Why Do Share Price Levels Matter? Investor Clienteles, Monitoring and Firm Performance

2004 ◽  
Author(s):  
Chitru S. Fernando ◽  
Vladimir A. Gatchev ◽  
Paul A. Spindt
Keyword(s):  
Firm Performance ◽  
Share Price ◽  
Price Levels

The impact of intellectual capital on firm performance: a study of Indian firms listed in COSPI

2018 ◽  
Vol 19 (5) ◽  
pp. 935-964 ◽  
Author(s):  
Neha Smriti ◽  
Niladri Das
Keyword(s):  
Firm Performance ◽  
Intellectual Capital ◽  
Value Creation ◽  
Generalized Method Of Moments ◽  
Value Added ◽  
Secondary Data ◽  
Share Price ◽  
Content Type ◽  
Listed Firms ◽  
The Impact

Purpose The purpose of this paper is to examine the effect of intellectual capital (IC) on financial performance (FP) for Indian companies listed on the Centre for Monitoring Indian Economy Overall Share Price Index (COSPI). Design/methodology/approach Hypotheses were developed according to theories and literature review. Secondary data were collected from Indian companies listed on the COSPI between 2001 and 2016, and the value-added intellectual coefficient (VAIC) of Pulic (2000) was used to measure IC and its components. A dynamic system generalized method of moments (SGMM) estimator was employed to identify the variables that significantly contribute to firm performance. Findings Indian listed firms appear to be performing well and efficiently utilizing their IC. Overall, human capital had a major impact on firm productivity during the study period. Furthermore, the empirical analysis showed that structural capital efficiency and capital employed efficiency were equally important contributors to firm’s sales growth and market value. The growing importance of the contribution of IC to value creation was consistently reflected in the FP of these Indian companies. Practical implications This study has robust theoretical grounds and employs a validated methodology. The present study extends knowledge of IC among academicians and managers and highlights its contribution to value creation. The findings may help stakeholders and policymakers in developing countries properly reallocate intellectual resources. Originality/value This study is the first study to evaluate IC and its relationship with traditional measures of firm performance among Indian listed firms using dynamic SGMM and VAIC models.

scholarly journals Unobservable characteristics of board directors and the performance of financial services firms in Nigeria

2020 ◽  
Vol 17 (4) ◽  
pp. 378-388
Author(s):  
Henry Osahon Osazevbaru ◽  
Emmanuel Mitaire Tarurhor
Keyword(s):  
Firm Performance ◽  
Financial Services ◽  
Stock Exchange ◽  
Gender Diversity ◽  
Share Price ◽  
Corporate Board ◽  
Return On Assets ◽  
Data Set ◽  
Strategic Performance ◽  
Financial Firms

This paper examines the intricate link between unobservable characteristics of directors on the corporate board and firm performance. It aims to extend the literature on corporate governance and firm strategic performance from the perspective of emerging African economies. A mix of performance measures were used (Tobin Q, return on assets, and share price) and unobservable characteristics were captured as a stochastic element or heterogeneity of observable board characteristics (board activity, gender diversity, size, and independence). The study applied non-linear generalized auto-regressive conditional heteroscedasticity model to examine the data set consisting of 299 firm-year observations from 23 financial firms listed on the Nigerian Stock Exchange from 2006 to 2018. Positive skewness and leptokurtic distribution were found for all the variables. Correlation matrix revealed no multicollinearity, as the highest value was 0.2386. Empirical results suggest that unobservable characteristics significantly and positively influence firm performance as measured by return on assets and share price. This is because the coefficient of the lagged-value of the variance scaling parameter is positive and significant at the 1% level. However, with respect to Tobin Q measure, the result was positive but not significant at the 5% level. Implicitly, the result is sensitive to performance proxies. Accordingly, this study concludes that unobservable characteristics drive firm performance. It is recommended that boards and regulators should pay attention to unobservable characteristics.

scholarly journals Chief executive officer’s gender and firm performance in the JSE SRI firms

2017 ◽  
Vol 13 (1) ◽  
pp. 73-78 ◽  
Author(s):  
Siphiwa L. Baloyi ◽  
Collins C. Ngwakwe
Keyword(s):  
Firm Performance ◽  
Gender Discrimination ◽  
Secondary Data ◽  
Chief Executive ◽  
Share Price ◽  
P Value ◽  
Chi Square ◽  
Net Profit ◽  
The Relationship ◽  
Ceo Gender

This paper evaluated the relationship between chief executive officers’ gender and firm performance. Therefore, the specific objectives of the paper were: 1) to evaluate the relationship between the CEO’s gender and company turnover; 2) to assess the relationship, the CEO’s gender and share price; 3) to examine the relationship between the CEO’s gender and net profit. The paper applied the positivist research method, which is a quantitative approach as it sought to measure the relationship between variables. Secondary Data on CEO gender, turnover, share price and net profit were collected from the archives of integrated report of 16 JSE SRI Companies that had a complete disclosure of the research variables. The paper used the Chi-square statistics (Phi and Cramer’s V tests) to test the relationship between CEO gender, turnover, share price and net profit. Findings from the statistical results showed that the Phi and Cramer’s V test gave a P value greater than 0.05 (P>0.05), which shows that within the sample of companies, there is no significant relationship between CEO’s gender, net profit, share price and turnover. The research concludes and recommends that gender might not necessarily affect performance, at least within the sample of companies, therefore, there should be no gender discrimination on CEO’s position. Women should, therefore, receive support to assume the position of CEO. This finding provides an agenda for further research to use broader sample across industry sectors to examine this relationship further, as gender is an important component of sustainable development goals.

scholarly journals The impact of hedge fund activism on target firm performance, executive compensation and executive wealth

2017 ◽  
Vol 6 (3) ◽  
pp. 14-28 ◽  
Author(s):  
Andrew Carrothers
Keyword(s):  
Firm Performance ◽  
Executive Compensation ◽  
Firm Value ◽  
Hedge Fund ◽  
Share Price ◽  
Target Firm ◽  
Increased Risk ◽  
Target Firms ◽  
Hedge Fund Activism ◽  
The Impact

This paper examines the relationship between hedge fund activism and target firm performance, executive compensation, and executive wealth. It introduces a theoretical framework that describes the activism process as a sequence of discrete decisions. The methodology uses regression analysis on a matched sample based on firm size, industry, and market-to-book ratio. All regressions control for industry and year fixed effects. Schedule 13D Securities and Exchange Commission (SEC) filings are the source for the statistical sample of hedge fund target firms. I supplement that data with target firm financial, operating, and share price information from the CRSP-COMPUSTAT merged database. Activist hedge funds target undervalued or underperforming firms with high profitability and cash flows. They do not avoid firms with powerful CEOs. Leverage, executive compensation, pay for performance and CEO turnover increase at target firms after the arrival of the activist hedge fund. Target firm executives’ wealth is more sensitive to changes in share price after hedge fund activism events suggesting that the executive team experiences changes to their compensation structure that provides incentive to take action to improve returns to shareholders. The top executives reap rewards for increasing firm value but not for increased risk taking.

Share Price Levels and Beta

1979 ◽  
Vol 8 (1) ◽  
pp. 60 ◽  
Author(s):  
Sasson Bar-Yosef ◽  
Lawrence D. Brown
Keyword(s):  
Share Price ◽  
Price Levels

scholarly journals Managerial Learning from Analyst Feedback to Voluntary Capex Guidance, Investment Efficiency, and Firm Performance

2021 ◽  
Author(s):  
Jihun Bae ◽  
Gary C. Biddle ◽  
Chul W. Park
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Share Price ◽  
Investment Efficiency ◽  
Firm Financial Performance ◽  
Price Effects ◽  
Predicted Values

We test predictions that managers issuing voluntary capex guidance learn from analyst feedback and that this learning enhances investment efficiency and firm performance. Our findings are consistent with these predictions. First, we find that managers’ capex adjustments and capex guidance revisions relate positively with analyst feedback measured by differences between postguidance analyst capex forecasts and managerial capex guidance. Second, changes in investment efficiency relate positively with analyst feedback. Third, subsequent firm financial performance relates positively with the predicted values of both managers’ capex adjustments and capex guidance revisions. These findings extend prior evidence regarding sources of managerial learning and investment efficiency and help to explain the active issuance of voluntary guidance by managers in settings where, as for capex guidance, the potential for managerial learning from related share price effects is limited, as we also explain. This paper was accepted by Brian Bushee, accounting.

scholarly journals Choosing the Precision of Performance Metrics

2018 ◽  
Vol 53 (4) ◽  
pp. 1911-1935
Author(s):  
Alan D. Crane ◽  
Andrew Koch ◽  
Chishen Wei
Keyword(s):  
Firm Performance ◽  
Stock Prices ◽  
Stock Price ◽  
Performance Metrics ◽  
Cash Flows ◽  
Large Role ◽  
Trade Off ◽  
Compensation Contracts ◽  
Price Levels ◽  
Over Time

There is a standard trade-off in compensation contracts between the provision of incentives and insurance. We hypothesize that this trade-off influences the precision with which firm performance is measured. We find that firm outcomes are measured less precisely when chance plays a large role in these outcomes. Further, this precision is determined through the choice of shares outstanding. This has several novel implications. Nominal stock prices can remain constant over time, and firms with unpredictable cash flows should have more shares and lower stock price levels, all else equal. We find evidence consistent with these implications.

Ownership Structure, Share Price Levels, and the Value of the Firm

2007 ◽  
Author(s):  
Chitru S. Fernando ◽  
Vladimir A. Gatchev ◽  
Paul A. Spindt
Keyword(s):  
Ownership Structure ◽  
Share Price ◽  
Price Levels

Are share price levels informative? Evidence from the ownership, pricing, turnover and performance of IPO firms

2004 ◽  
Vol 7 (4) ◽  
pp. 377-403 ◽  
Author(s):  
Chitru S. Fernando ◽  
Srinivasan Krishnamurthy ◽  
Paul A. Spindt
Keyword(s):  
Share Price ◽  
Price Levels ◽  
And Performance
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