scholarly journals The Global Impact of Brexit Uncertainty

2019 ◽  
pp. 1-60 ◽  
Author(s):  
Tarek A. Hassan ◽  
Laurence van Lent ◽  
Stephan Hollander ◽  
Ahmed Tahoun
Keyword(s):  
Computational Linguistics ◽  
Intention To Leave ◽  
The United States ◽  
Conference Calls ◽  
Firm Level ◽  
International Firms ◽  
Listed Firms ◽  
Quarterly Earnings ◽  
First Moment ◽  
The Impact

Using tools from computational linguistics, we construct new measures of the impact of Brexit on listed firms in the United States and around the world: the share of discussions in quarterly earnings conference calls on costs, benefits, and risks associated with the UK’s intention to leave the EU. Using this approach, we identify which firms expect to gain or lose from Brexit and which are most affected by Brexit uncertainty. We then estimate the effects of these different kinds of Brexit exposure on firm-level outcomes. We find that concerns about Brexit-related uncertainty extend far beyond British or even European firms. US and international firms most exposed to Brexit uncertainty have lost a substantial fraction of their market value and have reduced hiring and investment. In addition to Brexit uncertainty (the second moment), we find that international firms overwhelmingly expect negative direct effects of Brexit (the first moment), should it come to pass. Most prominently, firms expect difficulties resulting from regulatory divergence, reduced labor mobility, trade access, and the costs of adjusting their operations post-Brexit. Consistent with the predictions of canonical theory, this negative sentiment is recognized and priced in stock markets but has not yet had significant effects on firm actions.

scholarly journals Firm-Level Political Risk: Measurement and Effects*

2019 ◽  
Vol 134 (4) ◽  
pp. 2135-2202 ◽  
Author(s):  
Tarek A Hassan ◽  
Stephan Hollander ◽  
Laurence van Lent ◽  
Ahmed Tahoun
Keyword(s):  
Computational Linguistics ◽  
Fixed Effects ◽  
Political Risk ◽  
Stock Market Volatility ◽  
Conference Calls ◽  
Firm Level ◽  
Quarterly Earnings ◽  
Political Risks ◽  
The Mean ◽  
Over Time

AbstractWe adapt simple tools from computational linguistics to construct a new measure of political risk faced by individual U.S. firms: the share of their quarterly earnings conference calls that they devote to political risks. We validate our measure by showing that it correctly identifies calls containing extensive conversations on risks that are political in nature, that it varies intuitively over time and across sectors, and that it correlates with the firm’s actions and stock market volatility in a manner that is highly indicative of political risk. Firms exposed to political risk retrench hiring and investment and actively lobby and donate to politicians. These results continue to hold after controlling for news about the mean (as opposed to the variance) of political shocks. Interestingly, the vast majority of the variation in our measure is at the firm level rather than at the aggregate or sector level, in the sense that it is captured neither by the interaction of sector and time fixed effects nor by heterogeneous exposure of individual firms to aggregate political risk. The dispersion of this firm-level political risk increases significantly at times with high aggregate political risk. Decomposing our measure of political risk by topic, we find that firms that devote more time to discussing risks associated with a given political topic tend to increase lobbying on that topic, but not on other topics, in the following quarter.

ENERGY IN A MODEL OF FIRM ENTRY

2018 ◽  
Vol 24 (2) ◽  
pp. 231-254
Author(s):  
Soma Patra
Keyword(s):  
Negative Impact ◽  
The United States ◽  
Energy Price ◽  
Firm Entry ◽  
Energy Prices ◽  
Dsge Model ◽  
Price Shocks ◽  
Firm Level ◽  
Dynamic Stochastic ◽  
The Impact

Nine out of the last ten recessions in the United States have been preceded by an increase in the price of oil as noted by Hamilton [Palgrave Dictionary of Economics]. Given the small share of energy in gross domestic product this phenomenon is difficult to explain using standard models. In this paper, I show that firm entry can be an important transmission and amplifying channel for energy price shocks. The results from the baseline dynamic stochastic general equilibrium (DSGE) model predict a drop in output that is two times the impact in a model without entry. The model also predicts an increase in energy prices would lead to a decline in real wages, investment, consumption, and return on investment. Additionally, using US firm level data, I demonstrate that a rise in energy prices has a negative impact on firm entry as predicted by the DSGE model. This lends further support toward endogenizing firm entry when analyzing the effects of energy price shocks.

scholarly journals Peer Relationships, Learning Forums, And Work Outcomes: An Empirical Analysis

2011 ◽  
Vol 2 (1) ◽  
Author(s):  
Gary Kleinman ◽  
Philip Siegel ◽  
Claire Eckstein
Keyword(s):  
Organizational Learning ◽  
Peer Relationships ◽  
Skill Development ◽  
Hierarchical Structures ◽  
Intention To Leave ◽  
The United States ◽  
Personal Learning ◽  
Cpa Firms ◽  
Developmental Relationship ◽  
The Impact

The pace of organizational and environmental change seems to demand that such professional organizations as CPA firms become learning organizations in order to compete with other firms. The flattening or thinning out of traditional hierarchical structures within organizations argues that traditional mentoring and supervisory structures may be inadequate for fostering needed individual learning about (a) organizational goals and politics, and (b) personal learning about job context and skill development, thus the ability of individuals within CPA firms to master new skills may be impaired. One effect of the lack of such learning may be increased role stress, job burnout, loss of commitment to the organization, intention to leave, and diminished job satisfaction. Using a sample of 440 accounting professionals from major CPA firms in the southeastern, southwestern, and northeastern regions of the United States, this research studies the ability of peer developmental relationship functions foster the requisite personal and organizational learning, and also to directly and indirectly influence attitudinal outcomes. We further examine whether the impact of developmental peer relationships on attitudinal outcomes is mediated by personal and organizational learning.A hierarchical regression-based test was used to evaluate our hypotheses. The results partially supported our expectations that such peer developmental relationship functions were significantly related to attitudinal outcomes, to elements of organizational learning, and to the skill development aspect of personal learning. Elements of organizational socialization, personal learning, and team-source learning were significantly related to attitudinal outcomes as well.

scholarly journals Does Herding Bias Drive the Firm Value? Evidence from the Chinese Equity Market

2019 ◽  
Vol 11 (20) ◽  
pp. 5583 ◽  
Author(s):  
Shah ◽  
Khan ◽  
Meyer ◽  
Meyer ◽  
Oláh
Keyword(s):  
Behavioral Finance ◽  
Firm Value ◽  
Equity Markets ◽  
Policy Implications ◽  
Stock Exchanges ◽  
Firm Level ◽  
Listed Firms ◽  
Trading Period ◽  
Behavioral Impact ◽  
The Impact

Equity markets play a pivotal role in the sustainability of developing countries, such as China. The literature on the detection of herding biases is confined to the aggregate level (firms, sector/industry and market). The present study adds to the behavioral finance literature by addressing the surprisingly unnoticed phenomena of the behavioral impact of herding bias on firm value (FV) at the firm level, using the sample of A-Shares listed firms at the Shanghai and Shenzhen Stock Exchanges (SSE and SZSE) under panel fixed effect specification. Initially, we detect the existence of investors and managers herding (IHR and MHR) biases at firm-level, and later, we examine their impact (distinct and interactive) upon the FV. The empirical results document the presence of IHR and MHR bias at market, sector and firm-level in both equity markets, which potentially drive the FV, while the impact is more pronounced during the extreme trading period. The findings are robust under different time intervals, and industry classification, therefore, offers useful policy implications to understand the behavioral dynamics of investors and managers.

Book Reviews

2011 ◽  
Vol 49 (3) ◽  
pp. 760-762
Keyword(s):  
Labor Market ◽  
Industrial Relations ◽  
The United States ◽  
Associate Professor ◽  
Wage Distribution ◽  
Labor Turnover ◽  
London School ◽  
Firm Level ◽  
The Impact ◽  
Employee Data

Timothy Dunne of Federal Reserve Bank of Cleveland reviews “Wage Structures, Employment Adjustments and Globalization: Evidence from Linked and Firm-Level Panel Data” edited by David Marsden and Francois Rycx. The EconLit Abstract of the reviewed work begins “Eleven papers examine the use of data sets that link the supply and the demand sides of labor markets, providing linked employer-employee data. Papers discuss labor turnover and wage mobility--the impact of the legal setting and institutions (Lorenzo Cappellari); job and worker flows at the firm level (Harald Dale-Olsen); summary of the literature on job displacements in the United States and European Union--what we know and what we would like to know (Till von Wachter); skill mismatch in Europe (Rene Boheim, Iga Magda, and Martina Zweimuller); variability of wages across sectors--how much, why, and the consequences (Francois Rycx); rent sharing--a survey of methodologies and results (Pedro S. Martins); union effects on wages (Alex Bryson); low-wage employment and the role of the firm--an agenda for data and research (Wiemer Salverda); firms compressing the wage distribution (Ana Rute Cardoso); labor market outcomes of internationalization--what we have learned from analyses of microdata on firms and their employees (Tor Eriksson); and development of linked employer-employee data for EU labor market and social policy analysis (Tanvi Desai). Marsden is Professor of Industrial Relations at the London School of Economics and Research Associate at the Centre for Economic Performance. Rycx is Associate Professor of Economics at the Universite Libre de Bruxelles and Research Fellow at the Centre Emile Bernheim, DULBEA, and the Institute for the Study of Labor, Bonn. Index.”

scholarly journals Sanctions, cooperation, and innovation: Insights into Russian economy and implications for Russian firms

2021 ◽  
Vol 2 (3) ◽  
pp. 4-26
Author(s):  
Andrey Panibratov
Keyword(s):  
Innovation Activity ◽  
Local Market ◽  
Negative Consequences ◽  
Russian Government ◽  
Firm Level ◽  
New Markets ◽  
International Firms ◽  
The Government ◽  
Political Value ◽  
The Impact

The aim of this paper is to reveal the effects of sanctions at the firm level, with the special attention to cooperation and innovation activity of sanctioned firms. Specifically, the differences between domestic and international companies in their ability to adapt to the sanctions in terms of their cooperation with partners and capability to innovate are discussed. The study argues that firms operating in international markets tend to prioritize product innovation and entering new markets to overcome negative consequences of sanctions. In addition, they are more likely to improve their products and to find new markets to compensate for losses and fill their unused capacities. An important finding having both managerial and political value is that operating in the international market may not necessarily provide an advantage in terms of new partners in the local market but rather facilitate the search for new foreign markets. Inviting the government to provide assistance for Russian domestic and international firms on an equal basis, we admit that with varying degrees of control and interest in national firms, the Russian government can help sanctioned companies in different ways, regardless the scale of their internationalization. The study contributes to the literature on the impact of economic sanctions at the firm-level and in the context of the domestic market of the sanctioned country.

scholarly journals Corporate dividend decisions and dividend smoothing

2017 ◽  
Vol 13 (3) ◽  
pp. 304-331 ◽  
Author(s):  
Basil Al-Najjar ◽  
Erhan Kilincarslan
Keyword(s):  
Stock Exchange ◽  
Institutional Setting ◽  
Cash Dividend ◽  
Firm Level ◽  
Data Set ◽  
Content Type ◽  
Listed Firms ◽  
Dividend Smoothing ◽  
Financial Characteristics ◽  
The Impact

Purpose The purpose of this paper is to investigate the impact of regulations, reforms and legal environment on dividend policy in a different institutional setting. Particularly, it examines the firm-level cash dividend behaviour of publicly listed firms in Turkey in the post-2003 period, since there were major economic and structural reforms as well as significant regulatory changes of dividend payout rules imposed by the supervisory bodies. Design/methodology/approach The paper focuses on a recent large panel data set of 264 Istanbul Stock Exchange (ISE)-listed firms over a ten-year period 2003-2012. First, it employs a modified specification of Lintner’s (1956) partial adjustment model for analysis regarding target payout ratio and dividend smoothing. Second, it performs a logit model for analysis in identifying the link between financial characteristics and the likelihood of paying dividends. Findings The results show that ISE firms now follow the same determinants as suggested by Lintner. They, indeed, have long-term payout ratios and adjust their cash dividends by a moderate level of smoothing, and therefore adopt stable dividend policies (although less stable policies compared to their counterparts in the developed US market) as a signalling mechanism over the period 2003-2012. Moreover, the results also report that ownership structure concentration affects the target payout ratio and dividend smoothing in the Turkish market. In addition, the results further show that more profitable, more mature and larger sized ISE firms are more likely to pay cash dividends, whereas ISE firms with higher investment opportunities and more debt are less likely to distribute cash dividends in the post-2003 period. Originality/value To the best of authors’ knowledge, this paper is the first major research that examines the implications of reforms and regulations on cash dividend payments and dividend smoothing over time in Turkey during its market integration process in the post-2003 period.

scholarly journals Impact of Environmental Disaster Movies on Corporate Environmental and Financial Performance

2021 ◽  
Vol 13 (2) ◽  
pp. 559
Author(s):  
Hyun-Do Kim ◽  
Kwangwoo Park
Keyword(s):  
United States ◽  
Mass Media ◽  
Financial Performance ◽  
Environmental Performance ◽  
The United States ◽  
Environmental Disaster ◽  
Data Set ◽  
Listed Firms ◽  
And Gender ◽  
The Impact

Using a unique United States box office data set, we investigate the impact of environmental sentiment on corporate environmental and financial performance of the United States listed firms. The influence of mass media on public and investor sentiments is well documented in the existing literature. However, little is known about the effect of movies, although they may influence the public more than other mass media because people, regardless of age and gender, enjoy watching movies. Using the event study methodology and multivariable regression analysis, we show that the release of anthropogenic environmental disaster movie(s) creates environmental sentiment and influences corporate behaviors. Specifically, firms significantly increase their environmental performance in the subsequent year of strong environmental sentiment after the release of environmental movies. More importantly, the positive effect of corporate environmental performance on financial performance is stronger when the environmental sentiment is stronger.

scholarly journals Country Risk

2021 ◽  
Author(s):  
Tarek A. Hassan ◽  
Jesse Schreger ◽  
Markus Schwedeler ◽  
Ahmed Tahoun
Keyword(s):  
Interest Rates ◽  
Direct Evidence ◽  
Country Risk ◽  
Global Risk ◽  
Firm Level ◽  
Listed Firms ◽  
Quarterly Earnings ◽  
Global Investors ◽  
Definition Of ◽  
Market Valuations

We construct new measures of country risk and sentiment as perceived by global investors and executives using textual analysis of the quarterly earnings calls of publicly listed firms around the world. Our quarterly measures cover 45 countries from 2002-2020. We use our measures to provide a novel characterization of country risk and to provide a harmonized definition of crises. We demonstrate that elevated perceptions of a country's riskiness are associated with significant falls in local asset prices and capital outflows, even after global financial conditions are controlled for. Increases in country risk are associated with reductions in firm-level investment and employment. We also show direct evidence of a novel type of contagion, where foreign risk is transmitted across borders through firm-level exposures. Exposed firms suffer falling market valuations and significantly retrench their hiring and investment in response to crises abroad. Finally, we provide direct evidence that heterogeneous currency loadings on global risk help explain the cross-country pattern of interest rates and currency risk premia.

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