◽  
Top Management ◽  
Regulatory Body ◽  
Management Commitment ◽  
Top Management Commitment

The demand for Diagnostic Centers in India is propelled by changes in culture, increase in population, rise in infectious disease, increase in healthcare expenditure and rising adoption of preventive health check-ups. The Private diagnostic market in India has limited number of organized players and the overall market is driven by unorganized laboratories. The Diagnostic Imaging equipments such as X-ray, CT (Computed Tomography) Scanner and BMD (Bone Mineral Densitometer) need to be handled with utmost care as they have human made ionizing radiation exposure risks. India is one of the largest consumers of refurbished diagnostic imaging equipments and the beneficiaries include Diagnostic Centers, Corporate Hospitals and Chain of Diagnostic Laboratories. The Atomic Energy Regulatory Body (AERB) in India regulates the usage of diagnostic imaging equipments by evolving policies and procedures to be strictly followed by Diagnostic Centers for containing excessive radiation. The changes in procurement policy made by AERB in September 2015 have restricted importing of used diagnostic imaging equipments up to a maximum of 7 years. This regulatory change has triggered a research question, Diagnostic Laboratories - Are these Radiation Safe? This research was conducted with the objective of assessing whether diagnostic centers follow the best practices mandated by AERB. The researcher has conducted a very structured assessment on AERB compliance using 7 different parameters namely, Regulatory, Layout Engineering, Technician Competency, Human Safety, Operations Knowhow, Radiation Exposure Monitoring and Top Management Commitment. This study was conducted in 192 diagnostic centers across multiple cities in Tamil Nadu, with a structured questionnaire contained 34 questions. Based on the responses received on the actual practices followed by diagnostic centers to contain Radiation risk, Radiological Compliance Index (RCI) was estimated. The analysis has revealed that Top Management Commitment was very low with a RCI score of 2.02 (Moderate Presence of AERB recommended best practices) and Operations “Know-Know” was high with a score of 4.40 (High Presence of AERB recommended best practices). The comparative analysis of RCI between National Accreditation Board for testing and Laboratories (NABL) accredited (RCI Score 3.19) and Non NABL (RCI Score 3.18) diagnostic centers has indicated that the accreditation did not significantly influence the compliance. The Pearson correlation co-efficient has established moderately positive correlation with Revenue (+ 0.321) & Patient Queue size (+0.293) on RCI. This study has concluded with sufficient evidence and analysis that Private Diagnostic Centers need to focus on appointing Radiation Safety Officer, monitoring radiation exposure dosage, periodical equipment service, continuous training of their staff and periodical QA tests for equipment fitness in order to achieve significant regulatory compliance maturity levels. This research has further recommended similar research in private diagnostic laboratories in other states in India and comparative analysis of compliance to AERB guide lines between Government Hospitals and Private Diagnostic Centers.

scholarly journals Cryptocurrencies’ Puzzle

2021 ◽  
Vol 66 (2) ◽  
pp. 99-134
Author(s):  
Cornelia Pop ◽  
◽  
Ingrid-Emanuela Colonescu ◽  
Keyword(s):  
Key Words ◽  
Money Laundering ◽  
Potential Role ◽  
Investor Protection ◽  
Jel Classification

The present paper tries to bring a certain degree of clarity to the cryptocurrencies puzzle by discussing the existing definitions and some classifications identified by academic studies. Further, it investigate, based on various academic studies, the uses of cryptocurrencies and their potential role as alternative money. The regulations regarding the cryptocurrencies are also considered since the spreading of the cryptocurrency phenomenon and the risks associated with the use of cryptocurrencies in various capacities raise problems related to (small) investor protection and anti-money laundering. Key words: cryptocurrencies, medium of exchange, assets, regulations JEL Classification: E49; E59

The Role of Litigation in First-Mover Performance in M-Business

2011 ◽  
Vol 7 (3) ◽  
pp. 92-104
Author(s):  
Belén Usero ◽  
María Ortiz
Keyword(s):  
Service Providers ◽  
Negative Impact ◽  
Share Price ◽  
Regulatory Change ◽  
Mobile Service ◽  
Technological Advances ◽  
Stock Market Valuation ◽  
The One ◽  
The Impact ◽  
First Mover

In recent years, technological advances and regulatory change have profoundly modified many Internet-related supply and user services. In some cases, although entry barriers for new competitors have been lowered, established companies have been able to reap certain sources of first-mover advantages (FMAs) as a result of their early entry into the market. Here, non-market strategies can be used by rivals and other industry participants to neutralize FMAs. This paper has two main objectives: on the one hand, to reflect on FMAs in an Internet-enabled market environment, specifically, mobile service providers; on the other hand, to study the impact of litigation on first-mover performance in the Spanish mobile services industry between November 2000 and July 2006. The results obtained show that litigation processes initiated against first mover Movistar, do not, on average, have a negative impact on market performance. Similarly, we observed that when legal proceedings do have an impact on a company’s stock market valuation, the negative impact, on average, outweighs the positive. Last, we also observed that the impact of some legal disputes on the first mover’s share price varies depending on who initiates legal actions and on the nature of the lawsuit filed.

Price and Volatility Linkages Between Indian Stocks and Their European GDRs

2019 ◽  
Vol 18 (2_suppl) ◽  
pp. S213-S237
Author(s):  
Vinodh Madhavan ◽  
Partha Ray
Keyword(s):  
Information Disclosure ◽  
Stock Exchange ◽  
Jel Classification ◽  
Share Price ◽  
Stock Index ◽  
Dynamic Correlation ◽  
The Difference ◽  
Underlying Stocks ◽  
Depositary Receipts ◽  
Volatility Linkages

This article tests for price and volatility linkages between Indian global depositary receipts (GDRs) traded in Luxembourg/London and their underlying shares traded in Mumbai. The relationship is studied between the GDR price and the domestic share price along with the appropriate exchange rates, the foreign stock index and the domestic stock index using the vector autoregression (VAR) and dynamic conditional correlation (DCC) specification of multivariate generalised autoregressive conditional heteroscedasticity (GARCH) models. VAR results indicate a similarity between the two prices of scrips: one trading in Mumbai and the other trading in Luxembourg (London). Further, DCC-GARCH model outcomes point to, by and large, a high-dynamic correlation between Indian GDRs traded in Luxembourg/London and their underlying stocks listed in Mumbai. Thus, the price and volatility linkages between the Indian stock and its European counterpart are invariant with respect to the choice of the foreign stock exchange. Such a similarity in findings, notwithstanding the difference in degree of information disclosure as well as listing requirements at London and Luxembourg, is perhaps indicative of the stock-exchange-invariant nature of law of one price. JEL Classification: G15, C22

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