scholarly journals The impact of domestic portfolio diversification strategies in Toronto stock exchange on Canadian textile manufacturing industry

2020 ◽  
Vol 71 (03) ◽  
pp. 215-222
Author(s):  
ABDULLAH EJAZ ◽  
RAMONA BIRAU ◽  
CRISTI SPULBAR ◽  
RAMONA BUDA ◽  
ANDREI COSMIN TENEA
Keyword(s):  
Textile Industry ◽  
Manufacturing Industry ◽  
Global Financial Crisis ◽  
Stock Exchange ◽  
Correlation Coefficients ◽  
Portfolio Diversification ◽  
Toronto Stock Exchange ◽  
Textile Manufacturing ◽  
Diversification Strategies ◽  
The Impact

The aim of this research study is to examine the impact of domestic portfolio diversification strategies in Toronto Stock Exchange (TSX) on Canadian textile manufacturing industry in order to obtain attractive investment opportunities. Dissipation of benefits of globally diversified portfolios due to overwhelming convergence among the international and regional stock markets around the globe have given rebirth to the idea of domestic portfolio diversification particularly after the global financial crisis of 2008. Textile industry in Canada is challenging but can achieve higher performance based on Toronto Stock Exchange behavior. Therefore, this is a complex applied research focused on investigating TSX as standalone stock market for domestic diversification opportunities. For this purpose, correlation coefficients, pairwise cointegration, multiple cointegration and causality of sectors in TSX have been examined. The empirical results show that majority of the sectors in TSX do not share high correlation with each other and they are also not highly cointegrated. These empirical findings indicate that TSX presents attractive opportunities for domestic portfolio diversification.

scholarly journals The Effect of Sustainable Asymmetric Market Conditions on Returns & Volatility in Stock Markets during a Global Financial Crisis

2021 ◽  
pp. 42-56
Author(s):  
Majid Imdad Khan ◽  
Aftab Ahmad ◽  
Rana Shahid Imdad Akash ◽  
Asif Mahmood ◽  
Ayyaz Ahmad ◽  
...  
Keyword(s):  
Financial Crisis ◽  
Stock Returns ◽  
Stock Markets ◽  
Global Financial Crisis ◽  
Stock Exchange ◽  
Investment Decisions ◽  
Portfolio Diversification ◽  
Market Conditions ◽  
The Global Financial Crisis ◽  
The Impact

Sustainable asymmetric market conditions’ development and volatility in stock returns play a vital role in investment decisions during a global financial crisis. Rational investment decisions and portfolio diversification can have the optimum returns. However, portfolio diversification through Islamic stock returns is perceived as a model of safer flight than that of conventional stocks. In the present study, the GARCH (1,1) - (Mean and Variance equations) has been employed to predict the impact of asymmetric market conditions on returns and volatility of Islamic stock markets (Dow Jones Islamic Market Malaysia (DJIM), Dow Jones Islamic Market Indonesia (JKII) and Dow Jones World Islamic Index (DJWI) Benchmark), and Conventional stock markets (Shanghai Stock Exchange (SSE-China), Bombay Stock Exchange (BSE-India) and Pakistan Stock Exchange (PSE-Pakistan), during the global financial crisis. The analysis reveals that the bullish effect was higher in all stock markets. Overall results suggested that Islamic stock markets have a sustainable impact of asymmetric market conditions on returns and volatility of Islamic stock markets & conventional stock markets during the global financial crisis. The asymmetric market conditions in stock markets are strongly recommended for economic globalisation during a global financial crisis.

Managers ability and investment dynamics during the global financial crisis: an emerging market context

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rehana Naheed ◽  
Bushra Sarwar ◽  
Rukhsana Naheed
Keyword(s):  
Global Financial Crisis ◽  
Stock Exchange ◽  
Emerging Market ◽  
Investment Policy ◽  
Managerial Ability ◽  
Content Type ◽  
Crisis Period ◽  
Managerial Talent ◽  
The Impact

Purpose Many scholars have developed several theories and empirics to study issues related to investment policy. However, there are still some unexplored issues in the field of finance that require further analysis and investigation, particularly in the corporate governance literature such as the role of managerial talent in the firms. This study investigated the impact of managerial ability on investment decisions of the firms. Design/methodology/approach The study first uses firm efficiency and managerial ability by using data envelope analysis (DEA) proposed by Demerjian, Lev and McVay, 2012. Data is collected for the firms listed in Shenzhen and Shanghai stock exchange for an emerging market of China during the crisis period with 1,640 number of observations. Findings The study reveals that the presence of more managerial talent in a firm is significant for the strategic decisions of the firms. Findings follow a resource-based view and identify that more talented managers help the firms in the acquisition of resources specifically during financial distress. The study subdivides the firms based on: ownership structures and financial constraints. Results generated from propensity score matching imply that the role of high-talented managers is significantly different from that of low-talented managers. Originality/value The study reveals managerial ability as a determinant of investment policy. To the researchers’ best knowledge, none of the previous studies have been conducted in emerging market literature during the crisis period.

scholarly journals The impact of operating leverage on the capital structure of Johannesburg Stock Exchange-listed firms before and after the 2008 global financial crisis

2018 ◽  
Vol 11 (1) ◽  
Author(s):  
Matabane T. Mohohlo ◽  
Johan H. Hall
Keyword(s):  
Financial Crisis ◽  
Capital Structure ◽  
South African ◽  
Global Financial Crisis ◽  
Stock Exchange ◽  
Johannesburg Stock Exchange ◽  
The Global Financial Crisis ◽  
Operating Leverage ◽  
The Impact ◽  
The Capital Structure

The financial leverage-operating leverage trade-off hypothesis states that as financial leverage increases, management of firms will seek to reduce the exposure to operating leverage in an attempt to balance the overall risk profile of a firm. It is the objective of this study to test this hypothesis and ascertain whether operating leverage can indeed be added to the list of factors that determine the capital structure of South African firms. Forty-six firms listed on the Johannesburg Stock Exchange between 1994 and 2015 are analysed and the impact of operating leverage is determined. The results are split into two periods, that is, the period before the global financial crisis (1994–2007) and after the global financial crisis (2008–2015). The impact of operating leverage during these two periods is then compared to determine whether a change in the impact of operating leverage on the capital structure can be observed especially following the crisis. The results show that the conservative nature of South African firms leading up to 2008 persisted even after the global financial crisis. At an industry level, the results reveal that operating leverage does not have a noticeable impact on capital structure with the exception of firms in the industrials sector of the South African economy.

scholarly journals The Impact of the Application of International Standard for Financial Reporting No (9) on the Faithful Representation of Financial Accounting Information in Jordanian Commercial Banks

2019 ◽  
Vol 14 (3) ◽  
pp. 88
Author(s):  
Amer Sulaiman Alkhresat ◽  
Tareq Hammad Almubaydeen
Keyword(s):  
Financial Reporting ◽  
Commercial Banks ◽  
Stock Exchange ◽  
Accounting Information ◽  
Correlation Coefficients ◽  
Study Data ◽  
Financial Accounting ◽  
Faithful Representation ◽  
Ifrs 9 ◽  
The Impact

The purpose of this study is to demonstrate the impact of the application of IFRS 9 on the faithful representation of financial accounting information in Jordanian commercial banks. To achieve this objective, the study used the descriptive analytical approach to analyze a questionnaire that was answered by the managers of 13 commercial banks, which are listed in Amman stock exchange. The researchers distributed 78 questionnaires, while 76 were retrieved with a percentage of 97%. Additionally, the study relied on the descriptive statistics, correlation coefficients, and the simple regression to analyze the study data, and hypotheses. As a result, the study found a significant impact for the application of IFRS 9 to the faithful representation of financial accounting information. Relied on the aforementioned consequence, the study recommended that there is a necessity for financial departments to focus on measuring their financial obligations, as well as focusing on the development of accounting policies during the application of the standard. In addition, the study concludes that it is important for these banks to have an adequate knowledge of accounting standards in general, while standard No “9” specifically.

An Analysis of Growth and Association between Labour Productivity and Wages in Indian Textile Industry

2018 ◽  
Vol 43 (1-2) ◽  
pp. 78-87 ◽  
Author(s):  
Vanita Ahlawat ◽  
Renu
Keyword(s):  
Real Wage ◽  
Wage Rate ◽  
Textile Industry ◽  
Labour Productivity ◽  
Value Added ◽  
Gender Disparity ◽  
Wage Determination ◽  
Textile Manufacturing ◽  
Wage Rates ◽  
The Impact

India is one of the largest textile producers in the world. Textile industry is huge employment-providing industry after agriculture in India. The present article is an attempt to analyse first, the growth and composition of employees engaged in textile industry in India. Second, to find the growth and relation between employments, man-days employed, wages and net value added (NVA) by textile industry in India. And lastly, the impact of labour productivity in wage determination is also analysed. The results suggested that there is huge gender disparity in employment, that is, women are very few in comparison to men workers. Overall employment in textile has an increasing trend among both categories of textile industry. Further, spinning, weaving and finishing of textile manufacturing is growing faster than manufacturing of other textiles. Employment in textile industry has a positive and significant correlation with real wage rates in both categories of industries. This indicates that increase in real wage rate causes enhancement in employment in textile manufacturing. And further results suggest that labour productivity is a significant determinant of wage rate of textile employees.

scholarly journals The Basel accords, capital reserves, and agricultural lending

2019 ◽  
Vol 79 (1) ◽  
pp. 27-47 ◽  
Author(s):  
Gary W. Brester ◽  
Myles J. Watts
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
Capital Requirements ◽  
Unintended Consequences ◽  
Portfolio Diversification ◽  
Content Type ◽  
Return On Equity ◽  
Reserve Requirements ◽  
The Impact ◽  
Capital Reserves

Purpose The safety and soundness of financial institutions has become a leading worldwide issue because of the recent global financial crisis. Historically, financial crises have occurred approximately every 20 years. The worst financial crisis in the last 75 years occurred in 2008–2009. US regulatory efforts with respect to capital reserve requirements are likely to have several unintended consequences for the agricultural lending sector—especially for smaller, less-diversified (and often, rural agricultural) lenders. The paper discusses these issues. Design/methodology/approach Simulation models and value-at-risk (VaR) criteria are used to evaluate the impact of capital reserve requirements on lending return on equity. In addition, simulations are used to calculate the effects of loan numbers and portfolio diversification on capital reserve requirements. Findings This paper illustrates that increasing capital reserve requirements reduces lending return on equity. Furthermore, increases in the number of loans and portfolio diversification reduce capital reserve requirements. Research limitations/implications The simulation methods are a simplification of complex lending practices and VaR calculations. Lenders use these and other procedures for managing capital reserves than those modeled in this paper. Practical implications Smaller lending institutions will be pressured to increase loan sector diversification. In addition, traditional agricultural lenders will likely be under increased pressure to diversify portfolios. Because agricultural loan losses have relatively low correlations with other sectors, traditional agricultural lenders can expect increased competition for agricultural loans from non-traditional agricultural lenders. Originality/value This paper is novel in that the authors illustrate how lender capital requirements change in response to loan payment correlations both within and across lending sectors.

Factors influencing liquidity position of Indian manufacturing companies

2020 ◽  
Vol 10 (2) ◽  
pp. 243-260
Author(s):  
Amit Tripathy ◽  
Shigufta Hena Uzma
Keyword(s):  
Manufacturing Industry ◽  
Stock Exchange ◽  
Cash Holdings ◽  
Emerging Economy ◽  
Market Mechanism ◽  
Manufacturing Companies ◽  
Content Type ◽  
Factors Influencing ◽  
Indian Context ◽  
The Impact

PurposeThe purpose of this paper is to investigate the increasing demand for corporate liquidity and examines the various factors influencing the cash position of firms in India. The financial policy to hold cash gained impetus after the financial crisis when the companies faced a severe cash crunch. However, the firms operating in emerging nations have an imperfect market mechanism with stringent regulatory norms. Thus, this paper attempts to examine the determinants of corporate cash holdings in an emerging country like India.Design/methodology/approachThe paper focuses on the impact of various factors (leverage, firm size, profitability, growth along with other variables), on the cash structure of all the manufacturing companies listed on the Bombay stock exchange. The study employs panel data methodologies over a sample of 323 firms over a period of eight years from 2010 to 2017.FindingsSignificant estimators affecting cash holdings of a firm are the size of a firm, debt levels, tangibility, sales growth and research and development expense. Overall, the study finds evidence on the existence of Pecking Order theory in explaining the determinants of cash holdings in the Indian market.Research limitations/implicationsThe study attempts to explore the critical determinants of cash in the Indian context which can be useful for managers and academicians to understand how the key theories of cash holdings operate in an emerging economy like India.Originality/valueIndia is an emerging economy and has recently gained global attention and has become a hotspot for foreign investments. Thus, this paper explores pieces of evidence on the critical factors affecting cash holdings in India. The study would provide an understanding of the existing cash policy in the Indian context and attempts to find the changes in the financing structure adopted by the manufacturing industry in the given period.

Strategic Impacts of Advanced Manufacturing Technology on American Textile Industry

2018 ◽  
Vol 9 (2) ◽  
pp. 54-69 ◽  
Author(s):  
Gregory W. Ulferts ◽  
Terry L. Howard ◽  
Nicholas J. Cannon
Keyword(s):  
Textile Industry ◽  
Manufacturing Industry ◽  
The United States ◽  
Global Market ◽  
Manufacturing Technology ◽  
Advanced Technology ◽  
High Rate ◽  
Labor Costs ◽  
Textile Manufacturing ◽  
The U.S

This article describes how U.S. manufacturing was stricken when companies embraced outsourcing beginning in the 1990s as a strategy for taking advantage of lower labor costs in developing countries. The U.S. textile and apparel industries lost 76.5% of its workforce, or 1.2 million jobs, between 1990 and 2012. The catalyst which has renewed the interest in manufacturing textiles and apparel in the United States is the narrowing gap between the U.S. and Asian labor costs. The sector changed in response to technology and the global market, and both the number and type of employees demanded turned as well. The advanced technology currently drives the domestic textile industry. Despite a positive outlook on growth, it is unlikely that textile manufacturing will create the large number of jobs that it did in the past. Furthermore, it is only viable because of the technological improvements to its factories. The current production is designed to employ fewer workers in order be more productive and less dependent on labor costs. Nevertheless, the high demand for specialized and unique textiles in the U.S. and Europe will likely continue to drive improved manufacturing technology and performance. China's transition from a manufacturing economy to a service economy will increase its manufacturing operational costs, while probably growing demand for the sorts of specialized textiles on which American textile manufacturers tend to focus. If such manufacturers can increase their market shares in China and other Asian countries, while maintaining such markets in the U.S. and Europe, the American textile manufacturing industry will likely grow at a moderately high rate.

scholarly journals The Impact of Audit Committee Characteristics on Earnings Management: A Canadian Case Study

2015 ◽  
Vol 2 (1) ◽  
pp. 68
Author(s):  
Lynda Ioualalen ◽  
Hanen Khemakhem ◽  
Richard Fontaine
Keyword(s):  
Earnings Management ◽  
Audit Committee ◽  
Management Practices ◽  
Stock Exchange ◽  
Empirical Test ◽  
Control Group ◽  
Toronto Stock Exchange ◽  
Financial Expertise ◽  
The Impact

The objective of this study was to analyze the impact of three Audit Committee (AC) characteristics, financial expertise, diversity and activism on aggressive earnings management. We hypothesized that these AC characteristics are negatively related to aggressive earnings management. To test or hypothesis, we conducted an empirical test with a sample of 10 Canadian corporations listed on the Toronto stock exchange: 5 companies that were accused of aggressive earnings management and 5 other corporations used as a control group. We analyzed the 5-year period prior to the accusation (1999-2003). We measured earnings management by the level of discretionary accruals (using the modified Jones model (1995). Our results show that activism and the financial expertise of AC members are negatively related to aggressive earnings management; however, we did not find a significant relationship between diversity and aggressive earnings management. These results contribute to help governance oversight organizations identify AC characteristics that have the most influence on the detection of aggressive earnings management, which could help agencies develop and enforce methods to detect and reduce aggressive earnings management practices.

The effects of status on the performance of portfolio diversification strategies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hye-Kyung Yu ◽  
Tohyun Kim
Keyword(s):  
Fixed Effects ◽  
Portfolio Diversification ◽  
High Status ◽  
Investment Strategies ◽  
Success Rates ◽  
Diversification Strategy ◽  
Content Type ◽  
Diversification Strategies ◽  
Venture Capital Firms ◽  
The Impact

PurposeThis paper investigates how a firm's status moderates the performance of its investment portfolio diversification strategy. We combine the investment diversification literature with the organizational status theory, arguing that status would weaken the benefits of a specialist strategy in their niche industry of investments while strengthening the positive consequences of a generalist strategy across various industries.Design/methodology/approachWe collected our data using the Securities Data Company (SDC) Platinum VentureXpert database. A fixed-effects spline regression analysis for 2,201 US venture capital firms between 1969 and 2016 was used to test for a nonlinear relationship between the level of portfolio diversification and firm performance.FindingsWe found that status differences exist in the performance of a specialist strategy but not in that of a generalist strategy. Our results indicate that portfolio specialization in fewer number of industries has little impact on low-status firms, whereas high-status firms suffer significantly lower IPO success rates. In contrast, above-median portfolio diversification was found to be beneficial to both high- and low-status firms.Originality/valueWe specifically identify the impact of status on the performance of investment diversification strategies, an area of research which has received little attention. Further, our findings provide some practical implications for managers making investment decisions between specialist and generalist investment strategies, given their status within the market. Implications for understanding the roles of firm status in portfolio diversification strategies are discussed.

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