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Full-Text Articles in Business
Does Brand Licensing Increase A Licensor's Shareholder Value?, Adina B. Robinson, Kapil R. Tuli, Ajay K. Kohli
Does Brand Licensing Increase A Licensor's Shareholder Value?, Adina B. Robinson, Kapil R. Tuli, Ajay K. Kohli
Research Collection Lee Kong Chian School Of Business
This study examines 171 brand licensing announcements and subsequent changes in the licensor firms' shareholder values using the event study method. We find that although brand licensing announcements lead to positive abnormal returns on average, nearly 44% of the announcements in our sample are followed by negative abnormal returns. We argue that investors react more favorably to a brand licensing announcement when they believe (i) the brand has greater ability to stimulate licensee product sales (and thus generate higher royalties for the licensor) and (ii) the licensor firm has greater ability to limit licensee opportunism (and thus limit brand dilution …
Corporate Social Performance, Analyst Stock Recommendations, And Firm Future Returns, Xueming Luo, Heli Wang, Sascha Raithel, Qinqin Zheng
Corporate Social Performance, Analyst Stock Recommendations, And Firm Future Returns, Xueming Luo, Heli Wang, Sascha Raithel, Qinqin Zheng
Research Collection Lee Kong Chian School Of Business
This study posits that security analysts heed corporate social performance information and factor it into their recommendations to general investors. In particular, as corporate social performance is often uncertain and ambiguous to general investors, analysts may serve as the informational pathway connecting corporate social performance to firm stock returns. Thus, we argue that analyst recommendations mediate the relationship between corporate social performance and firm stock returns. On the basis of not only a qualitative study with literature searches and interviews of stock analysts but also a quantitative study with two longitudinal samples of large firms, we find support for these …
Investor Diversification And The Pricing Of Idiosyncratic Risk, Fangjian Fu
Investor Diversification And The Pricing Of Idiosyncratic Risk, Fangjian Fu
Research Collection Lee Kong Chian School Of Business
Theories predict that, due to investor under-diversification, idiosyncratic risk is positively priced in expected stock returns. Empirical studies based on various methodologies yield mixed evidence. This study circumvents the debate on methodological issues and traces the pricing of idiosyncratic risk to its economic source – investor under-diversification. Assuming that institutional investors tend to hold more diversified portfolios and thus care little about idiosyncratic risk relative to individual investors, we find that the positive relation between idiosyncratic risk and stock returns is significantly stronger (weaker) in stocks that are held and traded more by individual (institutional) investors. In addition, the pricing …
Capital Structure Dynamics And Stock Returns, Jie Cai, Zhe Zhang
Capital Structure Dynamics And Stock Returns, Jie Cai, Zhe Zhang
Research Collection Lee Kong Chian School Of Business
Many finance theories predict that the capital structure affects firm value, which implies that the changes in leverage have an impact on stock returns. Most of the existing literature however has been focusing on the determinants of the capital structure. Using a sample of U.S. public firms during 1975-2002, we document a significantly negative effect of leverage changes on next-quarter stock returns. This effect remains significant after controlling for other firm characteristics such as ROE, book-to-market, firm size, and past returns. We propose and test several hypotheses to explain the observed effect. We find that the negative effect is stronger …