Earnings Announcements, Miller’s Stocks and Private Investors – Trading Patterns and Performance

2012 ◽  
Author(s):  
Thomas Etheber ◽  
Dominik Hennen ◽  
Steffen Meyer ◽  
Tilman Rochow
Keyword(s):  
Earnings Announcements ◽  
Trading Patterns ◽  
And Performance ◽  
Private Investors

Earnings management and institutional investor trading prior to earnings announcements

2019 ◽  
Vol 9 (1) ◽  
pp. 22-50 ◽  
Author(s):  
Shasha Liu
Keyword(s):  
Earnings Management ◽  
Institutional Investors ◽  
Earnings Announcements ◽  
Chinese Stock Market ◽  
Data Set ◽  
Content Type ◽  
Trading Patterns ◽  
Earnings Surprises ◽  
Trading Pattern ◽  
Investor Trading

PurposeThe purpose of this paper is to investigate if earnings management affects the trades of different investors prior to earnings announcements.Design/methodology/approachUsing a unique account-level trading data set from the Chinese stock market, the author investigates the different investor trading patterns prior to earnings announcements.FindingsThe author obtains direct evidence to show that: first, institutional investors, particularly active ones, tend to sell (buy) stocks before negative (positive) earnings surprises; second, institutional investors buy stocks intensively with the lowest earnings management and the highest earnings surprises, and the trading patterns are primarily driven by active institutions. No significant trading pattern is observed on the stocks with negative earnings surprises; and third, the author uses a natural experiment in accordance with the Chinese accounting standards reform to address endogeneity, and the causality of the results still holds.Originality/valueThe findings provide clear evidence by emphasizing the importance of earnings management in the formulation of investor decisions.

scholarly journals New evidence on the performance of Italian privatized firms: Should the experiment be repeated in the aftermath of the recent financial crisis?

2015 ◽  
Vol 12 (3) ◽  
pp. 94-113
Author(s):  
Ottorino Morresi ◽  
Andrea Oro Nobili
Keyword(s):  
International Studies ◽  
Efficiency Gains ◽  
Leverage Ratio ◽  
Performance Improvements ◽  
Financial Firms ◽  
Privatized Firms ◽  
Recent Financial Crisis ◽  
And Performance ◽  
Private Investors ◽  
New Evidence

We provide new evidence on the performance of privatized firms in Italy. On a large sample of 53 non-financial firms privatized from 1992 to 2005, our study shows that privatizations improve efficiency and profitability ratios, sales, and dividend payout. The most important determinant of performance and efficiency gains is the full transfer of control to private investors. Unlike the prevalent international evidence, we find that privatizations result in an increase of leverage ratio and do not affect the number of employees. Moreover, in contrast to international studies, we also find that efficiency and performance improvements are larger in firms operating in protected sectors, and that state-owned firms acquired by foreign investors do not appear to fare better after their privatization. Finally, we find that performance and efficiency gains already occur some years before the date of privatization

Can Restructuring Gains Be Sustained Without Ownership Changes? Evidence from Withdrawn Privatizations

2020 ◽  
pp. 1-29
Author(s):  
Gabriele Lattanzio ◽  
William L. Megginson
Keyword(s):  
Necessary Condition ◽  
Private Ownership ◽  
Corporate Policies ◽  
Ownership Transfer ◽  
Posttreatment Period ◽  
Restructuring Process ◽  
And Performance ◽  
Private Investors

Abstract By employing a novel, hand-collected sample of withdrawn and completed share issue privatizations, we show that both groups undergo comparable restructuring processes over the 3 years preceding the event. We employ matching procedures to explicitly control for the restructuring effect, isolating the effect of the ownership transfer from state to private investors on corporate policies and performance. We document that, absent the ownership transfer, most of the gains realized during the restructuring process are reabsorbed over the posttreatment period. The transition from state to private ownership thus represents a necessary condition for the long-term success of privatization programs.

Election Cycles and Organizations: How Politics Shapes the Performance of State-owned Enterprises over Time

2019 ◽  
Vol 65 (3) ◽  
pp. 677-709 ◽  
Author(s):  
Carlos Inoue
Keyword(s):  
Disadvantaged Communities ◽  
Political Incentives ◽  
Dynamic Perspective ◽  
And Performance ◽  
Private Investors ◽  
Resource Support ◽  
The Relationship ◽  
Shed Light ◽  
Over Time ◽  
Election Cycles

This study develops a dynamic perspective on how elected state officials’ political incentives shape the behavior and performance of organizations, particularly state-owned enterprises (SOEs). Drawing on theoretical views about the relationship between politicians and firms, I argue that state officials seeking votes manipulate SOEs to boost employment before elections. As a result, SOEs exhibit both higher employment levels and lower financial performance in election years. The positive relationship between elections and SOE employment, however, is not uniform across firms and geographic communities: it is likely to be stronger in economically disadvantaged communities and weaker for SOEs with private investors. Data from Brazil’s water sector—an industry managing a crucial societal resource—support these predictions. These results shed light on the mechanisms linking officials’ political incentives and SOE behavior and show that SOE performance is politically contingent and thus varies systematically over time. More broadly, this study reveals how firms’ responses to political pressures depend on both organizational and community attributes and highlights how the interplay of election cycles, organizations, and communities shapes the performance of organizations in state capitalism.

scholarly journals Participatory Land Governance in Mozambique: Brief Review of the Legal Framework and the Implementation Challenge

2021 ◽  
Vol 24 ◽  
Author(s):  
Alda Salomão
Keyword(s):  
National Development ◽  
Legal Framework ◽  
Participatory Development ◽  
Public Affairs ◽  
Land Policy ◽  
Popular Participation ◽  
Development Processes ◽  
The Government ◽  
And Performance ◽  
Private Investors

Abstract A commitment to democracy and popular participation in the national development has been a central principle in all Mozambican Constitutions and a consistent directive in government policies and laws. To test the extent to which this principle has been materialized in the land sector, this paper provides a general overview of Mozambique’s recent history and the role reserved for land in the formation of the state and in materialization of democratic governance. The paper concludes that more than any other factor, political party interference in public affairs has shaped the identity and performance of the Mozambican state, setting the stage for a complex interaction between the government, local people and private investors that has jeopardized the great potential of the national land policy and law to promote effective and sustainable participatory development processes.

Trading Patterns and Performance of Trader Types in Taiwan Futures Market

2005 ◽  
Vol 08 (02) ◽  
pp. 217-234 ◽  
Author(s):  
Chao-Hsien Lin ◽  
Hsinan Hsu ◽  
Chwan-Yi Chiang
Keyword(s):  
Positive Feedback ◽  
Futures Market ◽  
Foreign Investors ◽  
Trading Patterns ◽  
Weak Evidence ◽  
And Performance ◽  
Positive Feedback Traders

By analyzing the behavior and performance of trader types in the Taiwan futures market, we find that the foreign investors, futures dealers and security dealers are positive feedback traders, whereas individuals are contrarians. Evidence shows that the foreign investors and security dealers earn significant profits. We conclude that they are information-based traders. Instead, the individuals and futures traders perform poorly. However, weak evidence reveals that futures dealers are behavioral-based traders. As it is also reported, the cumulative performance demonstrates that foreign investors are the clear winners and individuals are the clear losers in the Taiwan futures market.

The impact of heuristic and herding biases on portfolio construction and performance: the case of Greece

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nektarios Gavrilakis ◽  
Christos Floros
Keyword(s):  
Decision Makers ◽  
Portfolio Construction ◽  
Investment Portfolio ◽  
Content Type ◽  
And Performance ◽  
Private Investors ◽  
Investment Portfolios ◽  
Performance Satisfaction ◽  
The Impact ◽  
The Relationship

PurposeThe purpose of this paper is to identify whether heuristic and herding biases influence portfolio construction and performance in Greece. The current research determines the situation among investors in Greece, a country with several economic problems for the last decade.Design/methodology/approachA survey has been conducted covering a group of active private investors. The relationship between private investors' behavior and portfolio construction and performance was tested using a multiple regression.FindingsThe authors find that heuristic variable affects private investor's portfolio construction and performance satisfaction level positively. A robustness test on a second group, consisting of professional investors, reveals that heuristic and herding biases affect investment behavior when constructing a portfolio.Practical implicationsThe authors recommend investors to select professional's investment portfolio tools in constructing investment portfolios and avoid excessive errors, which occur due to heuristic. The awareness and understanding of heuristic and herding could be helpful for professionals and decision-makers in financial institutions by improving their performance resulting in more efficient markets.Originality/valueThe main contribution of this paper lies in the fact that it is the first study on two major behavioral dimensions that affect the investor's portfolio construction and performance in Greece. The rationale of the current research is that the results are helpful for investors in order to take rational, reliable and profitable decisions.

The trading patterns and performance of individual vis-à-vis institutional investors in the Qatar Exchange

2014 ◽  
Vol 13 (1) ◽  
pp. 24-42 ◽  
Author(s):  
Walid M.A. Ahmed
Keyword(s):  
Capital Market ◽  
Institutional Investors ◽  
Poor Performance ◽  
Individual Investors ◽  
Sample Period ◽  
Entire Sample ◽  
Investment Performance ◽  
Content Type ◽  
Trading Patterns ◽  
And Performance

Purpose – The main thrust of the present study is to look into the trading patterns of behavior and investment performance exhibited by individual and institutional investor categories in the Qatar Exchange (QE). The paper aims to discuss these issues. Design/methodology/approach – The present study uses daily aggregated investment flows made separately by each investor group, as well as daily closing price observations of the QE stock composite index. The trading patterns of investor categories are examined by estimating a bivariate vector autoregressive process of order p, VAR (p). To determine whether each category performs well or poorly over the entire sample period, each investor category's cumulative returns are estimated and analyzed. Findings – The empirical results reveal that institutional investors pursue positive feedback trading strategies, whereas individual investors tend to be negative feedback traders. Both investor categories appear to be engaged in herding behavior. Additionally, institutional investors perform well over almost the entire sample period. In contrast, individual investors' negative market timing ability dominates their overall poor performance. Practical implications – The investment performance gap found between institutional investors and individual investors in the Qatari capital market may reflect a large information asymmetry in favour of the former category. Indeed, the poor performance of individual investors implies that their trading activities are generally driven by factors and considerations that are irrelevant to fundamentals. Moreover, their irrational trading decisions may play some role in the formation of asset price bubbles. Originality/value – The present study makes the first attempt to provide empirical evidence on the investment patterns and performance of individual and institutional investors trading on the Qatari capital market.

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