scholarly journals The impact of internationalisation on stock liquidity and volatility: Evidence from the Johannesburg Stock Exchange

2018 ◽  
Vol 11 (1) ◽  
Author(s):  
Kudakwashe J. Chipunza ◽  
Kerry McCullough
Keyword(s):  
Risk Premium ◽  
Firm Value ◽  
Trading Volume ◽  
Cost Of Capital ◽  
Stock Exchange ◽  
Volatility Risk ◽  
Stock Liquidity ◽  
Risk Premiums ◽  
Significant Difference ◽  
The Impact

Maximising firm value remains a key tenet of corporate managers. Firms with lower illiquidity and volatility attract lower risk premiums, and these are associated with a lower cost of capital and higher firm value. Internationalisation is one avenue purported to provide liquidity and volatility benefits – possibly lowering both liquidity and volatility risk premiums. This study investigated whether South African domiciled stocks experience a surge in liquidity and/or decline in volatility subsequent to internationalisation. The findings show that internationalisation resulted in a surge in liquidity, and this increase was persistent as suggested by the trading volume and Amihud illiquidity measures of stock liquidity; however, the turnover measure indicated that such liquidity gains were temporary. Similarly, volatility declines after internationalisation were temporary. There was inconclusive evidence to show that internationalised stocks had higher liquidity relative to purely domestic shares, and no statistically significant difference between the volatility of internationalised and purely domestic shareholders’ equity was noted. There is only weak evidence to support internationalisation as a route for lowering cost of capital via a reduction in the liquidity risk premium.

scholarly journals Information and Heterogeneous Beliefs: Cost of Capital, Trading Volume, and Investor Welfare

2013 ◽  
Vol 89 (1) ◽  
pp. 209-242 ◽  
Author(s):  
Peter O. Christensen ◽  
Zhenjiang Qin
Keyword(s):  
Information System ◽  
Risk Premium ◽  
Trading Volume ◽  
Cost Of Capital ◽  
Public Information ◽  
Exchange Economy ◽  
Substantial Impact ◽  
Certainty Equivalents ◽  
Ex Ante ◽  
The Impact

ABSTRACTIn an incomplete market with heterogeneous prior beliefs, we show that public information can have a substantial impact on the ex ante cost of capital, trading volume, and investor welfare. The Pareto efficient public information system is the system enjoying the maximum ex ante cost of capital and the maximum expected abnormal trading volume. Imperfect public information increases the gains-to-trade based on heterogeneously updated posterior beliefs. In an exchange economy, this leads to higher growth in the investors' certainty equivalents and, thus, a higher equilibrium interest rate, whereas the ex ante risk premium is unaffected by the informativeness of the public information system. Similar results are obtained in a production economy, but the impact on the ex ante cost of capital is dampened compared to the exchange economy due to welfare-improving reductions in real investments to smooth the investors' certainty equivalents over time.

scholarly journals THE IMPACT OF CORPORATE GOVERNANCE ON COST OF CAPITAL: THE CASE OF SMALL, MEDIUM, AND LARGE CAP FIRMS

2016 ◽  
Vol 12 (1) ◽  
Author(s):  
Sajid Gul
Keyword(s):  
Corporate Governance ◽  
Risk Premium ◽  
Lower Cost ◽  
Cost Of Capital ◽  
Stock Exchange ◽  
Practical Implication ◽  
Empirical Examination ◽  
Managerial Opportunism ◽  
The Impact ◽  
Practical Implications

Purpose: This study is an empirical examination of the argument that higher Corporate Governance (CG) is associated with decreased cost of capital. Methodolgy: The sample of the study comprise of 200 small, medium, and large corporate firms listed at the Pakistan Stock Exchange. Findings: The results reveal that CG and cost of capital is negatively correlated in large, medium, and small Cap firms. The result confirms the theoretical proposition of the agency theory that investors will be willing to accept a lower risk premium if firms have robust oversight mechanisms to curb managerial opportunism. In case of interaction effect the results show that in medium Cap firm’s investors demand lower cost of capital from high CG-medium ownership group. Nonetheless, pool and large Cap firms in the high CG predominant ownership group category pay higher cost of capital. The result also indicates that large and small Cap firms as compare to medium Cap firms in low CG-medium ownership category pay higher cost of capital. Further, it appears that investors demand higher cost of capital from pool and small Cap firms in low CG-predominant ownership group. Practical Implication: There are significant academic and practical implications which are briefly described in last part of the study.

scholarly journals ANALISIS REAKSI PASAR BURSA EFEK INDONESIA SEBELUM DAN SESUDAH PENGUMUMAN RIGHT ISSUE TERHADAP ABNORMAL RETURN DAN LIKUIDITAS SAHAM (Studi Kasus Pada Perusahaan-Perusahan Yang Terdaftar Di Bursa Efek Indonesia Tahun 2015-2018 Sektor Infrastruktur)

2019 ◽  
Vol 3 (2) ◽  
pp. 245
Author(s):  
Yehofa Wajin
Keyword(s):  
Stock Returns ◽  
Trading Volume ◽  
Quantitative Methods ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Sampling Technique ◽  
Stock Liquidity ◽  
Significant Difference ◽  
Before And After ◽  
Rights Issue

Go public companies in order to increase funds, companies can conduct corporate actions, namely rights issues. Right issue is a new share offering from the company for old investors with a system offering it to an old investor first. The information about the rights issue was published as an announcement that could be used to see market reactions. This market reaction is measured by abnormal returns to see stock returns and trading volume activity to see stock liquidity.This research intend to see abnormal stock returns and stock liquidity before and after the announcement of the rights issue with a sample of infrastructure sector companies in the Indonesia Stock Exchange for the period 2015-2018 with purposive sampling technique of sample selection, according to predetermined criteria then obtained 6 companies.This research is a descriptive study using quantitative methods. The test used in this study is the normality test then using a paired sample t-test. The results of this study show no significant difference from abnormal returns and stock liquidity before and after the announcement of the rights issue.

scholarly journals Investment decisions as mediating of fundamental and technical factors on firm value

Accounting ◽  
2021 ◽  
Vol 7 (7) ◽  
pp. 1661-1668
Author(s):  
Fedy Romamti ◽  
I Gusti Bagus Wiksuana ◽  
Ida Bagus Anom Purbawangsa ◽  
Ida Bagus Panji Sedana
Keyword(s):  
Stock Prices ◽  
Firm Value ◽  
Trading Volume ◽  
Agricultural Sector ◽  
Stock Exchange ◽  
Investment Decisions ◽  
Stock Trading ◽  
Technical Factors ◽  
The Impact

This study aims to analyze the impact of fundamental and technical factors on firm value with investment decisions as a mediating variable. The samples were 12 companies at agricultural sector in the Indonesia Stock Exchange. The results show that leverage had a negative and significant effect on investment decisions and firm value. Profitability and trading volume had a positive and significant effect on investment decisions and firm value. Previous stock prices did not have any significant effect on investment decisions but a positive and significant effect on firm value. Investment decisions had a positive and significant effect on firm value. Leverage had a negative and significant effect on firm value through investment decisions. Profitability and stock trading volume had a positive and significant effect on firm value through investment decisions. Previous stock prices did not have any significant effect on firm value through investment decisions.

scholarly journals Dampak pandemi Covid-19 terhadap harga saham dan aktivitas volume perdagangan (Studi kasus saham LQ-45 di Bursa Efek Indonesia)

2020 ◽  
Vol 2 (2) ◽  
pp. 204
Author(s):  
Galuh Artika Febriyanti
Keyword(s):  
Stock Prices ◽  
Trading Volume ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Stock Company ◽  
First Case ◽  
Significant Difference ◽  
Before And After ◽  
Sample Test ◽  
The Impact

The purpose of this research to examine the impact of the Covid-19 on stock prices and trading volume activity on listed firms of Index LQ-45 on the Indonesia Stock Exchange. The first case of the Covid-19 in Indonesia was announced on March 2nd, 2020. This research is to find out whether there are average abnormal returns and transaction volume of the stock company listed in Index LQ-45 before and after of event the first case of the Covid-19 in Indonesia was announced on March 2nd, 2020. These data have been taken for 30 days before and 30 days after the first announcement of Covid-19 in Indonesia. The result of the paired sample test shows that there is a significant difference in the abnormal return of stock company listed in index LQ-45 between before and after the first announcement of the Covid-19 case in Indonesia. This is indicated by the significance value of 0,008 < 0,05 which the stock prices decreased after the first announcement of the Covid-19 case in Indonesia. The volume transaction also shows different significance. The transaction volume after the announcement of shares shows an increasing value.

The effect of intangible assets on sustainable growth and firm value – Evidence on intellectual capital investment in companies listed on Bucharest Stock Exchange

Kybernetes ◽  
2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Catalin Ionita ◽  
Elena Dinu
Keyword(s):  
Growth Rate ◽  
Intellectual Capital ◽  
Firm Value ◽  
Intangible Assets ◽  
Stock Exchange ◽  
Listed Companies ◽  
Sustainable Growth ◽  
Content Type ◽  
Sustainable Growth Rate ◽  
The Impact

PurposeThe present study investigates the connection between company investments in intellectual capital (IC) and how they translate into financial value. The aim is to test the impact of intangible assets on the firm value and its sustainable growth.Design/methodology/approachThe research employs computation models to determine the sustainable growth rate (SGR) and the firm value (FV), and by using the ordinary least squares (OLS) model through a linear regression assesses the relationship between the dependent variables and expenditures on intangibles like R&D, IT programs and patents. A sample of 42 companies has been selected out of the 78 listed at Bucharest Stock Exchange (BSE), based on the appropriateness of the information disclosed in the financial reports for the period 2016–2019.FindingsThe results show that intangibles classified as innovative competences (R&D and Patents) do not have a positive impact on SGR and FV in listed companies from Romania. Moreover, R&D has a negative and significant effect on FV, while IT Programs have a positive and significant impact on FV, but not on the SGR. Variables categorised as economic competencies (Brands, Shares held in associates and jointly controlled entities) and firm structure-specific variables (Leverage, Firm Performance) seem to have a significant effect on SGR and FV. Shares held in associates and jointly controlled entities is the variable that can have the biggest impact when it comes to FV for companies listed at BSE.Research limitations/implicationsDue to non-disclosure of specific information by some companies, or lack of investments in intangibles the sample had to be reduced and does not cover all listed companies.Practical implicationsCompanies listed on the Regulated Market from the Bucharest Stock Exchange should maintain their scale of liabilities at a reasonable level when financing intangible assets in order to ensure corporate long-term and sustainable development. Also, these companies should maintain awareness about the importance of intangible assets and invest more in specific sub-components, in order to sustain competitive advantage. Recognizing the roles of intangibles, managers need to develop strategies to invest in profitable intangibles by reasonably allocating their limited resources, in order to achieve sustainable growth and increase company success.Originality/valueStudies concerning the relation between investments in intangibles and sustainable growth rate and firm value of listed Romanian companies are very scarce. This paper reveals new research, never before undertaken, concerning expenditures on intangibles by Romanian companies and the valuation of such investments on Bucharest Stock Exchange.

Impact of regulatory announcements on systemic risk in the Indian telecom sector

2018 ◽  
Vol 13 (5) ◽  
pp. 1395-1416 ◽  
Author(s):  
Sushma Priyadarsini Yalla ◽  
Som Sekhar Bhattacharyya ◽  
Karuna Jain
Keyword(s):  
Risk Premium ◽  
Systemic Risk ◽  
Service Providers ◽  
Policy Makers ◽  
Content Type ◽  
Risk Premiums ◽  
Buffering Hypothesis ◽  
Research Findings ◽  
Telecom Sector ◽  
The Impact

Purpose Post 1991, given the advent of liberalization and economic reforms, the Indian telecom sector witnessed a remarkable growth in terms of subscriber base and reduced competitive tariff among the service providers. The purpose of this paper is to estimate the impact of regulatory announcements on systemic risk among the Indian telecom firms. Design/methodology/approach This study employed a two-step methodology to measure the impact of regulatory announcements on systemic risk. In the first step, CAPM along with the Kalman filter was used to estimate the daily β (systemic risk). In the second step, event study methodology was used to assess the impact of regulatory announcements on daily β derived from the first step. Findings The results of this study indicate that regulatory announcements did impact systemic risk among telecom firms. The study also found that regulatory announcements either increased or decreased systemic risk, depending upon the type of regulatory announcements. Further, this study estimated the market-perceived regulatory risk premiums for individual telecom firms. Research limitations/implications The regulatory risk premium was either positive or negative, depending upon the different types of regulatory announcements for the telecom sector firms. Thus, this study contributes to the theory of literature by testing the buffering hypothesis in the context of Indian telecom firms. Practical implications The study findings will be useful for investors and policy-makers to estimate the regulatory risk premium as and when there is an anticipated regulatory announcement in the Indian telecom sector. Originality/value This is one of the first research studies in exploring regulatory risk among the Indian telecom firms. The research findings indicate that regulatory risk does exist in the telecom firms of India.

scholarly journals The Influence of Good Corporate Governance and Capital Structure on Firm Value: The Mediation Role of Financial Performance

2020 ◽  
Vol 35 (2) ◽  
pp. 230
Author(s):  
Ridwan Nurazi ◽  
Intan Zoraya ◽  
Akram Harmoni Wiardi
Keyword(s):  
Corporate Governance ◽  
Capital Structure ◽  
Financial Performance ◽  
Firm Value ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Multiple Linear Regression Analysis ◽  
Company Value ◽  
Good Corporate Governance ◽  
The Impact

<pre>The objective of this study is empirically identify the impacts of Good Corporate Governance and capital structure on firm value with financial performance as intervening variable. We operate quantitative approach within the scope of manufacturing company of metal, chemical, and plastic packaging sector which listed in Indonesia Stock Exchange during the 2017-2018 periods as the population. Samples are chosen by purposive sampling method inwhich the company must report the financial statement in a row, obtained 79 observations. The data analysis technique used is financial ratio analysis to determine the condition of the business financial ratios of the variables studied. Data were analyzed using multiple linear regression analysis. The result shows that corporate governance and capital structure influence the firm value, moreover the use of institutional ownership ratio and capital structure will increase the value of the firm. The result also shows that the impact of Corporate governance and capital structure on the company value are mediated by financial performance. It means that the value of the firm can increase if the company able became an effective monitoring tool.</pre>

Do intellectual capitals matter to firm value enhancement? Evidences from Taiwan

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yensen Ni ◽  
Yi-Rung Cheng ◽  
Paoyu Huang
Keyword(s):  
Intellectual Capital ◽  
Firm Value ◽  
Stock Exchange ◽  
Emerging Market ◽  
Customer Relationship ◽  
Strategic Decisions ◽  
Content Type ◽  
Data Resource ◽  
Customer Capital ◽  
The Impact

PurposeThe purpose of this study is to find evidence of the impact of intellectual capital on firm value, and, in turn, enhance the existing literature which lacks consensus on it. By employing some distinctive proxies for human capital, innovation capital, customer capital and process capital, this study might provide valuable information for firms to make strategic decisions.Design/methodology/approachThis study uses Tobin's Q to represent firm value and various variables to be the proxies for intellectual capitals. By utilizing firm-year observations, this study applies panel data models first, and then Petersen regression models for further investigation to enhance the robustness of the empirical results.FindingsFirm value is affected positively by the average net profit per employee as well as goodwill and intangible assets. This is because firms having employees with abundant knowledge will possess advantage for innovation, and the excellent reputation, a part of goodwill for oriental firms, would encourage people to consume and invest more.Research limitations/implicationsThe constraint of data resource is the main limitation. With the limited scales and as an emerging market of Taiwan Stock Exchange, it is not confirmed whether the results are appropriate for the developed markets. Nevertheless, firms should make efforts on developing intellectual capital and corporate governance for operating businesses with competitiveness and safety.Originality/valueSince capable employees enhance the innovation, innovation improves customer's satisfaction and good customer relationship increases the sales; this study illustrates that for expanding businesses, firms should make more efforts on developing intellectual capital.

The Correlation between R&D Activities and Income Rate in Addition to Gross Profit Rate of the Enterprise Operation

2013 ◽  
Vol 798-799 ◽  
pp. 865-868 ◽  
Author(s):  
Tina C. Chiao
Keyword(s):  
Research And Development ◽  
Financial Performance ◽  
Institutional Investors ◽  
Trading Volume ◽  
Stock Exchange ◽  
Business Value ◽  
Profit Rate ◽  
Taiwan Stock Exchange ◽  
The Impact ◽  
Future Business

As the trading volume by institutional investors in Taiwans stock market increasing in recent years according to information of Taiwan Stock Exchange Corporation, the influence on financial performance by the institutional investors is getting more and more important although institutional investors play a monitoring role to the company. Thus the impact of R & D activities on the financial performance of enterprises is studied frequently. This study focuses on the impact of R & D activities on income rate in addition to gross profit rate of the Enterprise Operation. The implication in practice is that business must attract research and development intensity (RDI) relative to research and development density (RDD) to improve future business value.

Sign in / Sign up

Export Citation Format

Share Document